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    [GATA] Uproar over RBC gold conspiracy report; Globe & Mail comments about it
    Tue, 25 Jun 2002 07:20:00 -0500
    [email protected]
    [email protected]

    Le Metropole Members,

    [GATA] Uproar over RBC gold conspiracy report; Globe & Mail comments about it
    Date: 6/25/2002 12:49:42 AM Central Standard Time
    From: [email protected]
    To: [email protected]

    12:58a ET Tuesday, June 25, 2002

    Dear Friend of GATA and Gold:

    The lead story at TheMiningWeb.com is
    headlined, "Uproar over RBC gold conspiracy
    report." The summary on TheMiningWeb.com's
    home page says: "Royal Bank of Canada has
    repudiated a report issued under its name
    that repeated claims of a conspiracy to
    suppress the price of gold. Knives are out
    for GATA boss Bill Murphy, with opponents
    dredging up old futures trading violations
    against him."

    You can find the story here:


    Or if that link is too long for you, just go
    to the home page:


    Meanwhile, the Toronto Globe & Mail has new
    commentary on the controversy, which was
    posted on the newspaper's Internet site
    Monday afternoon and well may appear in its
    print edition today. I'll append that text.

    Some of us are a little puzzled by all the
    fuss. If, as Royal Bank says, the bank's gold
    conspiracy report is no more than a
    memorandum for internal use signifying only
    the views of one bank employee, practically
    meaningless; if, as the Globe & Mail's
    commentary speculates, GATA is just a bunch
    of conspiracy nut cases cast off from "The X-
    Files"; and if the gold market is actually
    entirely normal ... why should anyone be
    upset at all?

    Why? Probably because as GATA's contentions
    seep into the mainstream press around the
    world, there is growing danger that an
    enterprising journalist or two will pose a
    few inconvenient questions to government
    officials, and one thing will lead to
    another, and before you know it, a free
    market in gold might break out somewhere.

    The funny -- and, so far, tragic -- thing
    is that the conspiracy GATA has been talking
    about is quite an open one, a matter of
    public policy and public record.

    The European central banks gathered in
    Washington and announced their plans to
    regulate the gold price by regulating their
    own gold leasing.

    Fed Chairman Alan Greenspan testified to two
    congressional committees about this central
    bank regulation of the gold price. Greenspan
    said: "Central banks stand ready to lease gold
    in increasing quantities should the price

    And GATA has issued dozens of reports,
    archived on the Internet, compiling the hard
    evidence of collusion against the gold price.

    The question is not at all whether there is
    a conspiracy to control the gold price; the
    only questions are just how far this
    conspiracy extends, exactly which mechanisms
    are used to implement it, and the propriety
    of all it.

    Of course it is more difficult, and dangerous,
    to address these questions than to call GATA a
    bunch of "conspiracy nuts."

    No matter. Our skins are thicker than that,
    and now the leading mutual fund manager in
    Canada, whose fund's performance lately is
    the envy of the investment world, has
    proclaimed himself a fellow nut case.

    Welcome to Chumley's Rest, Mr. Embry. Allow
    me to introduce you to a very dear friend of
    mine. No, not the big rabbit -- Bill Murphy!

    As they say in the reruns, "The truth is out
    there." GATA promises new episodes soon.

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

    * * *

    A gold-plated conspiracy theory

    By Mathew Ingram
    Toronto Globe & Mail
    Online Edition, Posted at 4:52 PM EST
    Monday, June 24, 2002

    Imagine the excitement last week at the
    headquarters of GATA -- the Gold Anti-Trust
    Action Committee -- when noted Royal Bank
    mutual fund manager John Embry issued a
    report referring to a price-manipulation
    conspiracy in the global gold market. For
    GATA, which has been preaching that message
    for years now, it was probably a bit like the
    U.S. government admitting that yes, there was
    a top-level CIA plot to assassinate former
    President John F. Kennedy, and the whole
    lone-gunman theory was just a crock.

    Gold conspiracy theorists might not like
    being compared with the Kennedy crowd -- which
    is so synonymous with loopy theories that a
    group of geeky true believers on "The X-Files"
    were known as "the lone gunmen" -- but GATA is
    seen in a similar light by traditional gold
    watchers. The Embry report is "tremendous
    credibility," GATA chairman Bill Murphy said.
    "Most of the gold world thought we were
    idiots. It turns out we're right."

    The Royal Bank seemed less than impressed at
    being allied with the gold conspiracy camp,
    however. Mark Arthur, head of Royal Bank
    Investment Management, said Mr. Embry's
    report was done for internal use and "in no
    way reflects the views of Royal Bank." He
    described it as "a collection of various
    arguments for gold stocks" that was part of a
    larger discussion. But it was clear that GATA
    members saw it as an endorsement by RBC.

    Mr. Embry is not a crank -- he is one of
    Canada's leading fund managers. In his
    report, he lists several reasons why gold
    prices could rise, including "increasing
    evidence of unsustainable gold price
    manipulation." He refers to gold sales by New
    York's Federal Reserve Bank, the timing of
    gains in the government's Exchange
    Stabilization Fund, and a statistical
    analysis that shows "high probability of
    price suppression."

    As jubilant members pointed out in e-mails,
    the report was a vote of confidence in the
    group, which makes many of the same points.
    For the past few years, Dallas-based GATA has
    been engaged in a crusade of sorts to prove
    that various central banks and the world's
    major gold traders -- or "bullion banks" --
    have been manipulating the price of gold in
    order to keep it low. Bullion banks lend to
    short-sellers (who profit if the price falls)
    and also engage in hedging trades with
    various gold producers.

    GATA launched a lawsuit last year against the
    Bank of International Settlements -- the
    central bank of central banks -- as well as
    Fed chairman Alan Greenspan and a number of
    commercial banks, alleging that they engaged
    in a conspiracy to manipulate gold prices.
    Why would a global conspiracy want to keep
    the gold price low? A couple of reasons, GATA
    says. For one thing, banks such as J.P.
    Morgan and Goldman Sachs make a nice return
    lending their gold and investing the proceeds
    in other financial instruments, and they
    generate better returns if the price of gold
    is low.

    GATA also says the U.S. and other governments
    are concerned that the world's banks have
    sold so much gold in the past that a run on
    bullion could trigger a global financial
    meltdown. According to the group, world gold
    demand exceeds supply by 1,500 tonnes, and if
    there were no price manipulation, bullion
    would be $800 (U.S.) an ounce instead of
    $350. GATA also says the "notional value" of
    the gold contracts held by U.S. banks is $87
    billion, or greater than that country's
    entire gold reserves of 8,140 tonnes. The
    World Gold Council, of course, disputes most
    of these figures.

    The driving force behind GATA is Chairman
    William J. Murphy III -- a former wide
    receiver for the Boston Patriots football
    team who later became a futures trader. Other
    executives with the group include Chris
    Powell, managing editor of a daily newspaper
    in Connecticut, and Reginald Howe, a graduate
    of Harvard Law School who runs a private
    investment fund. Proponents of its price-
    manipulation theories have included such
    market luminaries as John Willson, the former
    CEO of major gold producer Placer Dome.

    Part of what makes GATA's arguments
    attractive is that the gold market is
    notoriously shadowy and complex -- even more
    so than other commodities. Fans of the price-
    manipulation theory like to point out that
    the U.S. Treasury and various central banks
    were involved in price-rigging in the late
    1960s through the London Gold Pool. After the
    rigging program ended, the price of gold soon
    soared to a high of $800 an ounce.

    So if there's a global effort to manipulate
    the price of gold in order to keep it low,
    why has gold been climbing higher for the
    past few months? Simple, the conspiracy
    theorists say: the plot is finally coming
    apart at the seams, and as it unravels it
    will push the gold price even higher. The
    only problem with this argument, as more than
    one observer has noted, is that it relies on
    the logical fallacy of circular reasoning, in
    which a lack of evidence is seen as further
    proof of a vast conspiracy -- since a
    conspiracy would naturally suppress any
    evidence of its existence.

    How come FBI special agents Mulder and Scully
    never got into this one while the X-Files was
    still on?



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    Centennial Precious Metals
    3033 East 1st Ave.
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    Michael Kosares, Proprietor
    US (800) 869-5115
    Canada 1-800-294-9462
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    [email protected]

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    Ed Lee, Proprietor
    [email protected]

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    Swiss America Trading Corp.
    15018 North Tatum Blvd.
    Phoenix, Arizona 85032
    Dr. Fred I. Goldstein, Senior Broker
    [email protected]



    If you benefit from GATA's dispatches, please
    consider making a financial contribution to
    GATA. We welcome contributions as follows.

    By check:

    Gold Anti-Trust Action Committee Inc.
    c/o Chris Powell, Secretary/Treasurer
    7 Villa Louisa Road
    Manchester, CT 06043-7541

    By credit card (MasterCard, Visa, and
    Discover) over the Internet:


    By GoldMoney:

    Gold Anti-Trust Action Committee Inc.
    Holding number 50-08-58-L

    By E-Gold:

    Gold Anti-Trust Action Committee Inc.
    Account number 110915

    Donors of $750 or more will, upon request,
    be sent a print of Alain Despert's colorful
    painting symbolizing our cause, titled "GATA."

    GATA is a civil rights and educational
    organization under the U.S. Internal Revenue
    Code and contributions to it are tax-deductible
    in the United States.


    Le Metropole Cafe

    All the best,

    Bill Murphy
    Le Patron

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