From: GATAComm@aol.com
Date: Thu, 22 Feb 2001 18:41:52 -0000
Subject: [GATA] Turmoil behind the scenes: something is up with gold

1:38p ET Thursday, February 22, 2001

Dear Friend of GATA and Gold:

GATA Chairman Bill Murphy has allowed me to share with
you the following alert he dispatched today to his
subscribers at www.LeMetropoleCafe.com.

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

* * *

By Bill Murphy
www.LeMetropoleCafe.com
February 22, 2001

Rumors are flying in the gold world that an
announcement of some kind will be made soon regarding
the gold market.

Of most importance is that gold lease rates, especially
the short rates, have begun to rise dramatically. The
one-month lease rate has risen from 0.7% to 1.75
percent over the past month and is starting to spike
up. The short-term rate has also inverted over the
longer rates, which is an aberration.

There is much to digest in all of this.

First, I am told that the lendable gold outside of the
big central banks has been exhausted. That makes sense,
as we have noted that in recent months the gold cartel
has called on Sri Lanka, Bangladesh, and Uruguay to
lend their gold.

We are also hearing that it is the large central banks
holding down gold now even though they have been told
that this does does serious damage to poor gold-
producing countries.

But there appears to be a severe shortage of physical
gold. Word has it that the Bank of England is very slow
in settling its gold transactions and that this is
causing great nervousness in the physical market.

Two sources have told me that they are hearing that
there will be some kind of new Washington Agreement
type of announcement by the agreement's 15 signatories
to the effect that they are further reducing their
lending.

That would be a bombshell. As I reported in last
night's "Midas" commentary, Frank Veneroso thinks the
gold loans could be as high as 17,000 tonnes, more than
three times the acknowledged figure, and that the
yearly supply/demand deficit is running around 2,000
tonnes.

In other words, no matter what the central banks do,
they are going to run out of gold in the near future
unless the price rises dramatically to slow down
demand.

There is something else. As the Gold Anti-Trust Action
Committee has reported often, the Bush administration
and Treasury Secretary Paul O'Neill have stated
publicly that they are for free markets and against
market interventions, which eventually backfire.

O'Neill just came back from the G-10 economic summit.
He and the Treasury Department must respond by March 15
in U.S. District Court in Boston to the Howe/GATA
lawsuit about rigging of the gold market. It is likely
that O'Neill told the G-10 conference that the United
States will no longer support rigging he gold market as
did Clinton, Rubin, and Summers.

That would fit in with everything else we know since
the Bush administration took over. Real economic data
is being reported now instead of phony numbers. The
action of the stock market is totally different. The
Clinton scandals never end. But the biggest one of all
is what the Clinton administration did to gold to
benefit the rich at the expense of the poor African
gold-producing countries. The U.S. policy toward gold
under Clinton contributed to death and economic
devastation in those countries.

I just received the following from South Africa about
speculation in that country.

"Via a chain of contacts, I was informed that there
exists some evidence that your quickly arranged visit
to the South African Reserve Bank just before you left
South Africa was not intended to offer you an
opportunity to sell them on GATA but to find out
quickly exactly what GATA knew. Some officials you
spoke to in Cape Town were concerned that GATA had more
facts than was suspected -- by the Hannibal Lecters of
this world?? -- and that it was important to find out
what these were so that countermeasures could be
taken."

Well, if that was the case, the Reserve Bank of South
Africa did learn that GATA and Reg Howe have this thing
nailed and that the cabal has been found out. It was
the most complete and best presentation I ever gave. If
they did not know before, they know now that the jig is
up for the gold cartel.

And finally, what better time than to dump a new
scandal on the Clinton administration? What else is
new?

Gold is higher on the day and has made a succession of
new highs. That is a change in the trading pattern of
recent weeks and months.

Some exciting times could be upon us.

-END-