MIKE COOPER

Tue, 27 Mar 12 at 00:18   | No Comments Yet

Counterfeit Gold Bars

 

Not what it appears to be             

 

It’s worth checking in on the gold bugs now and then, lunatics though some are, because fringe theories are held by more than fringe residents. One idea that’s been making the rounds for years is that some amount of the world’s gold reserves is fake:

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.

Sounds nutty … but perhaps they’ll yet have the last word. A tungsten-filled gold bar has now actually surfaced:

A report from ABC Bullion of Australia … provides photographic evidence of a new gold bar that has been drilled out and filled with tungsten rods 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.

Tungsten, because its atomic weight and specific density are close to gold’s, so the partially-fake bar will weight almost exactly the same amount.

Perhaps it’s all fake! Maybe the Federal Reserve’s famous gold vault, deep under New York City, is effectively empty!

But suppose that’s true. Would it make any difference? No one ever uses that gold, after all — it’s mostly just shifted from one room to another, within the vault, as countries and banks sell to one another. It’s just a massive edifice of willed belief, as intrinsically valueless as wampum, or big stone wheels, or (for that matter) the greenback.

In the end, all currency is merely a token, a tangible representation of trust. The trust is what matters, not the object.

That said, I guess I’m going to have to dig my gold bars out of the back yard and cut them in half — just to be sure.