September 1, 2001 Tim Wood www.TheMiningWeb.com Dear Tim: This may be of some interest as a response to your latest essay at www.TheMiningWeb.com, "Gold bulls surrender Labor Day opportunity," which shows much insight. Around 1994 Jimmy DePiazza, Phibro's trader in Connecticut, figured out a way to corner the silver market. Phibro had been taken over by Salomon Brothers, whose chairman was Warren Buffet. Old-timers like myself will remember one of the great coyish plays of all time. It was going into option expiry day with silver trading around $5. Phibro was loaded with $5.20 calls, which had concerned the silver shorts. But with silver at $5, the shorts were relaxed and laughing at what seemed like Phibro's bad trade. The market closed. The shorts were all smiling. Then Phibro announced that it was excercising its $5.20 calls -- calls that were 20 cents above the market. Phibro wanted the silver. The shorts panicked. The price of silver soared the following day and week. Phibro had found a way to corner the silver market. The following week Warren Buffet received a call from the U.S. Treasury Department and was told that squeezing the silver market was not a good idea. The Treasury people did not tell Buffet what to do. They just said that he could very well win the silver battle but that Salomon Brothers would lose the war. For Salomon was under great pressure due to financial market concerns and some bond market scandals, if my memory serves me correctly. Warren Buffet knew just what the government meant: Squeeze silver and you will have every government agency on top of you. Buffet was assured that if Phibro stopped the squeeze, the government would make sure that it lost no money on its trade. So Phibro sold its silver longs. Buffet wanted no part of taking on the U.S. government if it meant dealing with one investigation after another. What would that have cost Salomon in lawyers, accountants, etc. A nightmare for Salomon was thus averted. Tim, that is why no gold Patton has shown up yet. I could go on and on, but I hope I have made my point. If there is a Patton for gold, it is GATA. We have been at this for three years. We knew the scoop that long ago. Where is the rest of the gold world? Why have they not been willing at least to acknowledge the overwhelming evidence GATA has developed? Why won't they even talk about it or suggest that the press do so? Even so, the tide has changed. Make no mistake about it. First you, then John Hathaway, now the Financial Times story about the attempt of the Bank for International Settlements trying to exlain the gold loan situatin. Oh, excuse me, Giacomo Panizutti, head of foreign exchange and gold for the BIS, was speaking only as a private citizen. Can you imagine an IBM senior executive making a statment like that? GATA's two-man army has grown into the thousands. Not a day goes by that one of us does not find more evidence regarding the manipulation of the gold market, disinformation supplied to the gold world, or specific cover-ups in Federal Open Market Committe minutes. Not a day goes by when one of GATA's army is not contacting his members of Congress to go directly to the U.S. treasury secretary to seek answers to reasonable questions about U.S. policy toward gold. There is a Patton out there. It is those inspired citizens all over the world who care about free markets, the truth, and what used to be the American Way. Like the bulldog Patton, the GATA army is winning the day with our own "enveloping horn" strategy, fashioned after Africa's greatest general, Shaka. Based on developments over the last few weeks, it could not be more clear that GATA is now on the offensive. The gold cartel is backpeddling -- most likely terrified of what is happening, knowing that the hearing in Reg Howe's lawsuit in U.S. District Court in Boston faces them on October 9. It is only a matter of time before the big money gets behind us. for the U.S. Treasury is going to be spending too much time defending itself to take on the investment world, which will realize that the Treasury is stuck in the most despicable financial scandal in U.S. history. All the best, BILL MURPHY, Chairman Gold Anti-Trust Action Committee Inc. ________________________ If you benefit from GATA's dispatches, please consider making a financial contribution. GATA welcomes 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 USA By credit card (MasterCard, Visa, and Discover) over the Internet: http://www.gata.org/creditcard.html By bank wire: Gold Anti-Trust Action Committee Inc. c/o Savings Bank of Manchester 923 Main St. Manchester, CT 06040 USA Bank routing number 211-170-185 For account number 9500-574-053 By Gold Money: http://www.GoldMoney.com Gold Anti-Trust Action Committee Inc. Account number 50-08-58-L By E-Gold: http://www.e-gold.com Gold Anti-Trust Action Committee Inc. Account number 110915 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. -END- ------------------------ Yahoo! Groups Sponsor ---------------------~--> <FONT COLOR="#000099">Learn Trading Tips the Professional Traders Use! 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