'MIDAS' COMMENTARY FOR JULY 9, 2001 By BILL MURPHY www.LeMetropoleCafe.com July 9, 2001 Gold $266.50, up 80 cents Silver $4.22, down 3 cents The gold market is comatose as the Gold Cartel has gold right back at its official price of $266. Meanwhile, they have to be frantically trying to figure out how they are going to get out of their massive short positions. Time is NOT on their side (see below). The big story of the day is one you will not hear spoken about in mainstream gold commentary. For weeks now Mike Bolser and I have been clamoring that U.S. Treasury Secretary Paul O'Neill should explain why 1,700 tonnes of the Treasury's gold bullion reserve were reclassified as "custodial gold' in August last year. The reason could not be more obvious. The word "custodial" implies taking care of something for someone else (as for the Bundesbank) as opposed to owning it yourself. That can be the only explanation for the reclassification. Some clerk was only doing his job correctly and told it as it was; that is, told the truth. U.S. Reps. Ron Paul (Texas) and John Larson (Connecticut), as well as Sens. Joseph Lieberman (Connecticut) and Wayne Allard (Colorado) have posed the same question to the treasury secretary, and so far he has failed to answer them, as well as many others. Lo and behold, look what we have here today -- a posting at www.USAGold.com by Elwood: * * * http://www.fms.treas.gov/gold/index.html Looks like all the gold at the mint locations is now called either "deep storage" or "working stock." It's labeled "Treasury-owned gold" at the bottom of the report. >From the notes at the bottom of May's report: "Deep Storage Gold -- formerly called Gold Bullion Reserve or Custodial Gold Bullion Reserve. This gold is owned by the U.S. Government and held for safekeeping by the U.S. Mint at the locations listed. "Working Stock -- formerly listed as specific coins and blanks or called PEF Gold. This is the portion of U.S. Government-owned gold that is used as the operating inventory for minting gold coins. Working stock includes bars, blanks, and finished coins." The May report (updated July 2) is the first month of the new classification. * * * Is this the Treasury's response to a most serious question posed by very serious people -- that U.S. Government gold is now classified "Deep Storage Gold" so that they have an answer to any sort of inquiries? Does this mean that there are no new questions to be asked in the future because of the pathetic Treasury's "definition of 'is'" obfuscation? This is one sick government we have. God help us all. What the heck is REALLY going on in Washington? What kind of systemic risk is close at hand? What has happened and is happening to America's gold? To what extent will the U.S. Government go to hide the truth from its citizens and members of Congress? What kind of depravity is ruling the roost in our nation's capital? "I never had sex with that woman, Miss Lewinsky." "The Levy girl was just a friend." "A gold swap with the Bundesbank? How silly!" "Deep Storage"? That is comical. Who thought that one up? I guess we are going to need a "Deep Throat" to find out about the U.S. gold in "Deep Storage." One thing for sure. WE GOT THEM. GATA has stirred up a hornet's nest on this one. There can be no other explanation for such a ridiculous classification of the gold of American citizens. Clearly they have made the change in classification because they can't answer the questions posed to them. So they changed the classification. What more does anyone need to understand that the gold market is under siege with the United States acting like the world's gold czar? Yes, the gold price is manipulated and something is very wrong in the gold market -- but, worse, something is even wronger with our government. A certain faction of Washington has LOST IT -- and lost the ideals our country was founded on. I am still waiting on confirmation that Newmont has closed its giant Gold Quarry mine in Nevada. If that is the case, it means that the two premier U.S. gold producers have closed their flagship mines within seven months. First, the Homestake mine in South Dakota and now this. While this would be a blow to Newmont shareholders, it will be a very positive development for the gold price -- mostly because it signifies the sharp drop in gold production that is upon us. Gold producers are hitting the wall all over the world. The Gold Cartel has created the most untenable of situations. The gold loans are 10,000 to 16,000 tonnes, the gold derivatives are massive and hover above the market like a neutron bomb, the U.S. Government is trying to cover up what it has done (always a no-no), and now gold supply is starting to drop off a cliff while gold demand remains strong. Murphy's Law is setting upon the Gold Cartel. The Manufacturers Association is moaning to the media that the strong dollar is hurting them and the U.S. economy. The pressure to bring the dollar down is going to intensify. A lower dollar can only stimulate gold demand. Meanwhile, if something is not done quickly in South Africa, that country's gold supply might dry up all together. The National Union of Mineworkers remained adamant yesterday that the mining industry was sitting on a time bomb, should the dispute with the Chamber of Mines continue to go unresolved. Should the threatened gold miners strike go ahead, more than 200,000 of the union's members could put down their tools. I do not know whose central bank gold they are using to hold down the price of gold at the moment, but I do believe strongly that this just can't last. Meanwhile, the political pressure to reduce interest rates is going to accelerate in a resounding crescendo soon. That will also be very gold-friendly. The concern of American citizens is that their 401-k's might become 1 k's. The latest on that development: * * * 401(k) Accounts Are Losing Money for the First Time By Danny Hakim The New York Times July 9, 2001 For the first time in the 20-year history of the popular 401(k) retirement savings plan, the average account lost money last year, even after thousands of dollars of new contributions. And despite some strengthening of stock prices in the last couple of months, recent estimates show, the declines persisted in the first half of this year. The trend is exposing years of mistakes by employees, raising some questions about proposals to permit Americans to manage part of their Social Security accounts, and clouding the future of many employees' nest eggs for retirement. The losses have led many individual workers to second- guess themselves, since they are the ones who decide how much to contribute to 401(k) plans and how to invest their money. There are some risks that people cannot control, such as stock market declines and company contributions that shrink with profits. But a look at shifting account balances over the last decade shows that many people have grown overly dependent on stocks, do not contribute enough to retire when they expect to and put too much into a single aggressive mutual fund or their own company's stock, financial planners and plan administrators say. And relatively few employers offer much useful help to workers in making these crucial decisions.... * * * The 401(k) story has just begun. The ending will not be a pretty one. It is not so pretty for Martin Armstrong either. Another scary development. Many Cafe members have asked about Marty A. over the past months. The latest: * * * http://www.armstrongdefensefund.org/contempt.htm Judge Richard Owen ordered Armstrong to remain in jail under contempt of court ... INDEFINITELY! How can a judge do such a thing? The judge refused to postpone the hearing until July 12 (one day before Armstrong's scheduled release). He then permitted the receiver to submit a brief in support of Armstrong's continued incarceration on the day of the hearing. (Any supporting briefs were supposed to be submitted by July 3.) Armstrong's court-appointed counsel was granted seven minutes to review the brief in court. This has obviously crossed the line to punishment, and there is nothing more Armstrong can do about it except appeal to the 2nd Circuit again. The receiver has never proved that Armstrong is in possession or control of any of the assets demanded from him. Armstrong turned over what he had, testified as to missing assets, and has served 18 months in jail. His house was searched by the FBI, and his office and shore house were searched by the receiver. What else is there to do? Armstrong has already served more time in jail than many convicted felons! This "justice" system is in dire need of reform! * * * How can this be again? I don't know whether Armstrong is guilty or not, but he was supposed to get out of jail so he could defend himself. He has been in jail 18 months and yet has not been proven guilty of anything. It's too much for me to get into this tonight, but who were Martin Armstrong's main business dealings with? Republic Bank, a prominent New York bullion dealer. Who was the founder of Republic? Edmond Safra, the billionaire found mysteriously murdered in Monaco. This gold game is not for Little Leaguers! -END- Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/