This essay started the movement now led by the
Gold Anti-Trust Action Committee. It was first posted
at www.lemetropolecafe.com on January 22, 1999, in
response to commentaries by Bill Murphy, whose
pen name is Midas.

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By Chris Powell
Manchester, CT USA
Email: CXPowell@...


For months now Midas has written more and more
convincingly of evidence that certain major brokerages
are conspiring with financial authorities in the
federal government and possibly a mining company or two
to suppress the price of gold.

Some of these brokerages recently announced creation of
what they call the Counterparty Risk Management Group,
whose purpose seems frankly to manipulate the price of
certain securities, particularly derivatives, some of
which likely involve gold, in the name of preventing
disruption of the market (and, of course, preventing,
most of all, damage to the brokerages themselves).

Meanwhile the rest of us -- mere investment
opportunists like myself, mining companies and their
shareholders, and the ideologues, people who believe
that precious metals should have a formal monetary
function -- sit here reading Midas with the greatest
interest while pounding sand in helpless frustration.

I don't get it. For if Midas is right about what is
happening, the brokerages and their accessories are
part of a vast criminal conspiracy that is breaking
antitrust law. We of the Gold Party should be suing to
stop them. If Midas' interpretation is correct, we'd
win.

Antitrust laws protect economic competition. To quote
the World Book Encyclopedia, "These laws prohibit price
fixing, an agreement among business firms to control
the price or supply of a product or service." The major
federal antitrust laws are the Sherman and Clayton
acts, but there are others, and all states have their
own such laws.

Whenever two or more parties cooperate in limiting
prices or supplies of a product or service, the free
market is defeated and antitrust law is broken. (There
is an exemption for labor unions.)

The federal government, through the Justice Department
and the Federal Trade Commission, can enforce antitrust
laws. But private parties can seek enforcement as well
by filing federal and state lawsuits.

It doesn't take much to start such a lawsuit -- a sworn
affidavit based on sincere belief. And once a lawsuit
is started, the plantiffs have the power to compel the
production of testimony and evidence from the
defendants.

My guess is that the announcement of the Counterparty
Risk Management Group would be in itself more than
sufficient for the basis of a price-fixing complaint.
And just imagine what might be uncovered by a lawsuit
whose discovery process could compel the production of
such a group's minutes and the testimony of the
brokerage officials believed to be involved in
suppressing the price of gold.

Such a lawsuit could be internationally explosive. And
because violations of antitrust law are liable to
triple damages, it also could be profitable to the
plaintiffs and expensive to the defendants.

But the great thing about such a lawsuit is that the
Gold Party would not have to win financial damages to
win financially. If there indeed is a conspiracy to
suppress the price of gold, its exposure alone probably
would bust it up and liberate the market. The mere
filing of the suit would warn the perpetrators that
they were in jeopardy. Busting up the conspiracy alone
would prove very profitable to the plaintiffs.

The practical question is the financing of such a
lawsuit. But it shouldn't require much -- a law firm
with a little familiarity with antitrust law and a
retainer of, say, $50,000 or so. Surely there are a few
mining companies that have been injured by this
conspiracy that should consider contributing, as well
as many ordinary mining company stockholders and people
with a philosophical interest in gold. It could be
filed as a class-action lawsuit and thereby qualify
gold interests everywhere for damages. If the suit
discovered evidence of a price-fixing conspiracy, the
plaintiffs would be likely to recover at least their
legal costs as part of a settlement.

Of course we'd be up against what have been called the
Masters of the Universe, including the federal
government. But so have been a lot of people of no
special influence, most lately the woman who was
derided as Arkansas trailer trash, Paula Jones. She was
wrong on sexual harassment law -- what Bill Clinton did
to her was disgraceful but not illegal -- but she stood
up for her right to her day in court, and because her
legal representation was financed by a foundation
pursuing a political aim, she not only won a
substantial settlement but also changed American
politics.

If Midas is even close to being right, the Masters of
the Universe are flagrantly breaking the law, and
catching them up in a lawsuit might be easy, thanks to
the power of discovery and deposition.

I'm a nobody but I pledge $500 to underwrite such a
lawsuit. To start we probably need a lawyer and mining
company or two and a few dedicated precious metals
shareholders of means who would like to shake things up
and even change the world. Any volunteers? If so,
contact Midas (LePatron@...). We can
change the world. Anybody can. This is still America if
we'll act like it is.

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Chris Powell is managing editor of the Journal Inquirer,
a daily newspaper in Manchester, CT USA.

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