Dear Friend of GATA and Gold:

Today's dismissal by the U.S. Commodity Futures Trading Commission of complaints about manipulation of the silver market leaves plenty of room for a conclusion opposite from the one that news reports will publicize -- that there's no evidence of manipulation.

Indeed, while GATA is grateful to the CFTC for the hearing the agency held on the issue on March 25, 2010 --

href="http://www.treasury.gov/resource-center/international/ESF/Pages/esf-index.aspx">http://www.treasury.gov/resource-center/international/ESF/Pages/esf-inde...

-- the act, as amended since 1934, says: "Consistent with the obligations of the government in the International Monetary Fund on orderly exchange arrangements and an orderly system of exchange rates, the secretary ... with the approval of the president, may deal in gold, foreign exchange, and other instruments of credit and securities."

That authority plainly covers everything financial on the planet and since the U.S. dollar is the international reserve currency, that authority is essentially a declaration of economic war on every other country.

Two years later GATA bumped into the Exchange Stabilization Fund again. It happened on November 5, 2001, during a hearing held in U.S. District Court in Boston in the anti-trust lawsuit brought by GATA consultant Reginald Howe against the Bank for International Settlements, the Treasury Department, the Federal Reserve, and their investment bank agents, a lawsuit complaining of manipulation the gold market:

href="http://www.gata.org/node/4211">http://www.gata.org/node/4211

From that report: "One of the lawyers for the government asserted the government's right, under the laws establishing the Federal Reserve Board and the U.S. Treasury Department's Exchange Stabilization Fund, to trade in gold in a way affecting gold's price. That is, he seemed to be claiming, on behalf of the government, the right to do exactly what the lawsuit complains of, without actually admitting that this was happening."

The judge in the Howe lawsuit never had to interpret the Gold Reserve Act and the authority of the Exchange Stabilization Fund; he dismissed the lawsuit on jurisdictional grounds. Still, the lawsuit was valuable for publicizing market manipulation and the government's claim of legal authority to manipulate markets.

As always the problem is getting the mainstream financial news media and mining company executives to examine the evidence and mechanisms of market rigging, which is the prerequisite for doing something about them. By e-mail your secretary/treasurer today will appeal again to various financial journalists to do a little research here. I'll also be calling attention to the evidence and mechanisms next month during presentations in Asia, Australia, and New Zealand.

In light of the provisions of the Gold Reserve Act, today's abdication by the CFTC is completely consistent with monetary metals market manipulation as legal U.S. government policy.

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