http://www.zerohedge.com/news/tungsten-filled-1-kilo-gold-bar-found-uk
Submitted by Tyler Durden on 03/24/2012 16:50 -0400
Source: Gold-quote.net
The table above illustrates that although tungsten's density is within 0.26% of pure gold making it nearly impossible to detect, it is nearly 5% heavier than the 22 karat gold of Krugerrands. The dimension differences of a counterfeited 22 karat coin would have to be 6 times larger than those of a pure gold coin to weight the same. So one is 6 times more likely to detect a counterfeited 22k coin or piece of jewellery than a counterfeited pure gold bar through simple measurement.
and don't forget this piece - it points the finger right at who may have been behind the frauds at issue regarding fake gold .....
http://www.marketoracle.co.uk/Article14996.html
“Gold Finger - A New Take On Operation Grand Slam With A Tungsten Twist” 
Tungsten-Filled 1 Kilo Gold Bar Found In The UK
The last time a story of Tungsten-filled gold appeared on the scenewas just two years ago, and involved a 500 gram bar of gold full of tungsten, at the W.C. Heraeus foundry, the world's largest metal refiner and fabricator. It also became known that said "gold" bar originated from an unnamed bank. It is now time to rekindle the Tungsten Spirits with a report from ABC Bullion of Australia, which provides photographic evidence of a new gold bar that has been drilled out and filled with tungsten rods, this time not in Germany but in an unnamed city in the UK, where it was intercepted by a scrap metals dealer, and was supplied with its original certificate. The reason the bar attracted attention is that it was 2 grams underweight. Upon cropping it was uncovered that about 30-40% of the bar weight was tungsten. So two documented incidents in two years: isolated? Or indication of the same phenomonenon of precious metal debasement that marked the declining phase of the Roman empire. Only then it was relatively public for anyone who cared to find out on their own. Now, with the bulk of popular physical gold held in top secret, private warehouses around the world, where it allegedly backs the balance sheets of the world's central banks, yet nobody can confirm its existence, nor audit the actual gold content, it is understandable why increasingly more are wondering: just how much gold is there? And alongside that - while gold, (or is it GLD?), can be rehypothecated, can one do the same with tungsten?
From ABC Bullion:
http://gold-quote.net/en/articles/fake-tungsten-gold-bars.phpABC Bullion received the following email from one of our trusted suppliers this week.
Note:
- It was not ABC Bullion that purchased this bar, the email and photos were sent to us as a general warning.
- I xxxx'ed out the city's name to avoid any second guessing as to the name of the dealer.
19/03/2012:
Attached are photographs of a legitimate Metalor 1000gm Au bar that has been drilled out and filled with Tungsten (W).
This bar was purchased by staff of a scrap dealer in xxxxx, UK yesterday. The bar appeared to be perfect other than the fact that it was 2gms underweight. It was checked by hand-held xrf and showed 99.98% Au. Being Tungsten, it would not be ferro-magnetic. The bar was supplied with the original certificate.
The owner of the business that purchased the bar only became suspicious when he realized the weight discrepancy and had the bar cropped. He estimates between 30-40% of the weight of the bar to be Tungsten.
This is very worrying and reinforces the lengths that people are willing to go to profit from the current high metal prices. Please be careful.Photos of the cropped bars: 1000g Gold bar cut showing inserted tungsten rods
Two halves of the cropped bar:
Finally, some observations from Paul Mylchreest on debasement:Let’s consider the run-up to Rome’s hyperinflation. I think this comment from jaysromanhistory.com “Good Money, Bad Money, and Runaway Inflation” resonates with what’s happening in the US today:
“Severus Alexander (AD 222-235) tried to reform by going back to the denarius but, once started, this path of runaway inflation and financial irresponsibility on the part of the imperial government proved impossible to control.”
It also seems that the hyperinflation was preceded by some kind of banking crisis, which is an interesting parallel. From “Demise and Fall of the Augustan Monetary System” by Koenraad Verboven:
“Papyri show it was common for private individuals to deposit money at a bank and to make and accept payments through bankers.Bankers in the west disappear from view around the middle of the 3rd c… A famous papyrus from Oxyrhynchus from 260 CE shows exchange bankers closing in order to avoid having to change the ‘imperial money’. The strategos ordered the exchange bankers to reopen and accept all genuine coins and warned businessmen to do the same. In 266 CE we find for the first time transactions being expressed in ‘ptolemaeic’ or ‘old silver’ as opposed to ‘new silver’.”
The chart shows how inflation remained relatively subdued until a tipping point was reached in the late- 260s A.D Monetary systems can absorb substantial abuse before there is a dramatic impact on the price level. For example, the debasement of the coinage was already accelerating in the early part of the third century A.D., before plunging in the latter part. Indeed, the chart below (apologies for the quality) only shows the trend up to 253 AD. By around 290 AD, the coins were only dipped in silver to give them a coating (<0.5%):
Fake gold bars out of tungsten a counterfeit story
Short-term investments are very bullish, erratic, unpredictable and undependable. But, long term investments are, relatively, considered safe and reliable. Precious metals like gold and silver are considered to be true money, and governments have been bastardizing precious metals since the night of time. It's all about printing fake money anyway. Even as stocks were losing their value, gold was marching steadily, increasing by five percent in US dollars.
However, this 'buy and hold' strategy might not work anymore as the sub-prime crisis has shaken this belief in the long term investment mode. Now, has gold joined the bandwagon of safe long-term investment going awry by treading the path of the sub-prime crisis?
The counterfeit story
This October, bankers in Hong Kong were in for a rude shock when they discovered some gold bars from the US to be actually gold plated tungsten i.e., fake gold bars. Acting fast, the Chinese officials found the perpetrators within hours. It seems that fake Tungsten blanks, between 1.3 and 1.5 million 400 oz, were manufactured in the US about fifteen years ago during the Clinton administration. Said to have been done by a very sophisticated refiner, 640,000 of these tungsten planks were gold plated and shifted to Fort Knox. The remaining also gold plated, but sold into the international market. (Fort Knox , as you may be aware, is the United States Bullion Depository, where the official gold reserves of the federal government are stored. This depository of about 4,603 tons (4 176 metric tonness) is the second highest gold depository in the US after the Federal Reserve Bank of New York's underground vault in Manhattan (5,000 metric tonness of gold). Whoever pulled this one on the gold bars had connections inside the government, big banks and also a top-of-the-line fabrication facility. For, counterfeit is not something new for the US government, it did this is 1964 when zinc dimes clad in silver were introduced. That's why the pre 1964 coins are valued more. Elsewhere, early this year, another counterfeit story made rounds as some of the gold bars in the vaults of the National bank of Ethiopia were found to be gold plated steel. It made news when the shipment of gold was returned by South Africa. It only could have been the work of a genius as fake gold bars made of steel are among the easiest to detect as they are lighter. Among gold coins, 22k Gold coins such as Krugerrand, are less likely to be counterfeited because the density of 22k gold minted from gold alloy that is 91.67 percent pure, is far apart from that of tungsten. Tungsten has the same density (19.25g/cm3) as gold, so a fake bar is indistinguishable by weighing it. In comparison the density of pure 24k gold is within 0.26% of tungsten.
| Physical comparison of 24k, 22k gold and tungsten | |||
|---|---|---|---|
| Gold Purity | Density (g/cm3) | Density difference from tungsten | Dimension difference of bar with same weight |
| Tungsten | 19.25 | 0% | 0% |
| 24K Gold | 19.3 | 0.26% | 0.0017% |
| 22K Gold | 18.43 | 4.25% | 0.0077% |
Source: Gold-quote.net
The table above illustrates that although tungsten's density is within 0.26% of pure gold making it nearly impossible to detect, it is nearly 5% heavier than the 22 karat gold of Krugerrands. The dimension differences of a counterfeited 22 karat coin would have to be 6 times larger than those of a pure gold coin to weight the same. So one is 6 times more likely to detect a counterfeited 22k coin or piece of jewellery than a counterfeited pure gold bar through simple measurement.
So just by weighing the coins you would tell a difference. So why aren't so many fake coins in the market? Coins are more liquid and circulated; they change hands more readily so it's more likely a fake one will be detected. Gold bars on the other hands are given as little exposure to human hands as possible (fear of theft). They are conveyed in armored trucks, their serial numbers are exchanged and they're stacked away in a vault never to see the light of day again. Their credibility relies on a piece of paper and paper is easy to forge. Also the labor involved in making fake coins does not make it as worth a criminal's time as a gold bar. (it costs $50,000 to make a fake $400,000 gold bar because of the real gold coating and the labor). Gold coins have lots of details including the number of ridges on the sides etc..and there are a lot of numismatic aficionados out there to tell a real from a fake.
Tungsten: the perfect gold substitute
Tungsten is a steel-gray metal found in shallow rectangular deposits. It has a very high melting point and is brittle making it hard to work with when it's raw. Today, companies like Chinatungsten use Tungsten in jewellery making and in memorial coins. Chinatungsten even offers tungsten alloy as gold substitute. Chinatungsten even brags, on its website, about being an "accustomed experts in fabricating tungsten bars and discs coated with gold."
It's a large scale operation, indeed. The question is since only high-end refineries could manufacture the counterfeit, could it be them? Not that the Chinese have ever made fake copies of anything. And incidentally, China is the leading producer of Tungsten in the world.
Counterfeit coins and gold trading
Well then, on to the impact of counterfeit coins on gold trading: GLD ETF is the case in point. GLD ETF ( StreetTracks Gold Shares), was born just five years ago in November 2004 and is the first ETF in the US to allow stock traders to directly gain price exposure to a physical commodity (gold and silver). Stock investors could buy assets to track the price of gold, get immediate and easy knowledge about gold then speculate-buy or sell. It is the second largest in the world behind SPY, with a mammoth 1117 metric tonnes of gold bullion in trust worth for share holders. GLD, in fact has more gold bullion than the central banks of China, Switzerland, Japan, Europe and India.
The influence of GLD is such that its trading activity can affect the global prices directly. So, are they going to drill all their bars to tell the real ones from the fake ones? Are they going to tell anyone if there is even just one fake gold bar somewhere? What will happen to investors billions if it turns out they hold fake gold? GLD finds a distinction between 'gold' and 'investment in gold'. And it's not clear what these investments in gold are, and they could be anything even remotely related to gold. It leaves none the wiser as there are no independent third party audits. The value of the fund will have to be de-pegged from the value of real gold if it doesn't hold real gold and will likely collapse and with it the billions in retirement investment. People affected would be more as there may be more than one person owning the same asset and hence no automatic right to physical holding. Just check out some of the 'risk factors' mentioned in the prospectus of GLD: "The Trust's gold may be subject to loss, damage, theft or restriction on access. " "The Trust may not have adequate sources of recovery if its gold is lost, damaged, stolen or destroyed and recovery may be limited, even in the event of fraud, to the market value of the gold at the time the fraud is discovered." "The ability of the Trustee and the Custodian to take legal action against subcustodians may be limited, which increases the possibility that the Trust may suffer a loss if a subcustodian does not use due care in the safekeeping of the Trust's gold." If at all anything happens, GLD can easily shake off its role in the whole game. Still, no one is ready to bet on a collapse of the gold market, yet. Further, UBS and Goldman and Sachs predict gold prices rising this year. Meanwhile, India the world's largest gold consumer has bought 200 metric tons of Gold from IMF, to protect against the weakening dollar. And China, Brazil and Russia are expected to buy the rest of the gold offered by IMF of about 403.3 tonnes. So, to the question asked in the earlier part about gold as long term investment, should one still track the price of gold? Yes, on reliable derivatives like gold-quote.net. After all, it's better to be wise than lucky. |
and don't forget this piece - it points the finger right at who may have been behind the frauds at issue regarding fake gold .....
http://www.marketoracle.co.uk/Article14996.html
Gld ETF Warning, Tungsten Filled Fake Gold Bars
Commodities / Gold & Silver 2009Nov 12, 2009 - 12:22 PMBy: Rob_Kirby
“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.
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.
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.
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.
And that’s my two cents worth for today.
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By Rob Kirby
http://www.kirbyanalytics.com/
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