“Gold Finger - A New Take
On Operation Grand Slam With A Tungsten Twist”
I’ve already reported on
irregular physical gold settlements which occurred in London, England
back in the first week of October, 2009. Specifically, these settlements
involved the intermediation of at least one Central Bank [The Bank of
England] to resolve allocated settlements on behalf of J.P. Morgan and
Deutsche Bank – who DID NOT have the gold bullion that they had sold
short and were contracted to deliver. At the same time I reported on
two other unusual occurrences:
1] - irregularities
in the publication of the gold ETF - GLD’s bar list from Sept. 25
– Oct.14 where the length of the bar list went from 1,381 pages to
under 200 pages and then back up to 800 or so pages.
2] - reports
of 400 oz. “good delivery” bricks of gold found gutted and filled
with tungsten within the confines of LBMA approved vaults in Hong Kong.
Why
Tungsten?
If anyone were
contemplating creating “fake” gold bars, tungsten [at roughly $10
per pound] would be the metal of choice since it has the exact same density
as gold making a fake bar salted with tungsten indistinguishable from a solid
gold bar by simply weighing it.
Unfortunately,
there are now more sordid details to report.
When the news of tungsten
“salted” gold bars in Hong Kong first surfaced, many people who I
am acquainted with automatically assumed that these bars were manufactured in
China – because China is generally viewed as “the knock-off
capital of the world”.
Here’s
what I now understand really happened:
The amount of “salted
tungsten” gold bars in question was allegedly between 5,600 and 5,700
– 400 oz – good delivery bars [roughly 60 metric tonnes].
This was apparently all highly
orchestrated by an extremely well financed criminal operation.
Within mere hours of this scam
being identified – Chinese officials had many of the perpetrators in
custody.
And here’s what the
Chinese allegedly 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. I know folks who have copies of the original
shipping docs with dates and exact weights of “tungsten” bars
shipped to Ft. Knox.
![](http://www.24hgold.com/24hpmdata/articles/2009/11/img/20091113CLA09011.jpg)
The balance of this 1.3 million
– 1.5 million 400 oz tungsten cache was also plated and then allegedly
“sold” into the international market.
Apparently, the global market is
literally “stuffed full of 400 oz salted bars”.
Makes one wonder if the Indians
were smart enough to assay their 200 tonne haul from the IMF?
A Slow Motion Train Wreck, Years
in the Making
An obscure news item
originally published in the N.Y. Post [written by Jennifer Anderson]
in late Jan. 04 has always ‘stuck in my craw’:
DA investigating NYMEX executive
- Manhattan, New York, district attorney's office, Stuart Smith - Melting Pot
- Brief Article – 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.
We never have found
out what happened to poor ole Stuart Smith – after his offices were
"raided" – he took administrative leave from the NYMEX and he
has never been heard from since. Amazingly [or perhaps not], 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?
These revelations should provide
a “new filter” through which Rothschild exiting the gold market
back in 2004 begins to make a little more sense:
“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 suspect:”
*SOMETHING IS AMISS. THEY
KNOW A BIG GOLD SCANDAL IS COMING AND THEY WANT NO PART OF IT. …”
“ROTHSCHILD
WANTS OUT BEFORE THE PROVERBIAL "S" HITS THE FAN.” BILL
MURPHY, LEMETROPOLE, 4-18-2004
Coincidentally [or perhaps,
not?], GLD Began Trading 11/12/2004
In light of what has occurred
– regarding the Gold ETF, GLD – 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 “salted 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:
http://www.spdrgoldshares.com/media/GLD/file/SPDRGoldTrustProspectus.pdf
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 Fed Has Already Been Caught
Lying
Liberty Coin’s Patrick
Heller recently wrote,
Earlier this year,
the Gold Anti-Trust Action Committee (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
(covered up to omit sections of text). 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/files/GATAFedResponse-09-17-2009.pdf.
The first paragraph on the third page is the most revealing. Warsh wrote,
"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."
This paragraph will likely be one of the most important news stories of the
year.
Though not stated in plain English, this paragraph is an admission that the
Fed has in the past and may now be engaged in trading gold swaps. Warsh's
letter contradicts previous Fed statements to GATA denying that it ever
engaged in gold swaps during the time period between Jan. 1, 1990 and the
present.
[Perhaps most importantly],
this was
GATA's second FOIA request to the Federal Reserve on the issue of gold swaps.
The 173 pages of documents received for the 2009 FOIA request all
pre-dated the 2007 FOIA request, which means they should have been released
in the response to the earlier FOIA request. This establishes a likelihood
that the Federal Reserve has failed to adequately search or disclose relevant
documents. Further, the Fed response admitted that it had copies of relevant
records that originally appeared on the Treasury Department Web site, but
failed to include them in its response.
Now that Federal Reserve
governor Warsh has admitted that the Fed has lied in the past about the
Fed’s involvement with gold. It should now be very clear to everyone
why the Fed is lying and the true nature of what they are hiding /
withholding.
On Doing God’s Work
An important footnote to
consider is the inter-twined-ness of the U.S. Federal Reserve and the U.S.
Treasury [can anyone really tell them apart?] as well as this duopoly’s
two principal agents – J.P. Morgan-Chase and Goldman Sachs. When
one truly grasps the nature of these highly conflicted relationships it gives
a fuller meaning to words recently uttered by Goldman head, Lloyd Blankfein,
who claimed,
“I’m doing god’s work”
Does this really mean that Mr.
Blankfein believes that the Federal Reserve is god? You can judge for
yourself. While the Fed prints money like no one else could - except
god almighty himself [or Gideon Gono, perhaps?] – I
really doubt that was the intent back in 1864, when the U.S. adopted “In God We Trust” as their
official motto.
![](http://www.24hgold.com/24hpmdata/articles/2009/11/img/20091113CLA09012.jpg)
And that’s my two cents
worth for today.
Got [real] physical gold yet?
Rob Kirby
KirbyAnalytics.com
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by Rob Kirby
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