November 19, 2009
Jim Willie, The Golden Jackass

The rise in gold pre-sages a currency collapse, led by the USDollar. Gold vaults at commodity exchanges in New York and especially London are being drained by delivery demands. Gold demand is skyrocketing, as distrust for the USDollar is broadening and revolt against the US$ is deepening. The quintessential finance war is between the United States and China, with the battlefield being the US$ and Gold. The race over the $1000 price level came in the face of mammoth shorting by the same Usual Suspects on Wall Street, which do so with paper, but without the required collateral. The gold market is poised for a surprise upward move from a basic broken condition, as the Powerz are losing control. It would be a joy to watch except for the extreme hardship due to come to the betrayed American people.

$$$ THE BIGGEST GOLD CRIME STORY OF THE CENTURY MIGHT BE SOON COMING TO FULL LIGHT. EVIDENCE IS BEING ACCUMULATING THAT THE CLINTON ADMIN WITH RUBIN AT USDEPT TREASURY REPLACED PERHAPS THE ENTIRE CONTENTS OF THE FORT KNOX GOLD WITH TUNGSTEN BARS PLATED BY GOLD. THE SALTED GOLD BARS ARE FASTING BECOMING A GLOBAL CRIME ISSUE. HONG KONG DISCOVERED THEM, AND NOW ASSAYERS ARE TRYING TO AUTHENTICATE MOST OF THE GLOBAL GOLD HELD IN BANKS. ENTIRE NATIONS ARE AT RISK. BEFORE LONG THE USGOVT COULD BE DECLARED A ROGUE NATION INTERNATIONALLY. $$$

Evidence is being gathered by perhaps a dozen key gold traders with diverse connections to the gold industry. They tie the delivery systems, the authentication processes, the assayers, record keeping, big financial firms, and trading platforms. Evidence mounts that as many as 1.5 million 400-oz gold bars were replaced at Fort Knox during the Clinton Admin with tungsten bars covered with a thin gold plate. This was a complex metallurgical feat, from what is told. The first 'salted bars' were discovered in Hong Kong a month ago, reported by the Hat Trick Letter. Since that time, tens of thousands of bars have been examined, usually using four test holes drilled for direct sampling. Other non-invasive methods are being used as well, such as electro-magnetic tests to detect the actual lattice structure of the metal to distinguish gold from other substitutes. Word came this week that almost every available assayer in the world is currently tied up, charged with proving the authenticity of gold bars worldwide, right now! Rob Kirby suspects that the Street Tracks GLD exchange traded fund might be loaded with such salted bars. It is a perfect destination for them, since the Wall Street syndicate prevents any audit. The total value of gold removed within the plot was worth over $500 billion. So where are the real gold bars stored? My guess is the same location where the Madoff money is secretly held.

My view is the story is not only credible, but it is the climax to the US financial collapse. In time the United States will be isolated, declared a Rogue Nation, unable to fund its debt except with monetization, whose leaders and former leaders face international prosecution. The resulting inflation will undermine the USDollar to the point that it will not be accepted. A USTreasury default will be forced, all in time. To be sure, some demand for gold might be frozen into inaction obviously, as customers would fear owning fake gold bars. However, the significantly greater effect is that sellers of gold will scramble to purchase real gold bars, so as to avoid fraud charges, criminal prosecution, and jail time. They will be motivated to repair the fraudulent transaction with full expedience. The replacement effect will cause an extraordinarily huge demand. Only at that time, will the risk of exposing the stolen gold come, as the thieves will want to cash out on their crime, at least partially. The removal and illegal swap of gold has precedent. In the 1960 decade, around 1968, President Lyndon Johnson ordered the removal of 7000 of the 8000 tons of gold from Fort Knox, and had it sent to England. The motive was to support the gold price at the time. Just a few years later, the US under President Nixon abandoned the US$ Gold Standard, as dictated by the Bretton Woods Accord. The gold was replaced during the Johnson Admin in Fort Knox by lead bars plated by gold. A contact of mine was in the USMilitary Police at the time. He reported long caravans exiting Fort Knox for weeks at a time, but the details of shipments were not known to the guards, only their duties.

For some excellent forensic financial analysis on the fake gold project, called Operation Grand Slam, see Rob Kirby's article. It is entitled "On Doing God A New Take On Operation Grand Slam With A Tungsten Twist HERE), dated 12 November 2009. $$$ GOLD MARKET BREAKDOWN IS WITHIN VIEW. LONDON GOLD IS BEING DRAINED BY THE CHINESE. A DISMANTLE OF THE CRIMINAL APPARATUS IS THEIR GOAL. UPON FULL BREAKDOWN, THE GOLD PRICE WILL BE RELEASED FROM PAPER TENTACLES AND RISE SHARPLY. $$$

Pressures mounted in early October at the London metals exchange as gold contract holders demanded delivery of gold. My source tells me that the parties demanding gold were almost exclusively Chinese. It is mostly private billionaires. Their stated motive was to diversify out of US$-based assets. Their rumored motive was to ruin the exchange, expose the chronic fraud linked to government ministries, and force the USDollar to fight in the open to demonstrate value or lack of value. The source said the next round of gold contract delivery pressure comes in late November, then again in March 2010, and finally in June 2010. He said the gold is gradually being drained in London, and that all demands for gold delivery were met in October, using legal force, the courts, and powerful attorneys. Not a single gold contract was settled for cash with a 25% dividend bribe. He concluded that the financial system will be broken at the gold-USDollar cross beam. He openly stated that he could not conceive of the system holding together past June of next year, and a severe test is likely in March 2010. He said with sly tone, "There is a saying: Watch out or you become **** before your own shovel. That is what is happening to the BOYZ right now. The people in the driver seat of the bulldozer have clear instructions what to do in the gold market." When the breakdown comes, it will be next to impossible to trade in USDollars, to settle commerce in USDollars, to finance the USTreasurys, to supply the USEconomy with credit, and to maintain the US banking system. The banks in the United States will then shut down in all likelihood.

My view is that a battle royal is being played out with gross global pressures, between the old broken insolvent corrupted powers of the West versus the new wealthy ambitious powers of the East, led by China. The future chapters will possibly involve the Intl Court in The Hague for prosecutions against the Wall Street firms and former USTreasury officials. It will possibly involve a wave of murders from the middle levels, working up, since the guilty parties operate with impunity and government protection. It will surely involve relentless attacks on COMEX and London CME for gold deliveries, where collateral requirements are not enfoced. The practice is known as naked shorting, illegal. It will probably involve the isolation of the United States, with full recognition of a crime syndicate lodged within its government ministries and capital markets. These are truly incredible times.

THE INTERNATIONAL FORECASTER
SATURDAY, NOVEMBER 21, 2009
by Bob Chapman

Last week, I reported a story that JPMorgan and Deutsche Bank had sold tons of gold futures contracts on the gold commodity markets for prices ranging from $950 to $1050 per ounce. These contracts came due in October. Curiously, when investors demanded to take physical delivery of their tons of gold, JPMorgan and Deutsche Bank reportedly offered to instead write them checks for the spot price of gold plus a 25% premium—$1275 /ounce! I speculated that if these rumors were true, they were evidence that: 1) the gold commodity market is selling gold that does not actually exist; 2) some very wealthy people are headed for prison; 3) if and when the real supply of gold is shown to be much less than currently supposed, the price of gold will increase dramatically; and 4) JPMorgan and Deutsche Bank had just set the minimum price of gold at $1,275.

This week, we have more rumors that suggest that the real problem may not simply be that the commodity markets have been selling “paper” gold that does not exist, but worse, they may have been selling “counterfeit” gold bars that are only gold plated on the outside and primarily tungsten ($10/pound) on the inside. This scheme could work because the densities of gold and tungsten are almost identical and therefore makes it difficult to tell a gold bar from a gold-tungsten counterfeit. While it might be possible for bullion banks and commodity dealers to talk their way out of selling more gold bars than actually exist, there are no words to excuse selling gold bars which are primarily composed of tungsten.

The rumors are spectacular and even chilling. For example, although Christopher Story at Global Intelligence is skeptical of the rumors, he described them as follows:

“The amount of ‘salted tungsten’ gold bars in question was allegedly between 5,600 and 5,700 of 400 oz–good delivery bars—roughly 60 metric tonnes. This was apparently all highly orchestrated by an extremely well financed criminal operation. Within mere hours of this scam being identified, Chinese officials had many of the perpetrators in custody. And here’s what the Chinese allegedly uncovered: Roughly 15 years ago—during the Clinton Administration [think Robert Rubin, Alan Greenspan, and Lawrence Summers]T.J.B.—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.” The reference to Ft.Knox seems incredible. Surely, it’s impossible to actually rob Ft.Knox, right?

But even more disturbing is the allegation that 16,000 tons of tungsten bars were allegedly produced by the “high-end, sophisticated refiner,” but only 60 tons have so far been discovered. Where are the other 15,000+ tons of tungsten bars?

The numbers alleged are almost too fantastic to be believed and may be exaggerated or false. But if these numbers are even partially true, they point to a fraud of monumental proportions and audacity that could cause: 1) the perceived supply of gold to be reduced dramatically; 2) the price of gold to skyrocket; and 3) the collapse of national and even global financial systems.

• Rob Kirby at Goldseek published a report on the tungsten-gold scandal that was identical to Christopher Story’s plus:*

“Irregularities in the publication of the gold ETF—GLD’s bar list from Sept. 25 – Oct.14 where the length of the bar list went from 1,381 pages to under 200 pages and then back up to 800 or so pages;” and,

*“The balance of this 1.3 million – 1.5 million 400 oz tungsten cache was also plated and then allegedly “sold” into the international market. Apparently, the global market is literally ‘stuffed full of 400 oz salted bars’.”*

*Kirby also remembered a February 2nd news report that Stuart Smith, senior vice president of operations New York Mercantile Exchange, was served with a search warrant by the district attorney's office. Details of the investigation were not disclosed but according to Kirby,

“We never have found out what happened to poor ole Stuart Smith. After his offices were ‘raided,’ he took administrative leave from the NYMEX and he has never been heard from since. Amazingly [or perhaps not], 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?”

In fact, “The NYMEX office of the Senior Vice President of Operations 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 larger than domestic mine production.” (Perhaps the DA’s raid on NYMEX was based on the presumption that the Senior VP knew where all the bodies—both human and tungsten—were buried.)

• “Gold swaps” are a device by means of which central banks and bullion banks might “cooperate” (actually, “conspire”) to “sell” gold at a reduced prices back and forth between themselves without suffering financial loss. For example, the Fed might sell 50 tons of gold to JPMorgan for $800 an ounce when the “free market” price was $825. JPMorgan would then sell the same 50 tons back to the Fed for $800 an ounce.

Neither the Fed nor JPMorgan would profit from this swap. However, the net effect of “cooperatively swapping” tons of gold at artificially reduced prices would be a suppression of the global price of gold. Gold, instead of rising from $825 to $850 per ounce, might instead fall to $810.

Result? The apparent value of our paper, fiat dollar would be supported and sustained.

This year, GATA filed a Freedom of Information Act (FOIA) request with the Federal Reserve System for documents since 1990 having to do with gold swaps, gold swapped, or proposed gold swaps.

On August 5th, Federal Reserve Governor Kevin M. Warsh responded to GATA’s FOIA request by sending 173 pages of documents requested—but also refusing to send another 137 pages under Federal Reserve rules of “confidentiality” concerning transactions with foreign banks. By that response, Fed Governor Warsh implicitly admitted that the Federal Reserve has in the past and may now be engaged in trading gold swaps with foreign banks.*

Point: Again, we see evidence that the price of gold has been manipulated to a significant (and perhaps enormous) degree. If that evidence ever evolves into proof, we can expect the price of gold to rise dramatically.

• Regarding the tungsten-gold-bar scandal, Jim Willie of the Golden Jackass wrote:

“ . . . the Powerz are losing control. . . . The biggest gold crime story of the century might be soon coming to full light. Evidence is accumulating that the Clinton administration with Rubin at the US Department of Treasury replaced perhaps the entire contents of the FortKnox gold with tungsten bars plated with gold. The salted gold bars are fast becoming a global crime issue. . . . assayers are trying to authenticate most of the global gold held in banks. . . . tens of thousands of bars have been examined, usually using four test holes drilled for direct sampling. . . . "

If those bars are found to be fraudulent, will the banks admit the fraud? Doing so would 1) diminish bank assets by a considerable amount; 2) reduce confidence in the banks holding these “toxic assets”; 3) push up the price of gold; and 4) reduce the perceived value of paper, fiat currencies like the dollar.

Willie continues:

“Some demand for gold might be frozen into inaction as customers would fear owning fake gold bars. However, the significantly greater effect is that sellers of gold will scramble to purchase real gold bars, so as to avoid fraud charges, criminal prosecution, and jail time. They will be motivated to repair the fraudulent transaction with maximum expedience. The replacement effect will cause an extraordinarily huge demand. . . .”

If demand for gold bars falters, demand for gold coins (so far untouched by tungsten) should increase dramatically. With increased demand, we should see skyrocketing coin prices.

According to Willie, an unidentified but reputable source claims:

“. . . the next round of gold contract delivery pressure comes in late November, then again in March 2010, and finally in June 2010. . . . the financial system will be broken at the gold-USDollar cross beam. . . . it is inconceivable that the system will hold together past June of 2010, and a severe test is likely in March 2010. . . . When the breakdown comes, it will be next to impossible to trade in US Dollars, to settle commerce in US Dollars, to finance the US Treasurys, to supply the US Economy with credit, and to maintain the US banking system. The banks in the United States will then shut down in all likelihood. . . . "

Willie predicts:

“. . . future chapters will possibly involve the International Court in The Hague for prosecutions against the Wall Street firms and former US Treasury officials. It will possibly involve a wave of murders from the middle levels . . . . It will surely involve relentless attacks on COMEX and LondonCME for gold deliveries, where collateral requirements are not enforced. The practice known as naked shorting is illegal. It will probably involve the isolation of the United States, with full recognition of a crime syndicate lodged within its government ministries and capital markets. . . . It is the climax to the US financial collapse. . . .”

• The tungsten-gold-bar rumors have precipitated some extraordinarily dire predictions. It’s too early to know which of the opinions advanced by Story, Kirby, GATA and Willie are largely correct. But there’s enough smoke to suspect that there may be a real, underlying “fire” in the gold commodity markets.

As Jim Willie concluded, “These are truly incredible times.”