Fake Gold Bars in Bank of England and

Fort Knox
2010 January 16
by pak alert

It’s one thing to counterfeit a twenty or hundred dollar bill. The amount of financial damage is
usually limited to a specific region and only affects dozens of people and thousands of dollars.
Secret Service agents quickly notify the banks on how to recognize these phony bills and retail
outlets usually have procedures in place (such as special pens to test the paper) to stop their
proliferation.
But what about gold? This is the most sacred of all commodities because it is thought to be the
most trusted, reliable and valuable means of saving wealth.
A recent discovery — in October of 2009 — has been suppressed by the main stream media but
has been circulating among the “big money” brokers and financial kingpins and is just now being
revealed to the public. It involves the gold in Fort Knox — the US Treasury gold — that is the
equity of our national wealth. In short, millions (with an “m”) of gold bars are fake!
Who did this? Apparently our own government.
Background
In October of 2009 the Chinese received a shipment of gold bars. Gold is regularly exchanges
between countries to pay debts and to settle the so-called balance of trade. Most gold is
exchanged and stored in vaults under the supervision of a special organization based in London,
the London Bullion Market Association (or LBMA). When the shipment was received, the
Chinese government asked that special tests be performed to guarantee the purity and weight of
the gold bars. In this test, four small holed are drilled into the gold bars and the metal is then
analyzed.
Officials were shocked to learn that the bars were fake. They contained cores of tungsten with
only a outer coating of real gold. What’s more, these gold bars, containing serial numbers for
tracking, originated in the US and had been stored in Fort Knox for years. There were reportedly
between 5,600 to 5,700 bars, weighing 400 oz. each, in the shipment!
At first many gold experts assumed the fake gold originated in China, the world’s best knock-off
producers. The Chinese were quick to investigate and issued a statement that implicated the US
in the scheme.
What the Chinese uncovered:
Roughly 15 years ago — 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 tons]. Subsequently, 640,000 of these tungsten blanks received their gold
plating and WERE shipped to Ft. Knox and remain there to this day.
According to the Chinese investigation, the balance of this 1.3 million to 1.5 million 400 oz
tungsten cache was also gold plated and then allegedly “sold” into the international market.
Apparently, the global market is literally “stuffed full of 400 oz salted bars”. Perhaps as much as
600-billion dollars worth.
An obscure news item originally published in the N.Y. Post [written by Jennifer Anderson] in
late Jan. 04 perhaps makes sense now.
DA investigating NYMEX executive, Manhattan, New York,–Feb. 2, 2004.
A top executive at the New York Mercantile Exchange is being investigated by the Manhattan
district attorney. Sources close to the exchange said that Stuart Smith, senior vice president of
operations at the exchange, was served with a search warrant by the district attorney’s office last
week. Details of the investigation have not been disclosed, but a NYMEX spokeswoman said it
was unrelated to any of the exchange’s markets. She declined to comment further other than to
say that charges had not been brought. A spokeswoman for the Manhattan district attorney’s
office also declined comment.”
The offices of the Senior Vice President of Operations — NYMEX — is exactly where you
would go to find the records [serial number and smelter of origin] for EVERY GOLD BAR ever
PHYSICALLY settled on the exchange. They are required to keep these records. These precise
records would show the lineage of all the physical gold settled on the exchange and hence
“prove” that the amount of gold in question could not have possibly come from the U.S. mining
operations — because the amounts in question coming from U.S. smelters would undoubtedly be
vastly bigger than domestic mine production.
No one knows whatever happened to Stuart Smith. After his offices were raided he took
“administrative leave” from the NYMEX and he has never been heard from since. Amazingly,
there never was any follow up on in the media on the original story as well as ZERO
developments ever stemming from D.A. Morgenthau’s office who executed the search warrant.
Are we to believe that NYMEX offices were raided, the Sr. V.P. of operations then takes leave
— all for nothing?
The revelations of fake gold bars also explains another highly unusual story that also happened
in 2004:
LONDON, April 14, 2004 (Reuters) — NM Rothschild & Sons Ltd., the London-based unit of
investment bank Rothschild [ROT.UL], will withdraw from trading commodities, including gold,
in London as it reviews its operations, it said on Wednesday.
Interestingly, GATA’s Bill Murphy speculated about this back in 2004;
“Why is Rothschild leaving the gold business at this time my colleagues and I conjectured
today? Just a guess on my part, but [I] suspect something is amiss. They know a big scandal is
coming and they don’t want to be a part of it… [The] Rothschild wants out before the proverbial
“S” hits the fan.” — BILL MURPHY, LEMETROPOLE, 4-18-2004
What is the GATA?
The Gold Antitrust Action Committee (GATA) is an organisation which has been nipping at the
heels of the US Treasury Federal Reserve for several years now. The basis of GATA’s
accusations is that these institutions, in coordination with other complicit central banks and the
large gold-trading investment banks in the US, have been manipulating the price of gold for
decades.
What is the GLD? GLD is a short form for Good London Delivery. The London Bullion Market
Association (LBMA) has defined “good delivery” as a delivery from an entity which is listed on
their delivery list or meets the standards for said list and whose bars have passed testing
requirements established by the association and updated from time to time. The bars have to be
pure for AU in an area of 995.0 to 999.9 per 1000. Weight, Shape, Appearance, Marks and
Weight Stamps are regulated as follows:
Weight: minimum 350 fine ounces AU; maximum 430 fine ounces AU, gross weight of a bar is
expressed in troy ounces, in multiples of 0.025, rounded down to the nearest 0.025 of an troy
ounce.
Dimensions: the recommended dimensions for a Good Delivery gold bar are: Top Surface: 255 x
81 mm; Bottom Surface: 236 x 57 mm; Thickness: 37 mm.
Fineness: the minimum 995.0 parts per thousand fine gold. Marks: Serial number; Assay stamp
of refiner; Fineness (to four significant figures); Year of manufacture (expressed in four digits).
After reviewing their prospectus yet again, it becomes pretty clear that GLD was established to
purposefully deflect investment dollars away from legitimate gold pursuits and to create a
stealth, cesspool / catch-all, slush-fund and a likely destination for many of these fake tungsten
bars where they would never see the light of day — hidden behind the following legalese
“shield” from the law:

[Excerpt from the GLD prospectus on page 11]

“Gold bars allocated to the Trust in connection with the creation of a Basket may not meet the
London Good Delivery Standards and, if a Basket is issued against such gold, the Trust may
suffer a loss. Neither the Trustee nor the Custodian independently confirms the fineness of the
gold bars allocated to the Trust in connection with the creation of a Basket. The gold bars
allocated to the Trust by the Custodian may be different from the reported fineness or weight
required by the LBMA’s standards for gold bars delivered in settlement of a gold trade, or the
London Good Delivery Standards, the standards required by the Trust. If the Trustee
nevertheless issues a Basket against such gold, and if the Custodian fails to satisfy its obligation
to credit the Trust the amount of any deficiency, the Trust may suffer a loss.”
The Federal Reserve knows but is apparently part of the scheme. Earlier this year GATA filed a
second Freedom of Information Act (FOIA) request with the Federal Reserve System for
documents from 1990 to date having to do with gold swaps, gold swapped, or proposed gold
swaps.
On Aug. 5, The Federal Reserve responded to this FOIA request by adding two more documents
to those disclosed to GATA in April 2008 from the earlier FOIA request. These documents
totaled 173 pages, many parts of which were redacted (blacked out). The Fed’s response also
noted that there were 137 pages of documents not disclosed that were alleged to be exempt from
disclosure.
GATA appealed this determination on Aug. 20. The appeal asked for more information to
substantiate the legitimacy of the claimed exemptions from disclosure and an explanation on
why some documents, such as one posted on the Federal Reserve Web site that discusses gold
swaps, were not included in the Aug. 5 document release.
In a Sept. 17, 2009, letter on Federal Reserve System letterhead, Federal Reserve governor Kevin
M. Warsh completely denied GATA’s appeal. The entire text of this letter can be examined at
http://www.gata.org/
The first paragraph on the third page is the most revealing.”In connection with your appeal, I
have confirmed that the information withheld under exemption 4 consists of confidential
commercial or financial information relating to the operations of the Federal Reserve Banks that
was obtained within the meaning of exemption 4. This includes information relating to swap
arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of
information that is customarily disclosed to the public. This information was properly withheld
from you.” the statement is an admission that the Federal Reserve has been involved with the
fake gold bar swaps and that it refuses to disclose any information about its activities!
The above statement is an admission that the Federal Reserve has been involved with the fake
gold bar swaps and that it refuses to disclose any information about its activities!

Why use tungsten?

If you are going to print fake money you need to have the special paper, otherwise the bills don’t
feel right and can be easily detected by special pens that most merchants and banks use.
Likewise, if you are going to fake gold bars you had better be sure they have the same weight
and properties of real gold.
In early 2008 millions of dollars in gold at the central bank of Ethiopia turned out to be fake.
What were supposed to be bars of solid gold turned out to be nothing more than gold-plated
steel. They tried to sell the stuff to South Africa and it was sent back when the South Africans
noticed this little problem. The problem with making good-quality fake gold is that gold is
remarkably dense. It’s almost twice the density of lead, and two-and-a-half times more dense
than steel. You don’t usually notice this because small gold rings and the like don’t weigh
enough to make it obvious, but if you’ve ever held a larger bar of gold, it’s absolutely
unmistakable: The stuff is very, very heavy.
The standard gold bar for bank-to-bank trade, known as a “London good delivery bar” weighs
400 troy ounces (over thirty-three pounds), yet is no bigger than a paperback novel. A bar of
steel the same size would weigh only thirteen and a half pounds.
According to gold expert, Theo Gray, the problem is that there are very few metals that are as
dense as gold, and with only two exceptions they all cost as much or more than gold.
The first exception is depleted uranium, which is cheap if you’re a government, but hard for
individuals to get. It’s also radioactive, which could be a bit of an issue.
The second exception is a real winner:
tungsten. Tungsten is vastly cheaper than gold (maybe $30 dollars a pound compared to $12,000
a pound for gold right now). And remarkably, it has exactly the same density as gold, to three
decimal places. The main differences are that it’s the wrong color, and that it’s much, much
harder than gold. (Very pure gold is quite soft, you can dent it with a fingernail.)
A top-of-the-line fake gold bar should match the color, surface hardness, density, chemical, and
nuclear properties of gold perfectly. To do this, you could start with a tungsten slug about 1/8-
inch smaller in each dimension than the gold bar you want, then cast a 1/16-inch layer of real
pure gold all around it. This bar would feel right in the hand, it would have a dead ring when
knocked as gold should, it would test right chemically, it would weigh *exactly* the right
amount, and though I don’t know this for sure, I think it would also pass an x-ray fluorescence
scan, the 1/16″ layer of pure gold being enough to stop the x-rays from reaching any tungsten.
You’d pretty much have to drill it to find out its fake.
Such a top-quality fake London good delivery bar would cost about $50,000 to produce because
it’s got a lot of real gold in it, but you’d still make a nice profit considering that a real one is
worth closer to $400,000.
What’s going to happen now?
Politicians like Ron Paul have been demanding that the Federal Reserve be more transparent and
open up their records for public scrutiny. But the Fed has consistently refused, stating that these
disclosures would undermine its operation. Yes, it certainly would!