GATA Urges Support For Congressmen Ron Paul's Gold Transparency Bill

Business Wire, March 4, 2002

Business Editors & Political Writers

DALLAS--(BUSINESS WIRE)--March 4, 2002

Research by the Gold Anti-Trust Action Committee Inc. has been cited by U.S. Rep. Ron Paul, R-Texas, in support of his legislative proposal to prevent the U.S. government from intervening in the gold market without authorization from Congress.

Paul's Monetary Freedom and Accountability Act, H.R. 3732, originates in concerns that the U.S. government, acting through the Federal Reserve Board, the Treasury Department, and the Exchange Stabilization Fund, has been surreptitiously suppressing the gold price in order to distort general measures of the U.S. and world economies.

GATA, an international civil rights and educational organization, was cited by Paul both in a statement in the Congressional Record and in a letter to all members of the House of Representatives soliciting support for his bill.

Paul's office says the Monetary Freedom and Accountability act needs support from all members of Congress but particularly from these members:

-- Rep. Michael Oxley, chairman of the House Financial Services Committee

-- Rep. John LaFalce, the committee's ranking Democratic member

-- Rep. Peter King, chairman of the Subcommittee on Domestic Monetary Policy

-- Rep. Carolyn Maloney, the subcommittee's ranking Democrat

-- House Speaker Dennis Hastert

-- House Republican Majority Leader Dick Armey

-- House Democratic Minority Leader Richard Gephardt

All members of the House can be reached by mail at U.S. House of Representatives, Washington, D.C. 20515.

Paul's statement in the Congressional Record and his letter to his colleagues follow:

Congressional Record, February 14, 2002

Statement by U.S. Rep. Ron Paul of Texas

Mr. Speaker, I rise to introduce the Monetary Freedom and Accountability Act. This simple bill takes a step toward restoring Congress' constitutional authority over U.S. monetary policy by requiring congressional approval before the president or the treasury secretary buys or sells gold.

Federal dealings in the gold market have the potential to seriously disrupt the free market by either artificially inflating or deflating the price of gold. Given gold's importance to America's (and the world's) monetary system, any federal interference in the gold market will have ripple effects through the entire economy.

For example, if the government were to intervene to artificially lower the price of gold, the result would be to hide the true effects of an inflationary policy until the damage was too severe to remain out of the public eye. By artificially deflating the price of gold, federal intervention in the gold market can reduce the values of private gold holdings, adversely affecting millions of investors. These investors rely on their gold holdings to protect them from the effects of our misguided fiat currency system.

Federal dealings in gold can also adversely affect those countries with large gold mines, many of which are currently ravished by extreme poverty.

Mr. Speaker, restoring a vibrant gold market could do more than any foreign aid program to restore economic growth to those areas.

While the Treasury Department denies that it is dealing in gold, the Gold Anti-Trust Action Committee (GATA) has uncovered evidence suggesting that the Federal Reserve and the Treasury, operating through the Exchange Stabilization Fund and in cooperation with major banks and the International Monetary Fund, have been interfering in the gold market with the goal of lowering the price of gold. The purpose of this policy has been to disguise the true effects of the monetary bubble responsible for the artificial prosperity of the 1990s, and to protect the politically powerful banks that are heavy invested in gold derivatives.

GATA believes that federal actions to drive down the price of gold help protect the profits of these banks at the expense of investors, consumers, and taxpayers around the world.

GATA has also produced evidence that American officials are involved in gold transactions.

Alan Greenspan himself referred to the federal government's power to manipulate the price of gold at hearings before the House Banking Committee and the Senate Agricultural Committee in July 1998: "Nor can private counterparts restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise."

Mr. Speaker, in order to allow my colleagues to learn more about this issue, I am enclosing "All that Glitters is Not Gold" by Kelly Patricia O'Meara, an investigative reporter from Insight magazine. This article explains in detail GATA's allegations of federal involvement in the gold market.

Mr. Speaker, while I certainly share GATA's concerns over the effects of federal dealings in the gold market, my bill in no way interferes with the ability of the federal government to buy or sell gold. It simply requires that before the executive branch engages in such transactions, Congress has the chance to review it, debate it, and approve it.