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Guest Post: Counterfeit Gold
Submitted by Casey Research
Dude, Is That Gold Bar for Real?
By Doug Hornig, Sr. Editor, Casey’s Gold & Resource Report
As the 10-year gold bull continues its stunning run, rumors of fakery seem to be cropping up as fast as new Eagles can be minted. Should you be worried? Do you need to run to the coin shop for a home test kit?
Well, the counterfeiters are out there, and have been for millennia, but how to counter them?
You probably remember movies about the Old West, wherein a shady-looking character would offer to exchange a gold coin for a horse, and the nag’s owner would bite down on the coin. That was about all you could do, if you lacked proper assaying equipment and had to make a snap judgment on the fly: depend on your teeth to tell you whether the metal in your hand was sufficiently soft to be genuine gold.
The bite test is actually a pretty good one since gold, despite being among the heaviest metals, is also very soft. If you chomp down and shatter a tooth, it ain’t gold. But does that mean you need to munch your way through your coin collection? In a word, no.
Not that faking coins would be that hard to do. This is the 21st century after all, and if there’s one thing we do well, it’s making copies of things. Given contemporary 3-D laser imaging, a die could be created that mimicked the real deal in perfect detail. It’s not as if you could hold your coin up to the light and see the kinds of safeguards built into paper currency these days.
Predictably enough, counterfeiting concerns eventually hit the Internet. About a year ago, the blogosphere bloomed with doomsday warnings after the publication of a series of articles in Coin World, dealing with the subject of coin counterfeiting in China, where it’s quasi-legal. The Web was abuzz with the worries of coin holders and eBay shoppers, as well as the pontifications of pundits about the coming flood of knockoffs from the far East.
Now that didn’t seem right to us. We’ve been at this a goodly while, and we’ve never heard of anyone being slipped a fake Eagle or Maple Leaf. Just to be on the safe side, though, we checked with a dealer of 30 years’ experience and got the same answer. Nope. Only seen a couple over the past three decades.
The thing is, it’s really impractical. Any counterfeit bullion coin would have to be gold in order to pass. If it were pure, then what would be the point? And if the counterfeiter skimped on the gold content, the coin’s weight would be a dead giveaway. The only alternative would be to gold-plate a coin made out of some other metal. But again, getting the weight right while preserving the correct size would be a challenge. In the end, there’s just not enough of a profit margin to make it worthwhile.
The exception is rare coins. These can be made with the proper gold content, then artificially aged so that only an experienced numismatist could pick them out. Because of the premium they command, faux rare coins made with real gold could be highly profitable where a bullion coin would not.
This is one of the reasons (impartial grading is the other) why many collectors will only trade coins graded and slabbed by third-party specialists like Professional Coin Grading Service (PCGS) or Numismatic Guaranty Corp. (NGC).
Ominously, though, some counterfeit coins are turning up inside phony slabs, and the graders are taking the threat seriously. Both the major services have warned about this, with NGC providing guidelines about how to spot fakes of their slabs here http://www.ngccoin.com/news/viewarticle.aspx?IDArticle=954 . The counterfeits all seem to be originating in China, so one prudent response would be not to trust rare coins offered for sale from that country, especially on eBay.
Gold bars are a separate category. Fakes do show up in the market from time to time, and they’re hard to identify. Generally speaking, counterfeiters don’t bother with the smaller ones, which are stamped, numbered, and sealed. They concentrate on 1-kilogram or larger sizes. These are poured, rather than stamped, and can be easily adulterated or even hollowed out and filled with some other, cheaper metal.
And that’s exactly what has happened, on a massive scale … at least if you believe the rumor that exploded across the Net late last year, stating that “someone” in Hong Kong had blown the whistle on thousands of tungsten-filled 400-oz. “gold” bars that are now circulating throughout the world. Others picked up the story and ran with it, some going so far as to allege that Fort Knox is filled with 640,000 fakes. Either because we were duped many years ago, or because the government deliberately put them there to hide the fact that most of our gold is gone. Take your pick.
That tungsten was cited as the culprit is no surprise, because it’s the metal of choice if you want to imitate a big chunk of gold. Put some gold plating on tungsten and it will fool all the cheap, non-invasive tests, such as specific gravity, surface conductivity, scratch, and touch stone. For a conclusive result, you have to drill into the bar, take a core sample, and submit it to more sophisticated verification techniques – fire assay, optical emissions spectroscopy, or X-ray fluorescence – and that involves a lot of time, trouble, and expense.
The market, of course, long ago realized it would be a hassle to fully assay every large gold bar every time it changed hands. That would create bottlenecks all over the place. Thus, to facilitate liquidity and protect large traders, the London Bullion Market Association (LBMA) came up with the good-delivery bar system, otherwise known as the “good delivery circuit.”
The system begins with a group of accredited refiners, all of whom have been certified by equally accredited assayers. The refiners manufacture the 400-oz. bars, applying their stamps and serial number before sending them out. Requirements for making and remaining on the LBMA’s good-delivery list are stringent, and those on it zealously guard their status. It’s of great importance to them because most of the vaults to which they ship product – the next step in the circuit – won’t accept anything but good-delivery bars.
This thing isn’t foolproof, nothing is, but it ensures a pretty decent paper trail, a formal, recorded history of who held the bars, when, and in which approved facility – all the way from refiner to end user, whether that be an individual, a central bank, or an ETF. No buyer wants something from a non-accredited seller, and no one else in the chain wants to get fingered for supplying phony gold. That would get them kicked out of a very lucrative loop, and sued into the bargain.
What about gold bars that come from a non-accredited source or are otherwise circulating outside the good-delivery circuit? That could mean you. You’re not part of the circuit to begin with. And yes, if you bought something that wasn’t good-delivery certified, the possibility that you have acquired some fake gold exists.
If you’re concerned about the source, you might want to have your gold assayed in order to alleviate your worries. This will become an issue when you choose to sell. In that instance, a dealer will almost certainly require an assay as part of the bargain, even if you have the chain of custody paperwork and it all checks out. And you can’t blame him. There’s no way he can be certain of what you did to it while it was in your possession. The only exception might be if you have a long-standing, mutually trusting relationship with him, originally bought it from him, and are selling it back to him. But even that’s no guarantee. What you most emphatically want to avoid is the worst-case scenario: arranging a sale, then having your gold flunk an assay, laying you open to charges of fraud.
If you sell to another private owner, rather than a dealer, he will surely ask for an assay, and you shouldn’t be offended if he does. Nor should you hesitate for an instant to demand one if you buy from a private party. Although this is not a recommended way to acquire gold bars, it may be possible that something comes along that you can’t refuse. Just be very careful. If someone has a gold bar for sale but is in too much of a hurry to wait for an assay, walk away.
Your takeaway from all the hoo-hah about tungsten bars should be that whenever a sensational rumor like this hits the Internet, and it doesn’t immediately graduate to Bloomberg, you always have to ask why. Financial reporters read blogs, too. You can be sure they’ve seen the rumor and asked the obvious questions: What’s the source? Who are the people who reported the appearance of the tungsten bars named? For that matter, why aren’t they raising holy hell if they’ve been ripped off? Where are the lawsuits? No serious journalist who can’t turn up the answers is going to give the story credence.
If it were true, the appearance of several thousand tungsten bars, for each of which someone has been suckered into paying a hundred grand or more, this would be big, big news. It wouldn’t stay confined to a few websites for long.
This isn’t to say that someone good isn’t digging deeply into this story right now. Nor that they won’t be able to prove it out. It is to say that, more than likely, the rumor is false.
In summary, there’s no reason to believe that there is a real issue with counterfeit bullion coins at the moment. That doesn’t mean they don’t exist, nor does it mean that evolving technology might not make them more profitable in the future than they are now. If you’re at all worried, simply deal with someone you trust. Establish a relationship with a gold dealer who has built a strong reputation, preferably over a matter of decades. Buy from them even if you stumble across some mail order supplier who is charging less of a premium.
Some basic guidelines:
For coins, avoid “commemoratives.” Stick with universally recognized government bullion coins (American Eagle, Canadian Maple Leaf, Austrian Philharmonic, Australian Kangaroo, South African Krugerrand).
For small bars, purchase only those that carry the stamp of one of the known, trustworthy refiners, such as PAMP, Credit Suisse, or Johnson Matthey.
For bigger orders, 1 kilo and up, ask your dealer if he has an assay or is willing to have one done. If you want 100 ounces, insist on an assay or consider buying directly from the Comex, which means you’ll be assured of getting a good-delivery bar that has never left the circuit. And the Comex will also vault it for you if you like. Do not, under any circumstances, buy a larger gold bar on the Internet; we’d even balk at buying coins there unless it was from someone we already knew.
We don’t believe there is reason to be concerned about bullion coins, but if you are the supremely cautious type or perhaps already own some commemoratives, there are tests you can perform at home to check them out.
• First off, you can simply apply a magnet. Gold is non-magnetic, but if you’re unlucky enough to have gold-plated steel, it’ll stick.
• Size and weight are good measures. Get a scale calibrated to hundredths of a gram. If a bullion coin weighs light (or possibly heavy), it’s bogus. Here’s a handy list of the major gold coins with their weights, diameters and thicknesses: http://www.onlygold.com/TutorialPages/Coin_specsFulScreenVersion.htm
• Since real gold has a higher specific gravity than other metals, you can test for that. Many Internet reference sites will tell you how.
• You could buy a commercial counterfeit detector. They aren’t cheap, but will quickly and easily perform the basic tests.
• If you have any suspect, non-governmental coins and happen to have some nitric acid handy, you can immerse your coin in the acid. Base metals will react, gold won’t. However, this is not something to try unless you are highly competent at handling dangerous chemicals; you do not want to test your skin along with the coin. In addition, of course, if you do have an alloy coin, the acid will ruin it.
• Rare coins are more of a challenge. If that’s where your interest lies, look for specimens that have been graded and slabbed. Buy from someone you trust. Never fall for a salesman’s pitch that a particular numismatic coin is a premier investment, sure to double your money. Don’t merely dabble in this area. What’s best is if you’re in it because coin collecting becomes a hobby you’re passionate about; worst is if you know and care nothing about what you’re buying. Read up on the subject, examine coins, get to know what the real thing looks and feels like, learn to spot the kinds of imperfections that characterize phonies. Become your own expert, or else risk being the dupe of the day. And if you do decide to pick up something on your own, send it to NCG or PCGS for grading. You’ll quickly learn whether you’ve been had.
Precious metals are going to be attractive to con artists, just like anything else of real value. No question about it. But there are some decent safeguards already built into the system. If you supplement them with your own knowledge and common sense, it shouldn’t be difficult to avoid becoming a victim. And for goodness sake, look after your own interests and don’t fret about what’s in Fort Knox. If it truly is full of tungsten, so much the better for your own holdings.
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The more false content in govt holdings, the better for your holdings... So it's the opposite of the content of the dollar rule?
The greatest fear a legitimate gov't fears is the counterfeit whose art is equal to their own. Where the exchequer of the currency cannot make distinction between the state's own issue of coin and that of the cunning artificer, soon comes ruin.
What then when the exchequer himself is the greatest countefeiter, diluter, destroyer of wealth and exchange?
So it is now. All the pretty paper notes, and no means whereby to restrict the fungibility.
All are alike in resemblence. But some were earned by hard labour, production, innovation--while others were merely printed and inserted among their legitimate brothers.
When a gov't openly brays that monetization is a tool to restore economic health, so should the counterfeiter hold himself higher than any peer.
It is all a lie. It is all falsehood. It is all ruinous intrigue.
It is a potent sign that (at least for the nation's currency) the end is nigh!
It makes absolutely no sense to be paid small amounts of currency for a day's labor when vast quantities of that same currency are being effortlessly clicked into existence at the whim of one man.
jim willie and rob kirby reported the story and gave it provisional credence....i buy it and am very interested in further developments...
I too am interested in further developments, but to my knowledge NOBODY has claimed they were sold fake gold bars (other than, maybe, Ethiopia buying gold-plated steel).
Since this rumor has been going around the 'Net for over a month and NO ONE has showed us a tungsten bar, I am inclined to NOT believe it.
Re US Eagles, my take is that they are pretty safe. Anyone get caught making fake legal tender ($50 for the 1 toz) will get LOTS of attention 'muy pronto' from the US Secret Service.
The 24k 1 toz (troy ounce) coins should weigh approx. 31.1 grams. The US Eagles (and Krugerrands) are 22k, but have 1 toz of gold (along with some copper, etc. for durability) should weigh about 39.9 / 40.0 grams. I bought my little made-in-China scale (accurate to 0.1 gram) at my coin shop.
no one is going to show you a tungsten bar...these
are matters of state security....willie is very
well connected - i would turn to him for more
evidence before turning to the cia-controlled
newsfakers in the establishment press....
If your coin or ingot is "seeded" with a tungsten billet, then your scales / measurement would need to be pretty accurate to detect it!
Tungsten is about 99.1% the weight of gold
Only an expensive electrical resistivity test would tell you for sure, but how would you test the machine hadn't been tampered with? To be certain, you would need to melt it down again ;-) Gold bitch!
To be certain your paper dollar is paper, apply a match to it.
LOL wood covered with ink . and 99% of all commentary here .. continues this illusion ,, all the stuff is concerned with piles of paper ,,
Doug,
This is extremely helpful and answers a lot of questions that have been on my mind recently. I have stop orders on all of my paper holdings (CEF and IAU) and plan on converting this to physical if/when the price drops further.
I have been researching potential dealers and would love some insight from readers (GG?) on which ones to trust and which ones to avoid. I'm located in the Southeast and would appreciate any and all reviews or suggestions.
Regards,
tulving.com tried and true, have bought large amounts of gold and silver. always honest, speedy, no
surprises
100% agree, after MANY years at this Tulving is the #1 go-to guy for people seeking JM Kilo bars or coins yet still 20 oz au or 500 oz ag minimum purchases. Lowest spread and best service all around.
Next would be Gainesville Coin for smaller (under 20 oz gold or under 500 oz silver) purchases.
Apmex is third in line in my book unless they have some super sale (usually on silver).
Northwest has burned too many customers in my book.
Bullion Direct, same deal as Northwest, they sell what they DO NOT have in stock plus, frankly, Gainville Coin has lower overall cost.
I live in Texas.
Not to turn it into an echo chamber here but yes - Tulving. What MarketTruth said.
That's how NWTM works. They guarantee you a price at which they'll sell to you. Then they make the silver.
All I know is you could still make a deal with NWTM two Novembers ago when everyone else was waiting on silver. It still arrived.
I have heard good things about Tulving for larger orders and APMEX for smaller ones. GIM forum has a section on purchasing, and people provide direct dealer experiences there. Check it out.
http://goldismoney.info/forums/forumdisplay.php?f=150
Northwest Territorial Mint - Custom Minting, Bullion Sales, Online Store
I'll second that, they have done pretty well by me for silver. Also, late last summer when everyone was crying 'no one has physical', they did. I had to wait for the next batch to be cast, but it was delivered in around 3-4 weeks.
last summer when every body said their was ni silver ,, so i waited three weeks for some duh
NTM... S-L-O-W delivery and sells items they obviously DO NOT have in stock. Some have waited months for delivery. Other times the delay was so long the customer got refunds.
Bullion Direct: https://www.bulliondirect.com/index.jsp
APMEX: http://www.apmex.com/
I've never had any problem with these dealers.
I have bought, in person, from 2 coin shops / bullion dealers in Florida. At some point I am going to weigh ALL of the 1 oz Eagles I have, but I have pretty high confidence in them both.
I also once bought 10 oz of platinum from Monex, the only problem with them is that they require a 10 oz. minimum purchase, a lot of dough for me for a 4 week delivery.
Where's the party? The Federal Deposit Insurance Corp. took over five more banks.
+11
Its 20 10, when will the commoners know? They won't find out about this until 2012.
Rothschilde will laugh, "Shoulda bought SILVER!"
"Every time you close your eyes (Lies, Lies!)"
A note on the nitric acid test:
1. If you try it, beware the fumes. Nitric acid gives off a lot of fumes that can severely burn your lungs if you breath them in.
2. Do the test near a source of water. This is to wash any splashes off of your skin. Concentrated acid will take less than a minute to really start to hurt.
3. If you dilute the acid, make sure you pour the acid into the water. The other way around is a quick way to end up in the hospital.
4. Leave the coin in over night. For some things this might be overkill, but the gold wont be hurt so better safe than sorry. This will also give the acid time to get through a thin gold plate.
5. If you try to neutralize the acid, make sure that you dilute it with water first (at least 4 times the original volume), then add baking soda until it stops fizzing. ONLY DO THIS OUTSIDE OR IN A VERY WELL VENTILATED AREA. Also, don't just dump in the baking soda, add it slowly and give it time to react. Once it is neutralized, it can be poured down the drain.
It might also be sensible to pre-chill the acid before use in the refrigerator to at least 0 C. Also remember that even if you dilute the acid the good way - pouring the acid into water - you have to do it VERY slowly, because mixing conc acids with H2O is always quite exothermic.
If you are not an experienced chemist, it is mandatory to have an ice bath handy - a large cup packed with fresh, cold ice, at least 5x volume of your liquid. If anything goes wrong (runaway heating in this case), you always want to just dump the stuff in it. This is an emergency measure and here you do not want to do it slowly, just dump your reaction mixture on the ice and run away.
The most important point OP forgot about: any time you use anything corrosive and/or irritating, you really, really, really want to wear gloves (good latex gloves) and goggles (polycarbonate type). Don't even assume splashing and staining will not occur - IT WILL, so, as OP posted, have a lot of water, preferably with baking soda dissolved in it, to wash the nitric off your skin, but remember that your eyes must be protected at all times, so goggles are really mandatory.
Also, be prepared to let go of the clothes you use when handling things like nitric acid, it literally eats through them.
And don't panic if it spills or stains your skin, it's not that nasty after all, even in concentrated. Just be cool and quickly wash it off.
Tungsten (symbol W) facts:
http://www.periodictable.com/Elements/074/data.html
Gold (symbol Au) facts:
http://www.periodictable.com/Elements/079/data.html
Boiling point of Au: 2856 °C
Melting (yes, melting, not boiling) point of W: 3422 °C
Note that Au is boiling well before W is melting. One has to have a sophisticated furnace and industrial environment to work with W.
Vickers hardness of Au: 216 MPa
Vickers hardness of W: 3430 MPa
W is hardest metal element. It is brittle and very difficult to mill.
http://www.periodictable.com/Properties/A/VickersHardness.v.log.html
Specific heat of Au: 129.1 J/(kg K)
Specific heat of W: 132 J/(kg K)
W carries more heat per unit mass than Au. Drop two bricks of the same mass, heated to the same temperature into identical volumes of water, and the brick containing W will transfer more energy to the water. (1 J = 0.239 Cal)
due to high production cost only london good delivery bars can be faked with tungsten. Its not very economic to fake 1kg and smaller bars... as result, i don't think there are many <=1kg bars that been faked with tungsten.
"do what ya otta, pour acid into watta"
Given that Tungsten is *lighter* than Gold (74 Vs 79 on the atomic table) much more likley to use good old Lead 82 (wrapped in a lighter spacer metal layer, then plated or over-cast with gold) to create a conterfeit bar with proper size, weight...
Please stop posting such rubbish. Go get some basic training in chemistry to differentiate atomic mass from bulk density.
Tungsten is THE material to counterfeit gold, it matches its density to 0,5%. Lead is much less dense. Another option I would not take lightly is depleted uranium - while it's a little bit lighter than tungsten, it's much cheaper and by far easier to form as it's soft and melts around 1130 C vs tungsten's badass 3420 C.
+ 32.1507
Ya and depleted uranium is too high of cost because people keep having trouble building enough nuclear power plants to get a good supply. Which is probably why the navy mostly just sails around all the time. Just to make the damn stuff.
A carbide drill will go through gold like butter, but when you hit the tungsten, snap!
I'd like to see a tungsten coin. I'm willing to bet that it SOUNDS completely different when dropped.
Post 203601 is so ignorant I don't know where to begin.
Doh. Sorry for the lapse. Not ignorance, distance. I should be more careful when refering to old dusty memories in public, esp. late on a Friday. Properly spanked. And for those who need the same refresher, here are densities in kg/m3...
Uranium 19100
Tungsten 19250
Gold 19300
Platinum 21450
Iridium 22500
Osmium 22610
This indicates Tungsten would FAIL as a counterfeiting method for anything but small units (coins, 1oz bars).
And another interesting perspective from here:
https://www.kitcomm.com/archive/index.php?t-39584.html
"...There are a handful of exotic elements more dense than gold, however they are rare and costly - often more so than gold. Platinum is more dense, and also more costly, than gold. The most dense element known, Osmium (22.6), is toxic, hard to work with, and costs around $100/gram!
So let's take a closer look at Tungsten and Uranium. Tungsten is very close to the density of gold - however this element is notoriously difficult to work with, partially due to its high melting point. Apparently in order to get a solid piece of Tungsten the easiest way to do this is to sinter it, which lowers its density.
This leaves Uranium. Uranium is also very close to golds density, however it's just a bit lighter. Uranium is also much cheaper than gold. Now, 24 Karat (pure) Gold is denser than Uranium, but most gold coins - what the counterfeiters are after - are not pure gold. 22 Karat is commonly used often by alloying the gold with silver and copper, to increase its toughness. 22 Karat gold is less dense than pure gold, having a density of 17-18 g/cm 3.
So I'm going to conjecture it may be possible to make a base metal (alloy), primarily with Uranium or depleted Uranium, that has a density almost exactly matching 22 karat (or less) gold. The counterfeit piece would be plated or jacketed with gold. Such a coin would pass a specific gravity test, and would pass an acid test. Obviously its weight would be the same.
Detecting such a counterfeit would require more sophisticated tests. A Geiger counter would be a start - any coins that are slightly radioactive should be considered highly suspect.
Both Silver and Gold (respectively) are the best elemental conductors of heat and electricity. One infallible test involves heating one side of the coin, and measuring how quickly the other side heats up and cools down. See this patent: http://www.freepatentsonline.com/y2002/0034211.html "
The coins will have more reliable and useful value if the shit hits the fan. What the hell can you do with a huge bar of gold other than buy a house? How will you buy food? You will need silver as well.
Keep an eye out. I picked up my dry cleaning a couple of months ago and gave the girl a couple of twenties. She apologized for not having any quarters when she included a half dollar with my change. I didn't have my glasses with me, but when I got to the car I looked at it and it was a '64 Kennedy. Something clicked and I went back in and asked if she had any more of those. She had 9 more. I asked if she would sell them to me for $5. She had to count them out and realized I was offering a (small) premium and asked why I wanted them. I told her they were collectable. She admitted that she had thought they were counterfeit because they did not look like the quarters. I walked out of there with a bit over 3.5 ounces of silver for $5.50. I think she has classified me as an eccentric. In honor of Friday night I will stay off the soapbox.
That's funny. I was playing cards the other night and one of the guys had thrown in a quarter into the pot I had won. I had noticed that when iti hit the table it sounded different - 1958. I offered it back to him afterwards but he said keep it.
A couple of months ago my wife got some change at the grocery and she showed me the penny she got - 1868. It was so worn it was almost smooth but under a magnifying glass the date is still legible. Who the fuck carries around an 1868 penny? Alzheimers patient perhaps??
Use your imagination. As a dealer I cull cents that are too worn to be worth the effort to handle for resale. I routinely put wheat back and Indian cents back into circulation all the time.
Believe it.
example of most likely fake (i haven't bought anything to test) precious metals from china
12 * 5 = 60 ounces of .999 fine silver for a set price of $160....
http://www.ioffer.com/i/12-silver-panda-commemorate-coin-each-coin-5oz--...
Others picked up the story and ran with it, some going so far as to allege that Fort Knox is filled with 640,000 fakes. Either because we were duped many years ago, or because the government deliberately put them there to hide the fact that most of our gold is gone.
Tyler, please tell me who it was you spoke to, that audited the shiny yellow bars in Fort Knox? The gold in Fort Knox was siphoned away by members of the Rothschild / Rockefeller criminal cartel, years ago. The first rule, when you put your stash in the ground, you don't place a giant rock marker with... "It be 'ere" (Fort Knox) inscribed for all to see!
The Rothschild's figured that there was no need to actually own the stuff. They KNOW it's just a barbarous relic that looks just as nice as in the thinist of films (leaf). I live within spitting distance of Waddeston and Ascott!
Doesn't anyone else see the irony of taking all that effort digging the stuff out of the ground, only to bury it back in the ground again?
"The Rothschilds figured that there was no need to actually own the stuff."
You may want to see this video (@ 5:50):
www.youtube.com/watch?v=MzuCOTOzSBo
Sure he is talking his 'book', afterall their family is a major member of central banksters. He does say to hold on to gold bars and this was in December 2008. What you may be referring to is when the Rothschilds pulled out of gold about two to three decades ago, which appears to be when the alleged tungsten bar fraud began.
"Go back to basics... If you're very safety conscience you hang on to your gold bars" -- Sir Evelyn de Rothschild on CNBC Dec 10, 2008
Thanks for that quite masterful Thespian information.
a rockefeller/ rothschild secretary, reported, that her boss was illegally removing gold from fort knox, a few days later, she fell to her death, from a high rise balcony
Doug- while you make a number of good points and certainly do us all a favor by encouraging all to dyodd there are several issues that need to be addressed in your article- First, and while it is more of a sentence structure problem you do NOT need to core, cut or drill a coin to test it with an XRF. So, while expensive, XRF is not destructive. Second, whether Au is mixed with lead or tungsten or peanut butter it will change the very specific sound- again, a cheap, non-destructive test that can be used on 400toz bars or 1/10th coins. It won't be free but if they are worth their weight in......
While you astutely divided bullion coins/junk etc from items with numismatic value I think you vastly underestimate the problem. Look at this guys auctions-
http://shop.ebay.com/coins.hk/m.html?_nkw=&_armrs=1&_from=&_ipg=&_trksid...
They are only stamped Replica in ink on the surface... you can get ANYTHING in 90% silver, or some base metal... I personally bought and returned a fake ASE and found out there are fake ones all over the place. The Chinese just don't fear the IRS or SS- go figure. I've heard now that worn coins are being faked as well, though I don't have a link for that I'm sure if readers can get past the captcha they can make the Google work.
Since you are really talking about gold I think you might want to look more closely at what the Chinese are up to. For example: http://www.tungsten-alloy.com/en/alloy11.htm
There are plenty more examples of real problems in the area's you have discussed to worry about whether the 400oz bars are widely faked or not. I humbly suggest that things of importance to individuals (say Zh'ers) might actually be worse, or at least getting worse as the $ motive continues its upward trend, than you have determined and that the tungsten problem may be with everything...not just TBTC (toBigtoCarry) chunks that only institutions own.
Not trying to pick a fight, really hoping you will continue to help make us all smarter... Thanks..
True. Silver coinage of numismatic value is being faked by Chinese shops and are being resold in the U.S. on eBay and elsewhere. I have been offered them as a dealer -- in bulk lots. Being "coined" in real silver and then faked by these shops is easy to do. They are the same silver composition as the real U.S. coins, but are worth more than "junk" due to the mint mark or other numismatic characteristics. Many are being actually slabbed in fake PCGS, NGC, and other holders. All this was/is extensively documented in past issues of Coin World Magazine. Many of them are quite passable. NGC offers a tutorial on fake slabs here: http://www.ngccoin.com/news/viewarticle.aspx?IDArticle=954
Beware.
XRF is not a solution for this problem.
X-ray fluorescence works by driving electrons off the atoms by means of an X-ray source. When electrons return to their rest state after this event they emit X-rays, which have a characteristic energy level depending upon the source atom and electron shell level. Measuring this energy allows you to identify the material and thickness of the layer, up to a point.
Unfortunately for this method, gold is an excellent absorber of X-ray energy. Once you have a thick enough layer of gold, any X-rays from other materials will be absorbed and will not be detectable.
In the case of gold and the XRF systems I am familiar with ($300k + scientific instruments), the thickness where gold becomes effectively infinite to XRF is less than 1 micrometer.
Great article and comments, thanks everyone. I've been collecting coins more off than on since I was a kid in the 1960s. When the gold and silver craze began I ignored it, busy as I was flipping ETFs, lol.
When the financial system imploded, I had to rethink my "cash is king" policy, given that my cash was US Dollars, not Aussies, Loonies, Francs, or Yuan. At first, I dipped my toe into the water of common bullion coins, mostly gold and silver. No bars. I have used APMEX and been very happy with their service and quality.
I began accumulating platinum eagles and even palladium maple leafs a little later, again, with no thought to numismatic value.
Then the coin collecting bug hit again, and lately I've been accumulating bullion coins of low mintages, priced mostly as bullion, but with significant collector upside potential.
For example, some of the so-called "burnished" gold and platinum eagles were minted in quantities of 10,000 or less, as opposed to typical mintages in the tens or hundreds of thousands.
The most I probably "overpaid" was for a 1/4 ounce 2008 W gold burnished eagle, with a mintage of just north of 2000. A pretty rare coin. Bullion value perhaps a mere $300, I paid $1100 for a PCGS MS 70 example with mint box and COA.
We all have our vices!
I very much doubt you'll ever see fake Eagles, Maples, Kangaroos or Philharmonic coins. A progressive coining die set needed to achieve enough precision to fool the common person would set you back at least USD$50K. Then you have the problem of specific gravity and of course the gold plating.
I'd be more concerned about the timing of these rumors. This is hardly indicative of the euphoria you'd expect at the top.
I call bull shit on this comment.
I can get a very high quality die made in China for less than $2,500 & the planchets made for about $50/piece (see my comments below). One wouldn't need to move many coins to cover their capital costs.
This stuff is child's play compared to the fake ancient bronzes they are making
Correct statements. And the higher the spot price the better and more prolific the fakes will be. Profit is the motivation -- follow the money, eh?
At one point I wanted to get some 1 oz tungsten coins. I'm curious to the sound it gives when dropped. After emailing sales@chinatungsten.com, they appeared able to do it, but I needed to order a big quantity. All they need were the dimensions of the coin and the design.
Perhaps some ambitious fellow could order a sufficient amount and sell them to people like me who only want a couple coins? Jim Sinclair seems like a good candidate...
"In summary, there’s no reason to believe that there is a real issue with counterfeit bullion coins at the moment"
Just plain wrong & watch your ass buying coins on Ebay!
What the Chinese are doing is to laminate a tungsten billet inside of a softer alloy that will a) correct for the difference in weight of gold/tungsten and b) take a strike, which tungsten will not because it's too damn hard. This is then gold plated and aged.
Sorry, a lot of the old coin shop guys are still using weight & displacement methods which will not work. Maybe APMEX too I don't know. As far as I know, the only way to spot these is to either pass a current through them or X Ray them.
I guess if the specific heat capacity of gold is higher than the same-weight/density substitutes, you could sit all your same-weight coins/bars in boiling water for 10 mins, then put them all onto a basin of ice .. they should all melt through to the same depth ..
Fake silver pandas and morgans have been around for a while among others.
Why do the miners even deal with the Comex and London Metal Market. If the price suppressing (naked shorting, fakes, etf deliveries in place of physical) is true, why not open their own spot markets around the world, so people can get it from the source and avoid the manipulation, delivery games. Price of gold and silver would go up, their profits up. If it pays to sell in Zurich instead of New York, then do their selling there. It does not have to be a London Fix, NYMEX controlled global price, just spot pricing around the world.
This would also avoid the leverage issues and CFTC rule games. If you have the money, you get the physical from the source.
this is what LBMA is for. its physical only market... London Metal Market i.e. LME doesn't deal with gold... Google is your friend...
Why is no one ever talking about the tax consequences of *selling* these PMs? Am I missing something? It would be great to purchase and hold PMs as a store of value, but after inflation/debasement, you're still going to pay 28% of the supposed "gain" back to the government. Assuming the tax rate and status as collectables stays the same, of course. No reason to expect that, in times where these investments do well, that the penalty would do anything but increase.
Having read hundreds of PM opinions/comments, I salute you for bringing that up. The beauty of precious metals is this.
Everytime that it appears that the recession will never end, demand for silver/gold becomes insatiable.
When nobody wants them, people sell to you sans sales tax, sans records/reciepts etc. When everybody wants them, they will pay 5-10% over spot--and will pay cash---no capital gains, no record/taxes. When PM's are HOT, speculators think that they will continue to rocket---even during pullbacks. PM manias only last as long as hard times do---then back to the abyss for 10-20 yrs.
The beauty of precious metals is this. It is the classic "Buy low-Sell high" stratedgy that our greedy financial system guarantees through it's corruption/malfeacence, and an inept Government to ever correct this system. Values always change, and hoarders always panic--both on the upside, but especially on the downside.
The reason that PM's look so good right now is because there is really nothing else worth investing in, except cheap residential housing. Ever meet a straving Landlord?
"Ever meet a straving Landlord?"
Have heard alot of them are Jingle Mailing in the keys to homes and walking away from their 'investment'. Why starve when you can lose money and call it quits by just walking away?
72% of something is better than 90% of a new value
..so the gold goes up 10 times the paper goes down 90% and your going to run out and pay taxes lol m
If you need to test coins, your best bet is to buy an ultrasonic thickness gauge.
The speed of sound through different metals is different, if you tell the gauge to read for gold and the item is tungsten, you will receive a dramatically different thickness...the difference will be obvious.
IMHO, if you cant sell your bullion under-the-table, you cant make money off of them.
A couple of interesting articles:
www.rense.com/general78/defeat.htm
www.gata.org/node/5739
Whatever happened to Double Jeopardy!
The IRS are pikers compared to the Supreme Court.
The 5 that voted to qualify Corporations as individuals with First Ammendment rights are traitors and should be tried for high treason.
*facepalm*
Doug--
Thanks for this very informative piece.
Questions.
(1) What does "dealer" mean? (I'll come back to this below.)
(2) I take it that if you're a "dealer," you're outside of the "good-delivery circuit," correct?
(2a) If so, is there a way to assess the reliability of a dealer?
(2a-1) I deal with Harlan J. Berk in Chicago. (My rec on HJB does NOT look good on paper, but his insight is truly spectral.) Surely a place with its own gold researchers is reliable, no?
(2b) If not, do you have a "good-delivery circuit" link?
(3) About a week after you posted this prescient gem...
http://www.financialsense.com/editorials/casey/2009/0528.html
,,,two Japanese businessmen were apprehended in Chiasso, Italy--close to the Swiss border--and were found to be carrying, in secret luggage compartments, $134.5B in U.S. paper (consisting of $500m and a handful of $1B U.S. bonds). The U.S. Treasury claimed fakery--six days after the seizure. This story never really circulated either (outside of sites like this one). What is your take on this occurrence?
Thanks for answers to any of the above questions.
This is all old news. Back in 1979 the apocalyptic scenarios were the same (though prompted by different details - rising unemployment, rising inflation, rising interest rates, etc). I met numbers of people who were moving to the country and buying wasted-ass hill property in West Virginia (where it was relatively cheap) because the commercial world as we knew it was "breaking down" and soon there would be no more food or manufactured goods in the stores. Selling everything else to buy gold (and especially silver) coins was considered not only an insurance policy against inflation but also a preparation for when paper money disappeared and precious metals would be used by all as the medium of exchange.
I've often wondered in the ensuing years how long it took each individual apocalytite I met to figure out that his/her "absolutely certain" scenario just wasn't playing out as expected, and the value of their backwoods property and precious metals just wasn't keeping up with returns from "doomed" stock and bond markets. Thirty-two years later I'm sure some are still scratching their fleas back at the cabin and counting their dimes and quarters for the zillionth time, convinced anew by recent events that they were right all along and the gold/silver Zion is at hand.
My question is, are you prepared to endure 32 years of ongoing opportunity cost because of the fear/hope that your apocalyptic vision of the future of trade, commerce and paper money is accurate? Do you understand that this is a possibility?
Regarding the fake Morgans, I've seen four different fakes of extremely rare or non-existant dates. Copies of well-worn coins, then doctored. A week later I saw identical forgeries, non-magnetic. $10.00 and under, at the Alameda California flea market.
Ok, I'm now somewhat nervous about buying coins on eBay. I've bought a few graded coins, in slabs, and a couple non-graded recently issued coins in mint packaging (although this is cheap to buy). I'd like to think I have a good eye for detail, and could spot a fake, but, rumor has it some of the fakes are of excellent quality.
I'll have authenticated the non-slabbed coins I've bought recently, including gold and platinum eagles. Honestly, I think I'm ok, but counterfeit rare coins are certainly on the market on eBay (I read an article recently on a coin site).
I buy and sell on eBay on a regular basis. Small lots only. My feedback is 100%. Look for any dealer with 1. A high (98% or better) feedback that is verifiable by seeing that they specialize in coins and/or philately. 2. Buy from a verifiable dealer. Look the dealer up on the ANA website or other certified dealer organization. 3. Verify your purchase immediately, don't wait. If your coin is to be returned, do so quickly. A scamming dealer doesn't have time to turn around stock and keep that feedback floating high without keeping current customers happy (the Ponzi effect). You can rest assured that if gold/silver reach the manic stage there will be good, cheap verification of authenticity available. Anyone who uses the excuse not to buy and hold real metal that he doesn't want to chance getting fake goods is not seeing the whole picture. Until then make sure your own stash is genuine. Good luck.
Thank you for the advice. Cautious by nature, I buy one coin at a time from one seller. The seller must have a near perfect feedback record, and, have been an eBay member for years. I actually check out any negative feedback to see if its a red flag. Often its some random error in communication or shipping.
I googled "counterfeit coins" and came up with an article that discussed a few other ways to minimize the chance of buying a counterfeit coin. One was never to buy from someone in China or Hong Kong (obviously), and, look up who the seller has done business with to make sure they haven't been buying from China/Hong Kong.
I guess it's become enough of a numismatic problem that fake NGC and PCGS holders have been turning up with the fake coins, and the grading sites now give out tips on how to spot fake holders. It goes on and on. I must say it sucks that China and other countries allows this sort of counterfeiting to go on. China is doing just fine doing business legitimately--there is no need to allow the peasants to be mass producing counterfeit coins, or many other goods. That's bullshit (excuse me).
Sounds like you are taking all the right precautions. But one can get burned unintentionally. I never, ever, absolutely, do NOT buy from anyone I can't make a quick phone call to. That would eliminate anyone outside the U.S..
I was buying 1 oz gold Eagles listed on eBay from a small time dealer in Las Vegas about 5 years ago. Nice coins, clean, and obviously genuine. I was buying 2 to 5 at a time. I noticed that he was listing more and more with each passing month. Then his feedback started showing slow delivery complaints -- not negative, but trending that way. It was pretty obvious that he was selling coins he did not have! He was pre-selling and buying the coins when the buyer's payments came in. When gold corrected he began losing money on each and every sale. That's the death knell for any Ponzi scheme. Oopsie. I had a paid-for lot of 6 coins that were due for delivery.... After 2 weeks it became apparent that he was stalling. I had to do a firm but unambiguous phone call to him (the first time I had actually spoken to him in person) about making fast delivery. I got my coins, but without a doubt there were dozens of buyers who did not. I'm sure I got their coins. His feedback degenerated quickly and eBay removed him. I got my coins but I was sweating the entire transaction. Altogether I had bought a couple dozen coins from him, all 1 oz AGEs. Moral to the story: It's fine to get with a reputable dealer but keep an eye on his business. The good thing about eBay (arguably there is nothing good about eBay) is that you can keep an eye on what, and how, the dealer is doing. If you buy from a vest pocket dealer in Podunk, Oklahoma you can't do that. Even large coin dealers have notoriously slow shipping times. I think that anyone with common sense can do fine in meeting their own precious metal needs. Those without the intelligence to perform in the market will get burned -- and those will be the most vociferous. That is to say, you'll hear more horror stories from the least credible. It will never be their fault for failing to do their due diligence -- as one should do in any financial transaction.
Has anybody heard of Peter David Beter: (from his website)peterdavidbeter.com
Quote:
Dr. Beter was General Counsel for the Export-Import Bank of Washington, candidates for the Governorship of West Virginia; cofounded SODESMIR in mineral exploration company in Zaire; represented American gas utilities building a pipeline the length of Argentina, represented mining interests in underwater manganese nodule exploration in the Pacific, was featured at financial seminars in New York City, Los Angeles, San Francisco, Toronto, Montreal, Geneva, and other international financial centers. As a political and economic commentator, Dr. Beter worked with Wall Street luminaries including Franz Pick, Edward Durell, Colonel Curtis Dall, Norman Dodd, Emmanuel Josephson, and many others. He wrote prolifically, including Conspiracy Against the Dollar (Braziller New York).
In his very first blog (mp3) he talks about the gold being taken from fort Knox by the Rockerfeller/Rothschilds in the 1970's.
Has it only taken 30 years for someone to turn the light on?
For some reason, some sellers of Russian originating gold, will ask you on the purchase form if the gold will be used for
1) jewelry
2) investment purposes
Now just why oh why would they be asking for that.
Twenty years ago, my father bought about 20 gold coins...after he died (10 yrs ago) we found all were good fakes except two. Be careful. I take everything I buy to a dealer in town and tell him I am interested in selling to get a free appraisal. He knows all the tricks and I walk out confident I have the real thing.
a lot of folks buy bridges ,,, lol these are the same that buy fake coins .. what a deal ,, lol
This product, while not cheap, will detect certain fake coins:
The Fisch
http://www.fisch.co.za/home.htm
From their website:
The FISCH works.
A coin either passes all four checks of weight, diameter, thickness and shape or it is rejected. No if's, but's or maybe's. No room for error. The Fisch checks a coin in seconds. Anywhere. Anytime.
I have own this and find it easy to use and accurate.
These Fisch products offer as good a fake detector as anyone should need.
If a fake passes these tests you'll end up spending it anyhow!
This is rather amusing ... I googled "tungsten alloy density" and the top non-sponsored link which resulted was the following, titled "Tungsten alloy for gold substitution":
http://www.tungsten-alloy.com/en/alloy11.htm
It's from a China company which apparently specializes in this sort of "business" ... some snips, which assure the reader of the seriousness of the company and admonish against using their products for illegal purposes (this is after lauding the wonders of W as a hard-to-detect gold substitute):
"Nowadays, tungsten alloy is increasingly used in some field relevant to gold or platinum substitution, such as: jewelry, e.g. ring, ear ring, necklace, wrist chain, etc. Also, it is widely adopted in making faking coins, such as memorial crown.
Since tungsten alloy bears a special property of longevity and high durability, when it is utilized to make jewelry, it always implicate the love between lovers or couple could be everlasting. Its hardness makes it ideal for rings that will resist scratching, are hypoallergenic, and will not need polishing, which is especially useful in designs with a brushed finish.
Chinatungsten offer tungsten alloy as gold substitution
We are well accustomed to exploit more innovative applications of tungsten products. Gold-plated tungsten is one of our main products.
In details, pure tungsten, in the forms of round disc, plate, sheet, ring, and etc., can be perfectly coated with gold layer with clinquant shine, to replace gold or platinum merchandise except its currency function.
If you are interest in this information, please feel free to contact us. Any questions or enquiries about tungsten alloy products will be welcomed by email to -----@-------------.com or telephone -- --- -------.
Notice: Chinatungsten Online (Xiamen) Manu.&Sales Corp. is a very professional and serious company, specializing in manufacturing and selling tungsten related products for more than two decades. Our gold-plated tungsten alloy products are only for souvenir and decoration purpose. Here we declare: Please do not use our gold-plated tungsten alloy products for illegal purpose."
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