Lump this together with GATA's work in exposing the secret manipulation of the price of gold and you add jet fuel to the gold conspiracy inferno.
The world is slowly waking up from the self induced coma that investors and governments have been living under when it comes to the realities behind gold and the implications of this awakening should not be underestimated.
What the fake gold bar story does is inject DOUBT on the accepted supply/demand dynamics of a shadowy global monetary reserve asset that has been blindly neglected for many years. The existence of fake gold bars, if true, is an amazing story and has the power to completely upend the global monetary system. Over the past 40 years, the reporting of the "official gold supply" has been focused almost entirely upon the work presented in the GFMS annual Gold Survey. This company's report is heavily cited as the "world's gold authority" but, as far as I know, GFMS neither questions the accuracy of its surveyed data nor verifies the quality, quantity or ownership rights of their reported global gold holdings. My friend Adrian Douglas over at GATA and MarketForceAnalysis.com helped expose this highly questionable operation with his article GFMS cooks books to make gold look bad.
So what happens when you inject reasonable doubt into a widely held global reserve asset? Unfortunately we have a very recent comparable situation where the world lost faith in the validity of another favorite reserve asset... REAL ESTATE. Real estate mortgages had historically been a very reliable asset for banks and institutional investors because they usually appreciated (although it was mostly due to the decrease in the value of fiat money) and they had identifiable income streams with predictable loss ratios. The secondary market for mortgages had always been rock solid in the past.
Then, with the invention of Mortgage Backed Securities (MBS's), banks were able to bundle huge packages of mortgages together, sell them off and leverage the proceeds to do the same thing over and over and over. It was like a new monetary printing press for the investment banks and, as always, when you give a banker a printing press they will abuse it until it breaks. In the real estate boom days these MBS packages were filled with thousands of very dubious mortgages laced with weak credits, inflated appraisals, phantom loans and highly complex structures with phony credit ratings. When the real estate bubble finally burst nobody could be sure what was actually in these Mortgage Backed Securities so the bottom fell out of a once reliable market. Almost overnight MBS's that traded at or near par value dropped to pennies on the dollar. To add insult to injury most banks used MBS's as a large part of their Tier 1 Capital forcing them to either raise further capital immediately or sell off a significant portion of their leveraged assets...hence the Financial Crisis last year.
The story of tungsten filled gold bars is similar in many respects to the MBS story. Just as the MBS's were filled with dubious/fraudulent loans it now seems possible that many large gold bars may be filled with dubious/fraudulent gold. And just as the market for MBS's froze overnight so may the market for large gold bars. The reality is that all the large gold bars in the world may now have to be re-melted and verified for purity before anyone dares to re-enter that market!
Do you think I am over reacting? Maybe. But if I were a wealthy investor buying a 400oz gold bar for over $450,000 you bet I'd make sure it wasn't a fake! Hedge funds and institutional investors are required by law to perform their fiduciary duty when investing in any asset. Just the hint of fraud puts them at risk of legal recourse if they don't verify the purity of their gold investments. If all "Good Delivery" bars used in exchanges around the world are now suspect, I wouldn't be surprised if the world gold markets are preparing for a global "Force Majeure"? Most of us know that the major ETF's have been set up from the beginning to avoid any legal responsibility for the purity or quality of their gold. Could this be the "get out of jail free card" for the fraudulent gold and silver ETF's.
Was this part of the banking cabal's endgame plan all along? I think gold market volatility is about to explode. Those holding large gold bars should be scared to death that they are filled with tungsten which tells me they either have to analyze their bar quality or sell them back into the market before everyone starts to question "Good Delivery" bars. This would drive the price on the "paper gold" markets down but at the same time drive the price for real, identifiable, .999 gold into the stratosphere (which is where it should have been without all the fake gold bars!)
For us little guys out there, the probability of your physical gold investments being fake is fairly low if you bought 1 oz coins. Don't get me wrong. There is more and more talk of fake coins coming out of China and history shows that many coins are not the purity they claim. Go buy yourself a testing kit or some coin measuring devices if you are worried. The problems with fake 1oz gold coins pales in comparison to the big players having 150M oz of fake bars circulating in the exchanges and in government reserves.
My advice: Forget about trying to figure out what's about to happen to gold and buy the other monetary metal...SILVER!
Back in the early 1990's when these gold plated tungsten bars were supposedly being manufactured the Clinton clan instituted their "strong dollar policy". The fulcrum of this policy was the rigging of the gold market and it looks like supplying fake gold bars into the market was all part of the price suppression plan. The silver situation was a little trickier than just creating fake silver bars. The problem was that, unlike gold where it is unheard of to melt down "Good Delivery" bars, large silver bars purchased from the exchanges were routinely removed from inventory and melted down to be used for industrial purposes. If the "Good Delivery" silver bars were filled with something like tungsten or lead the industrial users would know almost immediately. That kind of visibility would have called into question all "Good Delivery" metals on the major exchanges.
The solution to this silver problem was to find enough silver to flood the physical market and continue to rig the paper silver markets on the COMEX. Ted Butler has exposed the COMEX market paper silver rigging operation, and I believe I exposed the physical silver solution in my article The Great Silver Mystery (..and the greatest secret of all time!). I postulated in this article that the US removed 470,000,000 oz of silver from the Manhattan Project Calutrons to continue the silver price rigging operation. As you can see from the US government's own data, the exports of physical silver jumped significantly for 4 consecutive years during the "strong dollar policy" heyday. From 1995-1998 the historical average of about 400 tons per year jumped 7x to about 2,700 tons per year.
http://minerals.usgs.gov/ds/2005/140/silver.pdf
It is my contention that 300M+ oz this silver was sent to the UK to supply the LBMA with physical silver and 150M+ oz were supplied to the COMEX inventories. All of these maneuvers were meant to supplement physical silver supply without letting the price rise which would have raised red flags for investors as well exposing the gold price manipulation scam. I would not be surprised if the silver attached to the silver ETF (SLV) has been "re-processed" a few times to dilute the silver content since it isn't in line at the COMEX or LBMA for industrial demand removal. The SLV Prospectus was even changed after the fact to remove the word "Bullion" from all occurrence of the term "Silver Bullion". Red flag or what?!
SO WHERE DOES THAT LEAVE US?
Not that silver needs another bullish reason to motivate investors but the fake tungsten gold bars should further shift investor money away from gold bars and into the tiniest monetary market in the world...SILVER!
Read Road to Roota V for all the other reasons to SWAP ALL YOUR GOLD FOR SILVER!
If you REALLY want to stay away from fake gold and silver you have to buy small weights from known fabricators. I'd even go so far as to stick with 1oz US Eagle coins because they are US Constitutional money and, theoretically, since they are denominated as $1 they should have the same legal protections as counterfeiting fiat money.
We are living through the final days of Fiat Money and you need to position yourselves with the right assets at the right time to survive this transition.
For some reason this songs keeps playing in my head...
"One day we'll look back on this and it will all seem funny
But now you're sad, yer Mama's mad
And you're papa say's he knows that I don't have any money
Yeah, you're daddy says he knows that I don't have any money"
Bruce Springsteen - Rosalita
May the Road you chose be the right Road!
Bix Weir
I'd like to extend a special invitation to all gold and silver bugs. For the past few years I have run a very private newsletter for followers of my Road to Roota Series. There were very good reasons to keep this newsletter private but I have decided to officially offer it to the public in a newsletter called the "Road to Roota Letters". This email based service focuses more on the conspiracy side of the gold and silver manipulation story without the constraints of generally accepted market views. The content analyzes the maneuvers of the banking cabal as well as the status of the return to the gold standard. Although this is a subscription only service, I am offering a FREE TRIAL to anyone who wants to receive it until January 1, 2010.
