5 replies to this topic

[Traderlex]

Operation Grandslam

making gold plated tungsten bars and calling them good. this story is about to take off now i would think. imagine the fear in the world today because of this. gold bars marked good for delivery. looks like assaying work is about to pick up and they will be hiring men to do the drilling of holes in each of the bars owned by the central banks..ha ha

There are two foreign depositories for gold:

1. Bank of England

2. Bank of NY

There is no doubt that the source of the "tungsten" is the Bank of England.

Tungsten is unique and one of its chief characteristics is that it has the same density of gold. Gold is very dense and so is tungsten. Tungsten is also very cheap.

One of the oldest scams is making a brick of tungsten and covering the brick with gold, sealing all the edges and covering the whole surface with real gold.

A London Good Delivery Gold Brick is a 400 oz gold brick, stamped on the bottom with the assayer (e.g. Johnson Mathey). The stamp would have the serial number and the weight of the bar to 3 decimal places.

If I were to buy gold from London and ship to say the bank of Nova Scotia, Scotia Macotta, the agent for the bank and for me would guarantee to me the purity and the weight.

For this I pay insurance, shipping fees and storage fees. If the gold comes from their own inventory, they would not assay. If it comes from another vault, then one or two bricks would be assayed.

The assay requires a hole to be drilled to make sure that gold is uniform. The core and the brick is then heated and reweighed and stamped and that new brick would have Good Delivery Status.

It would be a nightmare to assay every brick that comes to a bank.

It now seems that the Chinese asked for an assay on some of their bricks and lo and behold, some were filled with Tungsten. You can imagine the nightmare that this presents itself.

Here is Jennifer Barry's account on these findings by Rob Kirby:

Speaking of fraud and the grim reaper…doctored gold bars


http://www.kirbyanalytics.com/

[goldswinger]

It is beyond me why would anybody buy gold bars, coins yes, but gold bars?. It's not like you can go to walmart and buy a plasma TV with a GOLD bar, or walk to your gold pawn shop with your heavy cargo and exchange it for US pesos....if you have to do that , chances are you'll get mugged while carrying you heavy cargo or on the way out with the cash...... If you leave it in the bank, chances are uncle Sam will confiscate it in due course. GS.

[cgnx]

This is a BS story to attempt to guage the skittishness in the gold market. As you can see, nobody gives a crap. When you are taking or buying large amounts of gold, you can bet your Bippy those folks have done there due diligence. Wouldnt you. Testing the mettle of those gld holders is my bet. If they can scare folks with BS stories, they will.

[dasein]

i am surprised this came out only now - i have been wondering when this would happen since gold got over 500/oz. tungsten bars in the vaults in HK? well, I can tell stories, makes sense to me, e.g. in the old days, most of the high end stolen cars from HK ended up in China and it was the PRC police and other high ranking officers that were implicated - one famous instance was a diplomatic mercedes. I also remember camping in the NTs and seeing large scale smuggling every night.

[Rogerdodger]

I remember a story about fake gold bars being held in vaults:

Posted 03.14.2008
On Wednesday, the BBC reported that millions of dollars in gold at the central bank of Ethiopia has 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.
According to the news, the authorities have arrested pretty much everyone involved, from the people who sold the bank the gold, to bank officials, to the chemists responsible for testing and approving it on receipt.
The problem is, anyone who so much as picked up one of these bars should have known immediately that they were fake, no fancy test required. The weight alone is an instant dead giveaway.
How do you make a fake gold bar that at least passes the pick-it-up test?

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.)


LINK

But you never know the real intent of stories.
For example last year I read this:

As the "deleveraging trade" continues on this planet, the Dollar will continue to move higher and this "deleveraging trade" phenomenon will take years to complete. There are still far too may investment banks hedge funds that have n their books a leverage of 30-1 or 40-1 or greater. The process of deleveraging assets has just begun – and we are not even halfway through it. This combined with the onset of what is going to be a very deep recession at a time when speculative bubbles in a variety of asset classes have just burst ensures that we will see falling prices and the rising value of the US Dollar.

In Dollar terms, it is likely that the price of gold will continue to fall because there is a host of negatives.

In intermediate terms, 6 months out I think you're looking at $600 gold.
Nov 8 2008

Gold was a little over $700 at the time the article was written.

Edited by Rogerdodger, 18 November 2009 - 09:30 AM.

[jjc]

With regards to the alleged tungsten fraud, such fakes could perhaps
circulate outside the Good Delivery circuit. But it's unlikely that any
such metal could ever make it into accredited storage.

Accredited custodians only take in bars from other accredited vaults,
and metal only enters the system from accredited refiners. Even when
they bear the correct bar stamps, large gold bars are not usually
accepted from people outside the Good Delivery circuit, which is why
taking a Good Delivery bar into private possession seriously dents its
value. Any potential buyer, lacking the accredited storage history which
ensures integrity, would rather deal accredited metal from an accredited
source. It's this warranty -- that delivery is good -- which makes the
professional wholesale market cost-efficient and liquid.

You can learn more about Good Delivery at the London Bullion Market
Association (LBMA)'s website. You'll note just how exacting the criteria
for refining and assaying are:
http://www.lbma.org.uk/delivery

The Physical Committee's detailed work on weighing scales is also worth
reviewing. Because at these tolerances, the difference in density
between gold and tungsten would show in a 400-ounce bar. Their very
different melting points (1064°C for gold, 3422°C for tungsten) also
make the alleged fakes unlikely, as do their physical states when cooled
(gold is soft, tungsten brittle). Following back along the chain of
integrity – the formal history of who held the bars, when, and in which
approved facility – would ultimately lead to the producing refiner, and
no amount of "tungsten" fakes would be worth the law suits, let alone
the loss of LBMA accreditation.

As regards the rumours and stories themselves, "Impeccably reliable
sources" would never tell an internet blogger that "a number of
well-heeled market participants bought...gold futures on the London
Bullion Market (LBMA)". Not because they wouldn't want to share such
information, but for the simple reason that London dealers don't offer
gold futures. Spot, forwards and options, yes. But futures, no.

Nor can anyone trade gold "on" the LBMA, because it is a trade
association, not an exchange or the market itself. Nor is gold dealt at
the London Metals Exchange (LME) as some authors state. It offers
base-metal contracts.