Gold 'plot' seems to hold more bull than bullion By Ingrid Salgado Business Report, South Africa http://www.businessreport.co.za May 13, 2001 DURBAN -- Outspoken supporters of the Gold Anti-Trust Action Committee (GATA), the Texas-based group that believes the world's central banks are colluding to squash the gold price, are few and far between. So it was hardly surprising that not a single South African mining house, African government, or trade unionist was prepared this week to openly back the men who believe gold-producing African countries have suffered at the hands of the world's biggest bullion banks. Led by chairman Bill Murphy, the self-styled modern-day Robin Hood, GATA arrived in South Africa this week to tout its theory that central banks are manipulating the gold price to stall the fallout from alleged excessive lending of their bullion reserves to top trading houses. Murphy lectured on Thursday that Africans "deserve to know the truth" about a scandal that would make the U.S. Watergate presidential disgrace "look like child's play." Listening to the speeches that were peppered with phrases like "this cannot be coincidence," "Clinton administration scandal," and "hypocrisy of the most outlandish order" were representatives of mining houses Anglogold, Goldfields, and Durban Roodepoort Deep, the National Union of Mineworkers (NUM), and the governments of South Africa, Ivory Coast, Ghana, and Swaziland. But while GATA was able to attract an array of executives to its seminar, it was less successful at holding their attention. "We've heard this all from GATA before," said one gold producer. "They're presenting no new evidence." This opinion was best illustrated by the intermittent snores of a U.S. businessman during a dry lecture given by Reginald Howe, the lawyer who is leading GATA's court action against Alan Greenspan, U.S. Federal Reserve chairman, and others. The lawsuit is highly complex but, in a nutshell, Howe is seeking damages for the private shares he held in the Bank for International Settlements (BIS) that were repurchased by the bank. GATA claims that the BIS, as the central bank of central banks, has facilitated the bullion borrowings at the centre of its price-fixing allegations. The action has been launched in the Massachusetts district court against the BIS, Greenspan, and investment houses J.P. Morgan and Chase Manhattan (which have since merged), as well as Citigroup, Goldman Sachs, and Deutsche Bank. The court papers cite Anglogold and Canada's Barrick Gold, the world's biggest gold producers, as having "material knowledge" of the bullion banks' alleged price fixing. Steve Lenahan, an Anglogold executive who attended GATA's summit, said: "We know there's an element in the court papers which is absolutely wrong, and it makes us question all the other assertions made by GATA in general and Mr. Howe in particular, because it's asserted with the same authority." Ironic, then, that Anglogold was among the South African mining houses that donated funds to GATA when it was formed two years ago. Lenahan said Anglogold had endorsed GATA's call for greater transparency in the flows of gold in official sectors. "But we don't draw the same conclusions from their assertions. We see no evidence at all for manipulation of the price of gold." Other gold producers, although concerned at unusual movements in the price of bullion over the last five years, are believed to be reluctant to throw their weight behind GATA because of the potential fallout should GATA's court action fail. According to Gino Govender, strategy co-ordinator for the NUM, it would be "difficult for us to say whether they [GATA] are right." "They certainly have a compelling argument. If their theory is true, it augurs well for the gold mining industry of South Africa." This potential for a gold rally is what GATA has emphasized in its efforts to pull in African nations as allies against the world's most powerful institutions. That the plan to take on the Fed is being launched from Durban seems somewhat odd. But Murphy refers to GATA's "battle plan" being based on the "enveloping horn" strategy favoured by "one of Africa's greatest generals," King Shaka. And, said Murphy, he had enlisted the support of the Zulu royal family after meeting King Goodwill Zwelithini on a previous visit. This led to meetings with Phumzile Mlambo-Ngcuka, the minerals and energy minister, and the Reserve Bank. -END- Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/