By Bill Murphy, Chairman Gold Anti-Trust Action Committee Inc. March 22, 2001 Weeks ago I let you know that the office of South African President Thabo Mbeki called GATA's office in Durban, South Africa, and asked to be kept abreast of GATA developments. The following email was sent to me this morning and forwarded to the president through proper channels. It was sent to him because it also expresses my sentiments and represents an aspect of what my presentation will entail at the GATA Africa Gold Summit. I would like to make it very clear that what was sent to the president is not coming from Reg Howe but from me. Reg will not discuss his thoughts or how he intends to proceed over the phone or by email, as we all realize that we are monitored by the gold cartel. As Reg is going to respond to U.S. District Court in Boston regarding all defendant responses by April 30, he will be able to explain his position at the summit, as his legal response will be public information at that time. >From MB, a very savvy member of www.LeMetropoleCafe.com: "As I read Adam's scanned filing of Reg's court papers on Page 17, the Treasury Department seems to say that whatever it was that they DID with respect to horizontal price fixing in the gold market ... they're immune from the Sherman Act anyhow. "If this IS their defense, President Mbeki isn't going to be too happy when he hears about it. He will naturally react the way anyone would, demand from Secretary O'Neill a specific answer to the following question: 'Are you or are you not manipulating the price of our principal export product, thus directly causing the loss of 170,000 jobs in our mining industry? We are NOT interested in whether you and your lawyers claim that the United States has the right to do so.' "I think that this defense may draw President Mbeki much closer to GATA, something the cartel should fear. "Imagine General Powell's reaction should the South African ambassador to the United States pose those questions. "It seems possible that Treasury's lawyers have overlooked the foreign policy aspects of what Reg has eloquently called New York/British gold imperialism. "Second, their quick reference to the Gold Reserve Act of 1934 is a plus for us, since the whole act is a minefield for Treasury with its creation of new powers over Congress via the ESF. "I'm taking all this as a plus since Treasury has not explicitly denied the charges of horizontal price fixing and thus has left itself open to more questions. Combined with the calls from Larry Kudlow, Wayne Angell, and Steve Forbes for a higher gold price, the secretary of the treasury must be about fed up with the 'gold thing.' "One way for him to make all this go away is to let gold loose and lay the blame where it belongs: at the feet of the architect of PardonGate." Not to go unnoticed in the future by the Justice Department during its coming investigation of the gold market scandal..... Note the startling increase in the short interest in the following gold stocks since March 15, 2001, according to today's Wall Street Journal: Barrick, up 27.51% Newmont, up 45.95% Homestake, up 83.48% Placer Dome, up 90.9% Wonder who the shorts are? Overly hedged Australian gold producers and a few South Africans have to be more than a bit nervous about the deterioration of the Aussie and South African currencies. They are headed for oblivion, as the Aussie dollar is close to 49 and the Rand was last seen around 8.05 to the U.S. dollar. Unless these currencies soar when gold rallies sharply, which is coming, the hedge books of any heavily hedged gold producers are going to go deep under water. Crashing stock markets and under-water gold hedge books do not let bullion bankers sleep well at night. Commodity prices have been really hit hard lately. The CRB has tanked from the low 230s to finish today all the way down to 213.08. If gold had been allowed to trade freely the past seven years, that could have been a very big negative for the gold price. As is, it is meaningless. Technically, the top in the Dow Jones Industrial Average is one of the largest I have ever seen. It forebodes a protacted, ugly bear market. The Dow, down another 98 points, and most stocks in the United States were battered once again today. The main stock indices have registered bear market signals. What is it going to take to turn the elves on Wall Street Week bearish? When will Wall Street suggest to investors that we are in a bear stock market? The strength in the Nasdaq is coming from the semi-conductors, yet their business stinks and is worsening. Micron's margins have gone from 50 percent to 19 percent, and they could even be losing money now. Projections are not constructive. The hedge funds have made big money by shorting the semi's. Are the big mutual funds trying to run them in to stem the general high-tech bearish investor sentiment and selling of the tech shares by the public? Anyone have any knowledge of such goings on? Is the tide turning on the reckless central banks? Today, from www.msnbc.com/news: BOE facing lawsuit over BCCI Bank could see civil case claiming $781 million in damages LONDON, March 22 -- The Bank of England is to face legal action over its supervision of collapsed Bank of Credit and Commerce International following a ruling in Britain's House of Lords on Thursday As stated for a long time now, the backlash against Wall Street is going to grow and grow and grow. And for very good reasons: JP Morgan reins in analysts Financial Times Wednesday, March 21 The independence of JP Morgan's stock market research is being questioned after analysts at the U.S. investment bank were instructed to seek approval from corporate clients before publishing recommendations on those stocks. In a memorandum circulated to JP Morgan analysts last week, Peter Houghton, head of equity research, said he must personally sign off all changes in stock recommendations. In addition, the memo further sets out rules, described as "mandatory," requiring analysts to seek out comments from both the companies concerned and the relevant investment banker at JP Morgan, prior to publishing the research. Mr. Houghton then says: "If the company requests changes to the research note, the analyst has a responsibility to incorporate the changes requested or communicate clearly why the changes cannot be made." In a further effort to ensure nothing slips through the net without being reviewed by the corporate financiers, JP Morgan requires prior to release of the research note, "the client banker" e-mails his approval to the publishing department. The attempt by JP Morgan to discipline its analysts will ring alarm bells among fund managers and investors. Concern is mounting over the integrity of research published by large investment banks where the main driver of business is not selling shares to investors but fees for advice on mergers and takeovers. "This is slavish subservience of analysts to bankers," an analyst at a rival firm said. In his report to The Treasury, Paul Myners criticised the relationship between brokers and fund managers and suggested fund managers should develop their own in-house research teams. Mike Crawshaw, co-head of research at Schroder Salomon Smith Barney, confirmed that it was not unusual to let corporate clients see research before it was released, but there he drew the line. "There are pressures from corporate relationships but putting the onus on the analyst to justify himself, that is definitely wrong." In the final paragraph of the memo, Mr. Houghton states that independence and integrity are vital to the firm. "The procedures outlined above do not represent an approval process but a communication process," he says. Terry Smith, head of research at Collins Stewart, said the constraints on analysts at large firms were increasing. "It is a bit like a judicial system where the accused decides the outcome." Mr. Smith fought a legal battle with his former employer, the investment bank UBS, over the publication of a book about dubious accounting practices which mentioned UBS clients. Yesterday he pointed to the recent flotation of Orange, where analysts were barred from briefings unless they agreed to have research vetted by the company. The urgent language of the memo and its tone suggest that the firm is seeking to rein in its research team at a time when investment banking revenues are drying up. Mr Houghton acknowledges the difficulties of a bear market in his memo, thus: "Downgrade notes obviously attract more attention than upgrade notes and we need to reflect this in our procedures." One analyst at another firm said: "How are we supposed to earn a living? There is no corporate business this year." This is pathetic. And what an outrage. How are 170,000 out-of-work miners in South Africa and miners in other parts of the world to earn a living after what Morgan and Chase have done to the gold price these past years? Poor old JP Morgan millionaires. As it relates to gold and as we all know, this same JP Morgan Chase is the big gold short at the moment. They are the ones with the massive gold derivatives on their books. They are among the ones that are putting pressure on gold producers to hedge forward so that they can make their fees, "make their living," and protect their massive gold short positions. It is only a matter of time now before Deutsche Bank, Goldman Sachs, Chase, and Morgan are paraded in front of the world in disgrace as the jaded hypocrites that they are. It cannot come soon enough for me. -END- ------------------------ Yahoo! Groups Sponsor ---------------------~-~> <FONT COLOR="#000099">Get great low international calling rates from Net2Phone! Click Here! </FONT><A HREF="http://us.click.yahoo.com/fBRVBB/kJXCAA/4ihDAA/WyOVlB/TM"><B>Click Here!</B></A> ---------------------------------------------------------------------_-> Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
