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Old 11-07-2011, 02:58 PM   #1
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Where is all that gold?

A few days ago, our very own PMBug (somewhere) wrote that it is important to know where the gold is and not just follow the prices.

So, where is all that gold? This question would be directed mostly at our Department of the Treasury and the Fed. I did see (but do not have the link, sorry) something put out by the Treasury saying that it had this many oz at Ft. Knox, that many in Denver and some at West Point. They also had a smaller amount sitting there in the NY Fed's vault. The Treasury piece also said they audit the gold each year.

If they audit the gold each year, why don't they let some journalists and/or other interested parties come along and see it?

Concerns like security should be easily taken care of. Also, if they would let a "trusted auditor" independently choose some bars for assay, that would make some of us doubters feel better that the gold is where they say it is...

Yes, there still might be questions of ownership (etc.), but if they let some independents in to check out the gold (would NOT COST MUCH), that would help tame all of our suspicions.

---

Same question re other nations, although I could see that security might be more of a problem in, say, Italy or Peru (I read an article in a Peruvian newspaper a year or two ago wondering where PERU's gold was).

Same question re the NY Fed. I did see (online somewhere, Google it!) a pretty brochure re the NY Fed and its vault. Yes, there were pictures.

Same with the ETFs like GLD, etc. Sub-custodians? ferchrissakes...

Last edited by DoChenRollingBearing; 11-07-2011 at 03:00 PM. Reason: bad grammar!
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Old 11-07-2011, 03:26 PM   #2
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Okay. So, we know that some countries have more than others. We also know that some countries lease bank space in the U.S. and other safer, stronger countries for safe keeping.

Once upon a time, my history professor in college was about to start the Napoleonic War part of our course. She proposed the question to the class, "If someone has something you want, how do you go about getting it?" After a few answers she then asked, "How do countries go about getting natural resources they want from other countries?" The kids pretty much came up with the same answers. Free trade, buy/sell etc etc.

I am pretty sure I was the only military vet in that class. All the kids seemed young. I had also read the assigned reading, so I knew she was about to lecture on Napoleon Bonaparte next. Finally, after all these kids had exhausted every thesaurus answer for buying, trading, or selling, I raised my hand and said, "You take it."

Yes, it was the answer she was looking for. Just like any common criminal, if someone has something you want, you go over and rob them of it. However, if they have a gun, you have to bring a bigger gun, or more guns. Hence, armies.

Anyway, what I'm really trying to share is that, not only is it possible that there really isn't enough gold to satisfy an audit, but that the government might not want to compromise the OPSEC and security during this time. I mean, honestly, with everything that desperate terrorists might be willing to do in order to put a knife in the heart of the USA, would you like to air the current location of America's gold reserves on CNN? You know there is a reason that Ft. Knox is the U.S. Army tank training center, right? I mean, it is a 10,000 man division, a fighting force driving the most sophisticated, lethal, toughest tanks ever created. So, since a land invasion for US gold is pretty much out of the question, what does that leave? Nuke it to make it inaccessible and/or melt it to destroy it? Maybe just dirty bomb it so that its radioactive for 15-30 years or something.

So with all that being said, I think our gold is pretty safe, but my point is that I wouldn't rule out the Government deciding it would be best to just play it safe and maintain the secrecy that has surrounded it for all these years.
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Old 11-07-2011, 11:35 PM   #3
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KMS, THAT is an interesting take. I had pretty much assumed that security would be a minor issue. You showed me: "Maybe not." Good on you.

I enjoyed the anecdote about your history professor looking for the right answer! You would have thought that if any of the kids in the class knew that NAPOLEON was next up on the agenda, that someone else would have figured out that answer...
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Old 11-08-2011, 06:38 AM   #4
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History is replete with examples of banking malfeasance in the issuance of credit against gold holdings. I really don't believe central banks today are any different with all their leasing and reselling of gold that never moves from a vault. It really would not surprised me at all to find out that the tungsten filled bar story is more pervasive than anyone really dares to guess.

I covered some of the background for DCRB's op in the total perspective vortex (tl; dr) thread.

My big fear is what may happen when the music stops and nations that think they own X tons of gold find out that their gold is encumbered by ownership claims of other nations 10 times over - that effectively the only one who owns the gold is the one who holds the gold.

I didn't include it in the total perspective thread, but it was an interesting bit of theater back in June at Ron Paul's Monetary Policy Subcommittee discussed accounting of US Gold and what we've pledged to the IMF:


Our gold is not encumbered, and none has ever been moved, *but* we gave some to the IMF and our accounting doesn't reflect it. Got it?
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Old 11-08-2011, 09:41 AM   #5
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Consider a Rothchilds factor.
They left the gold market in 2003, simultaneously the tungsten use and price tanked.
Just try and locate the receivers of the mass amount of tungsten, during its bubble performance. Not available.
All the gold is where it has always been. In Oligarchy's clenching hands.
Who bought all the gold flavored tungsten?
Taxpayers, for their govt.
The ultra rich WILL do everything to keep the paper printing and the gold at home.
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Old 11-08-2011, 06:38 PM   #6
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Originally Posted by PMBug View Post:
My big fear is what may happen when the music stops and nations that think they own X tons of gold find out that their gold is encumbered by ownership claims of other nations 10 times over - that effectively the only one who owns the gold is the one who holds the gold.
This is the part that really baffles me. Here we are on this forum, average people, and we can see through this paper gold charade.

Are the "rulers" of nations really that dumb that they don't see the extreme risk of puchasing paper gold from the IMF?

There must be some other factors going on behind the scenes that complicate the reasons why they do this.
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Old 11-08-2011, 06:43 PM   #7
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Originally Posted by drAGonfly47 View Post:
Consider a Rothchilds factor.
They left the gold market in 2003, simultaneously the tungsten use and price tanked.
Just try and locate the receivers of the mass amount of tungsten, during its bubble performance. Not available.
All the gold is where it has always been. In Oligarchy's clenching hands.
Who bought all the gold flavored tungsten?
Taxpayers, for their govt.
The ultra rich WILL do everything to keep the paper printing and the gold at home.
I have a feeling that somehow, someday this is going to backfire in their oligarchy faces.
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Old 11-08-2011, 07:57 PM   #8
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@ dragonfly

Hmm, interesting comment re tungsten. This subject (tungsten) is where we could use some "adult supervision" (comments from a material scientist) re how to check an Eagle (or Maple Leaf, etc.) to see if it is real gold or just painted tungsten.

Tungsten is VERY HARD TO WORK with though. It might not be practical to make 1 oz coins. Fake big bars is another story.

---

I saw an ad from an interesting company last weekend in Barron's:

assayonwheels.com

They offer a mobile smelting and refining service (in a delivery truck sized vehicle) to pawn shops, etc. They are mostly in the mid-Atlantic area states now, they had their ad in Barron's because they want money to expand. Check out that link, it's an interesting service they offer. Their patents are pending.
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Old 11-08-2011, 07:57 PM   #9
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Originally Posted by Unobtanium View Post:
This is the part that really baffles me. Here we are on this forum, average people, and we can see through this paper gold charade.

Are the "rulers" of nations really that dumb that they don't see the extreme risk of puchasing paper gold from the IMF?

There must be some other factors going on behind the scenes that complicate the reasons why they do this.
Keep in mind that most of these purchasing, leasing and selling decisions are being made by central bankers, not politicians.

Keep in mind also that by leasing and reselling gold as central banks have been doing for decades upon until 2008 or so, they were effectively fractional reserve ballooning the amount of paper gold in existence (essentially gamlbing that they could rely on procuring future production to satisfy leases I suppose). In any event, this helped central banks keep a lid on the price of gold because most players in the the paper/futures markets don't actually take delivery of physical gold. Demand for physical gold has not yet called the bankers on their "bluff".

At least, that's how I understand it from a crude and very limited understanding. I'm sure the cats at GATA could explain it better and in more detail.
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Old 11-08-2011, 08:17 PM   #10
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Originally Posted by PMBug View Post:
Keep in mind that most of these purchasing, leasing and selling decisions are being made by central bankers, not politicians.

Keep in mind also that by leasing and reselling gold as central banks have been doing for decades upon until 2008 or so, they were effectively fractional reserve ballooning the amount of paper gold in existence (essentially gamlbing that they could rely on procuring future production to satisfy leases I suppose). In any event, this helped central banks keep a lid on the price of gold because most players in the the paper/futures markets don't actually take delivery of physical gold. Demand for physical gold has not yet called the bankers on their "bluff".

At least, that's how I understand it from a crude and very limited understanding. I'm sure the cats at GATA could explain it better and in more detail.
Thanks, got it, understood.

The fact that central bankers are buying the gold from each other, then surely they know that it is a shell game amongst each other. I mean, all the central bankers are pretty much in the same "fraternity", right?

So they should not be surprised when the musical chairs game ends and some are left holding only a piece of paper.

You mention 2008. That must be when their price controls began to unravel and the price of gold has seen a steady rise, partly related somehow to their recent huge injections of fiat into the system.
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Old 11-08-2011, 09:16 PM   #11
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2008 or so is when most central banks stopped selling gold and started buying. I might have the year wrong. It could have been 2006 or earlier, but I'm pretty sure the selling stopped after 2000.
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Old 11-10-2011, 10:36 PM   #12
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@DoChen,
Tungsten is usually formed via powder metallurgy - compressed powder is sintered by passing electric current through a bar in a hydrogen atmosphere. It's too high a melting point to cast; what would you make the mold out of? Can't use carbon because it reacts.
For faking gold density, though, it could be sintered with a little bit of gold powder to bind it and fill the voids, which would be easy and not take the high temperatures. Plate the result, and bingo - gold bar, coin, whatever.
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Old 11-11-2011, 05:54 AM   #13
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Originally Posted by PMBug View Post:
2008 or so is when most central banks stopped selling gold and started buying. I might have the year wrong. ...
Quote :
... In 2009 central banks became net buyers of gold for the first time in over two decades. ...


...
http://seekingalpha.com/article/3067...ts-and-figures
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Old 11-11-2011, 10:49 AM   #14
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@ DCFusor

How hard would doing that be (filling in the sintered tungsten "blanks" with gold, and then maybe a quickie gold plating)?

Could Uncle Wong do that in his workshop there in China?

Does this look to be a realistic problem re increasing faking of gold coins?
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