Fake gold bars in Bank of England and Fort Knox

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Fake gold bars in Bank of England and Fort Knox

Postby Gnosty » 18 Jan 2010, 11:26

It’s one thing to counterfeit a twenty or hundred dollar bill. The amount of financial damage is usually limited to a specific region and only affects dozens of people and thousands of dollars. Secret Service agents quickly notify the banks on how to recognize these phony bills and retail outlets usually have procedures in place (such as special pens to test the paper) to stop their proliferation.

But what about gold? This is the most sacred of all commodities because it is thought to be the most trusted, reliable and valuable means of saving wealth.

A recent discovery — in October of 2009 — has been suppressed by the main stream media but has been circulating among the “big money” brokers and financial kingpins and is just now being revealed to the public. It involves the gold in Fort Knox — the US Treasury gold — that is the equity of our national wealth. In short, millions (with an “m”) of gold bars are fake!

Who did this? Apparently our own government.


In October of 2009 the Chinese received a shipment of gold bars. Gold is regularly exchanges between countries to pay debts and to settle the so-called balance of trade. Most gold is exchanged and stored in vaults under the supervision of a special organization based in London, the London Bullion Market Association (or LBMA). When the shipment was received, the Chinese government asked that special tests be performed to guarantee the purity and weight of the gold bars. In this test, four small holed are drilled into the gold bars and the metal is then analyzed.

Officials were shocked to learn that the bars were fake. They contained cores of tungsten with only a outer coating of real gold. What’s more, these gold bars, containing serial numbers for tracking, originated in the US and had been stored in Fort Knox for years. There were reportedly between 5,600 to 5,700 bars, weighing 400 oz. each, in the shipment!

At first many gold experts assumed the fake gold originated in China, the world’s best knock-off producers. The Chinese were quick to investigate and issued a statement that implicated the US in the scheme.

What the Chinese uncovered

Roughly 15 years ago — during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] — 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.

According to the Chinese investigation, the balance of this 1.3 million to 1.5 million 400 oz tungsten cache was also gold plated and then allegedly “sold” into the international market. Apparently, the global market is literally “stuffed full of 400 oz salted bars”. Perhaps as much as 600-billion dollars worth.

An obscure news item originally published in the N.Y. Post [written by Jennifer Anderson] in late Jan. 04 perhaps makes sense now.

DA investigating NYMEX executive ,Manhattan, New York, Feb. 2, 2004.

A top executive at the New York Mercantile Exchange is being investigated by the Manhattan district attorney. Sources close to the exchange said that Stuart Smith, senior vice president of operations at the exchange, was served with a search warrant by the district attorney’s office last week. Details of the investigation have not been disclosed, but a NYMEX spokeswoman said it was unrelated to any of the exchange’s markets. She declined to comment further other than to say that charges had not been brought. A spokeswoman for the Manhattan district attorney’s office also declined comment.”

The offices of the Senior Vice President of Operations — NYMEX — 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 bigger than domestic mine production.

No one knows whatever happened to Stuart Smith. After his offices were raided he took “administrative leave” from the NYMEX and he has never been heard from since. Amazingly, 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?

The revelations of fake gold bars also explains another highly unusual story that also happened in 2004:

LONDON, April 14, 2004 (Reuters) — NM Rothschild & Sons Ltd., the London-based unit of investment bank Rothschild [ROT.UL], will withdraw from trading commodities, including gold, in London as it reviews its operations, it said on Wednesday.

Interestingly, GATA’s Bill Murphy speculated about this back in 2004;

“Why is Rothschild leaving the gold business at this time my colleagues and I conjectured today? Just a guess on my part, but [I] suspect something is amiss. They know a big scandal is coming and they don’t want to be a part of it… [The] Rothschild wants out before the proverbial “S” hits the fan.” — BILL MURPHY, LEMETROPOLE, 4-18-2004

What is GATA?

The Gold Antitrust Action Committee (GATA) is an organisation which has been nipping at the heels of the US Treasury Federal Reserve for several years now. The basis of GATA’s accusations is that these institutions, in coordination with other complicit central banks and the large gold-trading investment banks in the US, have been manipulating the price of gold for decades.

What is the GLD? GLD is a short form for Good London Delivery. The London Bullion Market Association (LBMA) has defined “good delivery” as a delivery from an entity which is listed on their delivery list or meets the standards for said list and whose bars have passed testing requirements established by the associatin and updated from time to time. The bars have to be pure for AU in an area of 995.0 to 999.9 per 1000. Weight, Shape, Appearance, Marks and Weight Stamps are regulated as follows:

Weight: minimum 350 fine ounces AU; maximum 430 fine ounces AU, gross weight of a bar is expressed in troy ounces, in multiples of 0.025, rounded down to the nearest 0.025 of an troy ounce.

Dimensions: the recommended dimensions for a Good Delivery gold bar are: Top Surface: 255 x 81 mm; Bottom Surface: 236 x 57 mm; Thickness: 37 mm.

Fineness: the minimum 995.0 parts per thousand fine gold. Marks: Serial number; Assay stamp of refiner; Fineness (to four significant figures); Year of manufacture (expressed in four digits).

After reviewing their prospectus yet again, it becomes pretty clear that GLD was established to purposefully deflect investment dollars away from legitimate gold pursuits and to create a stealth, cesspool / catch-all, slush-fund and a likely destination for many of these fake tungsten bars where they would never see the light of day — hidden behind the following legalese “shield” from the law:

[Excerpt from the GLD prospectus on page 11]

“Gold bars allocated to the Trust in connection with the creation of a Basket may not meet the London Good Delivery Standards and, if a Basket is issued against such gold, the Trust may suffer a loss. Neither the Trustee nor the Custodian independently confirms the fineness of the gold bars allocated to the Trust in connection with the creation of a Basket. The gold bars allocated to the Trust by the Custodian may be different from the reported fineness or weight required by the LBMA’s standards for gold bars delivered in settlement of a gold trade, or the London Good Delivery Standards, the standards required by the Trust. If the Trustee nevertheless issues a Basket against such gold, and if the Custodian fails to satisfy its obligation to credit the Trust the amount of any deficiency, the Trust may suffer a loss.”

The Federal Reserve knows but is apparently part of the scheme. Earlier this year GATA filed a second Freedom of Information Act (FOIA) request with the Federal Reserve System for documents from 1990 to date having to do with gold swaps, gold swapped, or proposed gold swaps.

On Aug. 5, The Federal Reserve responded to this FOIA request by adding two more documents to those disclosed to GATA in April 2008 from the earlier FOIA request. These documents totaled 173 pages, many parts of which were redacted (blacked out). The Fed’s response also noted that there were 137 pages of documents not disclosed that were alleged to be exempt from disclosure.

GATA appealed this determination on Aug. 20. The appeal asked for more information to substantiate the legitimacy of the claimed exemptions from disclosure and an explanation on why some documents, such as one posted on the Federal Reserve Web site that discusses gold swaps, were not included in the Aug. 5 document release.

In a Sept. 17, 2009 letter on Federal Reserve System letterhead, Federal Reserve governor Kevin M. Warsh completely denied GATA’s appeal. The entire text of this letter can be examined at http://www.gata. org.

The first paragraph on the third page is the most revealing:

”In connection with your appeal, I have confirmed that the information withheld under exemption 4 consists of confidential commercial or financial information relating to the operations of the Federal Reserve Banks that was obtained within the meaning of exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you.”

The above statement is an admission that the Federal Reserve has been involved with the fake gold bar swaps and that it refuses to disclose any information about its activities!

Why use tungsten?

If you are going to print fake money you need to have the special paper, otherwise the bills don’t feel right and can be easily detected by special pens that most merchants and banks use. Likewise, if you are going to fake gold bars you had better be sure they have the same weight and properties of real gold.

In early 2008 millions of dollars in gold at the central bank of Ethiopia turned out to be fake. What were supposed to be bars of solid gold turned out to be nothing more than gold-plated steel. They tried to sell the stuff to South Africa and it was sent back when the South Africans noticed this little problem. The problem with making good-quality fake gold is that gold is remarkably dense. It’s almost twice the density of lead, and two-and-a-half times more dense than steel. You don’t usually notice this because small gold rings and the like don’t weigh enough to make it obvious, but if you’ve ever held a larger bar of gold, it’s absolutely unmistakable: The stuff is very, very heavy.

The standard gold bar for bank-to-bank trade, known as a “London good delivery bar” weighs 400 troy ounces (over thirty-three pounds), yet is no bigger than a paperback novel. A bar of steel the same size would weigh only thirteen and a half pounds.

According to gold expert, Theo Gray, the problem is that there are very few metals that are as dense as gold, and with only two exceptions they all cost as much or more than gold.

The first exception is depleted uranium, which is cheap if you’re a government, but hard for individuals to get. It’s also radioactive, which could be a bit of an issue.

The second exception is a real winner: tungsten. Tungsten is vastly cheaper than gold (maybe $30 dollars a pound compared to $12,000 a pound for gold right now). And remarkably, it has exactly the same density as gold, to three decimal places. The main differences are that it’s the wrong color, and that it’s much, much harder than gold. (Very pure gold is quite soft, you can dent it with a fingernail.)

A top-of-the-line fake gold bar should match the color, surface hardness, density, chemical, and nuclear properties of gold perfectly. To do this, you could could start with a tungsten slug about 1/8-inch smaller in each dimension than the gold bar you want, then cast a 1/16-inch layer of real pure gold all around it. This bar would feel right in the hand, it would have a dead ring when knocked as gold should, it would test right chemically, it would weigh *exactly* the right amount, and though I don’t know this for sure, I think it would also pass an x-ray fluorescence scan, the 1/16″ layer of pure gold being enough to stop the x-rays from reaching any tungsten. You’d pretty much have to drill it to find out it’s fake.

Such a top-quality fake London good delivery bar would cost about $50,000 to produce because it’s got a lot of real gold in it, but you’d still make a nice profit considering that a real one is worth closer to $400,000.

Source: http://www.daily.pk/fake-gold-bars-in-b ... nox-14477/
Pakistan Daily, January 11, 2010

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Manipulating Precious Metals Markets

Postby Paulo » 09 Mar 2010, 16:09

From here:

3:55p ET Monday, March 8, 2010

Dear Friend of GATA and Gold:

GATA today delivered to the chairman of the U.S. Commodity Futures Trading Commission, Gary Gensler, a letter from GATA Chairman Bill Murphy, appealing to the CFTC to act against the concentrated and manipulative short positions in the precious metals markets. The commission is expected to hold a hearing this month on establishing position limits in those markets. Murphy's letter is appended.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

March 8, 2010

Gary Gensler, Chairman
U.S. Commodity Futures Trading Commission
3 Lafayette Centre
1155 21st St. NW
Washington, DC 20581

Dear Chairman Gensler:

The Gold Anti-Trust Action Committee (GATA) was formed in January 1999 to expose and oppose the manipulation and suppression of the price of gold. What we have learned over the past 11 years is of great importance in regard to the CFTC’s forthcoming hearings regarding position limits in the precious metals futures markets. Our efforts to expose manipulation in the gold market parallel those of Harry Markopolos to expose the Madoff Ponzi scheme to the Securities and Exchange Commission.

Initially we thought that the manipulation of the gold market was undertaken as a coordinated profit scheme by certain bullion
banks, like JPMorgan, Chase Bank, and Goldman Sachs, and that it violated federal and state anti-trust laws. But we soon discerned that the bullion banks were working closely with the U.S. Treasury Department and Federal Reserve in a gold cartel, part of a broad scheme of manipulation of the currency, precious metals, and bond markets.

As an executive at Goldman Sachs in London, Robert Rubin developed an idea to borrow gold from central banks at minimal interest rates (around 1 percent), sell the bullion for cash, and use the cash to fund Goldman Sachs' operations. Rubin was confident that central banks would control the gold price with ever-more leasing or outright sales of their gold reserves and that consequently the borrowed gold could be bought back without difficulty. This was the beginning of the gold carry trade.

When Rubin became U.S. treasury secretary, he made it government policy to surreptitiously operate an identical gold carry trade but on a much larger scale. This became the principal mechanism of what was called the "strong-dollar policy." Subsequent treasury secretaries have repeated a commitment to a "strong dollar," suggesting that they were continuing to feed official gold into the market more or less clandestinely to support the dollar and suppress interest rates and precious metals prices.

Lawrence Summers, who followed Rubin as treasury secretary, was an expert in gold's influence on financial markets. Previously, as a professor at Harvard University, Summers co-authored an academic study titled "Gibson's Paradox and the Gold Standard,"
(see Footnote 1 below) which concluded that in a free market gold prices move inversely to real interest rates, and, conversely, if gold prices are "fixed," then interest rates can be maintained at lower levels than would be the case in a free market. This was the economic theory behind the "strong dollar policy."

Federal Reserve Chairman Alan Greenspan understood Summers' research when he remarked at a 1993 meeting of the Federal Open Market Committee:

"I was raising the question on the side with Governor Mullins of what would happen if the Treasury sold a little gold in this market. There's an interesting question here because if the gold price broke in that context, the thermometer would not be just a measuring tool. It would basically affect the underlying psychology." (See Footnote 2 below.)

GATA has collected reams of evidence that Western central bank gold has long been mobilized and surreptitiously dishoarded to rig the gold market and influence related markets and that this rigging has drawn upon the U.S. gold reserves.

President Obama has called for greater transparency in both the federal government and the financial markets. In pursuit of such transparency GATA has made Freedom of Information Act requests to the Federal Reserve and Treasury Department for a candid accounting of their involvement in the gold market, particularly in regard to gold swaps. In a reply to GATA's lawyers dated September 17, 2009, Fed Governor Kevin M. Warsh acknowledged that the Federal Reserve has gold swap agreements with foreign banks but insisted that such documents remain secret. (See Footnote 3 below.)

As a result, last December GATA sued the Federal Reserve in U.S. District Court for the District of Columbia, seeking access to the Federal Reserve's withheld records of gold swaps.

Understanding that the manipulation of the price of gold is profoundly important to all markets and the American public, on January 31, 2008, GATA placed a full-page color advertisement in The Wall Street Journal at a cost of $264,000. (See Footnote 4 below.) GATA's ad warned, "This manipulation has been a primary cause of the catastrophic excesses in the markets that now threaten the whole world." What GATA warned against has come to pass.

GATA has long implicated the New York Commodities Exchange (Comex) as being a mechanism by which gold and silver price suppression is implemented. The smoking gun is the excessive concentration of bullion bank positions in the gold and silver futures markets. This concentration enables market manipulation -- just as market concentration was the justification offered by the CFTC in 1980 when it acted against the Hunt Brothers in the silver market.

The weekly commitment of traders report documents the total net short position of commercial traders in the commodity markets. The monthly bank participation reports disclose the holdings of U.S. banks in various markets. In a letter to GATA dated February 19, 2009, Laura Gardy, a CFTC legal assistant, wrote, "The commission determined that where the number of banks in each reporting category is particularly small, fewer than four banks, there exists the potential to extrapolate both the identity of individual banks and the banks' positions. As a result, as of December 2009 the CFTC no longer names the number of banks when it is less than four."

The CFTC has been investigating possible manipulation of the silver market for more than a year, so this reporting change is disturbing to us, as it reduces transparency and the ability to uncover market manipulation.

The CFTC's own reports of November 2009 show that just two U.S. banks held 43 percent of the commercial net short position in gold and 68 percent of the commercial net short position in silver. In gold, these two banks were short 123,331 contracts but long only 523 contracts, and in silver they were short 41,318 contracts and long only 1,426 contracts. How improbable is it that these two banks attract most of the investors who want only to sell short? (See Footnote 5 below.)

It has been possible to extrapolate that the two banks that hold these large manipulative short positions on the Comex are JPMorgan Chase and HSBC because of their huge positions in the OTC derivatives market, whose regulator, the U.S. Office of the Comptroller of the Currency, does not provide anonymity when it publishes market data. (See Footnote 6 below.) In the first quarter 2009 OCC derivatives report, JPMorgan Chase and HSBC held more than 95 percent of the gold and precious metals derivatives of all U.S. banks, with a combined notional value of $120 billion. This concentration dwarfs the concentration in the gold and silver futures markets and should raise great concern about the lack of position limits on the Comex.

It is also disturbing to us that HSBC is the custodian for the major gold exchange-traded fund, GLD, and that JPMorgan Chase is the custodian for the major silver exchange-traded fund, SLV. It is a significant material omission to fail to disclose to GLD and SLV investors that the custodian banks of the two exchange-traded funds have an interest in falling prices in the futures and derivatives markets.

Detailed daily monitoring of gold trading reveals these patterns:

1. In recent years gold price suppression has been apparent from the near-complete failure of the gold price to rise more than 2 percent per day on the Comex (what GATA calls the 2 Percent Rule) while there is no corresponding restriction on days when the gold price is falling.

2. At option expiry gold almost always falls to a point where a large number of call options have been written, nullifying the value of the options. Typically, the price rallies immediately after option expiration.

3. The gold price consistently falls at 3 a.m. New York time when the gold cartel’s traders report to work in London, and again following the PM gold price fix, when physical market pricing has concluded for the day, and in the access market following the Comex close.

No other market trades so repetitively.

GATA has evidence that there are enormous physical short positions in the gold and silver markets that cannot be covered. Because of the decades-long interference with the gold market, we estimate that the free-market price of gold is multiples of the current price. Growing stress caused by burgeoning physical bullion demand is threatening to lead to a price explosion, which will restore to the market the balance that regulation has failed to maintain. In our view, the Comex paper market will become dysfunctional, with "force majeure" having to be declared as the concentrated shorts are unable to deliver on their obligations.

We urge the CFTC to report fully and candidly on these markets and take appropriate action.


Gold Anti-Trust Action Committee Inc.

... Footnotes:

1. "Gibson's Paradox Revisited: Professor Summers Analyzes Gold Prices" by Reginald H. Howe. http://www.goldensextant.com/

2. http://www.federalreserve.gov/monetaryp ... eeting.p...

3. http://www.gata.org/files/GATAFedRespon ... 7-2009.pdf

4. http://www.gata.org/node/wallstreetjournal

5. http://www.cftc.gov/dea/bank/deanov09f.htm

6. http://www.gata.org/node/7307

End of article...



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Re: Fake gold bars in Bank of England and Fort Knox

Postby Paulo » 31 Mar 2010, 19:39

Tuesday, March 30, 2010

Andrew Maguire & Adrian Douglas:
Discuss What Could Be the Largest Fraud in History - Andrew is an independent metals trader
turned whistleblower at the center of a storm for exposing what could be the largest fraud in
history involving countries, banks and government leaders. Adrian Douglas Board of Director
from GATA, the man who Andrew reached out to joins in this interview where they discuss a
fraud so extraordinary and so unimaginable that it is the kind of thing that only happens in
hollywood thrillers. They also discuss the CFTC sponsored meeting on metals which was an
unmitigated disaster because it additionally exposed the fraud on a grander scale.

Audio here:
http://kingworldnews.com/kingworldnews/ ... 3A2010.mp3

PS Hollywood would never expose this

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Re: Fake gold bars in Bank of England and Fort Knox

Postby Paulo » 01 Apr 2010, 19:55

Continued interview regarding these treasonous nation wreckers:

http://kingworldnews.com/kingworldnews/ ... 3A2010.mp3

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Re: Fake gold bars in Bank of England and Fort Knox

Postby Paulo » 05 Apr 2010, 10:43

The following is a follow up of this exposure. It is very wise to pass on
to friends and family:

Andrew Maguire finally exposes systemic fraud by CFTC & JPMorgan

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Re: Fake gold bars in Bank of England and Fort Knox

Postby Paulo » 26 Apr 2010, 12:00

America's Impending Master Class Dictatorship

By Stewart Dougherty
Jan 22 2010 2:24PM


FOREWORD: At certain times, focusing on the big picture is important not just for investment success, but for personal welfare, and even survival. We believe such times are here. It is estimated that 98% of Americans have never held a gold coin in their hands. Yet 100% of Americans regularly handle Federal Reserve Notes. From a contrarian standpoint, the financial message from those two statistics is clear. Even so, gold is much more than money or an investment medium; it stands for liberty and throughout history has facilitated escape and ensured freedom. Never having touched a gold coin is the monetary equivalent to never having breathed fresh air, felt the warmth of sunshine, looked up at the stars or risen from the gutter. Fiat Federal Reserve Notes are becoming nothing more than sewage decomposing in the vast, toxic septic tank of predatory Washington politics, epic Federal Reserve arrogance and error, blatant Wall Street fraud and outright Master Class plunder. Below, we outline America’s troubling and compounding predicament, and urge you to think about how to protect yourself from its consequences, both financially and personally.

Thanks to the endless barrage of feel-good propaganda that daily assaults the American mind, best epitomized a few months ago by the “green shoots,” everything’s-coming-up-roses propaganda touted by Federal Reserve Chairman Bernanke, the citizens have no idea how disastrous the country’s fiscal, monetary and economic problems truly are. Nor do they perceive the rapidly increasing risk of a totalitarian nightmare descending upon the American Republic.

One stark and sobering way to frame the crisis is this: if the United States government were to nationalize (in other words, steal) every penny of private wealth accumulated by America’s citizens since the nation’s founding 235 years ago, the government would remain totally bankrupt.

According to the Federal Reserve’s most recent report on wealth, America’s private net worth was $53.4 trillion as of September, 2009. But at the same time, America’s debt and unfunded liabilities totaled at least $120,000,000,000,000.00 ($120 trillion), or 225% of the citizens’ net worth. Even if the government expropriated every dollar of private wealth in the nation, it would still have a deficit of $66,600,000,000,000.00 ($66.6 trillion), equal to $214,286.00 for every man, woman and child in America and roughly 500% of GDP. If the government does not directly seize the nation’s private wealth, then it will require $389,610 from each and every citizen to balance the country’s books. State, county and municipal debts and deficits are additional, already elephantine in many states (e.g., California, Illinois, New Jersey and New York) and growing at an alarming rate nationwide. In addition to the federal government, dozens of states are already bankrupt and sinking deeper into the morass every day.

The government continues to dig a deeper and deeper fiscal grave in which to bury its citizens. This year, the federal deficit will total at least $1,600,000,000,000.00 ($1.6 trillion), which represents overspending of $4,383,561,600.00 ($4.38 billion) per day. (The deficit during October and November, 2009, the first two months of Fiscal Year 2010, totaled $296,700,000,000.00 ($297 billion), or $4,863,934,000.00 ($4.9 billion) per day, a record.) Using the GAAP accounting method (which is what corporations are required to use because it presents a far more accurate and honest picture of a company’s finances than the cash accounting method primarily and misleadingly used by the U.S. government), the nation’s fiscal year 2009 deficit was roughly $9,000,000,000,000.00 ($9 trillion), or $24,700,000,000.00 ($24.7 billion) per day, as calculated by brilliant and well-respected economist John Williams. (www.shadowstats.com) Fiscal Year 2010’s cash- and GAAP-accounting deficits will likely be worse than 2009’s, given government bailout and new program spending that is on steroids and psychotic.

Putting Fiscal Year 2009’s $9,000,000,000,000.00 ($9 trillion) deficit another way, 17% of America’s private wealth, accumulated over a period of 235 years, was wiped out by just one year’s worth of government deficit spending insanity.

Given this, is it any surprise that Treasury Secretary Geithner has announced that the release of the nation’s FY 2009 supplemental GAAP financial statements has been delayed? Remember, this is the same Secretary Geithner who bullied people to cover up the sordid details of the AIG, or more accurately, the taxpayer-funded, multi-billion dollar, Santa Claus bailout and bonus bonanza for Goldman Sachs. Do you really think this government, characterized as it is by fiscal and monetary secrecy, lies, chicanery, cronyism and stonewalling, wants the people to know what is actually happening? Obviously, it does not, so it hides from the public the inexcusable facts.

It is estimated that the top 1% of Americans control roughly 40% of the nation’s wealth. In other words, 3 million people own $21,400,000,000,000.00 ($21.4 trillion) in net private assets, while the other 305 million own the remaining $32,000,000,000,000.00 ($32 trillion). 77,000,000 (77 million) Americans (the lowest 25%) have mean net assets of minus $2,300 ($-2,300.00) per person; they live from paycheck to paycheck, or on public assistance. The lower 50% of Americans own mean net assets of $27,800 each, about enough to purchase a modest car. Obviously, it would be impossible to retire on such an amount without significant government or other assistance. Meanwhile, the richest 10% of Americans possess mean net assets of $3,976,000.00 each, or 143 times those of the bottom 50%; the top 2% control assets worth more than 1,500 times those in the bottom 50%. When you combine these facts with Wall Street’s typical multi-million dollar annual bonuses, you get an idea of wealth inequality in America. Historically, such extreme inequality has been a well-documented breeding ground for totalitarianism.

If the government decides to expropriate (steal) or commandeer (e.g., force into Treasuries) America’s private wealth in order to buy survival time, such a measure will be designed to destroy the common citizens, not the elite. Insiders will be given advance warning about any such plan, and will be able to transfer their money offshore or into financial vehicles immune from harm. Assuming that the elite moves its money to safety, there would then be $120,000,000,000,000.00 ($120 trillion) in American debt and liabilities supported by only $32,000,000,000,000.00 ($32 trillion) in private net worth, for a deficit of $88,000,000,000,000.00 ($88 trillion). In that case, each American would owe $285,714.29 to balance the country’s books. (Remember to multiply this amount by every person in your household, including any infant children.)

If the common people suspect that something diabolical was in the works, a portion of the $32 trillion in non-elite wealth could be evacuated as well prior to a government expropriation and/or currency devaluation, resulting in less money for the government to steal. What these statistics mean is that it is absolutely impossible for the government to fund its debt and deficits, even if it steals all of the nation’s private wealth. Therefore, the government’s only solutions are either formal bankruptcy (outright debt repudiation and the dismantling of bankrupt government programs) or unprecedented American monetary inflation and debt monetization. If the government chooses to inflate its way out of this fiscal catastrophe, the United States dollar will essentially become worthless. You can be absolutely certain that a PhD. in economics, such as Dr. Bernanke, is well aware of these realities, despite what he might say in speeches. For that matter, so are Chinese schoolchildren, who, when patronized by Treasury Secretary Geithner about America’s “strong dollar,” laughed in his face. One day, perhaps America’s school children will receive a real education so that they, too, will know when to laugh at absurd propaganda.

The government has announced that during the fiscal years from 2010 through 2019, it will create an additional $9,000,000,000,000.00 ($9 trillion) in deficits, an amount that is almost certain to be understated by trillions given the country’s current economic trajectory. The government assumes that this vast additional deficit will be funded by others, such as the Chinese, as it is a statistical fact that the United States will be incapable of funding it.

Furthermore, with the budgetary equivalent of a straight face, the Office of Management and Budget reports in its long-term, inter-generational budget projection that the United States government will experience massive, non-stop deficits for the next 70 (SEVENTY) years, requiring the issuance of tens of trillions of dollars of additional debt. The OMB does not project even one year of surplus during the entire seventy year budget period.

These deficits and debts are now so gargantuan that they have become surreal abstractions impossible even for sophisticated financiers to begin to comprehend. The common citizen has absolutely no idea what these numbers mean, or imply for his or her future. The people have been deluded into thinking that America’s arrogant, egomaniacal, always-wrong-but-never-in-doubt fiscal witch doctors and charlatans, including Greenspan, Rubin, Summers, Geithner and Ponce de Bernanke, have discovered a Monetary Fountain of Youth that endlessly spits up free money from the center of earth, in a geyser of good will toward the United States. Unfortunately, this delusion is false: there is no Monetary Fountain of Youth, and contrary to the apparent beliefs of the self-deified man-gods in Washington, D.C., the debt and deficits are real, completely out of control, and 100% guaranteed to create catastrophic consequences for the nation and its people.

When government “representatives” deliberately sell into slavery the citizens of a so-called free Republic, they have committed treason against those people. This is exactly what has happened in the United States: the citizens have been sold into debt slavery that they and their descendants can never escape, because the debts piled onto their backs can never, ever be paid. Despite expensive and sophisticated brainwashing campaigns emanating from Washington, claiming that America can “grow” out of its deficits and debt, it is arithmetically impossible for the country to do so. The government’s statements that it can dig the nation out of its fiscal hole by digging an even deeper chasm have become parodies and perversions of even totally discredited and morally disgusting Keynesianism.

The people no longer have elected representatives; they have elected traitors.

The enslavement of the American people has been orchestrated by a pernicious Master Class that has taken the United States by the throat. This Master Class is now choking the nation to death as it accelerates its master plan to plunder the people’s dwindling remaining assets. The Master Class comprises politicians, the Wall Street money elite, the Federal Reserve, high-end government (including military) officials, government lobbyists and their paymasters, military suppliers and media oligarchs. The interests and mindset of the Master Class are so totally divorced from those of the average American citizen that it is utterly tone deaf and blind to the justifiable rage sweeping the nation. Its guiding ethics of greed, plunder, power, control and violence are so alien to mainstream American culture and thought that the Master Class might as well be an enemy invader from Mars. But the Master Class here, it is real and it is laying waste to America. To the members of the Master Class, the people are not fellow-citizens; they are instruments of labor, servitude and profit. At first, the Master Class viewed the citizens as serfs; now that they have raped and destroyed the national economy, while in the process amassing unprecedented wealth and power for themselves, they see the people as nothing more than slaves.

America’s public finances are now so completely dysfunctional and chaotic that something far worse than debt enslavement and monetary implosion, terrible curses unto themselves, looms on the horizon: namely, a Master Class-sponsored American dictatorship.

Throughout history, the type of situation in which America now finds itself has been a fertility factory for tyranny. The odds of an outright overthrow of the people by the Washington and Wall Street Axis, or more broadly, the Master Class are increasing dramatically. The fact that so few people believe an American dictatorship is possible is exactly why it is becoming likely.

Dictatorships have blighted history and ruined lives since the beginning of civilization. In recent times alone, tyrants such as Hitler, Stalin, Lenin, Ceausescu, Amin, Hussein, Mussolini, Tojo, Kim, Pinochet, Milosevic, Tito, Batista, Peron, Pol Pot, Mugabe, Marcos, Somoza, Mengistu, Bokassa, Sese Seko, Franco, Ho Chi Minh, Mao, and Castro have power-sprayed blood onto the screen of time and ravaged mankind with murder, torture and human oppression. A full catalog of history’s tyrants would require a book of hundreds of pages. In the past 100 years alone, over 200 million human beings have been annihilated by wars, ethnic cleansings and government assassinations. Just when we think that civilization has been able to rise above tyranny’s inhumanity and disgrace, a new dictator appears on the scene to start the process all over again. Every time this happens, fear and submission paralyze the vast majority of the affected masses, leading them to “follow orders” and lick autocracy’s blood-stained boots.

History has proven to tyrants that oppression works. In fact, it is easy to control a populace, once you control the money, markets, military (including police), media and minions (the recipients of welfare, social security, free health care, government jobs and the like, who are dependent upon the state and likely to be compliant). This is exactly where the United States is today.

Recent American events paint an ominous picture of a Master Class that is now in total control.

When 90% of the American people vehemently rejected the $700,000,000,000.00 ($700 billion) TARP bailout plan, the Master Class put it on a fast track and approved it anyway.

When a clear majority of the American people said no to a government takeover of Chrysler and GM, the Master Class poured billions of taxpayer dollars into those corporate sinkholes and took them over anyway.

When the people said no to multi-trillion dollar crony bailouts for the bankers and insurers whose corruption had caused global financial mayhem, the government pledged to those elite insiders more than $13,000,000,000,000.00 ($13 trillion) of the people’s money anyway.

When the people expressed astonishment and anger that Wall Street planned to pay itself record 2009 bonuses, in the midst of America’s worst-ever fiscal and financial crisis caused by them, Wall Street stuffed its pockets with taxpayer-supported bonus money anyway.

When the people said no to a proposed $40,000,000,000.00 ($40 billion) bailout of AIG and its elite trading partners such as Goldman Sachs (an amount that subsequently exploded to $180,000,000,000.00+ ($180+ billion)), the Master Class went underground, covertly misappropriated taxpayer money and made the payoffs anyway.

When Fannie Mae and Freddie Mac were nationalized at enormous taxpayer expense, the government approved $6,000,000.00 individual pay packages in 2009 (150 times the average American wage) for the CEOs of both failed companies anyway.

When a clear majority of the people said no to nationalized health care, even after being bombarded by a multi-million dollar, lie-drenched propaganda campaign designed to bamboozle them, the House and Senate passed nationalized health care bills anyway.

When more than seven million American workers lost their jobs and were subsisting on unemployment benefits and food stamps, federal government employees, who now earn DOUBLE what private sector workers earn, were given another round of pay and benefits increases anyway.

When private sector workers’ 401Ks and IRA retirement plans plummeted in value due to economic collapse and endemic Wall Street-orchestrated market corruption (including systemic front running, flash trading, naked short selling and other manipulations), government “defined benefit,” lifetime-cost-of-living-adjusted pension plans, despite already being underfunded by $2,000,000,000,000.00 ($2 trillion), were made richer than ever anyway.

The long, shameful litany of events signaling the total divorce between the Master Class and the people of the United States doesn’t stop there. It goes on and on.

The message from the American Master Class to the American people is simple and clear:

We Defy You.

Governments that openly defy the people are either already totalitarian or in the process of becoming so. Monetarily, the United States clearly functions as a totalitarian dictatorship already, with a Federal Reserve that operates in secrecy, creates limitless amounts of debt and currency at will, and showers trillions of dollars upon favored Master Class insiders with zero transparency or accountability whatsoever. The Federal Reserve is so shameless about its dictatorial powers that it flatly refuses to provide details about multi-trillion dollar bailouts and rescues of privileged elites, in open defiance of Congress and the people. The fact that they get away with these blatant acts of defiance demonstrates the true extent of the Master Class chokehold on America.

If the Master Class were a benign despot and if its policies and programs actually worked, that would be one thing. But that is not the case. Rather, its programs are in a complete shambles.

Every single government entitlement program in the United States is bankrupt. This includes Social Security ($17,500,000,000,000.00 underfunded; $17.5 trillion); Medicare Part A ($36,700,000,000,000.00 underfunded; $36.7 trillion); Medicare Part B ($37,000,000,000,000.00 underfunded; $37 trillion); Medicare Part D ($15,600,000,000,000 underfunded; $15.6 trillion), Government and military pensions ($2,000,000,000,000 underfunded; $2 trillion), Food Stamps (current underfunding difficult to measure because the number of recipients is exploding; hundreds of billions underfunded versus original projections, minimum); and the list goes on. The above underfunding amounts are NET of projected tax receipts over the next 50 years. But the current recession has invalidated virtually all long-term budget and tax receipt assumptions, meaning that the true underfunded amounts are now greater than current, already mind-boggling estimates.

While the above statistics are terrifying enough to any citizen with a functioning brain, what is Twilight Zone-eerie and a far more serious cause for alarm is the casual indifference with which the Master Class is now making the country’s dire and irreparable fiscal circumstances even worse.

The nationalized health care program will cost at least $1 trillion over the next ten years, and most likely multiples of that. It is being crammed down America’s throat by a bankrupt government that does not have the money today and will not have the money tomorrow to pay for it. Worse is the fact that the same government that has bankrupted each and every existing social program now intends to directly or indirectly control the health care of all citizens. Based on the government’s existing track record and the health care program’s enormous complexity, invasiveness and cost, the probability that it will become a national fiscal and humanitarian catastrophe is roughly 100%.

“Cap and Trade” is a multi-trillion dollar tax scam being foisted onto the American public without a legitimate debate or popular referendum. You might be surprised to learn that “Climate Revenues” are already included in the federal budget, starting with $79,000,000,000.00 ($79 billion) in fiscal year 2012, which begins only 20 months from now. During fiscal years 2012 through 2019, the government expects to collect $646,000,000,000.00 ($646 billion) in “Climate Revenues,” a completely new tax category. Have any of your elected traitors told you that they have enacted $646,000,000,000.00 ($646 billion) in “Climate” taxes beginning twenty months from now and continuing forever? These “Climate Revenues” are based on junk science, lies and hysteria, and have been pimped by greed-diseased parasites who seek to make billions from operating and manipulating the Cap and Trade “marketplace.” Favored elitists such as Hank Paulson, Al Gore, General Electric and Goldman Sachs, among others, have positioned themselves to profit from the nation’s upcoming Cap and Trade tax misery and economic debilitation.

The reality is that the giant Ponzi scheme called the United States of America is running out of money. In any Ponzi scheme, money must constantly be poured into the top of the funnel in order to pay the redeemers at the bottom. As the number of redeemers has grown, tax receipts have fallen far short of covering their withdrawals, a problem that has now become an outright government funding emergency further aggravated by the fiscal, financial and economic crises.

If the Washington and Wall Street Axis were not legally able to create and distribute counterfeit American money, the Ponzi scheme would have collapsed already. Trillions of new, out-of-thin-air, printing-press and electronic “dollars” have bought the Axis additional time, but new sources of revenue must immediately be found to keep the scam alive. Congress is fully aware of this reality. Outright tax increases would be bad politics during a recession that is morphing into a depression, and also bad for 2010 re-election campaigns, so they cannot be implemented. Therefore, Congress continues to advance the health care and Cap and Trade agendas, which are nothing but taxation Trojan Horses festooned in righteousness and sanctimony, despite overwhelming popular opposition.

If the nationalized health care program is passed, revenues and fees will kick in immediately in 2010, whereas costs will not begin to accrue until 2012 and later. The government plans to spend the revenues immediately to forestall a total fiscal collapse. Nationalized health care has absolutely nothing to do with health care; it has to do with creating an immediate revenue stream to help fix the current government funding crisis. Similarly, Cap and Trade has nothing to do with fixing the environment. It, too, is nothing more than a massive tax increase similarly designed to address the government’s epic funding shortfall, with thick slices of pork thrown in for privileged insiders and deceitful propagandists like bloated “Father of the Internet” and now “Savior of the World” Al Gore.

The last thing the Master Class wants is for the people to understand the disastrous state of the nation’s finances. Master Class brainwashing tells the people that it is “negative” and “pessimistic” to look at the facts, despite the fact that psychological health is characterized by the ability to identify and deal with reality. The Master Class wants the people to put on Bozo the Clown happy faces and let sugar plums and green shoots dance in their brains as they write one check after another to pay for Cap and Trade, nationalized health care, and a mind-numbing assortment of other taxes and fees.

On Sunday night, November 30, 2009, North Korea’s dictator Kim Jong Il (a name that says it all, even better than Made-off’s), an international poster child of Master Class psychological illness, devalued his country’s currency by 99%. This vicious tyrant, who has given birth to a national hell on earth, is chauffeured in Mercedes Benz limousines, drinks the finest imported whiskies and dines in imperial dignity on foods prepared by personal chefs while his citizens starve to death on the streets or, at best, eke out a subsistence living. Kim became paranoid that the people were actually figuring out how to improve their pitiful, impoverished lives in tiny ways, so he decided to wipe them out. The people were given one week to exchange their money at a rate of 100 old Won for 1 new Won. Any lifetime family savings in excess of roughly $700.00 were simply confiscated by the North Korean government. To keep the people in line, the military and police were put on high alert, fully prepared to kill or arrest any protesters.

On January 9, 2010, Venezuela’s strong man Hugo Chavez devalued his country’s currency by 50%, overnight and without warning, causing immediate inflation, shortages of food and supplies, and general financial chaos throughout the nation.

While you might be shaking your head in pity over the plight of the citizens of North Korea and Venezuela, ask yourself this: could this not happen in the United States?

On April 5, 1933, President Franklin D. Roosevelt, an Obama hero, outlawed gold ownership overnight by signing Executive Order 6102, which gave the people three and one-half weeks to surrender all privately-owned bullion to the government for a price of $20.67 per ounce. On January 30, 1934, nine months after collecting the people’s gold, Roosevelt devalued the dollar 69% overnight, by raising the gold price from $20.67 to $35.00 per ounce.

Since its founding in 1913, the Federal Reserve has devalued the dollar by 98+% thanks to endless money printing and debt creation, a corrosive and impoverishing process that is now accelerating. In the past year, the Fed has engineered $20+ trillion in bailouts, subsidies and guarantees for well-connected and lucky scavengers and opportunists, an amount equal to roughly 40% of the total private wealth created in this country since its inception. All because a few elitist government man-gods with an almost perfect record of error and failure have deemed in their imperial wisdom that it shall be so. The citizens, whose hard-earned wealth is being systematically destroyed by this continual, government-decreed monetary debasement were never invited to the debate or given a say, which is par for the course for dictatorships. This massive de facto devaluation now hangs over the people’s wealth like a great monetary sword of Damocles.

Conceptually, whether it is a 50% overnight devaluation in Venezuela, a 69% overnight devaluation in the United States, a 98% devaluation in America over time, or a 99% overnight devaluation in North Korea, what is the difference? The fact is: there is no difference; monetary debasements are all the same. In each and every case, the people’s wealth is stolen via government edict, while the people stand by helplessly and in shock.

So one must ask: For whom does the bell toll? A foreign “them,” or a domestic us? Who is to say that you will not be told tomorrow morning that, effective immediately, in accordance with some perversely named mandate such as the “American Monetary Security, Wealth Preservation and Terrorism Prevention Act,” enacted by emergency for “the safety of the nation and the financial well being of the citizens,” all existing currency and bank balances will be redenominated in “New Dollars,” at a conversion rate of 1 new for every 100 old currency units? Would this not simply be another, almost predictable act of defiance toward the American people by the Master Class? And if that happened, do you honestly believe that the Master Class would not have been alerted in advance and allowed to make special preparations for itself ahead of the devaluation? Do you think they intend to go down in the same ship as the people they defy? If such a currency devaluation were announced, what could you do about it? March on Washington? But how would you get there if your money had been wiped out?

Despite what you may hear from State Media, which includes virtually all establishment news organizations, particularly financial ones (e.g., CNBC), America is on the precipice. No bankrupt nation in history has ever defended or preserved the freedoms of its citizens. In fact, it has been the exact opposite: in desperation, bankrupt governments have routinely plundered their citizens’ wealth and imposed totalitarian controls. What will make things different for the United States, the largest debtor nation in all of recorded civilization?

The United States government cannot ever, possibly pay its debts, is pathologically incapable of controlling its spending or curbing its hunger for both domestic and international empire and persistently refuses to tell the American people the truth. If America’s citizens were told the truth and given the benefit of true leadership, as opposed to the guile and dishonesty of an endless array of political liars and hacks, perhaps they could rally and defeat the problems that afflict them. But instead, they are fed by the Master Class a steady diet of narcotic propaganda that deludes, confuses and enervates them. The truth cannot set people free if it is never told, and that is the essence of America’s gathering tragedy.

In a future article, we will detail specific developments you should watch for to chart the course of America’s ominous and potentially deadly national storm. The current, grave situation is already a clear call to action. When the signals become even more urgent, it will be late in the game to take protective action, and possibly too late. Citizens should begin to prepare now not just for financial survival, but for the personal security of themselves and their loved ones should a Category 5 economic and political hurricane rip into the nation, something that becomes more likely every day.

With respect to personal finances, in virtually every national currency devaluation and major political upheaval in the past, gold has represented sanctuary for the affected people. Gold has not just preserved wealth, but personal freedom as well. While governments can devalue fiat currencies, they cannot, by edict, devalue gold. Yes, they can try to manipulate its price, but unless all governments join in the collusion, ultimately the price will return to market. The market for gold is global, and demand exists in all nations and among all peoples. Should the government attempt to confiscate gold, it will be an outright admission that the financial system is collapsing, and the people will know better than to hand over to a corrupt government their only means of survival. The most important point is this: devalued currencies never rise again. Once they are destroyed, they are gone forever, and those whose wealth had once been denominated in them are wiped out. As you have no doubt heard before, not one fiat currency has survived over time, and that is an indisputable fact. More significantly, no fiat currency has ever suffered the abuse that has been inflicted upon the United States dollar, meaning that it is at extreme risk. Gold has been money for 5,000 years. It has not merely survived, it has prevailed over each and every fiat currency collapse throughout history. Given this, the most important financial question a person can ask him- or herself today is: How is my wealth denominated at this time? And given its denomination, is my wealth likely to be safe in current and evolving circumstances?

One thing is certain: as the epic David and Goliath monetary battle unfolds, between the people fighting to defend their hard-earned wealth on one side, and a Master Class that greedily and pathologically wants to plunder them on the other, the price of gold will become extremely volatile for a period of time. Volatility will, in fact, tell you that the War on Wealth has officially been declared, and will be your signal to do whatever you must to protect what is yours. As the government Goliath and its Master Class allies short tonnes of bullion into rigged futures markets in a desperate attempt to make gold look dangerous and risky, the Davids will be coming forth not just in the United States but from all corners of the globe, buying 10 grams here and one ounce there. There are 6.8 billion Davids, versus one diseased Master Class that numbers in the small millions. There is no way the Master Class can defeat the people, if the people finally rise up and say “No More of Your Plunder. No More of Your Cold and Soulless Financial Oppression. No More of Your Cynical and Godless Exploitation.”

If you find the above argument compelling, you should consider how to protect yourself from Executive Orders that could be issued at any time, under any pretext, and that could be extremely hostile to your financial and/or personal health and well being. One simple way to start is to purchase one ounce of gold for yourself and each member of your household, and much more if you can afford it. That is not financial advice; it is merely the common sense generously communicated to you by history.

Stewart Dougherty


Stewart Dougherty is a specialist in inferential analysis, the practice of identifying historic and contemporary patterns and then extrapolating their likely effects upon the future. Dougherty was educated at Tufts University (B.A., magna cum laude), and Harvard Business School (M.B.A. and an academic Fellow). He can be reached at [email protected]. He is not affiliated with or compensated by those he references or recommends. He does not offer investment or trading advice, and nothing in this article should be construed as such. This article represents the author’s personal opinions, and nothing more. The reader has the author’s permission to share, print, forward or post this article provided that the content is not changed and the author is acknowledged.

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PS Odious Debt


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Re: Fake gold bars in Bank of England and Fort Knox

Postby Paulo » 18 Jun 2010, 07:20

The Bogus Bullion-ETF's

Article with linked footnotes here:
http://www.bullionbullscanada.com/index ... rokstories

The precious metals market has been rocked by the twin bombshells of Andrew Maguire's emergence as a “whistle-blower”,
along with Jeffery Christian'sstunning admission that the bullion-banks had leveraged their dwindling bullion by an insane 100:1.While there are numerous repercussions to these revelations, perhaps nowhere does this news have more of an impact than with the bankster-frauds known by the symbols “GLD” and SLV”.

Regular readers are familiar with my strident criticisms of these paper-bullion funds. There are numerous bases for challenging
their legitimacy, but the place I usually start is to point out that the same bullion-banks who are the supposed “custodians” for
all this “bullion” also have gigantic short-positions which (by remarkable coincidence) are very similar in size to the total (alleged) holdings of GLD and SLV.

While defenders of these fraud-funds point to “audits” which suppose “prove” that these funds are properly backed, as I have
pointed out before, those audits are nothing but a bad joke. There are two problems. First, while the ETF “bullion” may be audited, the short positions of the bullion-banks are never audited. Thus, all that has ever been demonstrated by these audits is that the bullion banks may hold enough bullion to cover either the short positions or the “custodian” agreements.

As I have maintained, time and time again, it is naivete of the highest order to believe that if the banksters were given the choice of honouring their custodian agreements with the bullion-ETF's or “covering” their own short positions that the banksters would choose to prop-up the bullion-ETF's. If you don't believe me, ask the clients of Morgan Stanley: who sued that fraud-factory after discovering that when they instructed Morgan Stanley to purchase bullion for their accounts that it only pretended to do so.

However, even though Morgan Stanley only “bought” pretend-bullion for those accounts, this didn't stop it from charging its customers real “storage” fees. To believe that the same banksters who cheat their own clients without thinking twice would protect the anonymous third-parties holding GLD and SLV is merely wishful thinking.

Secondly, as regular readers know, every bar of SLV “silver” is counted as part of official, global inventories. In fact, roughly 2/3 of total silver inventories are the supposed bullion-holdings of SLV. What this means is that even if there was any, real silver in SLV that every ounce of that silver has a “for sale” sticker on it. This means that even if SLV conducted an “audit” every day, that such an audit would only be valid for a millisecond: the time it takes for someone to place a “buy” order for every ounce of bullion supposedly held by SLV.

Returning to the custodian agreements, when I alleged that the bullion-ETF's were nothing but empty frauds, because the banksters had never demonstrated that they had more than half the gold needed to cover their massive obligations, keep in mind what that implies. If the bullion-banks had merely leveraged their bullion by 2:1, that alone could make GLD and SLV totally worthless.

In fact, thanks to Jeffrey Christian of the CPM Group (the same people who count SLV's silver as part of official inventories), we now know that the banksters' bullion is leveraged 100:1 – fifty times the amount of leverage required to render GLD and SLV worthless. While GLD and SLV holders may have been willing to gamble on the generosity of bankers when their leverage was only suspected of being 2:1 (a bad bet, at the best of times), that world doesn't exist. In the world of 100:1 bullion-leverage, it isn't even rational to hope that there is any bullion backing these funds.

If the banksters had truly, fully-backed GLD and SLV, then (as a matter of arithmetic) that would mean that the remainder of their bullion positions would have to be leveraged that much more – to somewhere around 150:1. This proposition becomes all the more ludicrous when we review some of my other criticisms of these fraud-funds.

To begin with, there are the absurdly low storage-fees which the bullion-banks charge GLD and SLV to “store” its bullion. We know what the fair-market value of such storage is, through the management fees charged by the minority of legitimate bullion-ETF's: who actually hold and store bullion directly for their unit-holders. It's many times the near-zero fees charged to GLD and SLV.

Thus, apart from all the other reasons to doubt the legitimacy of these funds, those dreamers who still believe in their legitimacy must also believe that the banksters are subsidizing these unit-holders – purely out of the goodness of their hearts. I'll give readers a moment to recover from their laughter, because this scenario gets much more ludicrous.

It's not just that the banksters would be subsidizing GLD and SLV unit-holders. These bullion-banks, the holders of the most-concentrated “short” positions in the history of commodities trading would be subsidizing the entry of millions of “longs” into the precious metals market – directly jeopardizing their massive, short positions.

It would be foolish merely to believe that the bullion-banks would subsidize GLD and SLV unit-holders, under any circumstances. However, to suggest that these banksters would subsidize the entry of millions of longs, while the banksters are sitting with gigantic short positions (leveraged 100:1) is truly the definition of idiocy. In other words, far from these custodian agreements representing the first choice for the banksters to deploy their totally inadequate amounts of bullion, those custodian agreements would be the last place the bankers would choose to start honouring their leveraged commitments.

Apart from the bankers not caring about the millions of (mostly) small investors holding these fraud-funds, a glance at the prospectus for any of these banker-backed “bullion-ETF's” reveals that the fund-managers could hold all sorts of different paper instruments – and pretend that they represent “bullion”.

When Jeffrey Christian blurted-out some of the most intimate secrets of the bullion-banks, during his blunder-filled testimony, among those “secrets” he touched upon was the enormous amount of bullion which is “leased”: either leased by the central banks to the bullion-banks, or leased by the bullion-banks to other “customers”.

Who are those other customers? Christian identified some of them as “electronics manufacturers” and “jewelers” - consumers of gold. This is an integral component of the banksters' multi-decade bullion-fraud. Precious metals researchers who have attempted to sift-through the fraudulent “paper trails” of the banksters claim that much of (if not most of) the bullion which is claimed to be “held” by Western central banks are nothing but “IOU's” for the countless tons of gold they have “leased” to the bullion-banks.

While undoubtedly those bullion-banks have used-up much of that “leased” gold in covering their short positions over the years (and thus that bullion is gone-for-good), there is at least some possibility that a portion of that gold might be recovered by central banks. Obviously, this is not the case with gold (and silver) that has been “leased” to electronics manufacturers or jewelers. All their gold has been consumed in their own manufacturing, and then sold (in tiny amounts) to countless third-parties.

This is bullion which the bullion-banks know will be gone forever, the moment they execute these “lease” agreements – yet the “bullion” remains on their books as both an “asset” and as real metal. Obviously, these so-called “lease agreements” are thus fraudulent, on their very surface. They are “final sales” which have been fraudulently portrayed as “loans”.

The banksters' motivation for engaging in such frauds is obvious, while the willingness of end-users to participate in such frauds is not as immediately apparent. Presumably, the electronics manufacturers and jewelers are given a “choice” by the bullion-banks: they can buy gold and silver (at a higher price), or enter into “long-term lease agreements” for the metal – at a significant discount. Both parties know the transactions are shams, but the bullion-banks get to pretend to hold much more gold and silver than actually exists, while the end-users get to increase their profit margins.

Thus, while much of the banksters' 100:1 leverage is achieved through the inherently reckless leverage built into the derivatives market, another significant component of this bullion-fraud is the multitude of “lease agreement” Ponzi-schemes. One form of those Ponzi-schemes is that the central bank “leases” bullion to the bullion-bank, then the bullion-bank “leases” that bullion to a 3rd party, and then that holder “leases” the gold to a fourth party, and so on...The same ounce of gold or silver ends up being listed as an “asset” (and real “bullion”) on multiple balance sheets.

However, scamming in that manner, is cumbersome – as you need to continually add new “links to the chain” in order to expand “leverage” in an ever more-fraudulent manner. It's much easier for the central banks and the bullion-banks just to “lease” the same ounces of gold and silver over and over and over.

Since the bullion-banks have been allowed (for decades) to engage in institutionalized fraud in their bullion “accounting” (i.e. pretending that a “leased” bar of bullion is the same thing as actually holding a bar of bullion), there is nothing stopping them from “leasing” the same bar of bullion to a hundred different customers.

In my previous critiques of the GLD and SLV frauds, my only “smoking gun” was the fraud perpetrated in silver inventories (by counting privately-held ETF-silver as part of global inventories), along with a great deal of circumstantial evidence, along with a liberal amount of common sense. However, following Jeffrey Christian's and Andrew Maguire's revelations about the bullion market (and the bullion-banks), that evidence is now literally a hundred times stronger.

We know the banksters have cheated “bullion” holders around the world by selling the same ounce of bullion to them a hundred times. We know that the banksters have made bullion-fraud a way of life. And these same banksters are the people whom the holders of GLD and SLV must implicitly trust – or else their investment is nothing but another steaming, mound of banker-fraud.

As I have stressed in numerous, previous commentaries, as legitimate investment vehicles, the bullion-ETF's like GLD and SLV make no sense at all. We are supposed to believe that, on a whim, the massively-short, massively over-leveraged bullion-banks decided to funnel all of their dwindling supplies of bullion into “funds” where the storage fees are so low that they are essentially subsidizing the entry of millions of “long” investors into the sector – exponentially increasing both their leverage, and the “pressure” on their massively over-leveraged positions.

Conversely, as a premeditated, deliberate fraud (at least in the eyes of the bullion-banks), GLD and SLV make perfect sense. These fraud-funds vacuumed-up $10's of billions of investor dollars which would have otherwise totally depleted their hoards of bullion. Instead of surging demand destroying the bullion-banks, they merely ratcheted-up their leverage another ten or twenty times – and 'sold' additional, vast amounts of their worthless paper.

Indeed, this is nothing more than a variation of the oldest of all banker-scams: taking the wealth of 'the little people', and handing them nothing in return but worthless scraps of paper with the words “gold” or “silver” written on them. If there is any “surprise” or “mystery” here, it's not the banksters would roll-out this old scam, yet one more time. It's that there are still millions of rational adults who, despite the recent revelations, continue to entrust vast amounts of their precious wealth to these obvious shams.

I also cannot avoid mentioning the majority of commentators, both inside and outside this sector, who continue to present these funds to investors as legitimate investments – with no warnings or caveats – despite the obvious nature of these shams. I ask readers to make note of those “analysts” who continue to tout these shams, so that you don't allow yourself to be misinformed by such irresponsible sources in the future.

Not only is “the Emperor wearing no clothes”, but these bullion-bank “tailors” have clothed a hundred naked Emperor's in their “finery”. Fool me once, shame on you. Fool me a hundred times, shame on me!

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