Anyone saw a Panda in half yet?
Drizzt
Posts: 1,036 ✭✭✭
Tuesday, Nov 17th, 2009
Rob Kirby seems like a fairly respectable fellow. But I am thoroughly agnostic about Kirby’s claim that a large portion of the world’s gold has been cut with tungsten. Big claims require big evidence, and I haven’t seen it yet.
True, as Mike Hewitt points out, a Chinese company boasts about making gold-plated tungsten:
A coin with a tungsten center and gold all around it could not be detected as counterfeit by density measurement alone … We are well accustomed to exploit more innovative applications of tungsten products. Gold-plated tungsten is one of our main products.
But there is no evidence that gold-plated tungsten has been used as a counterfeit.
However, we do know that at least some gold held by central banks is fake. For example, as the BBC noted last year, some 90kg of gold held by Ethiopia’s central bank was really gold-plated steel.
Obviously, this is not a first world country or banking center we’re talking about. Ethiopia is one of the world’s poorest countries.
But the fact that any central bank has fallen for fake gold means – in a rational world – that a full audit of the gold holdings of central banks worldwide should be conducted.
Rob Kirby seems like a fairly respectable fellow. But I am thoroughly agnostic about Kirby’s claim that a large portion of the world’s gold has been cut with tungsten. Big claims require big evidence, and I haven’t seen it yet.
True, as Mike Hewitt points out, a Chinese company boasts about making gold-plated tungsten:
A coin with a tungsten center and gold all around it could not be detected as counterfeit by density measurement alone … We are well accustomed to exploit more innovative applications of tungsten products. Gold-plated tungsten is one of our main products.
But there is no evidence that gold-plated tungsten has been used as a counterfeit.
However, we do know that at least some gold held by central banks is fake. For example, as the BBC noted last year, some 90kg of gold held by Ethiopia’s central bank was really gold-plated steel.
Obviously, this is not a first world country or banking center we’re talking about. Ethiopia is one of the world’s poorest countries.
But the fact that any central bank has fallen for fake gold means – in a rational world – that a full audit of the gold holdings of central banks worldwide should be conducted.
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Comments
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Much bigger problem with the counterfeit paper gold. Testimony at the CFTC hearings revealed that there may very well be 1000 times as much paper (futures, ETFs, funds, etc) claiming to be back by gold as their is gold actually backing it. And some of the holders of this paper are being charged storage fees on gold that doesn't even exist. When the lid blows on this one what do you think the price of "real" gold will climb to? We'll probably end up with two gold spot prices - the paper stuff and the real stuff. >>
BINGO!!!
<< <i>Big claims require big evidence, and I haven’t seen it yet. >>
It doesn't even require big evidence. A big whopper of a tale (nearly all the U.S. gold reserves are fake) that has obvious holes in it (e.g. hours after discovering fake gold bars, the whole plot is unraveled and the Chinese know that the plot occurred in the mid-1990s in the U.S., and has the perps in custody!) doesn't need evidence. Remember, the melting point of tungsten is much, much higher than gold (~6,000F vs ~2000F). So anyone using one of these bars (for jewelry, gold plating, electronics, etc.) would immediately discover it and demand the real thing, and perhaps go to the press/authorities. So someone at the LBMA would need to pick who to give the real bars to, and who to give the bad bars to. That would require a lot of people being in on this, and one mixup would ruin the whole thing.
Also, remember that the CFTC hearings did not say that there was 1000x the paper gold as there was real gold. The number 100 was thrown out there (I believe 'multiples of 100 times' was the wording), but it could have been mis-spoken or misinterpreted (e.g. we do know that ~1,000 ounces of gold/silver trade even on COMEX for every ounce actually delivered). It does seem very clear that gold is handled in LBMA similarly to fractional reserves, but I can't imagine it working at, say, 300x. But even if it is 3x, that would have major implications.