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Here is the text of GATA Chairman Bill
Murphy's address to the New Orleans
Investment Conference today, Thursday,
November 29, 2001
* * *
Hello, everyone. I would like to extend a special
greeting to those Gold Anti-Trust Action Committee
supporters who have come from all over the world to
attend this conference.
Two years ago from this very podium I presented
evidence the gold market was manipulated by a cartel of
bullion banks. Since then GATA has secured massive
amounts of additional evidence that confirms our
original assessment.
For those of you still not familiar with the staggering
amount of price-fixing proof GATA has on the Gold
Cartel, I suggest you go to www.GATA.org. GATA has laid
out more evidence of a concerted effort to manipulate
the gold price than the United States Government has
publicly produced on Osama bin Laden's direct
responsibility for the terrorist attacks against
America.
America rightly declared war on the terrorists.
GATA rightly declared a war of our own against the Gold
Terrorists.
Three years ago my colleague, GATA Secretary/Treasurer
Chris Powell, suggested we do something about the
obvious price-capping activities of the bullion banks.
That is how the Gold Anti-Trust Action Committee came
into being. Nothing we have discovered in the past
three years has contradicted our initial assertion.
Over these ensuing years not one person in the gold
industry has told us where we are wrong or why our
sobering evidence is faulty. No one!
That is not to say that there have not been highly
visible individuals in the gold industry casting
aspersions our way. For the first couple of years the
executives of heavily hedged gold producers, Barrick
and AngloGold, began some of their highly attended
presentations by chortling at the "conspiracy nuts" to
elicit some "yucks" from the many sycophants in their
audience.
I don't think they will use that tactic anymore. If a
bunch of crazed madmen living in the caves of
Afghanistan can pull off a successful conspiracy via
those awful terrorist attacks on the United States, do
you not think it conceivable that the richest and most
powerful people in the world could effectively conspire
to manipulate the price of gold?
Mocking conspiracies is suddenly "out." The truth is
that corporate price-fixing conspiracies are common.
What is most uncommon with the gold conspiracy is the
magnitude of this price-fixing case, the parties
involved, and the devastation it has wrought on so many
unsuspecting victims.
It was clear to GATA from the very beginning that
bullion banks such as Goldman Sachs and Chase Bank were
capping all gold price rallies. Every single gold
spike, whether a minor or major one, has been
simultaneously stuffed by these two banking
institutions.
I think it fair to say no market has ever traded like
gold. Spike, smash. Spike, smash. This occurs when a
vigilant Gold Cartel is surprised by some announcement
or event that brings on a surge of physical gold
buying, leaving the cabal without enough physical on
hand to slow down the price pops. So calls go out,
physical is mobilized, and before you know it, the
price of gold is trashed right back down to where the
spike began.
This cartel is extremely well organized. What do you
think the odds are the "official" price of gold would
close out 1997, 1998, and 1999 at exactly $289 per
ounce? I doubt the odds makers in Las Vegas would even
touch that one. But that is exactly what happened and
will give you some idea how precise the cabal's work
has been over the years.
When Chris and I formed GATA, our goal was to expose
this manipulation, fight for a free gold market, and to
win the day for so many GATA contributors who believed
we could get the job done. We have given our best
effort to do just that, as have so many in GATA's army
of supporters.
The revelations of our findings present a most
troubling picture:
FIRST. The manipulation of the gold price goes way
beyond certain bullion banks. It includes the
controversial $40 billion U.S. Exchange Stabilization
Fund, which operates solely under the auspices of the
president and treasury secretary); the International
Monetary Fund; the Bank For International Settlements;
and the Federal Reserve.
SECOND. This manipulation has made a mockery of the
notion that American financial markets are free-
trading. While government spokesmen preach that concept
to an unsuspecting world, the banking and political
elitists rig a market when it is in their best interest
to do so. It is very sad to think of how many lives
were lost fighting Communism, only for our own
government to stoop to its own Orwellian approach to
the markets.
THIRD. Fair play in America is slowly fading into
oblivion. Many of us here to today have seen the
decimation of our gold investments over the past half-
decade. All the while, the Gold Cartel and their
favored clients have borrowed gold at 1 percent
interest rates, sold it in the physical market, and
invested the proceeds at 6 percent in U.S. Treasury
instruments, at no risk because they knew that the
price of gold would not be allowed to rise.
FOURTH. This one ought to shock you. More people have
died because of the heinous activity of the Gold Cartel
than have been killed by the terrorists. On behalf of
GATA, I have been to Vancouver and Toronto in Canada;
New York twice, Washington, D.C. 3 times, New Orleans
twice, Denver, Austin, Texas, and Fairbanks, Alaska, in
the United States; Paris; and to Johannesburg twice,
Durban twice, Cape Town, and Pretoria in South Africa.
It was on my two trips to South Africa that I saw first
hand the economic devastation of the black people in
sub-Saharan Africa. There is just no money to combat
their terrible disease, crime, and unemployment
problems. AIDS and cholera are out of control. It is
just awful.
If it were not for the Gold Cartel and their sinister
operations, the price of gold today would be well north
of $600 per ounce, which would set off a natural
resource boom in Africa. Money would be freed up to
deal with these plagues that are killing off so many.
How does the United States address this issue? With
pompous deceit. A few years ago, the IMF proposed to
sell 3000 tonnes of its gold to help the poor African
countries via a debt relief program. President Clinton,
Robert Rubin, and Lawrence Summers went to great
lengths to arrange passage of such a proposal. What
hypocrisy! They did not care about black people as they
proudly proclaimed. They wanted the 3,000 tonnes of
physical gold to flood the market to perpetuate the
gold fraud.
Fortunately, they fooled almost no one. Thirty-six out
of 41 poor gold-producing countries voted against it.
So did the Congressional Black Caucus and the
leadership of the Democratic and Republican parties in
the United States.
The IMF, banking, and political elitists were rebuffed…
but not to be denied.
In October 1999 the IMF held a meeting for its member
countries in Santiago, Chile, only a couple of weeks
after a lightning $84 runup in the price of gold.
GATA's Mike Bolser found the IMF manual distributed to
the attendees, which explains how member central banks
are to account for something called gold swaps -- gold
that leaves the vaults of the central banks. In effect,
Bolser came across the IMF's gold playbook.
As you will learn shortly, it appears the gold swap
issue is at the heart of the manipulation of the gold
price.
Bolser's discovery led GATA's Andrew Hepburn to query
the IMF with the following:
"Why does the IMF insist that members record swapped
gold as an asset when a legal change in ownership has
occurred?"
The IMF answered:
This is not correct: the IMF in fact recommends that
swapped gold be excluded from reserve assets. (see Data
Template on International Reserves and Foreign Currency
Liquidity, Operational Guidelines, para. 72."
Over the years the GATA camp has received nothing but
denials from the U.S. Treasury, Alan Greenspan, Bank
for International Settlements, bullion banks, and the
IMF. In essence, their responses have been well-
couched, disingenuous, and difficult to disprove. THIS
response was NOT, thanks to the sleuthing of Canada's
Hepburn. Their constant lying finally caught up with
them. The central bank of the Philippines responded to
Hepburn as follows:
"Beginning January 2000, in compliance with the
requirements of the IMF's reserves and foreign currency
liquidity template under the Special Data Dissemination
Standard (SDDS), gold swaps undertaken by the BSP with
non-central banks shall be treated as collateralized
loan. Thus, gold under the swap arrangement remains to
be part of reserves and a liability is deemed incurred
corresponding to the proceeds of the swap."
In other words, the IMF instructed the central banks
that even though the gold was gone, it should still be
counted as part of their reserves.
The central banks of Portugal and Finland and the
European Central Bank itself all confirmed the
Philippines central bank's response to Hepburn.
The GATA camp caught the IMF flagrantly deceiving the
public. Since then the IMF has refused to answer all
follow-up questions from GATA supporters.
This is no insignificant issue.
On May 10 this year the Gold Anti-Trust Action
Committee held the GATA African Gold Summit in Durban,
South Africa. Leading South African gold producers; the
National Union of Mineworkers; the largest South
African trade union (Cosatu); the Ministry of Minerals
and Energy; the South African Reserve Bank; and
representatives from five sub-Saharan African
governments attended. The all-day affair was widely
covered by the South African press, including two days
of television coverage by the South African
Broadcasting Co.
GATA was fortunate to have James Turk, Reg Howe, and
Frank Veneroso take time from their very busy schedules
to go all that way and give evidentiary presentations
in support of GATA's allegations.
It has been Frank's contention for years that the so-
called gold loans of the central banks are far greater
than the 5,000 tonnes acknowledged by the gold
industry. At the summit, Frank explained how he came up
with numbers of 10,000 to 16,000 tonnes of gold loans,
or two to three times the amount acknowledged by the
Gold Cartel.
Why is this so important? It's very simple. Mine supply
is only 2,500 tonnes per year. The annual supply/demand
deficit is running around 1,600 tonnes per year. The
only way the Gold Cartel can keep the gold price from
rising and to ration the limited mine and scrap supply
is to feed central bank gold into the physical market.
The difference between Frank's numbers and those used
by the gold industry are extraordinary, for if Frank is
correct, which I am sure he is, the Gold Cartel will
begin to run out of ammunition in a few years. Their
gold hoax has to crumble.
It is very ironic that in harming so many innocents,
the blundering bankers have set the stage for the
detonation of a gold derivative neutron bomb that is
going to rock the financial markets, one that could
even threaten their own viability. That is because
there is no way they can get their gold back short of a
rise in the price of many hundreds of dollars per
ounce, perhaps even $1,000 per ounce. I will leave that
topic for Frank and return to the critical gold swap
issue.
At a January 1995 Federal Open Market Committee
meeting, Virgil Mattingly, the general counsel to that
committee, made the following statement:
"It's pretty clear that these ESF operations are
authorized. I don't think there is a legal problem in
terms of the authority. The statute [31 U.S.C. s. 5302]
is very broadly worded in terms of words like 'credit'
-- it has covered things like the gold swaps -- and it
confers broad authority."
The GATA Army bombarded senators, congressmen, the U.S.
Treasury, and Fed Chairman Alan Greenspan with requests
for an explanation of this stated reference to ESF gold
swaps. This was pursuant to our army's receiving
hundreds of letters from the U.S. Treasury, prompted by
requests to Congress, assserting that the ESF "has not
held any positions in gold since 1978."
The heat became so intense that Greenspan felt
compelled to respond to Kentucky Sen. Jim Bunning by
forwarding a memo to him that Mattingly had written
Greenspan. Mattingly stated the following:
"Given the passage of time, some six years, I have no
clear recollection of exactly what I said that day but
I can confirm that I have no knowledge of any 'gold
swaps' by either the Federal Reserve or the ESF. I
believe that my remarks, which were intended as a
general description of the authority possessed by the
Secretary of the Treasury to utilize the ESF, were
transcribed inaccurately or otherwise became garbled."
That answer just does not pass any kind of smell test.
Not only were his comments recorded, all the Fed
Governors present signed off on the final transcript.
Clearly, this was a pitiful cover-up attempt
reminiscent of the missing 18 minutes of Watergate
tapes.
Think about this. To accept Mattingly's answer, in a
precedent-setting sense, ought to be able to give
defense attorneys the right to throw out recorded and
transcribed confessions by using the "garbled defense."
What the IMF, BIS, ESF, the Fed, and the bullion banks
don't want you to know is that a big percentage of the
central bank gold has been swapped out. It is GONE.
They are petrified they will be found out and will go
to any lengths to conceal the gold truth. GATA's gold
swap revelations make it way more than likely that
Frank Veneroso's central bank gold numbers are the
correct ones, not the ludicrous ones postured by the
gold industry.
By focusing on this one GATA issue, it is easy to
understand the magnitude of the gold problem,
unnecessarily created by greedy elitists.
This problem is most scary. While the West dumps its
gold to perpetuate the strong dollar gold scheme set in
motion by Clinton, Rubin, and Summers, the East is
scoffing up cheap gold. The Russians, Chinese, Muslims,
and Arabs are hoarding physical gold, for they realize
a price explosion is coming.
The Russians have now have a gold coin as currency, the
Chevronet, and are building their gold reserves, not
reducing them. The Muslims are beginning to run with a
gold coin called the Islamic dinar, while Arabs are
loading up on gold via purchases out of Turkey and
Switzerland. Meanwhile, the Chinese have been scouring
South Africa, quietly buying physical gold. And come
January the Chinese officially open up their gold
market to their public.
Get the picture? The banks in the West are going deeper
and deeper into gold hock with their lending and
swapping while the East is saying "thank you very much"
and raking it in.
On May 10, 2000, Frank, Reg, Chris, and I met with
House Speaker Dennis Hastert and presented the "Gold
Derivative Banking Crisis" report to him. We explained
to the speaker that if the U.S. bullion banks continued
their gold price-capping follies, our financial system
could be held hostage by a foreign power that
threatened to buy up the physical gold market.
Gold has now become a national security issue. Like it
or not, the gold problem for the United States worsens
every day like a malignant cancer. The choice is to
deal with the gold problem now, which will require
painful chemotherapy-like treatments, or stay in denial
-- which could be fatal.
The press in the United States has chosen denial and
total suppression of the subject. I was on CNBC 34
months ago. That was the last major coverage GATA
received by the American free press. A disturbing
revelation for me has been to realize there is no such
thing in America as a free press when it comes to
opposing the big money interests. It is a disgrace and
makes a mockery of our chastising the press of other
countries over censorship.
On December 7, 2000, our colleague, Reg Howe, filed a
lawsuit in U.S. District Court in Boston against five
bullion banks, the BIS, Treasury Secretary Summers, and
Alan Greenspan and William McDonough of the Federal
Reserve. On November 5 Reg survived a motion to dismiss
by these most formidable of opponents. Only one
newspaper in the United States, the New York Post, has
even mentioned this case, which may be one of the most
important in U.S. history.
I have had three lunches with some very sharp Wall
Street Journal reporters. The result: nada. Reuters and
Bloomberg will not carry GATA releases and refuse to
mention us. The right- and left-wing investigative
reporters for TV and newspapers who say they will take
on all comers refuse to take on the big money Wall
Street crowd on the gold issue. This lack of
journalistic integrity will eventually take its toll.
This is of concern to all Americans. Thomas Jefferson
warned Americans to be wary of the banks more than 200
years ago. For these bullying banks to have so much
power over the U.S. press is frightening. The Gold
Cartel maneuvers are most un-American and diametrically
opposed to what our country stands for.
That is what the Gold Anti-Trust Action Committee and
our army of supporters have worked so diligently to
expose.
We are not going to let them get away with it. They are
going to pay for the harm they have done. GATA will not
rest until this rotten cabal goes down -- until we
prevail and win the day.
My colleague Chris Powell described best what the GATA
effort is all about in his coverage of Reg Howe's day
in court against 14 hotshot Gold Cartel lawyers:
"When it was over, the courtroom cleared out quickly,
and Howe was left alone at the counsel table packing
his books and papers into his briefcases. Forgive the
editorializing, but I couldn't help but think of the
scene at the end of the trial in that wonderful movie,
'To Kill a Mockingbird,' when Gregory Peck, playing the
quietly heroic defense lawyer, Atticus Finch, does the
same thing, seemingly alone -- and yet he is not alone,
but rather is watched by the oppressed people in the
gallery with awe, admiration, and respect for standing
up against the most hateful and vicious power. What I
saw today was really not so different."
Chris went on:
"Enough of the cursed cynicism that the courts are as
rigged as the markets, that there is no fighting the
power. We know some things about market rigging but
there is no evidence that anything in court today was
rigged. We got a day in court if not quite yet OUR day
in court. And for all its faults this remains a country
where one brave man pleading his own case can summon
the representatives of all the money in the world and
put the bastards in danger of having to answer for
themselves."
That, my friends, is what GATA is all about.
Thank you.
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