Sent: Friday, January 26, 2001 5:56 AM
Subject: MORE ON GREENSPAN MARKET MANIPULATION LAWSUIT
Subj:[GATA] South African paper raises illegal gold
manipulation issue Date:1/25/01 11:41:08 PM Central Standard Time
From: [EMAIL PROTECTED] (GATA Committee) To:
[EMAIL PROTECTED]
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 "bear considerable
confidential knowledge" of the conspiracy and that they profit from
it, but that they "apparently do not play a significant role in the
execution of the conspiracy."
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 "among the greatest scandals in economic
history."
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.
"If we had known that the gold price was being
held down, we would have hedged considerably more of our production,"
says Kelvin Williams, Anglogold's marketing director. "We hedge only 20
percent of our output -- relatively little in comparison with other
producers."
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.
"We support any endeavour whereby gold would benefit,"
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 "conspiracy" 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.
-END-
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