Dear Friend of GATA and Gold:

Argument over excessive holdings of U.S. dollar reserves has broken into the open again at the highest levels of an Asian government. The other
day it was South Korea. Tonight, as you'll see by the news stories appended here, it's Japan.

Whatever governments and central banks end up doing about it, their nervousness about their
growing expropriation by the United States through the devaluation of their dollar reserves is on display almost everywhere. The Bloomberg
story from Tokyo below says: "The government projects that unrealized losses in its foreign reserve holdings will reach about 11.4 trillion yen ($110 billion) by March 31." Most of that is from dollar devaluation.

Big holders of dollars are looking for an alternative, and soon they may not care too much if one of those alternatives happens to
expose the frauds of the international financial system, may not care too much if one of those alternatives happens to be a
four-letter word starting with "g."

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

* * *

Koizumi Says Japan Needs
to Mull Diversifying Reserves

By Mayumi Otsuma
Bloomberg News Service
Thursday, March 10, 2005

http://www.bloomberg.com/apps/news?
pid=10000101&sid=aLiN2CsGfTn0&refer=japan

TOKYO -- Japan should "in general" consider the necessity of
diversifying the investment of its foreign reserves, Prime Minister
Junichiro Koizumi said.

"I think it's necessary to diversify the investment destinations" of
foreign reserves, Koizumi said today at the budget committee of the
upper house of parliament in Tokyo. "At the same time, we have to
make a judgment in general, considering what's profitable and what's stable."

Japan's official reserve assets, the world's largest, totaled $840.6
billion at the end of February. The government projects that
unrealized losses in its foreign reserve holdings will reach about
11.4 trillion yen ($110 billion) by March 31.

U.S. dollars account for a majority of the world's foreign-exchange
reserves, which are holdings of foreign currency at central banks.
The dollar share was 63.8 percent at the end of 2003, down from 66.9
percent two years before, according to International Monetary Fund
figures released in April last year.

The yen was at 104.05 to the dollar at 11:49 a.m. today in Tokyo,
compared with 103.93 late yesterday in New York.

* * *

Japan Finance Minister Tanigaki:
Be Very Cautious On FX Reserves

By James Simms
Dow Jones Newswires
Thursday, March 10, 2005

TOKYO -- Japanese Finance Minister Sadakazu Tanigaki said Thursday
that the government must be very cautious when discussing the issue
of the nation's foreign exchange reserves portfolio.

"With (foreign exchange) reserves this large, we must consider
various factors, and we must take serious consideration of the
markets as well," Tanigaki told reporters after an Upper House
budget committee session.

"We have been very cautious in the decisions we have taken on
foreign exchange reserves," he added.

Tanigaki was speaking shortly after Prime Minister Junichiro Koizumi
told a parliamentary committee that in general, it is better to
diversify investments.

The finance minister said the prime minister's remarks may have been
taken as meaning there has been a change in Japan's policy regarding
foreign reserves.

The dollar fell against the euro and the yen following Koizumi's
remarks. The dollar, which was trading above Y104.00 before the
comments, tumbled to a low of Y103.70, while the euro rose to
$1.3458 from just around $1.3400.

But the U.S. currency regained ground a bit after that. As of 0316
GMT, it was trading at Y104.02 and $1.3409.