Thread: Fake gold bars in Bank of England and Fort Knox

Fake Gold Bars in Bank of England and Fort Knox

by TheTotalCollapse.com on January 20, 2010


It’s one thing to counterfeit a twenty or hundred dollar bill. The amount of financial damage is usually limited to a specific region and only affects dozens of people and thousands of dollars. Secret Service agents quickly notify the banks on how to recognize these phony bills and retail outlets usually have procedures in place (such as special pens to test the paper) to stop their proliferation.

But what about gold? This is the most sacred of all commodities because it is thought to be the most trusted, reliable and valuable means of saving wealth.

A recent discovery — in October of 2009 — has been suppressed by the main stream media but has been circulating among the “big money” brokers and financial kingpins and is just now being revealed to the public. It involves the gold in Fort Knox — the US Treasury gold — that is the equity of our national wealth. In short, millions (with an “m”) of gold bars are fake!

Who did this? Apparently our own government.

Background
In October of 2009 the Chinese received a shipment of gold bars. Gold is regularly exchanges between countries to pay debts and to settle the so-called balance of trade. Most gold is exchanged and stored in vaults under the supervision of a special organization based in London, the London Bullion Market Association (or LBMA). When the shipment was received, the Chinese government asked that special tests be performed to guarantee the purity and weight of the gold bars. In this test, four small holed are drilled into the gold bars and the metal is then analyzed.

Officials were shocked to learn that the bars were fake. They contained cores of tungsten with only a outer coating of real gold. What’s more, these gold bars, containing serial numbers for tracking, originated in the US and had been stored in Fort Knox for years. There were reportedly between 5,600 to 5,700 bars, weighing 400 oz. each, in the shipment!

At first many gold experts assumed the fake gold originated in China, the world’s best knock-off producers. The Chinese were quick to investigate and issued a statement that implicated the US in the scheme.

What the Chinese uncovered:
Roughly 15 years ago — during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] — between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day.

According to the Chinese investigation, the balance of this 1.3 million to 1.5 million 400 oz tungsten cache was also gold plated and then allegedly “sold” into the international market. Apparently, the global market is literally “stuffed full of 400 oz salted bars”. Perhaps as much as 600-billion dollars worth.

An obscure news item originally published in the N.Y. Post [written by Jennifer Anderson] in late Jan. 04 perhaps makes sense now.

DA investigating NYMEX executive ,Manhattan, New York, –Feb. 2, 2004.

A top executive at the New York Mercantile Exchange is being investigated by the Manhattan district attorney. Sources close to the exchange said that Stuart Smith, senior vice president of operations at the exchange, was served with a search warrant by the district attorney’s office last week. Details of the investigation have not been disclosed, but a NYMEX spokeswoman said it was unrelated to any of the exchange’s markets. She declined to comment further other than to say that charges had not been brought. A spokeswoman for the Manhattan district attorney’s office also declined comment.”

The offices of the Senior Vice President of Operations — NYMEX — is exactly where you would go to find the records [serial number and smelter of origin] for EVERY GOLD BAR ever PHYSICALLY settled on the exchange. They are required to keep these records. These precise records would show the lineage of all the physical gold settled on the exchange and hence “prove” that the amount of gold in question could not have possibly come from the U.S. mining operations — because the amounts in question coming from U.S. smelters would undoubtedly be vastly bigger than domestic mine production.

No one knows whatever happened to Stuart Smith. After his offices were raided he took “administrative leave” from the NYMEX and he has never been heard from since. Amazingly, there never was any follow up on in the media on the original story as well as ZERO developments ever stemming from D.A. Morgenthau’s office who executed the search warrant.

Are we to believe that NYMEX offices were raided, the Sr. V.P. of operations then takes leave — all for nothing?

The revelations of fake gold bars also explains another highly unusual story that also happened in 2004:

LONDON, April 14, 2004 (Reuters) — NM Rothschild & Sons Ltd., the London-based unit of investment bank Rothschild [ROT.UL], will withdraw from trading commodities, including gold, in London as it reviews its operations, it said on Wednesday.

Interestingly, GATA’s Bill Murphy speculated about this back in 2004;
“Why is Rothschild leaving the gold business at this time my colleagues and I conjectured today? Just a guess on my part, but [I] suspect something is amiss. They know a big scandal is coming and they don’t want to be a part of it… [The] Rothschild wants out before the proverbial “S” hits the fan.” — BILL MURPHY, LEMETROPOLE, 4-18-2004

What is the GATA?

The Gold Antitrust Action Committee (GATA) is an organisation which has been nipping at the heels of the US Treasury Federal Reserve for several years now. The basis of GATA’s accusations is that these institutions, in coordination with other complicit central banks and the large gold-trading investment banks in the US, have been manipulating the price of gold for decades.

What is the GLD?GLD is a short form for Good London Delivery. The London Bullion Market Association (LBMA) has defined “good delivery” as a delivery from an entity which is listed on their delivery list or meets the standards for said list and whose bars have passed testing requirements established by the associatin and updated from time to time. The bars have to be pure for AU in an area of 995.0 to 999.9 per 1000. Weight, Shape, Appearance, Marks and Weight Stamps are regulated as follows:

Weight: minimum 350 fine ounces AU; maximum 430 fine ounces AU, gross weight of a bar is expressed in troy ounces, in multiples of 0.025, rounded down to the nearest 0.025 of an troy ounce.

Dimensions: the recommended dimensions for a Good Delivery gold bar are: Top Surface: 255 x 81 mm; Bottom Surface: 236 x 57 mm; Thickness: 37 mm.
Fineness: the minimum 995.0 parts per thousand fine gold. Marks: Serial number; Assay stamp of refiner; Fineness (to four significant figures); Year of manufacture (expressed in four digits).

After reviewing their prospectus yet again, it becomes pretty clear that GLD was established to purposefully deflect investment dollars away from legitimate gold pursuits and to create a stealth, cesspool / catch-all, slush-fund and a likely destination for many of these fake tungsten bars where they would never see the light of day — hidden behind the following legalese “shield” from the law:

[Excerpt from the GLD prospectus on page 11]

“Gold bars allocated to the Trust in connection with the creation of a Basket may not meet the London Good Delivery Standards and, if a Basket is issued against such gold, the Trust may suffer a loss. Neither the Trustee nor the Custodian independently confirms the fineness of the gold bars allocated to the Trust in connection with the creation of a Basket. The gold bars allocated to the Trust by the Custodian may be different from the reported fineness or weight required by the LBMA’s standards for gold bars delivered in settlement of a gold trade, or the London Good Delivery Standards, the standards required by the Trust. If the Trustee nevertheless issues a Basket against such gold, and if the Custodian fails to satisfy its obligation to credit the Trust the amount of any deficiency, the Trust may suffer a loss.”

The Federal Reserve knows but is apparently part of the scheme. Earlier this year GATA filed a second Freedom of Information Act (FOIA) request with the Federal Reserve System for documents from 1990 to date having to do with gold swaps, gold swapped, or proposed gold swaps.

On Aug. 5, The Federal Reserve responded to this FOIA request by adding two more documents to those disclosed to GATA in April 2008 from the earlier FOIA request. These documents totaled 173 pages, many parts of which were redacted (blacked out). The Fed’s response also noted that there were 137 pages of documents not disclosed that were alleged to be exempt from disclosure.

GATA appealed this determination on Aug. 20. The appeal asked for more information to substantiate the legitimacy of the claimed exemptions from disclosure and an explanation on why some documents, such as one posted on the Federal Reserve Web site that discusses gold swaps, were not included in the Aug. 5 document release.

In a Sept. 17, 2009, letter on Federal Reserve System letterhead, Federal Reserve governor Kevin M. Warsh completely denied GATA’s appeal. The entire text of this letter can be examined at http://www.gata. org/
The first paragraph on the third page is the most revealing.”In connection with your appeal, I have confirmed that the information withheld under exemption 4 consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you.”

above statement is an admission that the Federal Reserve has been involved with the fake gold bar swaps and that it refuses to disclose any information about its activities!

The above statement is an admission that the Federal Reserve has been involved with the fake gold bar swaps and that it refuses to disclose any information about its activities!

Why use tungsten?

If you are going to print fake money you need to have the special paper, otherwise the bills don’t feel right and can be easily detected by special pens that most merchants and banks use. Likewise, if you are going to fake gold bars you had better be sure they have the same weight and properties of real gold.

In early 2008 millions of dollars in gold at the central bank of Ethiopia turned out to be fake. What were supposed to be bars of solid gold turned out to be nothing more than gold-plated steel. They tried to sell the stuff to South Africa and it was sent back when the South Africans noticed this little problem. The problem with making good-quality fake gold is that gold is remarkably dense. It’s almost twice the density of lead, and two-and-a-half times more dense than steel. You don’t usually notice this because small gold rings and the like don’t weigh enough to make it obvious, but if you’ve ever held a larger bar of gold, it’s absolutely unmistakable: The stuff is very, very heavy.

The standard gold bar for bank-to-bank trade, known as a “London good delivery bar” weighs 400 troy ounces (over thirty-three pounds), yet is no bigger than a paperback novel. A bar of steel the same size would weigh only thirteen and a half pounds.

According to gold expert, Theo Gray, the problem is that there are very few metals that are as dense as gold, and with only two exceptions they all cost as much or more than gold.

The first exception is depleted uranium, which is cheap if you’re a government, but hard for individuals to get. It’s also radioactive, which could be a bit of an issue.

The second exception is a real winner:

tungsten. Tungsten is vastly cheaper than gold (maybe $30 dollars a pound compared to $12,000 a pound for gold right now). And remarkably, it has exactly the same density as gold, to three decimal places. The main differences are that it’s the wrong color, and that it’s much, much harder than gold. (Very pure gold is quite soft, you can dent it with a fingernail.)
A top-of-the-line fake gold bar should match the color, surface hardness, density, chemical, and nuclear properties of gold perfectly. To do this, you could could start with a tungsten slug about 1/8-inch smaller in each dimension than the gold bar you want, then cast a 1/16-inch layer of real pure gold all around it. This bar would feel right in the hand, it would have a dead ring when knocked as gold should, it would test right chemically, it would weigh *exactly* the right amount, and though I don’t know this for sure, I think it would also pass an x-ray fluorescence scan, the 1/16″ layer of pure gold being enough to stop the x-rays from reaching any tungsten. You’d pretty much have to drill it to find out it’s fake.

Such a top-quality fake London good delivery bar would cost about $50,000 to produce because it’s got a lot of real gold in it, but you’d still make a nice profit considering that a real one is worth closer to $400,000.

What’s going to happen now?

Politicians like Ron Paul have been demanding that the Federal Reserve be more transparent and open up their records for public scrutiny. But the Fed has consistently refused, stating that these disclosures would undermine its operation. Yes, it certainly would!

http://www.thetotalcollapse.com/fake...and-fort-knox/

Related articles:

1. Ron Paul: Be Prepared for the Worst
2. Germany latest victim of phony gold bar scam
3. In His Gloomiest Prediction Yet, Marc Faber Sees Big Financial Bust Leading To World War
4. The Economic Crisis and What Must be Done
5. Recent World Events Indicate Impending Market Chaos

Zinc Dimes, Tungsten Gold & Lost Interest

by Jim Willie, CB. Editor, Hat Trick Letter | November 18, 2009

In 1964 the USGovt introduced the zinc dimes clad with silver. They at least admitted the debauchery publicly. Now pre-1964 silver coins are all considered different, and valued differently too, higher. Rome committed the same coinage fraud 1900 years ago. Their Empire went bust as the city burned almost concurrently. Ayn Rand is a guiding light for Alan Greenspan, the enabling destroyer of the US banking system, destroyer of the US household archipelago, and dispatcher of the US industrial base to Asia. He is the hero icon worshipped by Wall Street. The irony is thick, that his career was spent following Old Europe orders that delivered the slow motion coup de grace to the American Empire. Ayn Rand wrote "If you want to know when a society is set to vanish, watch the money. Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of moral existence. Destroyers seize gold and leave to its owner a counterfeit pile of papers." The Chinese are learning this lesson the hard way, challenged to convert their USTreasury Bonds and USAgency Mortgage Bonds into true wealth before the paper becomes worthless and untradable. Actually, the bonds will eventually be redeemed by the USFed with newly printed money, when an avalanche occurs of foreigners seeking redemption en masse. For almost ten years they have been exchanging their finished products to the US & West for paper with ink on it, a veritable counterfeit pile of papers. The Chinese are cashing in on their paper, trading it for new global power.

NEW TUNGSTEN MINE DISCOVERY

The tungsten deposits come in very high grade ore, located in shallow rectangular deposits dispersed widely across the world, segregated in unusual vault heap leach mineralizations. Yes, these guys are leeches! In October, the Hong Kong bankers discovered some gold bars shipped from the United States were actually tungsten with gold plating. This is the exact same Modus Operandi as the silver clad zinc dimes from 45 years ago. History repeats itself. The parallels to mortgage bond fraud with either subprime borrowers or multiple property titles used in bond securitization is easy to spot. A consistent theme runs through the American management of finance and dissemination of fraudulent assets on a global basis. Tungsten gold bars is a feat difficult to surpass. Credit must be given for not leaving any potential for fraud untapped. The Goldman Sachs front running of NYSE trades with their Unix box is just icing on the cake. Fortunately for them, the FBI hustled the whistle blower off and painted him as a Russian marauder of criminal type. Actually, the front running flash trade device is more like icing on the cake whose main body is the naked shorting of bank stocks done by Wall Street firms, whose protector in the USDept Treasury ordered a halt in the practice after they had finished shorting and needed help from the market in covering. Thus the Banned Bank Short List. What a complete comedy of corruption the US financial assets have become. So word comes of tungsten permeating the banking system. It appears the syndicate might be opening the floodgates for the bankers of the world to begin an attempt to corner the light bulb market!!

No disrespect is intended for the trillion$ counterfeits of superstar grade. Refer to the missing $2.3 trillion Pentagon appropriations announced on 10 September 2001. Actually that is just theft, at least done by patriots and certain allies. Refer to the JPMorgan recorded sales of $2.2 trillion in USTreasury Bonds over and above the total issuance by the USDept Treasury itself. That is counterfeit, by definition, at least done by the financial envy of the world. Refer to the missing $1.9 trillion in Fannie Mae funds documented by USDept Housing & Urban Devmt between the years of 1988 and 2000. That gutting was a presidential skeet shooting mission, maybe to fund libraries for memorabilia. These are dastardly deeds of distinction. These are legacy crimes.

The initial discovery was something like four gold bars, which the Hong Kong bankers drilled invasively to test the contents. Reminds me of drilling the earth and measuring how many grams of gold per tonne. The HK bankers hoped to have 99% gold yield in their drill program for the resident bars. They found something like 1% instead and 99% tungsten. By the way, tungsten sells for less than $70 per ton, which makes its swaps for gold to be 60x more profitable than silver bar swaps. Another handy usage for the Gold/Silver ratio in calculations. The hunt was on. Now not a single assayer on the planet is available, as all are tied up. They have been commissioned to test the gold bars shipped from the United States of Fraudulent Banker America in their own bullion vaults. They use basic methods of four drill holes with direct assay of shavings, but also less invasive methods like electro-magnetic waves to examine the metal lattice structure. When highest level methods are needed, they turn to mass spectrometry. NOW ALMOST NO GOLD BARS WILL LEAVE THE LONDON OR NEW YORK METALS EXCHANGES WITHOUT SOME AUTHENTICATION, AS DISTRUST IS WIDESPREAD.

The global bankers must deal with toxic bonds and phony gold bars. Yes, New York City is the financial center of world, but for fraud. Talk circulates that a president from yesteryear with his Goldman Sachs Treasury Secretary might have swapped the entire contents of Fort Knox. So did they not only lease the national treasure of gold, but swapped it first, then leased tungsten gold? Time will tell, as evidence is being accumulated and compiled. The assayers have also been commissioned to assist in authentication of gold bar delivery the world over from the US exchanges. Current estimates among the gold trader community run well past a few hundred thousand 'salted' gold bars, maybe over a million. When the Jackass inquired from a reliable gold trader source as to the timespan for the swaps, the late 1990 decade was the reply for dates on almost the entire false batches. Actually it is a mountainous batch. So the introduction to sophisticated Wall Street methods of currency management during the Decade of Prosperity had a side game running that were profitable indeed to the guys running the USDept Treasury and White House. In an age where the lines between patriotism and treason are blurred, this tungsten episode brings new meaning to the word HEIST.

For some excellent forensic financial analysis on the fake gold project, called Operation Grand Slam, see Rob Kirby's article. It is entitled "On Doing God's Work: Gold Finger, A New Take On Operation Grand Slam With A Tungsten Twist" (CLICK HERE), dated 12 November 2009.

BREAKDOWN AT GOLD EXCHANGES

A Jackass article was posted entitled "Hitmen Contracts to Bust COMEX" in May (CLICK HERE), not without a little stir, even a removal of the article 24 hours later by one website due to its controversial subject matter. The article gave warning. The bust cometh, and it will be spectacular. Enemies come to address the state corruption with syndicate entrenched. The stories told in the press will be peculiar, since told by the victimized establishment. The headlines might be a comedy, with phony reports of foreign subterfuge, when the perpetrators are American and English, who operate from the new Axis of Fascism. The focal point for attacks is actually London at their metals exchange. The early October events included numerous offers by exchange officials to settle gold contract deliveries in cash with a 25% extra vig bonus. Or was it a bribe? Much gold was drained from London on demanded delivery, thanks to a small army of lawyers, a small blizzard of contracts, and a few key judges at the courts. Gold was taken, thus enforcing futures contracts, which happen to be binding contracts. The pressure at the end of November will be worse to make good on gold contract deliveries. Recall the stories back in April for a Deutsche Bank rescue by the Euro Central Bank with a very large (over one million oz gold position) provision made. DBank was in trouble. The pressures are mounting every couple months. Next March will be a climax of the breakdown, or else June.

Some say naively, or rather ignorantly, that nothing in the news points to any breakdowns or extreme pressures. Each delivery month event includes more gold removed from the London exchange, more gold demanded from it, and more movement toward a breakdown. So the next events have even more pressure, with less gold supply and continued relentless demand. Recall also that the exchange, along with the COMEX in the Untied States, exempt the big banks from maintaining 80% collateral when they short gold & silver with paper contracts. Thus the name suppression, or better yet corruption. They are being caught in their naked shorting game. The December 1st events surrounding settlement delivery demands will be more contentious and stressful than October 1st. In sequential manner, the March event will be even more pressure packed, with precious little physical gold in store and more targeted Chinese delivery demanded. The June event will be even more pressure packed still, a backup date for a potential breakdown if it does not occur in March.

The common denominator for the parties demanding gold delivery in London is simple: they are all Asians, all, as in all, and the great majority are Chinese. To say the Chinese are trying to bust the government gold gamers who defend the USDollar is a gross understatement. They use USTreasury Bond credit supply somewhat as leverage, to silence the opposition and critics. One can safely conclude that the US and British banks will be broken with the nexus being their gold management, which underpins the USDollar. Other pressure is sure to mount. Not the kind of pressure you might imagine. Pressure is mounting for senior bank executives and politicians to start revealing the identities, deeds, locations, and dates of the gold tungsten swap, the mortgage bond firehose, and other pervasive frauds protected by the USGovt and British Govt. It might even include producing the true location of the Madoff funds.

GOLD & SILVER BREAKOUTS

The gold & silver prices are moving in lead fashion, and have done so among the currencies for at least the last three months. The major currencies fiddle and diddle (as Johnny Most used to say during Boston Celtic basketball game broadcasts), but gold & silver continue to rise. The Chinese, according to word from connected sources, intend to push the gold price and the silver price relentless upward without explosive parabolic moves and without painful huge selloff corrections. That way, the army of public investors will not lose heart, and will remain on the path, in full phalanx support of the Chinese Govt initiative. The Euro currency has hit the 150 level in mid-October and in mid-November, only to fall back a little. The Euro is not ready for a powerful move to 160 just yet. Such an advance would bring with it a painful effect to German exporters again, not desired. As a result, the gold price in Europe has made significant moves, and is in the process of challenging the 785 high from February. The key to a massive gold bull market is confirmation in terms of other currencies. The gold breakout is being led globally in US$ terms, since the American Peso is the weakest currency on earth outside Zimbabwe. It is being recognized as a Third World banana republic currency. Even the Costa Rican colone currency has made little gains against the USDollar in the last couple months. Bananas are a chief export of Costa Rica. Pura vida! GOLD IS TAKING ITS RIGHTFUL PLACE AS THE PREMIER GLOBAL CURRENCY, AFTER A BREAKDOWN IN THE MONETARY SYSTEM AND INSOLVENCY IN THE BANKING SYSTEM.



My 1130 midterm target for gold has been hit, stated at least three times this summer and autumn in public articles. One must wonder if a sizeable selloff in gold is coming. My view is that given the lack of sudden sharp upward thrusts in the gold price, the prospect of a sharp correction is lessened. Charts tend to show symmetry oftentimes. Besides, the Beijing Put is becoming well-known in the financial circles. The Chinese are using some reverse technical analysis, buying heavily when the gold chart indicates imminent weakness. That way the clueless Western gold sellers will be denied their cheaper re-entry, and will be forced to buy at higher levels. The Chinese are employing an unusual pattern. They are accumulating gold. The Chinese will continue to buy gold with both hands until the supply is exhausted of turkeys who fail to comprehend the Paradigm Shift, fail to comprehend the USDollar revolt, fail to comprehend the broken Western banks, fail to comprehend the endless stimulus, and fail to dismiss the stupid gold bubble argument that seems to be floating around in recent propaganda ploys. Its author overlooks the USTreasury bubble of gigantic proportions.

Whether or not a notable pullback correction comes for gold, who knows? who cares? This is not a time to go in & out, selling & buying back a gold position. It is a time to acknowledge a powerful global shift that will send the USDollar into the dungeon, and deliver gold to unheardof heights. The next target for gold is 1300. The targets for gold are dictated by the size of the jumps from the head and shoulder of the inverted Head & Shoulders pattern. The lost respect from the gold bullion bar fraud, the Weimar output of printed money, the monetization dependence from global isolation, and the lack of leadership all tend to pull the USDollar down. More accurately, these factors will push gold up into a dominant currency position fully recognized, as nations struggle to rebuild their banks after toxic US infection that does not end.



G-20 CONFIRMS PARADIGM SHIFT

The Scotland gathering of bankers had some key signals to report. Note the signal how they ignored the USDollar as a topic in the open chambers. Conclude they wish for benign neglect, where the US$ can find its true value much lower, and eventually depart as the global reserve currency. Note the signal how they urged continued global stimulus. Conclude they wish for the major governments to continue to debauch, undermine, and destroy the major currencies such as the USDollar, British Pound, European Union Euro, Swiss Franc, and Japanese Yen. Conclude they wish for the emerging market economies to be given massive assistance by the industrialized submerged market economies. The more the prominent older nations render harm to their banking systems, economies, and balance sheets, the easier it will be for Brazil, Russia, India, and China to conduct the business of walking the earth as new leaders. The new BRIC nations will build their dominant positions one brick at a time. The Paradigm Shift is away from the USDollar, with power shifting from West to East and in particular toward the BRIC nations. Their most recent visible victory is killing off the G-8 Meeting, which does not convene anymore. Not only does the G-20 serve as the global banker conference forum, but the Chinese have a lead voice, precisely as they demanded. Creditors win their way.

The commodity currencies are in a different earth zone. My analysis has stated that the prominent older nations, the so-called industrialized nations, will not raise their official interest rates. They will only talk, since their banks are insolvent and their government debt securities are caught in asset bubbles. The Euro Central Bank is the most likely to raise interest rates, but only as part of a strategy to split the EU, to push the Latin PIGS nations (Portugal, Italy, Greece, Spain) into the cellar while the Nordic nations work to make restore their sovereignty without forced welfare payments (Germany, Benelux, Austria, Leichtenstein). The German nation has been drained by $40 billion per year for each of the last ten years, and resentment is strong. The Australians and Norwegians hiked their official interest rates in recent weeks. They have commodities to fortify their national economies, and do not concentrate on the sale of inked paper in tainted export.

The Paradigm Shift is toward a more legitimate group of currencies. It is toward currencies backed by hard assets. The currency basket from the Intl Monetary Fund seems like the temporary device. It is actually a Straw Man carrying a straw basket. Before the grand shift is complete to at least one hard asset currency, the doomed currencies will be bound together with IMF twine. The bankers believe the IMF straw basket will give them the power to control the decline of the USDollar, or protect themselves from that decline. The strategy might succeed. It will surely enable the gold price to climb versus all currencies. Gold will be like Moses in a basket as a baby, except moving upstream. The candidates for hard asset currencies are the New Russian Ruble, the Gulf Dinar, maybe even a New Nordic Euro. The process will take time, needs intermediary vehicles to carry the load over some bumpy roads, and urgently needs military protection to enable the new currency launches.

EXIT STRATEGY & WEIMAR DOLLARS

No exit strategy is available either to the Untied States or the British. The USFed conducted its comical pathetic display to announce the USEconomy remains weak with slack capacity, and that an ultra-low official interest rate would be firmly fixed for a long time still. No surprise here! What they did not say is that, like with Japan, they have no possible exit plan. Now almost twenty years later, Japan is stuck with a near 0% rate. If the USFed raises interest rates, they pop the biggest financial bubble on the planet, USTreasury Bonds. The USFed is further hindered since Wall Street is playing the Dollar Carry Trade. They are borrowing 0% money in US$ and investing in commodities like crude oil and US stock indexes. Other players are using the free borrowed money to invest in gold. In fact, just today St Louis Fed President Bullard stated his expectation of no further USFed rate hike until year 2012. It is funny how the farther the bankers are from Wall Street, the less their judgment is clouded.

The Exit Strategy will lead to a road paved by Weimar Dollars. The world's major financial centers outside the central bank accomplices are ditching their dollars. They are diversifying out of US$-based bonds of all types. They are accumulating gold. Some are investing in facilities that are vertically integrated with commodity production, transport, and trade. Like China! The USGovt is investing, by contrast, in clunker cars, still more houses, dead car industry, spoiled AIG insurer, a mortgage cesspool Fannie Mae, pork projects (see unused airport in Johnstown Pennsylvania), and phony war on terrorism for syndicate gain. Quite a contrast! With the news spreading globally about tungsten-laced gold bars, or actually gold-plated tungsten bars, the reputation of the Untied States will grow more tarnished, and more regarded as the most diversified field of financial corruption in modern history, if not all human history.

In time, the only friend of the USDept Treasury to finance its steady stream of Trillion$ in debt will be the Printing Pre$$. Without the printed money to pull off the auctions, they would be utter loud failures. Without the USDollar Swap Facility, foreign central banks would not have funds to use in Treasury auctions. Without the funds from foreign USAgency Mortgage Bonds sold to the USFed for freshly printed USDollars, the foreign central banks would not have funds to use in Treasury auctions. Without the Permanent Market Operations used to scoop up all the unsold bonds stuck with primary dealers, one week routinely after each auction, dealers would be unable to participate in the next Treasury auctions. They would suffer from bond constipation. The key event in the next few months, pushed by the foreign disgust at fraud more pervasive than ever conceived by ordinary man, is THE EXPOSURE OF MONETIZATION for support of the USTreasury Bond. The debt monetization remains a dirty secret, well concealed by the USGovt and the financial press. What comes is isolation, and to those isolated, their best friend will be a Printing Pre$$.

Exposure comes, with detrimental impact to the USDollar. The resulting tarnish to the USGovt image and Wall Street reputation (as though it could be further ruined) will be reflected on the USDollar. In time it will fully resemble a Third World currency. The process will take time, but hyper-inflation is coming to US shores. Where are the Deflation Knuckleheads who tended to dominate the web journals last spring and summer, in incredible dense vapid clueless fashion??? What a tremendously misguided group. They follow religiously the deteriorating economies, miss the twin storm, ignore the power of the unprecedented monetary inflation, and somehow overlook the entire global movement if not revolt against the USDollar in a grand Paradigm Shift. They represent the worst economists in the alternative media on web journals. Their tunnel vision on the falling asset price effect left them vulnerable to missing a tsunami on their own doorstep, incredibly. They still do not offer an explanation of why crude is at the $80 price level again. Supplies of oil are nowhere as great as the false USGovt statistics indicate, but the entire world is hedging at the same time against the US$ with oil assets.

OBAMA VISITS THE LEAD US CREDITOR

During the president visit to Beijing, Obama has been reminded of who the master creditor is. It is China. In public no discussions are made of the Chinese concentrated pressure in London at the metal exchange. Taboo topic. The US President has slipped on three key topics, with mention of the human rights issue, currency manipulation, and the future of communism. The US has no place to lecture any other nation. In the US the new development is dangerous virus vaccines, its resulting debilitation, and confiscation of life savings via Wall Street fraud, so keep human rights talk down. In the US the new development is formation of the Politburo with Czars (without legal power) and the confiscation of homes by Fannie Mae. The rental of Fannie Mae homes after lost title through foreclosure is the last roadway to state ownership of property once held by the proletariat. So keep talk of communism down. In the US the chronic ongoing development is interventions in financial markets with an objective to maintain the USDollar at least double its true value, and to lift stocks of big banks that are insolvent after phony accounting rules were adopted, endorsed, blessed as good. So keep the currency manipulation talk down. China is actually moving toward capitalism, while America has forgotten what capitalism is, and marches with right foot in fascist mud and left foot in communism mud. Some call the US president a puppet of Wall Street, confirmed by his appointment of Goldman Sachs to run the Dept Treasury.

The Chinese serve as the spearhead to displace the USDollar from its perch as the global reserve currency. They realize fully that the battle that must be won is over the Gold-Dollar fiery rod. The Chinese might be orchestrating a gold price move to 1150 and a silver price move to 19 just to slap the US face a little during the state visit. Creo que si!

http://www.financialsense.com/fsu/edito ... /1118.html

Airborne, I was reading about this back around Thanksgiving.

At one time Fort Knox contained over 700 million ounces of gold. But most of it sits below the big banks in New York, and the big ones in Europe.

Related: http://www.alipac.us/f19/tungsten-fi...0/#post1306575

GoldCore's Mark O'Byrne on the Fake Gold Scandal, Macro Gold, and the Risk On Trade!



Published on Oct 4, 2012 by CapitalAccount
check us out on Facebook
http://www.facebook.com/CapitalAccount

Follow us @
http://twitter.com/laurenlyster
http://twitter.com/coveringdelta

Welcome to Capital Account. Gold hit an 11 month high today, supposedly bolstered by signs that the ECB will keep borrowing costs low and the notion that the central bank stands ready to buy bonds in the secondary market. As long as central banks continue to print and maintain negative real interest rates, should investors consider owning gold? A recent PIMCO report stated the following:

"We believe investors should consider allocating gold and other precious metals to a diversified investment portfolio... Regarding inflation in particular, we feel that the Federal Reserve's decision to begin a third round of quantitative easing makes gold even more attractive."

Could this mean investing in gold will become mainstream? We speak to GoldCore founder Mark O'Byrne about the impact of PIMCO's report. We discuss both the supply side, as well as the demand side of the gold bull run. As far as supply is concerned, what are the fundamentals driving gold higher? And as far as demand is concerned, how important is the macro environment of risk-on, risk-off? Are people using gold to hedge, not against moderate inflation, but against the potential for dislocating deflation or runaway inflation and hyperinflation? Mark O'Byrne will give us his take. He is founder and executive director of GoldCore.

Also last month a gold dealer in Manhattan discovered a certified gold bar was in fact made up of more than 75 percent Tungsten. Does fake gold really represent a tail risk for buying physical gold or is this a one-off thing? We speak with Mark O'Byrne, Founder and Executive Director of the international bullion dealer GoldCore about the role of gold and the potential for fraud.

And although we tend to favor market solutions, are market forces actually doing a disservice to democracy? Are media outlets really just focusing on the horserace of presidential politics rather than the substance because the former is more profitable? Lauren and Demerti talk about the presidential debate coverage in today's "Loose Change."

Related: http://www.alipac.us/f19/max-keiser-...ld-vid-265883/

The Germans Are Coming for Their Gold

Published: Wednesday, 24 Oct 2012 | 5:10 PM ET
By: John Carney
Senior Editor, CNBC.com
Diamond Sky Images | Photodisc | Getty Images

A German federal court has said that country’s central bank should conduct annual audits and physically inspect its gold reserves worldwide, including gold in the custody of the Federal Reserve Bank of New York. In addition to the FRBNY, Bundesbank gold is stored in London, Paris and Frankfurt.

(Read more: Republicans Eye Return to Gold Standard)

For decades, the Bundesbank has relied on written confirmation of its gold holdings in London, Paris and New York. According to the report from the German audit court, the last time Bundesbank officials physically inspected the central banks gold holdings was, well, never.

(It should be stated that the folks at FT Alphaville quote a report saying an inspection took place in 1979/1980.)

Interestingly enough, the Bundesbank is apparently quite happy with taking the word of other central bankers about the existence, location and size of its gold reserves. It put out the word that it disagrees with the Audit Court, which only has advisory power and cannot force the Bundesbank to follow its recommendations, about the need for inspections. Nonetheless, the Bundesbank is actually going to follow the recommendation that it verify the gold stocks. It also has plans to ship some 150 tons of gold back to Germany for a more “thorough examination.”

The Bundesbank is, of course, quite right in its opinion of the value of the examinations. In reality, it does not matter one bit whether the Federal Reserve Bank of New York actually has the German central bank’s gold or whether the gold is pure. As long as the Fed says it is there, it is as good as there for all practical purposes to which it might be put. It can be sold, leased out, used as collateral, employed to extinguish liabilities and counted as bank capital just the same whether it exists or not.

(Read more: Why Some Call Return to Gold Standard ‘Ludicrous’)

The actual presence of the gold wouldn’t make a lick of difference unless, say, Germany’s central bank decided it wanted to start using the gold for some practical, non-monetary purpose like making watches.

But there’s long been a paranoia about central bank and government gold reserves. (Read more: GOP Appeased Me on Gold Standard: Rep. Ron Paul)

The gold of the United States government, which officials say is held in the United States Bullion Depository in Fort Knox, has been rumored—probably since the Depository’s founding in 1937—to have been looted and replaced with gold-painted tungsten, for instance. The government treats this as nonsense—which it most likely is—but nonetheless it does conduct regularly scheduled audits of the gold in Fort Knox, including doing purity tests on a small sample of the gold.

This paranoia is not entirely irrational, for one reason. As I mentioned above, for almost all imaginable operational purposes, the actual existence of the gold in Fort Knox or in the vault beneath the FRBNY’s Liberty Street headquarters is irrelevant. The bookkeeping is what really matters here. So long as the Fed says Bundesbank owns X tons of gold, the Bundesbank can act as if it did own the gold—even if the gold had somehow been swallowed into a gold-eating galactic worm hole. But the irrelevance of the facticity of the gold does quite easily lend itself to thinking: if the gold being there doesn’t matter, why would it be there?

(Read more: The Gold Standard and the Myth of Price Stability)

I’m sure the Bundesbank officials understand this quite well, even though the German Audit Court does not. There is nothing to be gained by inspecting the gold. If it is all there and pure, there is no difference from an undiscovered absence. But if the gold isn’t there, well, calamity could follow as trust in the central bank gold depositories evaporated instantly.

In any event, it looks like Bundesbank officials will soon be visiting the Fed’s vault, which is located 80 feet below street level and 50 feet below sea level. The vault is accessible only by elevators controlled by an operator in a remote location. I’ve been told by a source that the elevator operator is actually not in New York City at all, although I can’t confirm this and the Fed won’t discuss this sort of thing.

Down in the vault there are 122 compartments assigned to depositing countries and international organizations. Smaller gold depositing countries get shelves in shared library compartments.

The compartments do not have labels reading “Germany’s gold” and so on. They are instead numbered, and only a few people at the Fed know what numbers correspond to which country. The Fed says it does this to protect the privacy of the depositors. But this also makes actual inspection less reliable.

There’s no way for Germany to know that the gold it is being shown is Germany’s, as opposed to some other depositor’s. In an extreme case—which I have no reason to believe is true—miscreants at the Fed could just show everyone who came to visit the same pile of gold.

This is related to another mystery about gold reserves: why do they persist?

The central banks of the world's established economic powers do not actually do anything with their gold, apart from rare and occasional sales of gold limited by the Washington Agreement to no more than 400 tons per year.

Some central banks lend out their gold to speculators and gold miners (who borrow the gold to finance mines—basically, a risk-free hedged loan since the borrowed gold can be repaid with newly mined gold, regardless of what happens to the price of gold on the market), which can be a somewhat profitable activity—especially when the alternative is just letting it sit around doing nothing but fluctuating in value with the market price. But, as far as we know, this isn’t something the Bundesbank or the Fed does.

When Congressman Ron Paul recently asked Fed chair Ben Bernanke about the rationale for central banks holding gold, Bernanke said it was the result of “long term tradition.” But that’s not really a satisfactory answer. The lack of a satisfactory answer actually contributes to the suspicion that the gold isn’t really there at all. If there’s no purpose for it, why would it be there?

So is the German Audit Court nuts? Not necessarily. For one thing, there probably is some value to putting to rest suspicions that the public is being deceived about central bank gold reserves—although I doubt an audit will really do very much in this regard. For another, there’s always the off-chance that someone has embezzled the gold, enriching himself unjustly. Might as well check if the gold is really there.

The Fed wouldn’t comment on the record about how it will handle a German request to inspect the gold. A source says they would likely work out a deal with the Germans permitting some sort of inspection.

But I like to imagine that the Fed officials would bring the Germans to the door of the a compartment labeled, say, No. 322, and then pose the question: “Are you absolutely sure you want to see what’s in here?”

- by CNBC Senior Editor John Carney
_________________________
Follow John on Twitter. (Market and financial news, adventures in New York City, plus whatever is on his mind.) You can email him at john.carney@nbcuni.com.

We also have two NetNet Twitter feeds. Follow CNBCnetnet for the best of the days posts, including breaking news. Follow NetNetDigest for a feed of every single post each day.

You can also be our friend on Facebook. Or subscribe to John's Facebook page. We're on Google Plus too! Click here for John's Google+ page. Questions? Comments? Tips? Email us at NetNet@cnbc.com or send a text message to: 917-740-8477.Call us at 201-735-4638.© 2012 CNBC.com

The Germans Are Coming for Their Gold - CNBC

http://www.alipac.us/f19/real-reason...s-gold-271041/

http://www.alipac.us/f19/paul-craig-...0/#post1399472