Repeat: Midas commentary for September 24, 2000

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Not to be reproduced without permission.
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Midas commentary for September 24, 2000

By Bill Murphy
www.LeMetropoleCafe.com
September 24, 2000

Spot gold $270, up $1.50
Spot silver $4.86, up 4 cents

quot;U.S. to Release 30 Mln Barrels of Oil From Reserves

quot;Washington, Sept. 22 (Bloomberg) -- The United States
will release 30 million barrels of oil from the
nation's reserves over 30 days to boost supplies,
Energy Secretary Bill Richardson said. The decision
comes after oil prices reached a 10-year high earlier
this week....

quot;'The Strategic Petroleum Reserve was established by
Congress to address supply disruptions. It was not
intended, and should never be used, to manipulate
prices,' the American Petroleum Institute said in a
statement yesterday.quot;

This is my kind of industry association -- one that
supports its own product. Contrast this kind of outcry
about oil market manipulation to the silence and
denials by the World Gold Council about gold market
manipulation.

What a Friday the 22nd was. The currency market was
admittedly manipulated through coordinated central bank
intervention and then it was announced after the close
that the U.S. government was going to manipulate the
oil market -- because it was in the quot;interest of the
nation,quot; according to Energy Secretary Richardson.

How about gold? For the umpteenth plus one time, gold
was slammed by the bullion dealers after an early $6
rally and it barely finished higher on the day. With an
incredibly positive bullish consensus of only 16
percent, an extremely oversold gold could manage to end
up with only a small gain after this unexpected
constructive development for the price. With that kind
of technical setup, any other commodity market would
have soared and closed on the highs of the day, not on
the lows.

Why don't the gold industry organizations speak out as
the oil industry does? One has to be brain-dead not see
what the gold cabal is doing to gold.

Throw the Aussie dollar into the manipulation pot too.

After the intervention announcement, the Aussie dollar
rallied 155 points on the Chicago Merc. I have made the
point many times that the Aussie dollar is being
trashed by the gold cabal to encourage Aussie gold
producers to hedge -- sell forward gold. Despite the
summer plunge in the gold price, gold in Australian
dollar terms is as highly priced as it has been in a
year or more. But a soaring Aussie dollar is not in the
interest and plans of the cabal or the U.S. government.

At the end of the day the euro and the pound were
sharply higher. The Aussie dollar? Unchanged! Obviously
trashed by the gold goons.

Last, but not least, there was the action in the U.S.
stock market Friday.

From Bill Fleckenstein's column:

quot;Let's get ready to bumbl-l-l-l-l-l-l-l-l-l-oil. Well,
that appears to be the game. As always, Colin said it
better and in a more interesting fashion than I could
have. Never has the manipulation of so many markets
broken out in so obvious a fashion. It makes it all the
more fitting that these epic shenanigans happened on
the same day that the World Wrestling Federation
announced it is going to be listed on the NYSE.quot;

From Richard Russell:

quot;The government is doing everything possible to keep
the good times rolling -- flooding the economy with
money, intervening on oil, intervening on the euro. And
some are even saying that the government intervenes in
the stock market, buying futures through the
stabilization fund on big down days.quot;

It is strange and ironic that both Fleckenstein and
Russell openly speak of growing market manipulations,
but when asked about gold, the longest and biggest
manipulation of all -- one that is hurting people very
badly all over the world -- they go blank. How can this
be?

In one day the government of the United States admitted
intervening in the oil market and the currency markets
in the national interests. Yet the government refuses
to admit that it intervenes in gold.

This is the same U.S. administration that bailed out
the Long-Term Capital Management hedge fund because
that too was supposedly in the nation's interest. GATA
and its friends know that the primary reason for the
bailout was to rescue LTCM and the bullion dealers from
their 300-tonne gold short position via a rigged, off-
market transaction.

This is the same U.S. administration that orchestrated
the collapse of the gold price after gold ran up to
only $337 per ounce after the announcement of the
Washington Agreement a year ago. The bullion banks were
bailed out once again -- in the interests of the
nation, of course.

The scary part of all these market manipulations is
that the investing public is being sucked in more and
more to think that there will never be a serious stock
market correction. All dips should always be bought.
That is why the savings rate in America is at historic
lows. The savings are in the stock market. No reason
not to have it there and be left behind -- there will
never be a rainy day.

One has to wonder if the manipulation of the gold
market is the tip of the iceberg when it comes to
market manipulations. One thing for sure is that GATA
is like a doctor who has found a malignant cancer. The
cancer is spreading. We told that to the speaker of the
House and to the congressional banking committee
members in our Gold Derivative Banking Crisis report.
We told them that the cancer can be cured with painful
treatment. We also told them that to stay in denial and
let the cancer go untreated could be fatal.

GATA is trying to warn the world of a coming financial
disaster. Our focus is gold, but if the cancer has
spread to the stock market, the disaster could be even
worse.

Americans have no clue that they are being set up. They
are encouraged to buy while insiders are selling out.
In the end, when it is too late, this will become very
obvious. If the stock market is rigged, like the gold
market, the collapse of the market could be
devastating. Americans could lose the nest eggs that
Wall Street promised them for investing in the long
term.

If any of these markets blow up as a result of market
manipulation, the witch hunt to ferret out the guilty
will be the most pronounced in history. Scalps will be
sought. It will be ugly.

The cafe will be laying out fact and fodder for all of
this in the months to come, as we have in the past.
Stay tuned.

One of the most academic financial gurus that I can
think of is Frank Veneroso of Veneroso Associates. I
have known Frank for more than 20 years. He was highly
respected on Wall Street for picking stocks,
identifying investment themes, consulting governments,
etc. As far as his investment picks went, he was almost
always quot;too earlyquot; and eventually almost always right.

Unfortunately, Frank's reputation has been tarnished
recently because he has advocated buying gold due to
its positive supply/demand fundamentals. Having made a
small fortune over the years by following Frank and
rarely seeing him wrong, I bought into his gold story
too.

Result: The wreck of the Hesperus. A financial disaster
and blunder for me. It appeared that Frank was
completely wrong in his assessment of the gold market.
How could he have been so wrong all of a sudden?
Frank's credentials go far beyond the gold world. He is
a macro-economic financial crisis consultant who
advised the finance ministers of Chile and Mexico
during economic distress over the past 30 years and, as
a consultant to the United Arab Emirates, advised it
not to open a stock exchange like The Manakh in Kuwait.
He told them The Manakh would collapse. It did.

Frank returned last week from a trip to Europe. I
called him to get his views on the latest market
happenings. Three years ago he thought the fair
equilibrium price of gold was $600. As a result of the
U.S. government's desperate machinations in all the
financial markets to prolong the bubble and the dis-
equilibriums that have resulted from the orchestration,
Frank sees things a bit differently now.

By the way, this is the same Frank Veneroso who took me
to task in an issue of the Blanchard Gold Newsletter in
early 1999. He thought I was a bit daft and that GATA's
claims about the manipulation of the gold price were
wild. The Bank of England's gold sale announcement
changed all of that. Now Frank believes that the gold
market is manipulated.

This is what makes Frank stand out. He is after the
truth. That is why he is esteemed by those who have
known him for so many years. He has been tarnished by
his advocacy of investing in gold. Yes, Frank was wrong
about the price of gold going up. That is the bad news.
The good news is GATA showed him why. His supply/demand
analysis was not wrong, but he was analyzing a market
that was was not free.

What does he think now as a result of all these
shenanigans?

According to Frank, the manipulation of all the markets
has been so extensive and so devious that the first
stop for the price of gold -- the first leg up -- is
not $600 anymore but $2,000 per ounce. Frank believes
this will occur when the gold cabal loses control and
gold investment demand goes off the charts as
confidence in other financial markets wanes.

Buy gold and add on dips. Buy silver and add on dips.
Buy the shares of your favorite precious metals company
and buy more on dips.

One of our European Cafe members sent me this
intriguing email:

quot;In the Financial Times there was an article on the
euro where it was stated that the ECB has 261 billion
euros in net foreign exchange assets and 120 billion
euros in gold stock. That represents some nice
firepower in case of intervention to help the ailing
euro. Then it goes.

quot;Analysts at Goldman Sachs, the investment bank, say
the ECB's best option may be not to spring a surprise
intervention on the market but to announce a medium-
term plan to reduce the euro-zone's high level of
reserves.quot;

For the gold technical crowd that wants the latest:

The latest CFTC Commitment of Traders Report revealed
that the commercials were still net long 31,285
contracts while the big specs were net short 30,561
contracts, which is further proof that gold should have
exploded on the surprise euro intervention. That it did
not do so adds to GATA's credibility.

How many times to those in the gold industry have to be
hit in the head to understand that they are being
fleeced?

I gave Angolgold CEO Bobby Godsell the raspberry in my
last commentary concerning statements coming out of
Anglogold in a short period that seemed very negative
for the gold price. One of your Cafe members and
staunch GATA supporters queried Godsell about his
comment that he wanted a quot;cheapeningquot; of gold. To clear
the air, this is the essence of Godsell's explanation:

quot;On 'cheapening' gold, I clearly blew it. The context
is this: Nine Australia journalists in a discussion
mode. I am praising Asian gold markets, which provide a
wide spectrum of fair value choice for all gold
consumers, with the typical Western retail offer, which
works on huge margins and small volume and serves only
the top end of the market. One journalist asks, 'Isn't
this cheapening gold?' I reply that I have no problem
with cheapening gold if by that we mean offering gold
products for everyone.

quot;I absolutely believe in design excellence, high
caratage, and good manufacture. I believe passionately
in this metal. I'll choose my words much for carefully
in future.

quot;I'm more and more convinced that gold is getting ready
for a breakout.quot;

Joe Namath stopped at the Arts District Gallery in the
Fairmount Hotel in Dallas on Friday. The gallery is the
home of Cafe and GATA artist Alain Despert. I have met
Joe only a couple of times, but he is good friends with
some of my old New York buddies. They include New York
Ranger Hall of Fame hockey legend Rod Gilbert, New York
All-Pro defensive Gerry Philbin, who played on their
1968 Super Bowl team that upset the Colts; and Ed
Marinaro, former Minnesota Vikings pro and Hollywood
actor of quot;Hill Street Bluesquot; and quot;Sistersquot; fame.

Joe had spoken to Eddie the day before and told Karen
Brown, who runs the gallery, that his nickname for
Philbin was quot;Madman.quot; I'll second that.

Times and life styles change. We used to arrive at
Studio 54 in limousines at hours that nowadays sees me
long abed. And, of course, my main mission in those
days was a great deal different than my main mission
now.

It was some day at the gallery. TV star Loni Anderson
showed up later in the afternoon to look at the art.

On the GATA front, the action is picking up too. This
week I was heard by Cafe members on the John Clemons
(Southeast and Southwest US) and Don McAlvaney radio
shows. In addition, there was a Canadian Business
Journal interview. Next Wednesday, September 27, at
4:15 PDT, it is a Financial Sense News Hour interview
with San Diego-based Jim Puplova
(www.financialsense.com) on KKSM (1320 AM).

GATA PR powerhouse Barrie Walsh from Halifax, Nova
Scotia, was responsible for setting this up and sent me
the following:

quot;He has excellent guests. I have been very impressed
with the quality of his guests and the depth of their
knowledge. Many are authors, university professors,
congressmen.quot;

Thanks again, Barrie.