Daan Joubert essay about gold price manipulation

4:45p ET Tuesday, February 6, 2001

Dear Friend of GATA and Gold:

Today at the Indaba 2001 mining conference in Cape
Town, South Africa, Anglogold Marketing Director
Kelvin Williams delivered a thoughtful speech you
can read here:

a href=http://biz.yahoo.com/bw/010206/ny_anglogo.htmlhttp://biz.yahoo.com/bw/01...

Note particularly Williams' dismissal of GATA:

quot;Forget for the moment about the notion of a
conspiracy against gold, and worldwide plots
between central bankers here, there, and
everywhere. We face a physical overhang of
metal, and if we don't keep the physical markets
healthy, we might all face a less happy long-term
future in gold.quot;

GATA disagrees that there is quot;a physical overhang of
metal.quot; And Wednesday morning GATA will reply with a
full-page advertisement in Business Day, the national
business newspaper of South Africa, that country's
equivalent to The Wall Street Journal in the United
States.

The advertisement is a statement by GATA Chairman Bill
Murphy and is sponsored by GATA's South African
affiliate, South Africans for a Free Gold Market, to
which we are deeply grateful.

We expect that the ad will come to the attention of
most participants at the Indaba 2001 conference and
to the greater business and political communities of
South Africa and will help mobilize that country to
join us in a fight that is to a great extent the
fight for South Africa's survival.

Murphy told me by telephone from Cape Town this
afternoon that he was not invited to the conference
dinner sponsored by Anglogold and Barrick Gold. But
he IS to be the speaker Wednesday at a breakfast of
130 South African business and political leaders.
Fortuitiously, the American Christian evangelist and
broadcaster Pat Robertson is visiting South Africa
and is scheduled to attend the breakfast too.

Murphy met today with former Johannesburg Mayor Ian
Davidson, a member of South Africa's Parliament and
a leader of the Democratic Alliance Party, and
Davidson said he planned to raise GATA's issues in
Parliament.

Murphy is scheduled to meet leaders of the African
National Congress, the political party that holds a
majority in the government.

The struggle continues, but things are going our way.

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

* * *

TEXT OF ADVERTISEMENT
IN BUSINESS DAY, SOUTH AFRICA
February 7, 2001

GOLD PRICE MANIPULATION

The United States-based Gold Anti-Trust Action
Committee has come to South Africa to expose the
reckless manipulation of the gold price to the
citizens of your very special country.

A cartel of bullion banks, along with a faction of
the United States government, have orchestrated the
lowering of the gold price since 1994 to the
detriment of the economy of South Africa and to the
leadership of your newly formed government. This
horizontal price-fixing violates both the Sherman
Act anti-trust laws in the United States and the
laws of human decency.

So much overwhelming evidence has surfaced to
support GATA's claims that GATA delegate Reginald H.
Howe filed a complaint in U.S District Court in
Massachusetts on December 7, 2000, citing:

-- The Bank for International Settlements.

-- Alan Greenspan, chairman of the Federal Reserve.

-- William J. McDonough, chairman of the New York
Federal Reserve Bank.

-- J.P. Morgan amp; Co. Inc.

-- Chase Manhattan Corp.

-- Citigroup Inc.

-- Goldman Sachs Group Inc.

-- Deutsche Bank AG.

-- Lawrence Summers, secretary of the treasury.

A significant amount of this evidence may be
reviewed at the www.GATA.org web site. It includes
our quot;Gold Derivative Banking Crisisquot; report,
presented on May 10, 2000, to the Honorable Dennis
Hastert, speaker of the U.S. House of
Representatives; the entire complaint; and a
startling revelation in an essay entitled quot;Smoking
Gun.quot;

This gold cartel has fixed the price of gold
hundreds of dollars below its natural equilibrium
price even though gold demand is currently running
1,600 tons per year higher than total gold mine
supply. This has been the case for years. As a
result of the collusion to hold down the price, gold
loans from central banks have risen by between
10,000 and 12,000 tons, with gold derivatives
exploding the past 19 months on the books of the
above-mentioned bullion banks. At similar
institutions gold derivatives have curiously
remained constant.

The manipulation of the market has been so
meticulous that the gold price finished the years
1997, 1998, and 1999 at exactly $289 per ounce.
These institutions and their informed, privileged
clients have been borrowing gold from central banks
at ridiculously low 1-percent-plus lease rates,
selling the gold into the physical market -- putting
pressure on the gold price -- and investing the
resulting proceeds in U.S. Treasuries.

Why have the central banks allowed themselves to be
lured into such foolish behaviour?

It has been a multi-billion dollar bonanza for the
BULLION BANKS at the expense of gold producers, the
gold and gold share investor family, as well as for
more than 100,000 gold miners who are out of work
because of mine closures. As each mine worker now
supports 11 to 12 other individuals, according to
Bheki Sibiya, president of the Black Management
Forum and chairman of South African Airways, the
effect on the South African economy has been severe.

Simply put: This unconscionable gold cartel won't
let the gold price rise because their gold loans
would then become prohibitive and their scheme would
come undone.

The Gold Anti-Trust Action Committee has visited
Johannesburg, Durban, and Cape Town to meet with
business leaders, the press, mining unions, and gold
producers. Our intention is to inform them how
simply the economy of South Africa could be
resurrected.

Reg Howe and I are attending the Investing in Africa
Mining Conference/INDABA 2001 at the Cape Sun Inter
Continental Hotel in Cape Town.

We are also meeting with ANC, IFP and Democratic
Alliance party leaders to seek public support in
addition to what already has surfaced, as
demonstrated in the newspaper article below:

*

From The Independent, Durban, 3 Feb. 2001

quot;This week the GATA campaign received support from
South Africa's biggest mining union. The 300,000-
strong Cosatu-affiliated National Union of
Mineworkers said it was time to expose 'cartels in
the international gold market.'

quot;Spokesman Mr. Gino Govender said: 'The sharp
decline in the international price of gold in the
1990s has caused a mining crisis in the country.quot;

*

Over the last few years the gold cartel has stopped
at nothing to facilitate their fraud. Recently, the
Rand exchange rate was battered vis-a-vis the U.S.
dollar from 7.5 to 8. This prompted the following
comment from the director of the South African
Department of Finance, Maria Ramos:

quot;We are quite mystified.quot;

GATA was not. The gold cartel hammered the
Australian dollar to influence Australian gold
producers to sell more of their production forward.
As the gold price rose sharply in local currency
terms, making production much more profitable, it
was easy for the bullion banks to persuade them to
increase their hedge positions. They have likely now
hammered the Rand for the same reason.

It was no surprise to GATA that following the Rand
raid it was announced that bullion bank Deutsche
Bank had arranged a R700 million facility for Avgold
to enable the company to complete its Target mine in
the Free State. Of course the condition for the loan
was that Avgold immediately sell forward up to 75
percent of the first five years of production.

Soon after, rumours circulated that Harmony Gold
would in turn be forced by fellow bullion bank J.P.
Morgan to agree to purchase put options on 1.0
million gold ounces to finance the billion-Rand
purchase of Elandsrand and Deelkraal from Anglogold.
This could require the sale of a further 30 tons of
gold.

The two transactions could together dump up to 75
tons of gold onto the market. This news was directly
responsible for the latest downward pressure on the
gold price.

South Africa's gold is a depleting resource. Market
talk has it that Anglogold and Canadian gold
producer Barrick Gold are together preparing a joint
takeover of unhedged producer Gold Fields. The
forward sales policies of excessive hedgers like
Barrick and Anglogold have assisted the gold cartel
in their price manipulation. Should South Africans
now allow them to purchase Gold Fields as a reward
for their role in driving the price down?

If successful, would Barrick and Anglogold force
Gold Fields to hedge their production, or is this
simply a cheap way for Barrick and Anglogold to
reduce their hedging exposure? Is Anglo's recently
announced increase in its hedge position a way to
raise cash for the Gold Fields deal?

GATA seeks political and financial support from all
South Africans for the Howe/GATA complaint. All GATA
needs to do is manoeuvre the defendants into a pre-
trial discovery process to expose the truth about
the size of their enormous short positions. Under
American law, plaintiffs may seek information from
defendants long before a trial begins by questioning
them under oath with a court reporter present. The
penalty for not telling the truth is a serious crime
called perjury that usually entails jail sentences.

As soon as the facts about the huge gold short
positions are forced into the open by bullion
dealers being deposed during the discovery process,
the price will soar as investors and panicky short
sellers scramble to buy physical gold. The price of
the metal will rise hundreds of dollars per ounce --
back to parity with platinum for starters, then
higher. Remember, gold is money -- platinum is not.
This event could occur in the next few months.

The sharp rise in the gold price will spur the South
African economy. Miners will go back to work as
closed mines once again become economic; there will
be revenues to combat cholera, AIDS, and crime; and
money and fresh job opportunities will prevent
skilled staff from leaving the country.

Africa will become the Boom Continent, not the
Hopeless Continent.

The gold cartel has hired the most expensive lawyers
in the land to fight off Reg Howe and GATA. Do not
let the unique opportunity this presents pass you
by. Become informed as South Africans about the
truth behind the gold market. Then spread the word
by contacting the political party of your choice.
Motivate them to take action. It means so much to
your country, yet takes so little effort.

Reg Howe and I can be reached at the Cape Sun until
Friday evening at (021) 488-5100.

For enquiries thereafter, please telephone Rhoda
Fowler in Durban at (031) 202-1831 or call me back
home at 091 214 522-3411 in Dallas, Texas, U.S.A.
The Gold Anti-Trust Action Committee may also be
contacted at our email address: GATAComm@aol.com.

Bill Murphy, Chairman
Gold Anti-Trust Action Committee Inc.
7 February 2001

Sponsored by South Africans for a Free Gold Market