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6:30p EDT Thursday, August 24, 2000

Dear Friend of GATA and Gold:

GATA member and consultant Ethan B. Stroud, formerly
a lawyer for the U.S. treasury and justice departments,
now in private practice in Dallas, Texas, has sent the
letter below to the U.S. Commidity Futures Trading
Commission. GATA encourages its friends to send similar
letters and advise us of any replies.

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

* * *

ETHAN B. STROUD
ATTORNEY AND COUNSELOR AT LAW
DALLAS, TEXAS

August 21, 2000

William J. Rainer
U.S. Commodity Futures Trading Commission
1155 21st N.W.
Washington, D.C. 90262-0581

Dear Sir:

This letter is written as a formal complaint concerning
the illegal price manipulation of gold and gold
derivatives by numerous bullion banks and brokerage
houses. This unlawful price fixing has been continuous
since 1996. It is respectively requested that an
investigation be made by the Commodity Futures Trading
Commission into this unlawful and illegal activity.

Background: The worldwide demand for gold has been
approximately 4,900 tons per year. The annual supply
from gold mines has been approximately 2,550 tons. The
world wants but is short 1,800 tons. Past demand has
been partially filled by European central bank sales
and loans. In September 1999, however, 15 European
central banks announced the termination of their gold
sales and loan programs with the so-called Washington
Agreement. Major gold companies followed and have
announced the termination of their hedge and forward
sales programs. Of course, neither the U.S. Treasury
Department nor the Federal Reserve Bank admits to
lending or selling gold.

Circumstantial evidence: Gold demand has increased. The
supply has shrunk. The shortage is 1,800 tons per year.
Logic demands a higher gold price. But gold is at a 22-
year low. During the last few years platinum and
palladium prices have doubled, oil prices have
skyrocketed from $10 to $31.00 per barrel, the CRB
index has moved substantially higher, and the M3 money
supply has increased 50 percent. The gold price during
these years has strangely, suspiciously, and
unnaturally plummeted more than $160.00 an ounce! This
price decline is an aberration and fraud caused by
short selling by rogue banks and brokerage companies
with borrowed gold or paper derivatives.

Gold is scarce and easily manipulated. These illegal
traders have destroyed the free market in gold. They
have caused irreparable harm to mine workers,
employees, corporations, investors, and thousands of
shareholders and threaten other free markets elsewhere.

Prima facie evidence of illegal gold price manipulation
is that J.P. Morgan of New York increased its short
sales of gold derivatives in 1999 from $18 billion to
$38 billion in the last six months of 1999. These facts
are public record in the Office of Comptroller of the
Currency at the Treasury Department in Washington.
Goldman Sachs is not required to make similar filings.
However, its egregious record of short selling at $290
can be affirmed through the trading records of the
Comex exchange.

Gold traders from Morgan and Goldman Sachs as well as
Chase Bank, CitiGroup, and Deutsche Bank have all
conspired to keep the gold price under $290 and have
intentionally moved the price away from a level
reflecting the legitimate forces of supply and demand.
This illegal and unlawful price fixing by these traders
has caused the present and future price of gold to
become artificial and hundreds of dollars below the
present, free, fair-market price.

Remedy: The swift and simple proof of these allegations
will be determined by this commission issuing a cease-
and-desist order prohibiting all these traders from
selling gold. (This is a common equitable remedy to
prevent further irreparable harm and damage.) Within a
few days, after the entry of this order, the present
artificial price of gold will rise to its true fair
market value of $600.

It is therefore respectfully requested that your office
immediately begin monitoring the past and present
trading activity of the above-listed traders with
respect to whether they have intentionally caused the
price of gold to become artificial by their short
selling and have thus unlawfully manipulated the market
price of gold both in interstate commerce and for
future delivery.

Respectfully submitted,

ETHAN B. STROUD