Wednesday, October 21, 2009

Run for Cover Updated

Today precious metals continue their rather steep and steady market climb with gold trading in the $1064.00/ oz range. Various pundits and gurus offer a litany of reasons causing this increase not the least of which is the continuing inflationary policies of the world's central banks led by the US Federal Reserve Bank. Some of the "experts" have been hinting that the inventories published by the various depositories are in all probability inflated. It is beyond the scope of this post to describe the so called "leasing" out on paper of these deposits and the trading of these leases in order to keep the price depressed. Suffice it to say that it is not above the scruples of the banksters in collusion with politicians to engage in such schemes to prop up the "value" of various fiat (unbacked paper currencies).

The actual amount of gold bullion on deposit at various central banks is not known with any precision but what is known is that the two major depositories of foreign gold bullion are the Bank of England and the Bank of NY. China has of late been steadily acquiring the metal in the form of bullion "bricks".
A London Good Delivery Gold Brick is a 400 oz gold brick, stamped on the bottom with the assayer (e.g. Johnson Mathey). The stamp would have the serial number and the weight of the bar to 3 decimal places.

If I were to buy gold from London and ship to say the bank of Nova Scotia, Scotia Macotta, the agent for the bank and for me would guarantee to me the purity and the weight.
For this I pay insurance, shipping fees and storage fees. If the gold comes from their own inventory, they would not assay. If it comes from another vault, then one or two bricks would be assayed.

The assay requires a hole to be drilled to make sure that gold is uniform. The core and the brick is then heated and reweighed and stamped and that new brick would have Good Delivery Status.

It would be a nightmare to assay every brick that comes to a bank.

It now seems that the Chinese asked for an assay on some of their bricks and lo and behold, some were filled with Tungsten. You can imagine the nightmare that this presents itself.

If this in fact is true, the fecal matter is about to hit the rotating ventilating device. Unless of course, it can be covered up and the "value" of most fiat currencies will not fall precipitously in relationship to gold i.e. gold at $2500.00+/oz.

Update 10/21/09 @17:04 EDT:

GLD gold bullion inventory is principally held in London
- I’ve already written about some large [allocated] physical transactions that were settled last week in London under VERY strange circumstances indicative of a shortage of physical gold bullion for good delivery.
- At the same time, significant irregularities appeared in the GLD bullion bar list

These circumstances suggest that a VERY REAL physical short squeeze is in progress RIGHT NOW and a gang of fraudsters from “fiat-crack-houses” [Central Banks] are attempting to finesse their losing over-sold hand in an elaborate Three-card Monty. With reports of independent physical audits now being conducted and mysterious happenings with GLD’s bar list – GLD has NEVER looked more suspect.
Hope you’ve all got some physical gold already.
By Rob Kirby

ht: Ol' Remus

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