PSA: If you invest in gold ...

[kenny]

Scroll down and watch the video.

http://www.zerohedge.com/news/tungsten-filled-10-oz-gold-bar-found-middle-manhattans-jewelry-district

 

[ForteKitty]

I'd be happier if it was filled with chocolate.

 

[kenny]

I'd be happier if it was filled with chocolate.

Not if you paid $18,000 for it.

 

[distracts]

I'd be happier if it was filled with chocolate.

Not if you paid $18,000 for it.

Really, really good chocolate.

eta: Now I want dessert. ICE CREAM YAY.

 

[minousbijoux]

OMG, Fortkkitty, that's the first thing I thought of too! Maybe its something about that very yellow gold color that reminds us of chocolate bar wrappers (Charlie and the Chocolate Factory perhaps with the golden ticket?)! Sigh.

 

[minousbijoux]

...and Kenny, sorry we're not registering the correct amount of shock ...

 

[Dancing Fire]

i remember about 20 yrs ago someone try to sell me 100 counterfeit 1 oz gold Pandas... gold at the time was trading for like $325 per oz.

 

[ForteKitty]

I'd be happier if it was filled with chocolate.

Not if you paid $18,000 for it.

Well, after the shock and anger wears off, of course. Compared to a block of tungsten? I rather have the chocolate.

 

[Karl_K]

The general idea has been around for a long time.
Funny story....
The lady who used to run the little coin/gold/collectable shop near me used to keep a tuning fork at the counter and hit coins and bars with it and could pick out the fakes by listening to it.
She had me mix them up and hand them to her one at a time and without looking she picked out the fakes every time.
You could not pick the good fakes out by weight or appearance.
You could pick them out by carefully measuring them because they were a bit off in size per weight.

 

[iLander]

I wonder if this was why the Gypsies always used to bite gold coins, to test them with their teeth?

 

[kenny]

What do our PS attorneys say?

I'm curious about what is legal.
I guess you could try to sue the dealer for fraud, but apparently the dealers didn't know they were duped too.

After the dust settles who exactly loses 70% of their money, the end buyer, the dealer, the one who sold it to the dealer?

With legal tender like a one-hundred dollar bill it is clear the end person, you or I, loses the entire $100, which gets confiscated and turned over to law enforcement.
But this is not currency.
It is a product, a defective one.
I think there are state laws about warranty on products.

 

[chrono]

This is positively scary.

 

[iheartscience]

I'd be happier if it was filled with chocolate.

Guess it's a good thing we'll never actually return to the gold standard. Sowwies Ron Paul!

 

[0-0-0]

I think we should go on a chocolate standard. At least it's edible in emergencies.

 

[chrono]

Not the cheapie American chocolate but the rich bitter dark ones.

 

[iheartscience]

I think we should go on a chocolate standard. At least it's edible in emergencies.

Now I could get down with that standard!

 

[Dancing Fire]

What do our PS attorneys say?

I'm curious about what is legal.
I guess you could try to sue the dealer for fraud, but apparently the dealers didn't know they were duped too.

After the dust settles who exactly loses 70% of their money, the end buyer, the dealer, the one who sold it to the dealer?

yes,IMO.

 

[kenny]

Oh My!
It's growing.

http://www.wealthdaily.com/articles/fake-gold-in-manhattan/3680

By Christian DeHaemer
Thursday, September 20th, 2012
A ten ounce gold bar costing nearly $18,000 turned out to be a counterfeit.
The bar was filled with tungsten, which weighs almost the same as gold, but costs just over a dollar an ounce.

MyFoxNY reports:

Ibrahim Fadl bought the bar from a merchant who has sold him real gold before. But he heard counterfeit gold bars were going around, so he drilled into several of his gold bars worth $100,000 and saw gray tungsten — not gold.
What makes it so devious is a real gold bar is purchased with the serial numbers and papers, then it is hollowed out, the gold is sold, the tungsten is put in, then the bar is closed up.

Chinese Fraud

The Secret Service is now investigating this latest counterfeiting.
But this isn't the first time this has happened...
In March, gold bars filled with tungsten showed up in England, Australia, and Hong Kong.
It has even been rumored that some of the 200 metric ton gold sold to India from the IMF contained tungsten.
Of course, no one is talking.

In the short run, this will mean your ability to buy gold bars will be slowed as New York gold merchants figure out how to regain credibility (or until the whole matter is swept under the rug).

One way to avoid buying fake gold is to buy it in smaller quantities from reputable merchants. Though it requires a great deal of sophistication to fill a gold bar with tungsten, the manufacturing techniques make it more worth it in large bars versus small coins.

Wealth Daily readers have used Asset Marketing for their gold coins for years with nary a complaint. You can find them here.
Straight to the Source

The source of these fake gold bars is a criminal Chinese gang that produced them during the Clinton years.
The story goes that between 5,600 and 5,700 400oz bars — 60 metric tons — were counterfeited by a sophisticated criminal organization...

The Chinese arrested many of the perpetrators shortly after the scam was uncovered, but not before a sizable amount of the gold bars were sold...

It's thought that more than 1.5 million 400oz tungsten blanks were manufactured in the United States. Of those manufactured, some 640,000 bars received gold plating and were shipped Ft. Knox, where they remain to this day. This was the impetus for Ron Paul's call to edit Fort Knox.
The remaining bars were gold plated and sold on the international market, where they show up from time to time in cities around the world.

This begs the question about the gold resting five stories below the Federal Reserve Bank of New York...
Could the planet's largest gold vault — containing 25% of the world's gold — be counterfeit?
Of course it couldn't... but don't hold your breath waiting for clarity.

In the aftermath of QE3 (or what some are now calling QE-finity, due to its never-ending nature), the price of hard assets must go up in relation to the U.S. dollar over the long term.
Silver, unlike gold, is much harder to counterfeit.

Due to the industrial nature of silver, it is melted down and used in manufacturing. This is something that would be sacrilegious to do to a gold bar with its certification numbers and seals.
Thus, fake silver bars would be more likely to be discovered.

The numbers I see are that gold is more than forty times more likely to be counterfeited than silver.
The silver that is counterfeited is usually in the form of bars that weigh ten onces and up.

U.S. silver coins that were produced before 1965 that are 90% silver and 10% copper are the most likely to be be real due to their small size.

 

[partgypsy]

If so, it would be the world's biggest bank heist. Maybe I should hold onto my 1 oz gold coin my sister and I inherited from our great grandfather? At least we know that's real gold (been in a bank safety deposit the last 40+ years).

 

[chrono]

Absolutely; I'm holding on to my old coins and wafers which were passed down from my great grandparents.

 

[kenny]

So, if we thought there was x ounces of gold floating around but it was proven the supply is only 0.5x does not the value of verified real gold just go up 50%? or is it 100%?

Never been a math guy.

 

[0-0-0]

Not the cheapie American chocolate but the rich bitter dark ones.

99% for purity of course!

 

[Karl_K]

So, if we thought there was x ounces of gold floating around but it was proven the supply is only 0.5x does not the value of verified real gold just go up 50%? or is it 100%?

Never been a math guy.

Somewhere around 20+% of all known gold is held by governments and not on the market so an artificial market already exists so it is hard to say.

 

[kenny]

So, if we thought there was x ounces of gold floating around but it was proven the supply is only 0.5x does not the value of verified real gold just go up 50%? or is it 100%?

Never been a math guy.

Somewhere around 20+% of all known gold is held by governments and not on the market so an artificial market already exists so it is hard to say.

But Karl, did you read this part of my above quote of the article?

It has even been rumored that some of the 200 metric ton gold sold to India from the IMF contained tungsten.
Of course, no one is talking.

In the short run, this will mean your ability to buy gold bars will be slowed as New York gold merchants figure out how to regain credibility (or until the whole matter is swept under the rug).

One way to avoid buying fake gold is to buy it in smaller quantities from reputable merchants. Though it requires a great deal of sophistication to fill a gold bar with tungsten, the manufacturing techniques make it more worth it in large bars versus small coins.

Wealth Daily readers have used Asset Marketing for their gold coins for years with nary a complaint. You can find them here.
Straight to the Source

The source of these fake gold bars is a criminal Chinese gang that produced them during the Clinton years.
The story goes that between 5,600 and 5,700 400oz bars — 60 metric tons — were counterfeited by a sophisticated criminal organization...

The Chinese arrested many of the perpetrators shortly after the scam was uncovered, but not before a sizable amount of the gold bars were sold...

It's thought that more than 1.5 million 400oz tungsten blanks were manufactured in the United States. Of those manufactured, some 640,000 bars received gold plating and were shipped Ft. Knox, where they remain to this day. This was the impetus for Ron Paul's call to edit Fort Knox.
The remaining bars were gold plated and sold on the international market, where they show up from time to time in cities around the world.

This begs the question about the gold resting five stories below the Federal Reserve Bank of New York...
Could the planet's largest gold vault — containing 25% of the world's gold — be counterfeit?
Of course it couldn't... but don't hold your breath waiting for clarity.

 

[chrono]

Will all this uncertainty mean another round of gold price increase?

 

[Karl_K]

Will all this uncertainty mean another round of gold price increase?

If anything it will make the price go down.
Since so far it is about large bars it might not move things a lot.
This is why I don't buy gold bars of any size.
Coins are much safer as they can more readily checked and are more complex to counterfeit.
A careful buyer can verify a coin 99.99% themselves not so with bars.
Stay away from collector coins and stick with bullion coins priced at near spot.
A Canadian Maple leaf coin is the current favorite of a careful buyer.
American eagles carry a bit more of a premium but are the most beautiful coin ever minted.

 

[Karl_K]

So, if we thought there was x ounces of gold floating around but it was proven the supply is only 0.5x does not the value of verified real gold just go up 50%? or is it 100%?

Never been a math guy.

Somewhere around 20+% of all known gold is held by governments and not on the market so an artificial market already exists so it is hard to say.

But Karl, did you read this part of my above quote of the article?

yes I did.
The price of gold is based on emotion and speculation rather than much of any real value so predicting what the price will do is pretty much impossible.
It is really a goofy market.

 

[kenny]

But if this turns out to be VERY widespread and large amounts of Fort Knox and the reserves of other countries are involved, part of the world's supply of gold just vanished into thin air.

What if yesterday we thought 158,000 tons of gold has been mined, but suddenly we learn there is only 120,000 tons?

Economics tells us that when supply goes down, price goes up.

 

[chrono]

In theory, there is less gold going around so price should increase. In reality, nobody wants to touch this stuff so price will decrease. I think gold price will be volatile in the short term. The coins I have are old gold British ones. What are those called? It's been a while since I've visited them in the vault but I don't think mine are American eagles.

 

[Dancing Fire]

speaking of counterfeit...
this is the best counterfeit $10 glod piece that i ever encountered. about 6 yrs ago a coin dealer friend of mine offer to sell me this 1892 $10 gold piece for $1500. i told him it was a counterfeit coin (he laughed at me) and so i offered him $310 which was melt value for its gold content, at the time gold was trading for about $620 per oz.anyhow,he claim it is a genuine coin,so i told him to send it to the grading lab,guess what? it came back "counterfeit"... so i ended up buying the coin from him for $310.

btw, this coin will fool 80% of the dealers out there.i had offers of $1650-$1900 from different coin dealers,but i refused to sell anybody a counterfeit coin.