GATA-PEI-Martin Armstrong-Republic-Edmund Safra : LUSENET : TimeBomb 2000 (Y2000) : One Thread

Conspirisy Theorists might consider taking a bite of this one... ------------------------------------------------------------------ 8:15p EST Saturday, January 15, 2000

Dear Friend of GATA and Gold:

Here's a special dispatch from GATA Chairman Bill Murphy about our recent contact with the international financial adviser, Martin Armstrong.

Please post it as seems useful.

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

* * *

Conversations With Marty Armstrong Before He Was Thrown In Jail

By Bill "Midas" Murphy January 15, 2000

A week ago today I had a two-hour conversation over the phone with investment guru Martin Armstrong which was, in many ways, quite remarkable. It was only a couple of months ago we were almost at each other's throats about GATA.

For those of you new to this story, Armstrong presided over Princeton Economics International, a renowned investment research firm that was noted for its Japanese fixed-income clients.

Armstrong was invited all over the world as a guest speaker to comment about his views of the markets. To give you some idea of the scope of his firm's worldwide presence, I took the following off the web site:

"PEI seminars are held around the world in Tokyo, Osaka, Hong Kong, London, Munich, Los Angeles, Princeton, Vancouver and Edinburgh, with normally annual events held in Beijing, Sydney and selected cities in Southeast Asia.

"All seminars are recorded and transcripts are normally available. Selected seminars are also available on video tape in NTSC or PAL. Audio tapes are available, as well, normally in English but also in Japanese for those held in Japan."

Before I get into the matter, here is the latest to bring you up-to-date about Martin Armstrong:

* * *

Armstrong jailed over allegedly missing assets

By Tony Hagen Trenton (N.J.) Times Saturday, January 15, 2000

NEW YORK -- Commodities guru Martin Armstrong was jailed last night after a federal judge ruled he willfully disobeyed a court order to turn over corporate records and millions in gold and antiquities.

Armstrong, who faces criminal securities fraud charges, was accused of concealing items belonging to Princeton Economics International and Princeton Economics Institute of Carnegie Center in West Windsor, N.J.

Armstrong, the head of the two companies, has pleaded innocent to charges he bilked Japanese investors out of $1 billion, and spent $16 million of their money to acquire gold, rare coins, and art work.

U.S. Magistrate Richard Owen ordered Armstrong held for 18 months or until he divulges the location of the missing assets. Armstrong was taken from the court to New York Metropolitan Correction Center.

Prosecutors said yesterday that Armstrong turned over a portion of the assets but destroyed corporate records they had demanded.

"In my opinion there is a substantial number of coins missing, approximately $1.3 million," said Richard Cohen, court-appointed receiver. Cohen has taken control of Armstrong's companies and is following the money trail.

Cohen said $1 million in gold bullion was still missing, and Armstrong sabotaged four company computers Wednesday, shortly before he was to turn them over to investigators.

"We're still about $15 million short," said Martin Glenn, a counsel for the receiver.

Armstrong, 50, contended many of the assets were either turned over to the receiver or were already in the receiver's possession. He said 500 missing gold Krugerrands were given to staff as pay or bonuses and 102 missing gold bars were used to buy out a Japanese partner. He said many of the 200 missing Greek and Roman coins were given to his Japanese investors as greeting gifts.

"So far, everything I have found I have turned over," Armstrong testified, explaining that this week he rented a car and drove assets daily to the receiver's New York office. He complained the receiver wouldn't give him an armored car.

"I've been making deliveries to the receiver every day. It's an ongoing process. I'm not finished yet," Armstrong told Owen.

But Owen, in his decision to have Armstrong arrested, cited 591 computer files that Armstrong erased this week plus the four damaged computers, which were at Armstrong's beach house in Loveladies, N.J.

"The story about the computers is a rather disheartening one about the state of mind of someone who was really going to do the receiver in. It's one thing to hit the delete button, it's another thing to write X's over everything in 591 files," Owen said.

Owen notes that the 591 files, which were detected by a computer forensics expert, were deleted Wednesday night after Armstrong had been ordered to turn the computers over.

"I did not intentionally delete the files," Armstrong said, adding they only contained personal information, not corporate records.

Armstrong was arrested Sept. 13 and charged with massive securities fraud by the U.S. Attorney's Office, the Securities and Exchange Commission and the Commodity Futures Trading Commission. Regulators are attempting to recover the trader's corporate assets so Japanese investors who bought his Princeton Note Bonds can be partly reimbursed.

Investigators have alleged Armstrong lost up to $400 million of his investors money in fruitless currency and commodities trades. They said he faked account statements to hide the losses and diverted corporate funds to buy luxuries for himself and his family.

Armstrong has denied the charges, saying he's being made a scapegoat for the actions of others.

Also yesterday, prosecutors alleged that hours before his Sept. 13 arrest, Armstrong attempted to "clean out" his corporate accounts to deposit money for his defense in lawyers' accounts. They said the trader succeeded in transferring about $750,000 but much of the remaining money was blocked by an asset freeze that was also imposed on Sept. 13.

Armstrong testified yesterday that he had made a good- faith effort to return everything investigators asked for. Strange details emerged of how he claimed to have exchanged gold coins for Japanese gifts of tea and decorative cups, kept 102 missing gold bars stuffed in a couch at his Maple Shade, N.J., home for four months, and kept a $750,000 bust of Julius Caesar hidden in a shed in his back yard.

Armstrong also described exchanging $7 million in missing coins to take control of a precious metals fund from an Australian business associate, Nigel Kerwin. He also said he handed over the missing gold bars while in a parking lot near his home to a Japanese associate, Akira Setagawa, who is under indictment in Japan in a related securities case.

Cohen disputed Armstrong's excuses for the missing funds and art, calling them a smokescreen. Cohen said he regretted that he didn't ask Owen to assign federal marshals to accompany Armstrong last week when he was ordered to round up company documents and assets.

"I think Mr. Armstrong did his best, but his best to evade the court order and his best to destroy the hard drives," he said.

* * *

My conversation last Saturday with Armstrong followed a long, startling email correspondence from him. It was sent to me in confidence and will not be revealed here until he gives the OK. Just for the record and self- protection purposes, it should be known that all correspondence between Armstrong, GATA Treasurer/Secretary Chris Powell, and I has been forwarded to GATA's attorneys.

My phone conversation with Armstrong touched on many subjects. I mostly just listened -- my mouth wide open most of the time, as the conversation centered around such subjects as Armstrong's receiving death threats from the Japanese, the billionaire's club that manipulates the metals markets, incriminating Republic Bank tapes, bribes paid in Thailand, the Japanese and Republic Bank, the persecution of his family, including his 81-year-old mother, and the efforts of the U.S Attorney's office efforts to deprive him of his First and Fifth Amendment rights.

The scariest part of the conversation was about Edmond Safra, the recently murdered Republic Bank founder. Marty knew which phone lines that Safra spoke on directly to the Republic traders. According to Armstrong, "All the conversations about every manipulation you ever wanted to hear are there." He said that the problem was that 10 days after he told the feds that he was after sensitive information that would expose the manipulations, Safra died mysteriously in Monaco.

This is not kid's stuff we are talking about here.

Ironically, Armstrong did not know as much about GATA as I thought he did. For example, he thought GATA was about going back to a gold standard. I told him that all we wanted was a fair, free gold market that was not manipulated. He thought we were just focused on the central banks of the world that we believed to be conspiring to hold down the gold price. I told him that we felt that the collusion involved certain New York bullion dealers with the help of the New York Federal Reserve Bank and the U.S. Treasury Department.

We were planning to get together to determine some sort of relationship. He told us that he could provide evidence (tapes and documents) that the metals markets in New York have been manipulated. Naturally, smoking- gun information of that nature is of great interest to us.

To give you some idea of how close we were to getting together, the following is the text of correspondence between GATA's Chris Powell and Armstrong over the past days:

* * *

Dear Chris:

Still alive so far. I will speak to my lawyer to see if early next week is OK for a meeting. One of our clients has sued Republic and we are unofficially cooperating together to try to get additional discovery.

U.S. government has rushed in to try to stay our discovery. We are about to make a fight next week to try to force Republic to comply with our subpoenas. The bastards are hiding behind the U.S. government big- time.

I am not sure what is going on. I have been told that the receiver is now going to try a contempt charge for my not handing in my keys despite the fact that the locks and security codes have been changed.

They just don't want me out and about. They made me get seven people to co-sign a $5 million bond for bail. I had 12 people to came forward. That pissed off the government and they lost the bail issue. So they are trying everything they can under the civil case for contempt of anything. It appears that a contempt-of- court can land you in jail for about one year. After that, higher courts deem it to be cruel and unusual punishment.

So if you tell a judge to get off and exercise your 1st Amendment in a protest against the government, you go to jail, since while in court you are not allowed to defame the government. I always thought that was the very point of the First Amendment: to ensure one's ability to speak out against corrupt governments.

These buggers have twisted everything around unbelievably.

Will be in touch.

All the best.

* * *

Dear Chris:

If the judge puts me away on Friday, and he is trying his best to find the slightest reason, I will be unable to attend our meeting. But perhaps you can visit me in the can.

A client is trying to organize a defense fund in case the judge strips all my attorneys of everything they have already spent retroactively. This seems to be an attempt to ensure that no lawyer will take the case.

Brian Code, the U.S. attorney, appears to have slipped up and told the staff in Princeton that this case will never go to trial. When Jim Smith asked how that can happen, he changed his tune and then said it will not come to trial for at least a year.

Boy, this game is so rigged, it is beyond belief.

All the best.

* * *

As I said before, GATA has no clue about the guilt or innocence of Marty Armstrong. That is not our point. The man is entitled to defend himself and it would appear he is getting a raw deal. The way I see it, "The enemy of my enemy is my friend." Republic Bank would not let us open a money market account there when GATA was first formed. At that time, I told Chris Powell that Republic, a bullion dealer, would be hearing from us in the future. The future is now, in a sense.

You might ask: Why embrace someone who has scorned us? Well, let me explain it to the naysayers as best I can. This gold game is a WAR that will be fought to the bitter end -- I am loathe to use the word "death" as a banker friend does. The FBI embraced "Sammy the Bull" to nail John Gotti, John Dean was called on by the Nixon chasers, and Monica Lewinsky was wooed by those out to prove President Clinton was lying. Should GATA use any less a tactic than used by our own FBI and the Democratic and Republican parties in the United States?


-- Scooter (, January 15, 2000


Scooter, interesting post. Yep, it's all about the gold, baby. All.

-- Hokie (, January 15, 2000.

Thanks Scooter - you beat me to it, I saw this on a couple of other forums.

Looks like Oil is trying to get out of the bag, Gold and silver will be next, whether the narket tanks or not.

TPTB want to keep the bubble going until post-election time - that's what 10 months or so?

they may be able to do it - my gut however says this time they've blown it... we'll see...

-- Andy (, January 15, 2000.

What is Bill Murphy's background and how did he get involved in all of this ?

-- Wanderer (, January 15, 2000.

Go to for info on Bill Murphy

-- Scooter (, January 16, 2000.

There was considerable discussion about Armstrong at the forum a couple of weeks ago. The exchange should still be available in their January 00 file. The (anonymous) poster, who some on the forum thought was Armstrong himself, alleged massive manipulation in commodities markets, especially gold and oil, and implied that Armstrong was being set up as the fall guy to discredit his accusations. Take it for what it's worth.

-- Cash (, January 16, 2000.

Longwaves URL:

-- Cash (, January 16, 2000.

Moderation questions? read the FAQ