by Dan Eden
December 04, 2009
from MondoVista Website
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
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.
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
Who did this?
Apparently our own government.
In October of 2009 the Chinese received a shipment of gold bars.
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 (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.
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
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
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,
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.
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
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)
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;
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 organization 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
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 association and updated from time
to time. The bars have to be pure for AU in an area of 995.0 to 999.9
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.
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.
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.
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
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
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 here.
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
This information was properly withheld from you."
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
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
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
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
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
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
Yes, it certainly would!
UPDATE: Audit of Fed Reserve Amendment Passes!
In an unprecedented defeat for the
Federal Reserve, an amendment to audit the multi-trillion dollar
institution was approved by the House Finance Committee with an
overwhelming and bipartisan 43-26 vote on Thursday afternoon despite
harried last-minute lobbying from top Fed officials and the surprise
opposition of Chairman Barney Frank (D-Mass.), who had previously been a
The measure, cosponsored by Reps. Ron Paul (R-Texas) and
(D-Fla.), authorizes the Government Accountability Office to conduct a
wide-ranging audit of the Fed's opaque deals with foreign central banks
and major U.S. financial institutions.
The Fed has never had a real
audit in its history and little is known of what it does with the
trillions of dollars at its disposal.
The manufacture of fake gold bars goes back
years and, because of this, it is not likely that the originator of this
scheme will ever be revealed or brought to justice.
Meanwhile the world is
just beginning to learn that much of its national reserves of gold may be
fake. If more testing reveals that this gold was guaranteed by Fort Knox and
the US Treasury then perhaps they will demand an exchange for "real" gold
- wouldn't you?
This is all happening at a time when the US economy is at its lowest and
most vulnerable. The effects could be devastating.
Some investors are already selling gold commodities before these facts are
widely known. They are investing instead in silver - the next best metal.
This will undoubtedly drive silver prices up.
According to Jim Willie, 24 year market analyst and Ph.D in statistics,
bust cometh, and it will be spectacular. The stories told in the press will
be peculiar, since not told objectively. The headlines might be a comedy,
with phony reports of foreign subterfuge, when the perpetrators are home
This is yet another story in the decline of America and capitalism - a
decline based on greed, deception and fraud.
UPDATE MARCH 5, 2010
Largest Private Refinery Discovers Gold-Plated
by Patrick A. Heller
March 02, 2010
Recently, the German television station ProSieben ran a news story covering
W.C. Heraeus in Hanau, Germany, the world’s largest privately owned
In the story, Wilfried Hörner, the head
of the gold foundry, shows a 500 gram bar (16.0755 troy ounces) received
from an unidentified bank.
The bar had the right physical dimensions to be
an authentic gold bar, but one of the Heraeus employees suspected something
funny. After the bar was cut in half, you can see that the inside is
tungsten, with only a coating of gold on the outside.
Last fall, Rob Kirby of Kirby Analytics in Toronto reported that China's
central bank had discovered some 400-ounce gold-plated tungsten bars among
those it had recently received from bonded warehouses.
It was later learned
that at least four counterfeit bars were found and that all had come from
sources in the United States.
As suspicions grow about counterfeit bars
among those held in bonded warehouses for delivery against either COMEX or
London Bullion Market Association contracts or shares of exchange traded
funds, investors could panic.
So, you can understand that there has been
almost a total blackout on news coverage on this story.