NY Post''s John Crudele picks up on the gold price story


10:23a ET Thursday, May 16, 2002

Dear Friend of GATA and Gold:

Thanks to the New York Post and its business writer,
John Crudele, for picking up on the gold story today
with the column appended here. This is a nice little
bomb dropped on the gold price suppressors in the
heart of the financial markets.

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

* * *

Silence may not be golden at J.P. Morgan Chase

By John Crudele
New York Post
Thursday, May 16, 2002

Not too many people would recognize the name Dinsa
Mehta, at least not outside the rarefied world of J.P.
Morgan Chase's executive suite. But it was a rumor
about Mehta's employment status at the bank that had
the world gold market buzzing last week.

For the record, Mehta is still working for J.P. Morgan
Chase, where he's been for 26 years. But he is thinking
of leaving after a major shake-up reduced his
responsibilities as head of global commodity risk
management and global foreign exchange. As Mehta
put it to me: "I'm still here with no walk-off date in the
near future."

Still, the man who goes by the nickname Dan is talking
like someone who wants a change, but "I'm being asked
to stay." So Mehta may or may not leave J.P. Morgan.
Got that?

Why does the world gold community care? Because
there have been relentless rumors that something is
wrong at J.P. Morgan because of its complex financial
derivatives business. And the sudden departure of
someone of Mehta's stature and responsibility could
signal that something is amiss with the bank's precious
metals trades, gold speculators guessed.

I've been down this path before and just about every
other news organization followed with scary reports
about J.P. Morgan's connection with Enron, Global
Crossing, Argentina, derivatives, and many of the other
financial debacles that popped up around the globe.

For the record, J.P. Morgan is still around. In fact, its
stock price has been bouncing back since lows
reached earlier this year when we all had the company
under a microscope. Most of us have put our microscopes
away. But mine came out when the Mehta stories
surfaced on the Internet on a very credible site frequented
by gold experts.

LeMetropoleCafe.com, which is maintained by an
organization called Gold Anti-Trust Action Committee,
posted the following quote May 7. For the record, GATA
believes governments purposely hold down the price of
gold through massive selling -- essentially rigging the

"This morning I received a phone call from the best of
sources in South Africa. The source has a friend who
spent some time recently with two J.P. Morgan Chase
senior bankers," wrote Bill Murphy, head of the group.
"The friend was told by the Morgan people that they
have 'lost control of the gold market and that the gold
derivative department was a mess,'" Murphy added.

The specifics of GATA's communiqu were sort of
intriguing: The gold derivatives department of J.P.
Morgan Chase is being investigated, the man who ran
the department has been fired (that would be Mehta),
and this was discussed on CNBC Europe, but was
called "still a rumor" by the program host.

Murphy also wrote, "It appears the 'conspiracy guys'
were right all along.

Hey, I'm cool with conspiracies. I've even told readers
that the U.S. government intervened in the stock market
after Sept. 11 -- a fact that now seems borne out by recent
admissions that the Federal Reserve used "extraordinary
measures." And I'm even willing to believe the idea that
governments would try to control the price of gold. Why
not? It's easy, since governments are major buyers.

But I wanted to get to the bottom of was this: Did J.P.
Morgan really have a problem with gold that led to the

Mehta says no. In fact, he says that because real
interest rates (rates after inflation) are so low right now,
there is actually very little risk in gold trading.

What about foreign countries interfering in the gold
markets? Mehta won't discuss that. But he is amused
by the way gold traders weave a rumor, especially
about his own demise.

"Conspiracy theorists are doing what they do best:
provide entertainment from the sidelines," Mehta said.
Investigations? "That's definitely not the case, bless
their (the conspiracy theorists') hearts," he said.

J.P. Morgan had no comments about most of this stuff
and deferred most questions to Mehta. But the
company did point out that it has reduced its work force
by thousands in recent months to cut costs.

So, what's the real reason behind the moves? Maybe
this is the answer. A letter to J.P. Morgan Chase
President William Harrison from the House Committee
on Energy and Commerce asks for tons of internal
documents related to the Enron investigation. "Please
provide all records relating to communications from 1997
to the present between Vice Chairman Mark Shapiro,
Vice Chairman James Lee Jr., Dinsa Mehta . . . and Ian
James, reportedly a director of Mahonia Ltd.," a
company connected with Enron. Since Mehta was one
of only a handful of J.P. Morgan people singled out by
Congress for special attention, maybe he wasn't such a
small fry after all. No wonder the company doesn't want
him to leave.