Thursday, 12 November
2009
By: Rob Kirby
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 (a
'Sir' since receiving the title
Knight Commander of the British
Empire in 2002 for his money-printing
abilities) 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.
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:
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.
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?
http://www.reuters.com/article/latestCrisis/idUSL2176351]
– I really doubt that was the intent
back in 1864, when the U.S. adopted
“In
God We Trust”
as their official motto.
And that’s my two cents worth for
today.
Got [real] physical gold yet?
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