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Goldgate Cover-up Latest: Fed's Mattingly, Greenspan Bamboozle Senator Bunning

July 23, 2001




Washington, D.C. 20551

June 25, 2001




The Honorable Jim Bunning

United States Senate

Washington, D.C. 20510

Dear Senator:

Thank you for your recent letter requesting information related to an inquiry received from two of your constituents, Mr. and Mrs. Rupert Raymond. The Raymond's letter principally concerns remarks made at a January 1995 meeting of the Federal Open Market Committee (FOMC) by Virgil Mattingly, in his capacity as general counsel to the FOMC. A memorandum addressed to me from Mr. Mattingly on this matter is enclosed for your information. The memorandum responds to the matter raised by the Raymonds in their letter.

I would like to take this opportunity to confirm the statements I made last year regarding the Federal Reserve and gold in a letter to one of your colleagues, Senator Joseph Lieberman. In that letter I said:

"The Federal Reserve owns no gold and therefore could not sell or lease gold to influence its price. Likewise the Federal Reserve does not engage in financial transactions related to gold, such as trading in gold options or other derivatives. Most importantly, the Federal Reserve is in complete agreement with the proposition that any such transactions on our part, aimed at manipulating the free price of gold or otherwise interfering with the free trade of gold, would be wholly inappropriate."

These statements accurately reflect the facts and long standing Federal Reserve policy to gold.

I hope this information is helpful. Please let me know if I can be of further assistance.


Alan Greenspan


June 8, 2001


TO: Chairman Greenspan

FROM: J. Virgil Mattingly

SUBJECT: Inquiries regarding "gold swaps"

This memorandum responds to your request for information related to recent inquiries the Federal Reserve has received regarding remarks I made at a January 1995 meeting of the Federal Open Market Committee ("FOMC") in my capacity as general counsel.

These inquiries focus primarily on a statement attributed to me that appears on page 69 of the published transcript of the January 31-Feb1, 1995, FOMC meeting to the effect that the Exchange Stabilization Fund ("ESF") has engaged in "gold swaps." Given the passage of time, some six years, I have no clear recollection of exactly what I said that day but I can confirm that I have no knowledge of any "gold swaps" by either the Federal Reserve or the ESF. I believe that my remarks, which were intended as a general description of the authority possessed by the Secretary of the Treasury to utilize the ESF, were transcribed inaccurately or otherwise became garbled. The Federal Reserve's lack of involvement with gold and gold-related financial instruments is set forth accurately in your January 19, 2000, letter to Senator Lieberman, a copy of which is attached. My remarks should not be interpreted as modifying in any respect what is set for that letter.

With respect to activities of the ESF, I note the Treasury Department stated in a recent federal court filing that the ESF has not held any gold since 1978.


My take on the Alan Greenspan and Virgil Mattingly gold matter:

*Greenspan most certainly presided over this 1995 FOMC meeting and does not want to deal with the truth and the facts. Thus, he turned to Mattingly.

*Greenspan does not want to discuss the gold swaps and what is really going on with America's gold so he hid behind Mattingly, using him for cover.

*It appears that Greenspan has not responded to anyone since his response to Lieberman 18 months ago. GATA's stepped up letter writing to many members of Congress has him backpeddling.

*It is clear that Greenspan briefed Mattingly and the direction of his response, a la supplying him with a copy of his letter to Lieberman and the Fed's party line.

*Mattingly, an accomplished attorney, is full of it. His response does not pass the smell test. GATA has the transcript of the 1995 FOMC meeting. Garbled?? Transcribed inaccurately?? No way!

"It's pretty clear that these ESF operations are authorized. I don't think there is a legal problem in terms of the authority. The statute [31 U.S.C. s. 5302] is very broadly worded in terms of words like ‘credit' -- it has covered things like the gold swaps -- and it confers broad authority." [Emphasis supplied.]


What do you think?

*There was no letterhead on Mattingly's memo, nor did he sign it. Did Mattingly even write it in the first place?

*Mattingly has Reg Howe's Complaint on his mind as noted in his memo.

*Once again the line from the Treasury's response to Massachusetts Federal District Court shows up: "the ESF has not held any gold since 1978."

It represents more disinformation, utilizing Clinton type "definition of is" language. Maybe they have not "held" gold since 1978 but they surely have been dealing in it based on all the evidence the GATA camp has uncovered and published.

It appears that our Government is engaged in a massive gold market cover-up to conceal the truth from the American public about their extensive operation to manipulate the price of gold. Fortunately, due to the pressure that GATA supporters are putting on them, they are making mistakes with increasing speed and regularity. As each week passes, they truly are looking more like "The Gang That Couldn't Shoot Straight."

They certainly are incapable of giving the "straight scoop" to members of Congress and to all other inquirers.

*Alan Greenspan's response to Senator Bunning sidesteps the questions asked of him by the Raymonds and specifically whether "gold swaps" were discussed at a specific FOMC meeting.

In and of itself, the response by Greenspan and Mattingly might not be so remarkable but when it is heaped on top of the other recent disclosures of the Treasury's disinformation and cover up maneuvers, it looks like a pile of manure.

Let us review the incriminating FACTS regarding the cover-up. To scrutinize the facts in detail, please review Reg Howe's "Judicial Holding Pattern: Giving the Defendants Plenty of Rope" at The Matisse Table below:

*The Fed has suddenly stopped reporting gold held by the ESF. That means that we can no longer monitor:

*Discrepancies between the Fed's gold certificate account, which by law must include certificates for all gold held by the Treasury, and the total U.S. gold stock, including gold held by the Exchange Stabilization Fund, of the Federal Reserve Bulletin. By definition, these discrepancies reflect positive or negative month-end gold balances at the ESF, and thus necessarily imply corresponding gold trading activities by the ESF.

*Close inspection reveal extensive trading activity in the Summary of financial statements for the ESF which are included the quarterly U.S. Treasury Bulletins. Yet, Treasury Secretary O'Neill said the following to Congressman Ron Paul before a House Financial Services Committee meeting, "My memory is that last year there was one transaction. It was a fairly small transaction involving an agreed intervention vis-a-vis the yen. It was the only transaction last year. I can assure you…."

*That does not fly. As Reg Howe comments about O'Neill, " he says nothing to explain how this "one...fairly small transaction" produced significant trading losses at the ESF in the two quarters preceding it, or why it caused such a large loss in fourth."

*In September, 2000, Over 54 million ounces of gold, reportedly held at the U.S. Mint at West Point, New York, were switched from the "Gold Bullion Reserve" category to "Custodial Gold Bullion" (in the Financial Management Service / Department of the Treasury Website) without footnote or explanation. This amounts to the apparent loss of gold ownership of over 20% of the total U.S. gold reserves previously thought to be part of our national asset base. "Reserves" obviously connote ownership while the connotation "Custodial" refers to taking care of another’s property. The 48 million plus ounces at the U.S. Mint at Denver, Colorado continued to be reported as "Gold Bullion Reserve". This reporting was both before and after the September change of reclassification of gold at the U.S. Mint at West Point, New York and no other "Custodial" positions for any other location have ever been reported.

To further confuse the issue, the categories of "Reserve" and "Custodial" gold have both been eliminated as of the May 2001 report. Both categories were consolidated and are now categorized and labeled "Deep Storage Gold."

Could the "Duck" story ever be more appropriate - ie, if it looks like a duck, quacks like a duck and walks like a duck, it most likely is a duck? Well, Greenspan and O'Neill are "ducking" the truth about what the U.S. is doing to manipulate the gold price. Gold acts like it is being manipulated, looks like it and the "quacking" Abbot and Costello "Whose on First" type reactions by the U.S. Government to cover up their gold market activities is proof that the GATA camp is correct and has them nailed.

This is a national disgrace! No wonder former Baseball Hall of Fame pitcher, Kentucky Senator Jim Bunning said the following at the Hearing on the Fed Nomination of Roger W. Ferguson, Jr. on June 13, 2001:

Mr. Chairman, I would like to thank Dr. Ferguson for testifying today and I would like to thank you for holding this hearing.

Dr. Ferguson, I appreciate your coming to see me last week.

I think we covered a lot of ground.

As you know, I expressed my strong concerns with the Fed talking about the financial markets. Obviously, every time the Chairman speaks, the markets listen.

But I am concerned that the Fed has tried to influence market levels.....


Senator Bunning is a man for GATA supporters to focus on as he is a member of the Senate Committee on Banking, Housing and Urban Affairs. He is also chairman of both the Subcommittee on Economic Policy and the Subcommittee on Financial Institutions and the Subcommittee Securities, which oversees banking insurance, securities and consumer protection.

Might Senator Bunning finally be the politician who will not stand for these un-American activities by seeking out the truth and confronting this nonsense?

*Neither former Treasury Secretaries Rubin and Summers, nor Treasury Secretary O'Neill, have addressed any member of Congress in writing regarding any questions asked of them regarding gold. No one at the Treasury has yet answered any questions regarding what prompted the September reclassification of the gold at West Point to "custodial" status, or more specifically, whether this changed status indicated that the gold had been committed to one or more swap transactions.

Could it be any more obvious that they are hiding something, trying to cover up their gold activity? The lessons of Watergate have gone for naught. It seems that the U.S. Government is proving GATA's case for us. It certainly is easier now for the average laymen to understand the something is VERY wrong. Why else would the Treasury and The Fed be jumping through hoops to avoid telling the simple truth?

The cover-up of the Watergate burglary is what did the Nixon Administration in. This cover-up is far more serious as it affects many governments, the economies of the poor gold producing nations, and perverts the integrity of the American financial system. It also makes a mockery of our Justice system and rule of law.

Is this the America you want your children and grandchildren to inherit? If not, keep the pressure on the Treasury and Greenspan by contacting and re-contacting your Senators and Congressman regarding the cover-up. Our tactics are working. The U.S. Government is out of control on this one. Fortunately, their "slip is showing" and they are clearly "losing it." GATA's "Enveloping Horn" army has them staggered to a significant degree. We must keep the pressure on them and we will.

It is time to win the day!

Minting of gold in the U.S. stopped in 1933, during the Great Depression.
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