We heard a segment on the radio while driving home the other evening, all about socially responsible investing. The program was referring to investors and fund managers who choose their stock portfolios with an eye towards a moral or ethical dimension. Some $2 trillion of U.S. investment money today is directed under guidelines of what is referred to as “social concerns.” Which raises the point, exactly how socially responsible is the act of buying gold?

In the way of stocks, for instance, some might shun tobacco companies because their products kill people, while pacifists might avoid defense industry stocks for the same reason. Catholics and others might not feel comfortable profiting off a drug company that makes birth control pills. Some people might shun media companies that dispense noxious content over the airwaves and cable and in movie theaters. Still other people may not want to own shares in companies doing business in certain countries, most visibly Cuba or Iraq these days.

The simple truth is that any thinking person is going to have qualms about some aspects of business as it is done today. We all find some instances of corporate behaviour not to our liking, for one reason or another. For example, many of would rather not personally profit from at least some of the following:

- Child labor.

- The rape of the environment

- Abortion drugs or procedures.

- Slave labor.

- Alcoholic beverages.

- Monopolistic or predatory corporate actions.


- Or any corporate practices that violate our own personal standards of moral or ethical behaviour. This very broad umbrella covers everything from a company’s recognition of “same-sex unions” to a corporate strategy of pushing soda pop to the detriment of childrens’ health - most of us are fussy about one or more of these sorts of social concerns.

Along these lines, we got to thinking exactly where gold ownership falls in the scheme of responsible investing. What is the moral or ethical aspect of taking some of your hard-earned dough and buying gold?

Many would first off make the argument that gold is not an investment at all, but rather the equivalent of taking your money off the table and burying it in the ground. This argument goes to the issue of “stewardship” of financial resources, and holds that it is more righteous to invest your money in some enterprise (i.e., buy common stock) than to park it in gold or some other passive investment.

The “good shepherd” quarrel against gold is that by buying gold you take money out of circulation, and that much money is now no longer available to be spent, invested, and do its part in keeping the economy going. Gold simply represents money that is dead to the world, goes the argument. Your money can help make the economic world go round, this argument holds, if you would but use it to create jobs, and therefore wealth, by investing in business.

Now, that certainly would be true if you actually went out and started a business somewhere, or even invested in someone else’s start-up enterprise. But is there any moral or ethical superiority inherent in taking ownership of some long-ago issued shares of stock? Does being the latest owner of an equity share make any real difference, except perhaps to the lucky person who sold it? Certainly in doing so you support the general stock market (and Lord knows it could use some help these days), but doesn’t such an act simply make you the latest in a long chain of, some might say, greater fools? Are common stocks somehow “better” than gold, ethically or morally? We think not.

Of course, by buying gold you enter, indirectly, into the business of extracting gold from the ground. This is a positive for the gold mining companies, their shareholders, and their employees. And the largest number of employees in gold mines are Africans working the mines of South Africa and greater Africa. Africa is today a continent of dire poverty, and gold-mining is one of the few bright spots in its economic picture. Many Africans employed in the mines are able to send money home to families that are otherwise surviving at a subsistence level.

Along these lines, Bill Murphy of the Gold Anti-Trust Committee (GATA) recently penned the following letter which rather sums up the GATA stance for gold. Mr. Murphy, in his usual emphatic style, rambles over quite a bit of ground in his open letter to rock star/activist Bono, but accurately makes the case that higher gold prices can only improve the lot of many people in impoverished sub-Saharan Africa:

Letter to Bono from GATA

Deirdre Veldon Editor Irish Times 4th Floor Ballast House Aston Quay Dublin 2, Ireland. Tel: +353 1 6714066

Dear Ms. Veldon,

I am chairman of the Gold Anti-Trust Action Committee (GATA) and would be most appreciative if you could forward this letter to Bono, or advise how I may reach him.

Dear Bono,

You are a good-hearted fellow Irishman and have gone all over the world doing what you can to help the poor, especially in sub-Saharan Africa. You have run into some obstacles. I have a way that WE can begin to turn the tide within weeks and at the most, months.

Unfortunately, and unknowingly, you consorted with someone who is doing his best to suppress the economies of sub-Saharan countries. I am referring specifically to Paul O’Neill, Treasury Secretary of the United States. Just about everyone knows you toured that part of the world with Secretary O'Neill in an effort to drum up some economic support for their beleaguered and starving poor.

I say that because O’Neill is part of a concerted effort to manipulate the price of gold to unnaturally low levels. I refer to this group as The Gold Cartel, which includes bullion banks such as J.P. Morgan Chase, Goldman Sachs and Citibank; the New York Fed; the Exchange Stabilization Fund; the IMF; and the Bank for International Settlements.

If it weren't for this Gold Cartel, the price of gold would have risen to $600 per ounce years ago and sub-Saharan Africa would be in the midst of a natural resource boom. The economies in this part of the world would be flourishing. The Economist called Africa “The Hopeless Continent” some time back. Were it not for the western banking establishment and U.S. Government, it would now be called the “Natural Resource Boom Continent.”

Just this past week, President Clinton spoke at the 14th Annual International AIDS Conference in Barcelona about how so much more needs to be done by the West to help Africa with this horrible disease problem. Grotesquely, he is as responsible for the money problems of sub-Saharan Africa (and resulting deaths) as any person in the world because the orchestration of a low gold price began during his Presidency. It was set in motion by his former Treasury Secretary's Robert Rubin and Lawrence Summers with the approval of U.S. Federal Reserve Chairman Alan Greenspan. One of the featured triggermen for this price fixing operation was Peter Fisher, formerly of the New York Fed during the Clinton Administration and now Under Treasury Secretary in the Bush Administration.

I would love to say that President Bush is above the fray, but he is not. His economic advisor, Lawrence Lindsay, is a former Fed Governor and knows everything. A delegation of the Gold Anti-Trust Action Committee met with the Republican Speaker of the House, Dennis Hastert, on May 10, 2000 and presented him with our Gold Derivative Banking Crisis document. We urged him to end the manipulation before the inevitable gold scandal soiled his Republican Party. The Republicans chose to continue the gold fraud, not end it. President Bush publicly supports aide to sub-Saharan Africa while his administration's gold policy is economically devastating southern Africa.

GATA has collected evidence of this manipulation for the past 3 1/2 years. Not one person in the gold industry has contradicted the specifics of our evidence in all that time. Bono, you might like to know that GATA and its ARMY have persevered over the years without pay and we even held our own GATA African Gold Summit in Durban, South Africa on May 10, 20001. Five sub-Saharan African nations attended as did the National Union of Mineworkers, Cosatu (most prominent trade union in South Africa), the major gold producers in South Africa, the Ministry of Minerals and Energy, the Reserve Bank of South Africa, the press including SABC, etc. You may review what transpired at www.GATA.org.

A nine page spread on our summit subsequently appeared in the widely read New African, which will be my pleasure to present to you.

The Washington/New York financial press is loathe to deal with this issue, but certain members of the United States Congress are not. Congressman Ron Paul of Texas and Congressman John Larson of Connecticut are co-sponsoring The Monetary Reform and Accountability Act. At the moment the Bill is in committee. It only asks that if the President, or the Treasury Secretary, are going to deal with America’s gold, they request permission from Congress first. Treasury Secretary O’Neill is on record as opposing this simple Act that only seeks truth and transparency. Congressman Paul cites GATA’s overwhelming evidence of gold price manipulation to support the merit of his Bill.

One corporate scandal after another is breaking in America. The biggest American scandal of all revolves around gold because The Gold Cartel's collusive and suppressive gold policy has contributed to so many DEATHS in Africa. That is still not on most American investor's radar screens. However, they are soon going to realize that The Gold Cartel took the gold barometer away from them. That highly visible barometer would have warned many average Americans that something was wrong and that our stock market was very vulnerable. When they know what GATA knows, they will go berserk. I love my country, but what certain of our bullion bankers have done, along with a few of our politicians, is appalling. 5,500 sub-Saharan Africans die every day just from AIDS alone. There is no money for medicine. This "5,500 deaths per day" figure is actually on the rise. By 2010, that number will be 13,000 a day. 11.5 million have died from AIDS. The number of deaths has been accelerating over the past 5 to 7 years. Life expectancy in many African countries is now well below 40 years of age, having dropped from 57-70 years old 10 years ago.

Taken in perspective, the people of sub-Saharan Africa are being forced to suffer the equivalent of two WTC tower collapses EVERY DAY and have been for quite some time now.

This HAS TO END!

To further substantiate GATA’s claims:

RBC Global Investment Management Inc., a division of Royal Bank of Canada, whose gold mutual fund is among the best performing in the world, has issued a report that was circulated throughout Europe to clients and prospective clients that fully endorses the Gold Anti-Trust Action Committee’s (GATA) analysis of the gold market and evidence of the manipulation of the price of gold.

The essence of the report states the price of gold is going to explode for the following reasons:

1) Unsustainable Supply/Demand Imbalance 2) Unsustainable Short Position 3) Unsustainable Low Inflation 4) Unsustainable U.S. Dollar 5) Unsustainable Prices for Financial Assets 6) Increasing Evidence of Unsustainable Gold Price Manipulation

Point number six is most significant as it echoes what GATA has discovered and revealed over the past 42 months. The RBC report cites 11 reasons behind gold price manipulation:

a. Aggressive gold lending, which from an economic perspective is indefensible, has filled the supply/demand gap.

b. NY Fed gold has been mobilized when the gold price is rising.

c. Timing of Exchange Stabilization Fund gains/losses corresponds to gold price movements.

d. Audited reports of U.S. gold reserves show unexplained variances.

e. Minutes of Fed meetings confirm officially denied gold swaps.

f. Rules on gold swaps revised but subsequently denied. However, individual central banks have repudiated the denial.

g. U.S. gold reserves have recently been re-designated twice, initially to "custodial gold" and latterly to "deep storage gold."

h. Statistical analysis of unusual gold price movements since 1994 indicate high probability of price suppression. The invalidation since 1995 of Gibson's Paradox -- that gold prices rise when real interest rates fall -- suggests that the real manipulation began then.

i. NY gold price movements versus London trading defy odds.

j. Timing of huge increases in bullion bank gold derivatives is consistent with gold price declines.

k. Rapid decline in U.S. Treasury holdings of gold-backed SDR certificates is not explained.

The RBC report goes on to say: "One or two of these factors could be viewed as random, but the full body of evidence is overwhelming."

The Gold Anti-Trust Action Committee has fully documented all eleven points cited by the Royal Bank of Canada regarding the manipulation of the price of gold.

The purpose of this letter is very simple. As chairman of GATA, I would like to fly to Europe on a moment’s notice to meet with you, partly because of our mutual Irish dedication to this issue. I will bring GATA's unchallenged evidence and suggest you present it to the most qualified investment counselor of your choice for review purposes.

There is a beauty in this. The Gold Cartel cannot stand the light of the day. They will fold in the world forum under the scrutiny of GATA’s queries because they have no truthful way to answer our questions without exposing their fraudulent vulnerabilities.

If I can meet with you, I am convinced we can win the day. Your world-renowned integrity and our evidence of what has transpired can begin to change the plight of the devastated in sub-Saharan Africa in a reasonably short period of time. The reason is that these misguided bankers and politicians are trapped in an untenable and massive gold short position. As soon as they are exposed to the world press, the price of gold will soar.

Bono, you are a world humanitarian and a hero to many. Fortunately, GATA can provide you the ammo to immediately help your championed people. I can be in Dublin, or London, at a moment’s notice.

BILL MURPHY CHAIRMAN GOLD ANTI-TRUST ACTION COMMITTEE

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Mr. Murphy has been a driving force in the field of conspiracies against gold, and his GATA organization has been a catalyst for uncovering quite a bit of interesting information about how our government does indeed conspire against gold while at the same time denying its importance.

But we shouldn't forget the blessing that this "conspiracy" has brought to gold buyers today - think of how unaffordable gold might if the U.S. Treasury, Federal Reserve, Bank of England, and a host of other parties hadn't labored so hard to push the price down over the past few years.

Notwithstanding, the major point of Mr. Murphy's letter is well taken: one positive net effect of your gold purchase is the support of those employed in the business of mining gold, i.e., you help to create jobs in places where jobs are very much needed.

And for yourself, gold provides security for you and your family, and becomes part of the heritage that provides for those whom you care about. Isn't that the definition of social responsibility? Gold is the wealth that you don’t have to watch or worry about. Gold is not subject to sloppy or fraudulent accounting, bankruptcy, stock dilution, credit issues, repudiation of debt, or the exaggerated fluctuations of the equities and credit markets that have mercilessly whipsawed investors over the past few years.

Gold remains forever brilliant, stable, and un-corroded. These days, what could be better than that?