Calandra says it''s when with gold, not if

12:15p ET Friday, January 26, 2001

Dear Friend of GATA and Gold:

The following is an English translation of two articles
published last weekend in Rapport, an Afrikaans-
language newspaper, in Johannesburg, South Africa. They
show that South Africa is taking notice of the imminent
visit there by GATA Chairman Bill Murphy and Reginald
H. Howe, our litigant against the gold cabal.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Anglo denies benefiting from lower gold price

By Curt von Keyserlingk

The gold price should be more than $600 per ounce but
is being held below $270 by an unlawful conspiracy.

So says American Gold Anti-Trust Action (GATA)
committee chairman William Murphy. GATA supports a
lawsuit brought by its adviser, Reginald Howe, in an
American court for damages in this regard.

Murphy and Howe will be in South Africa next week to
discuss their allegations with gold producers, mining
unions, and the government.

Howe claims in court documents that Anglogold and
Barrick of Canada quot;bear considerable confidential
knowledgequot; of the conspiracy and that they profit from
it, but that they quot;apparently do not play a significant
role in the execution of the conspiracy.quot;

Defendants include Alan Greenspan, chairman of the
American Federal Reserve Board; Lawrence Summers, U.S.
treasury secretary; and J.P. Morgan Chase, Citigroup,
Goldman Sachs, Deutsche Bank, and the Bank for
International Settlements.

Howe describes their actions as quot;among the greatest
scandals in economic history.quot;

Murphy writes in an e-mail to Sake-Rapport that should
Anglogold know that the gold price will not rise, it
earns additional income by maximizing its hedging at a
lower price. He says Anglogold also profits from a
lower gold price because this weakens competing gold
producers, allowing Anglogold to acquire them cheaply,
as is currently happening.

quot;If we had known that the gold price was being held
down, we would have hedged considerably more of our
production,quot; says Kelvin Williams, Anglogold's
marketing director. quot;We hedge only 20 percent of our
output -- relatively little in comparison with other
producers.quot;

Williams points out that Anglogold's low-hedged
production equals only 30 percent of the production
hedged by Australian mines, and considerably less than
North American mines.

Williams says Anglogold's low hedging level makes it
easier to make more money when the gold price rises.
This contrasts with the case of Ashanti, a gold mine in
Ghana, which hedged a great portion of production and
consequently came close to bankruptcy in 1999 when the
gold price soared.

During periods of rising prices, a producer that hedges
must pay the difference between the hedge price and the
market price to the bank in advance. This causes cash
flow pressure because payments relate to production
that has not yet been soared.

Williams says he is willing to hold discussions with
Howe and Murphy, should they so request.

quot;We support any endeavour whereby gold would benefit,quot;
says Ferdi Dippenaar, marketing director of the non-
hedging group, Harmony. This means that profits are
more closely linked to the gold price than those of
Anglogold.

Dippenaar e-mailed GATA this month, confirming that his
group and GATA were to hold further discussions about
imbalances in the gold price.

He told Sake-Rapport that some Harmony shareholders
supported GATA while others remained skeptical about
allegations.

* * *

This is how the gold price is manipulated

By Curt von Keyserlingk

The quot;conspiracyquot; to keep the gold price down is spurred
by two causes, says Reginald Howe, the man who has
subpoenaed (among others) American Federal Reserve
Board Chairman Alan Greenspan and some of the world's
largest banks.

Howe says American authorities campaign for this, as a
lower gold price masks inflation and the massive U.S.
payments deficit and at the same time maintains dollar
strength artificially.

Banks loaned huge amounts of gold to parties who sold
it, and such banks would have suffered huge losses if
the price had risen, because clients could not afford
to repurchase gold at higher prices in order to return
it to the banks at the end of the loan term.

William Murphy of GATA estimates that banks are
currently lending between 10,000 and 12,000 tons of
gold.

In court documents Howe says Greenpan admitted to a
committee of the American Congress in 1998 that central
banks were poised to lend gold in increasing quantities
should the price rise. Such actions place more gold on
the market, thereby lowering the price.

Certain parties borrow gold in order to sell it and
invest the proceeds, because the return on cash is
greater than the cost of borrowing gold -- provided the
price does not rise. Howe alleges that the subpoenaed
banks had since 1994 regularly made huge gold sales in
order to prevent price increases.

Howe alleges that all the defendants had infringed
American legislation concerning horizontal price
fixing, that some of them had committed fraud, and that
Greenspan and Lawrence Summers, American treasury
secretary, had acted unconstitutionally by manipulating
the linking of the dollar to gold.