Visitors Now: | |
Total Visits: | |
Total Stories: |
Story Views | |
Now: | |
Last Hour: | |
Last 24 Hours: | |
Total: |
Submitted by Tyler Durden on 09/23/2012
A few days ago, our report on the discovery of a single 10 oz Tungsten-filled gold bar in Manhattan’s jewelry district promptly went viral, as it meant that a tungsten-based, gold-counterfeiting operation, previously isolated solely to the UK and Europe, had crossed the Atlantic. The good news was that the counterfeiting case was isolated to just one 10 oz bar. This morning, the NYPost reports that as had been expected, in the aftermath of the realization that the sanctity of the gold inventory on 47th Street just off Fifth Avenue has been polluted, and dealers promptly check the purity of their gold, at least ten more fake 10-ounce “gold bars” filled with Tungsten has been discovered.
The Post has learned as many as 10 fake gold bars — made up mostly of relatively worthless tungsten — were sold recently to unsuspecting dealers in Manhattan’s Midtown Diamond District.
The 10-oz. gold bars are hugely popular with Main Street investors, and it is not known how many of the fake gold bars were sold to dealers — or if any fake bars were purchased by the public.
As is to be expected, the Post story is weak on details: after all, any dealer who admits to having allowed Tungsten to enter his or her inventory can kiss their retail business goodbye, as customers will avoid said Tungsten outlet like the plague, for the simple reason that suddenly counterparty risk has migrated from Wall Street to the Diamond District. The one named dealer is the same one who already made an appearance in the previous story on Tungsten in gold’s clothing.
One gold dealer discovered that four of the 3-inch-by-1-inch gold bars he bought — worth about $72,000 retail — were counterfeit.
“It has the entire street on edge,” said Ibrahim Fadl, 62, who has been the owner of Express Metal Refining, a Midtown gold-refinery business, for the last 11 years. “I and the others on the street work off of trust; now that trust is strained.”
Fadl, a Columbia University graduate with a master’s degree in chemical engineering, and who has more than 40 years in the industry, purchased the four fake bars from a well-known Russian salesman with whom he has done business.
Ah yes, those pesky Russians: always happy to do the Fed’s bidding, because who really gains from the loss of confidence in physical gold?
Fadl became suspicious when he offered the salesman a deep discount for the investment-grade gold bars and he quickly accepted it, a source tells The Post.
Fadl said he did his due diligence “by X-raying the bars to ascertain the purity of the gold and weighing the bars, and the Swiss markings were perfect.”
Tungsten is an industrial metal that weighs nearly the same as gold but costs a little over $1 an ounce. Gold closed Friday at $1,774.80 an ounce.
This whole fiasco doesn’t pass the smell test. A very simple, non-destructive method for determine the authenticity of gold was discovered by Archimedes about 2250 years ago. It has been a staple of simple physics ever since. Check out “Archimedes Principle.” Archimedes was tasked with determining whether a golden crown was made of pure gold. Quoting from Wikipedia:
“This principle states that a body immersed in a fluid experiences a buoyant force equal to the weight of the fluid it displaces. Using this principle, it would have been possible to compare the density of the golden crown to that of solid gold by balancing the crown on a scale with a gold reference sample, then immersing the apparatus in water. The difference in density between the two samples would cause the scale to tip accordingly.”
Any gold trader can easily apply the same test to gold bars. One does not have to drill into them or saw them open. The test would take a couple of minutes.
So, I suspect this is a manufactured problem. By who?
“Cui bono?”
Some posters on zerohedge had the same conclusion. Possibly the same people that GATA says is manipulating gold and silver prices.