Fake Gold?!
(As if paper gold is not fake enough; are they now faking the
"physical" bars, too?!)
Silver Stock Report
by Jason Hommel, October 20th, 2009
Gold does not rust or corrode. A 24-karat gold coin can survive
in the dirt, or under the sea for hundreds of years with no
corrosion.
Why then, does James in the Bible say that certain
men's gold will corrode? Is the Bible wrong? Or is some gold
today fake gold?
James 5 (NIV)
1 Now listen, you rich
people, weep and wail because of the misery that is coming upon you. 2
Your wealth has rotted, and moths have eaten your clothes. 3 Your
gold and silver are corroded. Their corrosion will
testify against you and eat your flesh like fire. You have
hoarded wealth in the last days. 4 Look! The wages you failed to pay the
workmen who mowed your fields are crying out against you. The cries of the
harvesters have reached the ears of the Lord Almighty. 5 You have lived on
earth in luxury and self-indulgence. You have fattened yourselves in the
day of slaughter. 6 You have condemned and murdered innocent men, who were
not opposing you.
There was a rumor this week,
from:
http://news.goldseek.com/GoldSeek/1255630435.php
"In an Asian depository
they’ve found “Good Delivery” bricks that had been gutted and filled with
tungsten.
Soon, there will be xxxx
hitting the fan all over place."
I call this a rumor,
because there is no link to further information: no real details for this
story, no named depository, no information on the weight or number of
bars, no contact person listed, no refinery name listed for the
bars, no name for the bank that delivered them, etc. It will be
interesting if more information comes out.
This story was
repeated in one other story:
http://news.goldseek.com/GoldSeek/1255885200.php
But
a google news search revealed nothing further for me.
GATA is
covering this story at the Midas table at www.lemetropolecafe.com.
You have to be a paid subscriber to follow along, or you can also sign up
for a free two week subscription.
Midas mentions that tungsten
sales exploded in the years 2002-2005, which suggests that it may have
been used in quite a few gold bars.
I read at the Midas
table at lemetropolecafe.com that you could test for tungsten filled
gold bars, with an electrical resistivity test -- but it's not
really true for us, practically speaking.
We assay and
buy all kinds of gold from the public, and we encounter many "fakes" that
the public just does not know if it's even gold or not. So I asked
my gold assayers if that was true. I knew that we bought such
electrical gold testing kits, and that we stopped using them, so I
asked why. They explained that they do not like the electrical
resistivity test kits because if a piece of gold jewelry has a heavy 24
karat gold plating over it, then you cannot tell if the underlying
material is 18 karat. That's what I thought. I know
that's also true for silver, as electrical current moves on the
surface, (for the most part). Thus, I tend to think that if a gold
electrical resistivity test could detect a tungsten filled gold bar, it
would have to use an extremely high and powerful current, and have
great contact points with the gold, and be a very sensitive
instrument.
The only practical and relatively foolproof way to
test for gold's purity is to cut into gold jewelry with a file, and
test it with acid, because true gold will not corrode, or dissolve, with a
certain strength of acid. The acids will bubble under the
microscope if they encounter impurities such as copper in 22 karat
gold. (Very strong acids, such as cyanide, will dissolve gold.)
The other foolproof way to test gold, of course, is to melt it all
down. This reminds me of Revelation, which says to buy gold tried in
the fire, which is good, practical advice for our day and
age.
Revelation 3:18
18 I counsel you to buy
from me gold refined in the fire, so you can become rich; and
white clothes to wear, so you can cover your shameful nakedness; and salve
to put on your eyes, so you can see.
My gold buyers
have recently had one customer attempt to sell us a 50
gram Credit Suisse gold bar, but it only weighed 30 grams! So we
didn't buy it!
The problem with tungsten is that the
specific gravity is very close to that of gold, so close, that a tungsten
filled gold bar would be much harder to detect by weight than a lead
filled bar, such as we may have encountered.
Gold's density is 19.3 grams per cubic centimeter and Tungsten
is 19.25. See:
http://en.wikipedia.org/wiki/Gold
http://en.wikipedia.org/wiki/Tungsten
Lead
is just over 1/2 the weight of gold by volume, at only 11.34,
which is closer to silver, at 10.49.
A few years ago, there
were true reports of "magnetically attractive silver" (steel, or
steel-filled) fake silver jewelry being sold. I found
several stores that were selling as "silver jewelry", chains that were
attracted to magnets, and thus, not real silver, but fake silver.
That story was true, but seemed to have died, as so few people seemed to
care. For example, gold is still so cheap, that some forms of gold
ear-rings, such as 1.2 grams, at 14 karat, sell for $25 a pair for
the "gold content", which is a similar enough price for any sort of
costume jewelry.
But gold bars are a bit more important, and buyers
of 400 oz. gold bars tend to have more power, so if this story of tungsten
filled gold bars is true, I'm sure we will hear further details, as time
goes on.
Will this story make gold prices move down, as people
may begin to distrust gold? Probably not. It's not much
of a story so far. If anything, if this is true, it's one more
reason to distrust the paper money establishment banks who may be
"holding gold for you", if the LBMA gold is not good. It should
encourage people to take delivery of real gold.
As a practical
application, many of our customers will want to know, "How do we
know our gold coins are good?". First of all, fake
gold coins would be much, much harder to manufacture
than tungsten-filled 400 oz. bars.
We keep several
examples of "fake" coins in our shops, so customers can easily see the
difference. A gold plated coin is usually silver underneath, and so,
it weighs much less, nearly half the weight, and is instantly
obvious.
A great example is to hold a silver Eagle, and a
gold Eagle, side by side, to see the relative density and smaller size of
the gold Eagle.
Gold plated coins also are very
smooth, as the gold plating tends to fill in the crevasses and
creases and it tends to round out the edges so that the coin is not crisp
or sharp feeling.
The other way we have tested gold coins and
silver bars is that we have cut samples in
half. You can then see the material is consistent all the
way through. That's a good way to test the reliability of a
refiner.
We have heard reports of fake Maple leaf coins being
attempted to be sold to jewelry shops, but none were good enough
to fool the jeweler, so there must have been something obviously
wrong with them.
==========
Good
news. Since I'm a business owner with a real business address in my
community, with the founding of the JH MINT and Coin Shop, see www.jhmint.com, I was interviewed by the
local newspaper this morning for about 30 minutes about the gold price and
where gold prices are going.
I was able to point out that the
overall general trend of the gold market is one where prices are headed
up, and going much further, due to the failing price suppression
and manipulation of the gold price by bullion banks and central banks
who have been leasing gold into the marketplace, and struggling to deliver
gold into their many paper contracts, which suppress the price.
We often hear that the IMF wants to sell 400 tonnes of gold, we
have heard that every year for the last ten years, and no gold is
sold. It's merely the threat of gold sales that is used to try to
cap all price rallies. Also, they dump many paper contracts to
deliver gold, onto the paper futures markets, to manipulate the
price. Recently, the number of these paper contracts has exploded as
gold has crossed the $1000/oz. mark. They can more easily create
paper contracts to deliver gold, than actually obtain and deliver real
gold.
We rarely hear how China, who has over $2100 billion in
foreign exchange reserves, wants to buy $80 billion of gold (less than 5%
of their holdings) for "prudent diversification" purposes, which
would be 80 million oz. of gold. I explained that to understand the
gold market, you need to know how many troy ounces are in a tonne, which
is 32,151 oz. So that means that China wants to buy 2500 tonnes of
gold, which is all the gold being produced annually by all the world gold
mines.
I explained that there are circumstantial reports complied
by GATA that suggest that Germany has swapped 3000 tonnes of gold
with the Unites States, to help suppress gold prices, but that now Germany
wants their gold back!
I was able to explain that I feel that gold
will probably go up by at least 30% per year for the next five years, or
more if or as manipulations continue to fail (and they are in the process
of failing), which will lead to gold prices of at least $4000/oz by
five years from now.
I explained that all the gold produced
in all the world is 150,000 tonnes, or about 5 billion ounces, worth about
$5 trillion. Yet not nearly that much gold trades annually.
Gold prices, like anything, are set by supply and demand, and new supply
is the tiny gold mine production of 2500 tonnes per year, worth about $80
billion.
The world bond market, at maybe $50 trillion, or $50,000
billion, ought to start flowing into the gold market, since when gold is
going up by 30%, there really is no real reason to hold bonds
anymore.
I explained that the Dow to Gold ratio, historically,
suggests that the ratio will return to a 1 to 1 ratio, suggesting that the
dow will hit 3000 as gold hits $3000, or maybe they will both be 10,000,
or even 30,000.
When stocks and bonds are looked at through
the prism of gold, stocks have lost 75% of their value, while remaining at
10,000 for ten years, while gold has gone up 4 fold, from $250 to over
$1000.
Our town is an historic gold mining town, Grass
Valley, California. The reporter's story will be about the 16 to 1
gold mine, and local efforts to revive the local Idaho-Maryland
mine.
I asked her why such facts about the gold market
were not common knowledge among reporters, since the job of reporters is
supposedly to be as a watchdog to excessive government money
printing. I suggested to the reporter that her editors might
try to kill the story, or at least, downplay the bullish story for gold,
and I asked her to please let me know if that happens. We'll
see.
Fortunately, I'll at least be able to present the bullish case
for gold and silver to my home community through continued local
advertising.
==========
I strongly advise you to get
real gold and silver, at anywhere near today's prices,
while you still can.
Call us today.
Yes, we sell silver,
and gold at the JH MINT!
Buy it now! Buy Silver or Gold Now!
Inventory &
Price List
Call the JH MINT, 10AM to 5PM Pacific,
Monday to Friday:
100 oz. silver minimum, USA shipping, wire transfer
only!
(530) 273-8175
Janelle (530) 913 0553 silver_support1@vzw.blackberry.net
http://www.jhmint.com/
Active,
live price quotes list:
http://jhmint.com/cgi-bin/ssrbidask
Sincerely,
Jason Hommel
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(Mom will
ship in lots of more or less than 100 ounces, and overseas,
and take credit cards or pay pal.)
If you are in
Northern California, see:
Rocklin Coin Shop
4870 Granite Drive,
Rocklin, CA 95677
http://rocklincoinshop.com/
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