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(Don't worry, paper money is an infinitely
bigger scam.)
There are more
reports of fake 10 oz. gold bars:
http://tinyurl.com/93pdqj6
Fox News has a
video of the bar:
http://tinyurl.com/czkcquf
Patrick Heller
has commentary on this topic, on which I disagree, and I rarely disagree with
him:
http://tinyurl.com/9zp9xsc
Some people are
needlessly in a panic, and since I'm a bullion dealer with a bit of knowledge
and expertise, I'd like to bring the voice of reason to the table. There is
no need for any hysteria.
My conclusion is
that this is not a conspiracy to throw physical gold or silver into question,
but rather, it is likely the work of one individual who found a way to scam
some dealers, which is impressive, because dealers don't often get scammed;
it's why they are in gold in the first place. The thief will get away with it
only this once, maybe, if they don't catch him, and here's
how they will catch him, and prevent this from ever happening again.
The sale of
these 10 oz. gold bars had to be either for cash or wire. A fraudster would
not likely give his name to be put on a check. If it's a wire, then the
seller can also be easily identified, so that's not likely. That leaves cash
as the likely form of payment!
If it was cash,
since it was over $10,000, and closer to $17,000 per bar, there should have
been a CTR cash transaction report, with a social security number, which
would also identify the counterfeiter. If no CTR exists to identify the
seller of the bars (and no smart seller of the bars would go for putting down
valid info on a CTR), then the bullion dealer kind of broke the fincen.gov
Federal Money Laundering regulations!
So, it's likely
that one of the two parties is in trouble!
(And if a
dealer violated Federal law, he is not likely to do that again, especially not
now that there is a Federal Investigation!) But since the first report of
these fakes was from a "dealer to dealer" trade, this explains why
one of the dealers spoke up, because the second dealer in the dealer to
dealer trade likely fully documented the trade.
I'm thinking
that this was a small operation by an individual jeweler who looked for
dealers who would not require a CTR on cash transactions, and who did not hit
the same place twice, and who only sold as much as he could get away with,
limited usually by the "cash on hand" of the bullion/jewelry shop
to whom he sold the bars.
Thus, it does
not require a "global remelt" or re-assay
of all bullion.
I don't see
this as a kind of Federal false-flag conspiracy operation to try to call all
gold into suspicion, and it doesn't do that for me yet. I would begin to
worry more if the world reports gold eagles, or any single one ounce gold
coins, filled with tungsten.
And since Gold
Eagles are US Currency, counterfeits of those would be under the jurisdiction
of the Secret Service for investigation.
Of course, if
they can do it with a 10 oz. bar, they can do it with a 1, technically
speaking. But so far, they didn't. Think about why not. And this brings me to
silver.
So, how do we
know that silver rounds that we buy and sell are not fakes?
Well, we just
heard of fake ten oz. gold bars, not 1 oz. gold bars. The reason is likely
because the time and energy it takes to make a fake must be substantial.
Clearly, these
were hand made, hollowed out or sliced open bars,
also created at risk. There would be no incentive to hand craft silver fakes,
as the profit would not be there, as it may have taken thousands of dollars
in skilled labor to make these fake tungsten gold bars. Nobody would spend
thousands to make a really good fake $35 piece.
Furthermore,
there is no equivalent of tungsten for silver. Tungsten weighs nearly the
same as gold, there is nothing that weighs like
silver.
Would a mint
make fake silver rounds? No.
Mints can make
everything from video game tokens to casino chips or copper rounds.
If a mint made
a fake, the mint would be prosecuted, and shut down, and there is no
incentive to put over a million dollars worth of
machines at risk to make $100,000 in fakes.
Besides,
machines don't make fakes.
The best
machine-made silver coin fakes in existence are the US government issued
common coins with the copper in the middle that you can see. Plated items do
not wear well, they bubble or peel. Clad items show the different metal on
the side, as common coins do, when the blanks are punched out of a strip of
metal by machine.
Thus, the fake
10 oz. bars are likely hand crafted.
Yes, we do test
the purity of the silver rounds we have. Weighing works. Also, the look, the
feel. Plated items are easily detected by hand, as plate bubbles, and it
leaves a "smooth" look and feel to the coin as it's
like paint that smooths out the stamped image and
fills in the lines and grooves. And also, for plated items, the weight is
often off by 30%.
We have cut
into a number of silver rounds over the years, and we've never detected a
fake from our regular suppliers.
We have bought
silver fakes from the public, because the customer does not know they are
fakes, and they typically sell only like 3 at a time, and we are moving fast
on the small trades, and we did not examine them closely enough. We all
learn. These days, every trade is double checked by at least two people, to
try to avoid such mistakes. The fakes we bought were plated buffalo copies,
did not even say they were silver, etc. It was a simple mistake that should
have been easy to see, unless you are just not paying attention or in a rush.
And again, it
was only a handful, and in the silver, it was not a sting operation, and does
not make me suspect the rest of my bullion.
In conclusion,
there is no need to re-test or re-assay any of your own bullion. It's likely
that 99.99% of all the bullion out there is 99.99% pure. And if that's not
good enough, I don't know what is.
Perth Mint agrees that fake gold is very uncommon, and has proof.
http://www.perthmintbullion.com/us/blog/blog/12-03-26/Fake_Bars_-_The_Facts.aspx
The fact that
the bullion world is abuzz with this story goes to show how ultra rare these kinds of fakes are. They are so rare,
and there are so many bullion dealers, I wonder what these fake bars would
sell for on ebay? Might even sell for more than the
gold, after all, the artistry was supposed to be superb, and doesn't good art
always sell for more? Anyway.
We have never
recommended 10 oz. gold bars, for an entirely different reason. Gold bars are
NOT wildly popular with the public, in fact, they
are very rarely purchased or ordered by the public. In three years, I think
we have only traded two of them, and two kilo gold bars.
Gold is money
when it is fungible, meaning that every piece is similar enough to other
pieces as to be easily exchangeable. A 10 oz. or a 31 oz. gold piece is a
large chunk of capital to put into a less desired, "non-moving",
not popular form. Also, when a 10 oz. gold bar is encased in a large piece of
plastic, you are not even saving any space, as 1 oz. coins in a plastic tube
use up less space in a vault, so a big gold bar in large plastic becomes even
less useful.
The best and
two most popular forms of gold are Gold Eagle 1 oz. coins, or generic gold 1
oz. bars. Again, my chart of my most popular forms of bullion bought and sold
can be very useful for this discussion: http://jhmint.com/reports.html
If you ever
visit the JH MINT in Grass Valley, ask to see our tray of fakes. I keep a
tray to show how badly done most fakes really are. We have on display fool's
gold, lead coins, gold electro plated coins, commemorative plated coins. They
never get the weight and look just right, and most are not intended to be
fakes. A gold plated commemorative coin filled with copper is about twice the
size, and half the weight of a gold coin. (Because gold is dense and heavy,
like tungsten.) It's extraordinarily easy to detect most fakes.
Finally, as
proof that what I'm saying is true, that 10 oz. gold bars are not so popular:
the reports of the fake ten oz. gold bars show they were sold to refiners.
Well, that's because a refiner is most likely going to melt them down, like
all the other useless forms of gold out there like used, old, dented, out of style gold jewelry or placer nuggets and
gold teeth.
The other way I
know the news reports are lying when they write, "ten oz. gold bars are
popular" is the fact that no form of gold is popular because gold itself
is still very unpopular and remains a rare and overlooked market, and remains
undervalued. All the gold produced by the world every year, at 70 million oz.,
x $1700/oz. is $119 billion/year., which is tiny in the scale of world
finance. Gold Eagle coins are only a $1.7 billion/year market in the USA
given the mintage figures released by the US mint, and thus, the 10 oz. gold
bar market is far smaller than that, perhaps less than 1/100th in size I'd
estimate, and thus, perhaps be only about a $17 million annual market in the
USA. If ten of these bars are now reported to be counterfeit, that's $170,000
worth. It's tiny, and wildly unpopular, not popular.
In conclusion,
ten fake 10 oz. gold bars was a $170,000 scam. That means that almost no gold
in the gold market is fake. Paper money is a scam
worth hundreds of trillions, that's maybe closing in on a quadrillion, which
is $1,000,000,000,000,000. That means that all of the paper money in the
paper money market is fake.
If this article
was useful to you, please forward it to others, or write your own articles
linking to this one, or even copy parts of it.
=====
I strongly advise you to take possession of real gold and silver, at anywhere
near today's prices, while you still can. The fundamentals indicate rising
prices for decades to come, and a major price spike can happen at any time.
JH MINT &
Coin Shop
13241 Grass Valley Ave
Grass Valley, CA 95945
(530) 273-8175
www.jhmint.com
Minimum
telephone order $5000 for free shipping, USA shipping only.
Open 10AM to 5PM Pacific Time, Monday to Friday, closed weekends and bank
holidays. (Also Closed from Dec. 25th to Jan 1st)
Kerri handles internet phone orders:
kerri@jhmint.com
(530) 273-8822
NEW Location in
Auburn, CA!
JH MINT Silver & Gold
1760 Highway 49 A140
Auburn, CA 95603
(530) 889-1086
www.jhmint.com
You can also
buy silver from my mom at www.momssilvershop.com
Mom will ship overseas, even large orders up to $300,000 or larger, and also
in lots of more or less than 100 ounces.
3510 Auburn Blvd #12
Sacramento, CA 95821
Sincerely,
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