news this week again proves that bankers are among the largest charlatans in
Jim Rickards reported that a Swiss bank refused to
deliver roughly $40 million of gold bullion to a wealthy client for 30 days
and only finally physically delivered his gold when the client brought in his
lawyers and threatened to take his story to Reuters and other syndicated
financial news networks. Then later this week, James Turk reported that he is
aware of another individual that has been trying to take physical possession
of approximately $550,000 of silver for two months now from a Swiss bank with
zero luck. Turk further elaborated that the bank has been trying to pressure
the client into accepting the cash equivalent market value of the silver
rather than deliver the physical silver to the client. In both of these
cases, I presume that neither of these Swiss banks ever held allocated gold
and silver for their clients or if they did, had then leased out the
gold/silver or sold the same gold/silver to multiple clients, and thus were
forced to stonewall their clients until they could secure the physical metal.
Why else would a bank take 30 days to deliver something that was supposed to
be sitting in a vault in an allocated account?
Of course, none of this is really shocking as the two above
cases merely mirror the circumstances of the 2005 class-action lawsuit
against Morgan Stanley in which Morgan Stanley told its clients it was
selling them silver in allocated accounts and storing it in its vaults.
However, when one of their clients, Selwyn Silberblatt,
demanded physical delivery, Morgan Stanley failed to deliver, prompting the
class-action lawsuit. Morgan Stanley eventually settled the lawsuit for $4.4
million. Time after time, bankers have been caught committing likely fraud
regarding the sales of gold and silver. This likely fraud extends to more
than physical sales. In the futures markets, bankers have been discovered to
be selling 100 ounces of paper gold for every one ounce of physical gold that
actually exists in the market. With PM ETFs, it is highly likely that multiple
claims exist on whatever physical gold and silver back the GLD and SLV,
if any physical gold and silver even back them at all.
addition, it’s not just banks you have to worry about these days. The
incidence of counterfeit gold coins and silver coins is on the rise along
with the recent steep rise in the gold and silver price. The Financial Times
recently reported that a
wave of hard to detect counterfeit gold coins is now coming out of China.
Say goodbye to the days of gold-plated tungsten and say hello to a more
complex counterfeit gold alloy consisting of 51% gold mixed with osmium,
iridium, ruthenium, copper, nickel, iron, and rhodium. Tungsten is a hard,
brittle grey metal that has the same density as gold but none of gold’s
characteristic softness. The new fake gold apparently not only has a density
similar to the real thing but also has a near identical softness and color, qualities that suggest that metal smiths with an
extensive knowledge of metallurgy are producing the new fakes. In fact,
Haywood Cheung, president of the Chinese Gold & Silver Exchange Society,
Hong Kong’s century-old bullion exchange, said goldsmiths and jewelers
in Hong Kong had recently been duped into buying between 200 and 2,000 ounces
of the new fake gold.
conclusion, if you want to ensure that you actually possess real physical
gold and real physical silver, take two steps.
Never entrust a bank to hold your physical gold and silver or you may end up
sitting on a vault full of nothing but air; and
(2) When you buy from an independent dealer, perform your due diligence to
avoid purchasing fakes.
JS Kim is the
Managing Director and Founder of SmartKnowledgeU, a fiercely
independent investment consulting and research firm that devises investment
strategies to protect Main Street from the fraud of Wall Street.
Article originally published
on SmartknowledgeU here