Think twice

Many people owning capital started to wonder about safe ways to invest their money since the crisis has exposed the vulnerability of the banking system. Alternatives heavily promoted, are investments in gold, silver and platinum. Not the numismatic collections, but the bullion type. However, recently there have been disturbing articles concerning fake gold bars that are in fact made of tungsten that is covered with a gold layer. Tungsten's density is similar to that of gold – 19.25 against 19.30 – which makes distinguishing between real and fake gold bars extremely difficult. The fraud has been exposed on German Television station ProSieben.

It is disturbing to say the least, that commodity exchanges have so far disclaimed responsibility for the gold's purity they trade and have managed to get away with that. While gold plated tungsten bars continue to be found around the world they may be forced to change their policies nevertheless. The global nature of the fraud may indicate that a number of established players in the gold markets have been involved in this well planned operation for a significant period of time.

In April 2004 the House of Rothschild withdrew from the gold market. At the time no one had seen that move coming. But the contours of a global scam is becoming clear since fake gold bars have been discovered. The Rothschilds did not wish to see their name linked to illegal activities. They must have known about the fraud, because there is hardly a party to be found that is better informed concerning the gold trade than they are. They control the world's financial and gold markets.

There has always been a direct correlation between currency and gold, even after Nixon decided to unilaterally abandon the Bretton Woods system. The Federal Reserve Bank has been printing money that is not backed by any precious commodity, which basically deteriorates the value of money. The FRB's president Ben Shalom Bernanke's nickname is Helicopter Ben for a reason since he proposed to print currency and drop it from a helicopter over populated areas. It is mind boggling that so called experts tried to explain the reason of this absurd proposal.

In order to cover up the gold fraud it makes sense that more gold had to be present to back up the currency that has been printed, even if fake gold bars had to be produced to hide this illegal action. Since the banks' reports are available almost exclusively within their own ranks it is difficult to check whether gold at some point suddenly appeared out of thin air. The US congress that has been appointed by law to perform this task has never done this, probably because many members of congress are employed by banks.

If the banks keep fake gold in their vaults and the FRB continues to print worthless money while Congress does not make a serious effort of fulfilling their task of supervising currency emission, the financial market may be likely be facing problems that are difficult to resolve. So if you are considering to convert some of your capital in gold bullions, think twice. In any event, dollars will not keep your capital in good shape.

Interesting question is: where has the gold gone? I wondered about this in my previous blog entry. A relatively small measure of gold is required to gold plate tungsten bars, even if large quantities of fake gold bullions would be circulating. If the fraud would appear to have significant dimensions, it would leave enough gold which whereabouts is currently unaccounted for. To some gold is not just the precious metal that backs up currency, just as alchemists' main interest is not converting lead into gold. Where is the gold?