Largest Private Refinery Discovers Gold-Plated Tungsten Bar
By Patrick A. Heller on March 2nd, 2010
Categories: Featured Articles, Gold and Silver Commentary, Precious Metals
Gold Plated Tungsten BarRecently, the German television station ProSieben ran a news story covering W. C. Heraeus in Hanau, Germany, the world’s largest privately owned refinery. In the story, Wilfried Hörner, the head of the gold foundry, shows a 500 gram bar (16.0755 troy ounces) received from an unidentified bank. The bar had the right physical dimensions to be an authentic gold bar, but one of the Heraeus employees suspected something funny. After the bar was cut in half, you can see that the inside is tungsten, with only a coating of gold on the outside.
You can watch this news story on You Tube, where it was posted February 28, at http://www.youtube.com/watch?v=ZKczs-7BFRI.
Last fall, Rob Kirby of Kirby Analytics in Toronto reported that China’s central bank had discovered some 400-ounce gold-plated tungsten bars among those it had recently received from bonded warehouses. It was later learned that at least four counterfeit bars were found and that all had come from sources in the United States. As suspicions grow about counterfeit bars among those held in bonded warehouses for delivery against either COMEX or London Bullion Market Association contracts or shares of exchange traded funds, investors could panic. So, you can understand that there has been almost a total blackout on news coverage on this story.
Tungsten is the only lower value metal that has a specific density close enough to gold to fabricate passable counterfeit pieces of the same size and weight as genuine coins and ingots. Over the years, there have been a few isolated reports of smaller coins and bars found to have been drilled to remove some of the gold which was replaced with tungsten. However, it is far more profitable to fabricate larger original bars of tungsten that are then gold-plated.
Thus far, the commodity exchanges have disclaimed of any responsibility for the purity of the gold bars they are delivering against contracts. As stories of gold-plated tungsten bars in bonded warehouses continue to appear, I expect the commodity exchanges are going to be forced to modify their business practices to provide a guaranty of purity for any bars they deliver.
The process of non-destructive testing of bars to check for counterfeits involves very expensive equipment and is time consuming. It is beyond the means of almost all investors and coin dealers. For maximize safety, I recommend purchasing only smaller size coins and ingots, say two ounces of gold content or less, and only deal with a company that has a lengthy track record and in-house staff expertise (unlike the bank that took in this counterfeit 500 gram bar). If you have purchased coins and ingots from unknown sources, you may want have them checked out by an experienced independent third party.
In contrast, the last things I would want to invest in are large gold bars stored in bonded warehouses in unallocated storage. If it turns out that the warehouse holding your bars has too many counterfeit bars in their inventory, it could go bankrupt. That would leave holders of unallocated inventory as unsecured creditors of the bankrupt company, and not as owners of gold.
Because the existence of counterfeit gold-plated tungsten bars could have such a huge impact on the financial markets, there is a huge potential for deception and misinformation to be passed around. Be very careful about automatically believing any story you may hear. For your own protection, it would be better to take physical possession of the smaller sizes of gold coins and bars now, and know that what you own genuine solid gold.
Patrick A. Heller owns Liberty Coin Service in Lansing, Michigan and writes "Liberty's Outlook," a monthly newsletter covering rare coins and precious metals. Past issues can be found online at http://www.libertycoinservice.com/ Pat Heller is also the gold market commentator for Numismatic News. Past columns online at http://numismaster.com/
I prefer silver to gold anyway!In the Norse legends it caused the war between the Aesir and the Vanir.
ReplyDeleteGullveig loved gold. It was all she talked about. Gold, gold, GOLD! The Aesir were tiring of hearing her incessant chatter about gold. They bound Gullveig in Odin's hall and pierced her with spears.
Unfortunately she kept coming back to life.
Israel is collecting all the gold in the world.
ReplyDeleteI saw this a few months ago too, could be that someone is dealing in counterfeit gold, but equally, as the article suggests, it could be someone wants everyone to drop gold as a safe investment and so has put a few duds on the market.
ReplyDeleteI would go for the latter, the only people who can deal in counterfeit gold are the same people who don't need to, it was always going to be discovered so to my mind this is a deliberate subterfuge to panic the gold markets, maybe get people to dump gold so it can be bought up cheap.
a bit like announcing Brown announced the sale of the UK's Gold reserves a few days before the event to drive down the markets for his Pupettmasters, the offshore Banksters.
All very transparent now,
Incidentally another article I read talked of fractional reserve gold certificates.
People think they are buying Gold held in Bank vaults but in fact, just like our money it is being fractionally reserved.
IE, the same gold is also owned by several other people, no one realises because if a few people go to the vault and says Id like to take posession, it doesnt matter.
Only if every one turns up at the same time.
Its the same of course with our monetary system.
Every pound held on deposit is lent out to about ten other people at 8% interest.
Anyone who can't see that this is the source of the credit bubble is asleep ( just as I was until I actually started looking into all this of course )
The general public owe nothing to the Banks because they were lent thin air.
Person a deposits £100 pounds with the Bank, the Bank lends that same 100 pounds out to TEN other people at 8% interest ( IE 80% in total )
Really though, they are being lent Nothing, the Bank doesnt have £1000 it only has £100.
Then a couple of yrs later they raise the rates, hundreds of thousands can now no longer afford the repayments on the thin air credit they were lent.
The bank hauls in their assets, flogs them off cheap and buys other assets with the money.
In this way, the wealth of the nation is gradually vacuumed upwards into the vaults of a few Elite banking dynasty's who control Western Governments.
Who has put anything of value into that house they reposessed, the public who thinks he has renaged on a contract, he has not, he was lent thin air.
The Person has put many years of sweat into paying off this ficticious debt, the bank lent NOTHING of value, it was simply thin air credit.
In my view when the banking systen crashed ( deliberately ) Govt should have said TOUGH, and written off all debts, Loans and morgages owed to those banks ( they only ever lent out fractionally reserved thin air anyway )
That would have made hundreds of thousands if not millions of people suddenly better off each month with no debt to psy back.
They would have gone out spending and so stimulated the economy.
But of course the intention is not to free people from bonded slavery but to further enslave them into this totalitarian corporate fascist tyranny.
I don't know how to escape but if we are using bits of worthless paper now and it almost works, maybe we can do so in a way that benefits rather than enslaves humanity.
Maybe a system of debt, IE you will give me a pound of Potatoes in return for 1/2 hour of my labour, this promise of my labour can in turn be used by you to settle your own debts, ultimately we all have to do our bit of work at the end of the day, week or whenever and it would rely on honesty, IE I must honour my debt of labour to someone, otherwise I get blacklisted and people stop trusting me.
I'm still working on it.
Would be really annoying if they were collecting all the gold in the world or most of it and we the people decided on another system.
Of course the same people are taking control of all the food and water so its a difficult problem.