What Does the Elemetal Scandal Say About Gold Prices - Update 1

Vince Lanci's picture

What Does Elemetal Imply for Precious Metals?

  • Gold smuggling accounts for up to 75% of all LATAM Gold imported in the US
  • Disruption of this augmented Gold supply is Bullish for Gold
  • Elemetal is running for corporate cover
  • No-one cares

UPDATE 2- We incorrectly listed the LOI betweeen Elemetal and DGSE. it is actually between DGSE and Elemetal Recycling.

h/t About.ag

UPDATE 1 - DGSE a publicly traded retailer, just signed an LOI to buy Elemetal, LLC. It gets better. DGSE is #2 on the S&P list of likely retailers to default. Wait, there's more.  Elemetal is actually majority shareholder in DGSE.  Essentially, Elemetal, which controls DGSE would rather default, then have the real depths of its activities revealed. Details and Elemetal structure at bottom.
 

Gold Supply Augmented with illegal Supply

via the Soren K.Group and Marketslant

In the past decade and a half, global gold consumption has risen by almost 1,000 tons a year, to about 4,300 tons, according to the World Gold Council, a London-based industry group. Legal mining operations haven’t kept up with demand, so illegal mines controlled by criminal gangs, from the Amazon to central Africa, help cover the deficit, according to Verité, a nonprofit group in Amherst, Mass., that’s researched the illegal gold trade. A 2016 Verité study found that five countries in Latin America shipped 40 tons of gold from illegal mines to the U.S. in one year, almost twice the legal exports from those countries. pdf here 

?

Simply put:

  1. Elemetal's Sources of metal for refinement were illegal.
  2. This implies higher prices via loss of black market source discounts and raw supply that was artificially augmented.
  3. Florida is (still)  the source of all our woes.
  4. Bloomberg will GLADLY cover the Gold Scandal, but not the Supply/ Demand implications. 

 

The Press Demonizes Gold More 

GOLD, SCANDAL, EVIL, DRUGS - buy stocks: We searched the web but were hard pressed for a single Bloomberg article that states the obvious: This implies Gold demand is outstripping legitimate supply and is bullish for prices. We find this annoying since Bloomberg is the primary source for the info above. 

Bloomberg:

The charges signal a U.S. crackdown on smugglers exploiting a spike in worldwide consumption of gold mined illegally in the Amazon basin, where laborers use fire hoses and mercury to extract the nearly pure precious metal.

Note in the above that gold buyers are exploited. Gold is tied to drugs and  illegal activity. It is true in this case, but the implications aren't bad for Gold. As  they demonize cash to eradicate it, Gold is now being tied to crime. This is typical, and it is a canard utilized to steer you away from an investment tool that cannot be branded or properly securitized yet.  Have you ever read an article saying "Drug Traffickers used US Bearer Bonds to hide their money. Be careful of US Bonds, they could be illegally obtained!" 

There is a phrase in the trader community that goes like this: Gold miners and Gold are not in the  FOB club. (Friend of Bloomberg)

https://www.marketslant.com/core/assets/vendor/ckeditor/plugins/widget/i...);">?

Interactive chart HERE

The Illegal Venezuelan Oil for Bonds Trade

Meanwhile we are pretty sure that Venezuelan officials have made illegal sales of oil cargoes, purchased US Bonds with the cash  through accounts in the Caribbean and those bonds are now being held in custodial accounts at US Banks for their later benefit. 

It goes like this. A Venezuelan dictator who is in danger of losing control must solidify his military support. so he tells a general, "See that tanker over there? It's a gift to you. Keep the money that the oil sells for". General does just that, and exports that cash to the U.S. The dictator lives to rule another day. 

How do we know? One of our group was asked to retrieve some of those US held bonds for a South American military official probably getting ready to skate out of Venezuela. We had actually reported this to US officials, and have heard nothing since. It is rampant. And it is electronic. And those bonds are in US banks. 

But Gold? That inert yellow pet rock? It is a means to launder drug money.

https://www.marketslant.com/core/assets/vendor/ckeditor/plugins/widget/i...);"> ?

So if illegal gold production is rampant in Latin America, and in several countries, unregulated illegal and informal mines account for over 75 percent of gold produced as the Verite report states; Why is this not being addressed? Where are Crocket and Tubbs when you need them?

Why hasn't this been stopped? Aren't we supposed to follow the money to catch smugglers? How hard can it be to catch money that conspicuous?  Maybe it is because we want Gold prices to be low. Maybe some banks benefit from this. That is not crazy when one realizes that HSBC got its start in the Opium trade.

Maybe They  Want The Cheap Gold to Keep Flowing

To put a finer point on things. There is a historical correlation between supply disruptions in commodities and price increases. Studies from as far back as Victorian era England consistently find that a 5% disruption in supply of a product with no change in demand creates roughly a temporary 20% increase in price.

To be fair, temporary supply disruption varies in its effect on immediate prices depending on the product disrupted. But by many measures, gold is a Giffen good. So what would happen if all of a sudden 75% of all the LATAM gold produced were unavailable for purchase? 

Recent examples would be the manipulation of Natural gas supply to California by Enron et al, and the subsequent price spikes. Another would be the short lived Oil shock of 2007- 08.

How crazy is it that upwards of 75% of LATAM gold is illegally mined, much of it used for drug money laundering, it weighs a ton, and the US has not cracked down on it? But we are all over Blood Diamonds, which are infinitely easier to smuggle than 100 lbs of gold right? 

So the Elemetal fiasco is telling of a bigger issue. That gold supplies are augmented with illegally procured metal. And no one cares. Elemetal doesn't seem to care

 

Elemetal Moves Forward... kind of

Here is the most recent Letter coming from Elemetal. It is actually a marketing piece. 

Dear valued Elemetal Capital customer,
Elemetal Capital will be performing an inventory audit over the next 14-21 days. We kindly ask for your cooperation by not making any new bullion sales to Elemetal Capital or sending any material to us during this time.
Your in-transit packages and sales booked to Elemetal Capital before this notice of inventory will be priced as agreed.
Material shipped to us after this notice and during the limited audit period, however, (including private-mint bars, rounds, sovereign mint coins, standard-recognized bullion) will be forwarded to our scrap channels for lock-in at the following scrap rates:
Metal Elemetal Buy
Gold 99% of fine content
Silver 95% of fine content
Platinum 95% of fine content
Palladium 95% of fine content

Please note that the usual scrap business of Elemetal Direct is unaffected by this Elemetal Capital inventory.
We'll announce very soon when we will resume accepting bullion at market rates.
All the best,
Elemetal Capital

CME Group and the London Bullion Market Association had suspended Elemetal Refining LLC last week from trading gold and silver futures on its exchanges. Why are these people even allowed to be in business? Silver Doctors have been all over this from day 1. in fact they have been all over this type of risk from day negative100

Via Silverdoctors.com

Federal Agents have arrested NTR Metals Manager Juan Granda, the self-proclaimed “Modern-Day Pablo Escobar” of Gold over charges the US Gold & Silver Firm smuggled $BILLIONS of illegally mined gold into the US:

As Bloomberg reports, NTR Metals Company Manager Juan Granda has now been arrested and charged: The operations manager at a metals-refining company was charged with helping run a gold smuggling network that reaped billions of dollars for illegal mines controlled by drug dealers and other criminals in South America.

Officials believe NTR smuggled nearly $4 Billion in illegally mined gold beginning in 2012..

full story HERE

In 2013, Peru seized $18 million worth of gold bound for refineries in Miami and elsewhere, including NTR. The rest "got away" we guess?

What is Going on Here?

South American smugglers and drug traffickers laundered money through sales of illegally mined gold from the Amazon rain forest. They sold it to NTR personnel in Latin America. The NTR people through various transactions laundered their purchases in other South American countries as the gold made its way to the U.S. Some of that gold then entered the U.S. via "legitimate  Florida businessmen" acting as a final intermediary for the laundering process.

Violetas: Florida Gold Laundromat?

Bloomberg

“Virtually all of the gold NTR purchased from Ecuador, including the gold from Spartan del Ecuador, was routed through an intermediary company, MVP Imports,” according to the U.S. complaints. U.S. customs records show MVP Imports as the importer, “masking” NTR’s role as the “ultimate purchaser” of the gold, the prosecutors said. More here

MVP Imports: a high end knickknack store for the rich in Coral Gables may actually be a  laundromat. The company is  run by a prominent businessman in Florida, that is accused of being listed in customs records as the buyer of much of the smuggled gold NTR bought, masking the fact that NTR bought it. 

What is NTR and what does that have to do with  Elemetal ?

Elemetal is the parent company of NTR. The list below is believed to be accurate:

via about.ag

This is a list of many/most of the Elemetal-related companies (including both corporations and names they do business as). Some are likely no longer operating; many of the "NTR" companies are likely now operating as Elemetal.

Deceive, Obfuscate, Inveigle Inc.

  • Echo Environmental Waverly LLC (subsidiary of Elemetal LLC)
  • Elemetal Capital, LLC (wholesale trading of physical, derivatives, Forex)
  • Elemetal Diamond, LLC (diamonds)
  • Elemetal Direct (described as recycling/refining, and direct-to-customer locations, and NTR Metals)
  • Elemetal Direct Americas, LLC (was NTR Metals (Americas), LLC until June, 2015)
  • Elemetal Direct USA, LLC
  • Elemetal Fabrication, LLC (was Pete's Custom Metal, Inc., then NTR Custom Metals, LLC)
  • Elemetal Insurance and Logistics, LLC (unknown)
  • Elemetal Management (unknown)
  • Elemetal Mint (private minting of bars/coins)
  • Elemetal Minting, LLC (perhaps Elemetal Mint is a DBA of this LLC?)
  • Elemetal Online (Provident Metals)
  • Elemetal Recycling, LLC (processing electronic waste; was Echo Enivironmental)
  • Elemetal Refining, LLC (was OPM Metals, a/k/a Ohio Precious Metals)
  • Elemetal USA, LLC (unknown purpose)
  • Elemetal Vault (vault service, trading)
  • Provident Precious Metals, LLC
  • NTR
    • NTR Bullion Group, LLC (owned by NTR Metals, LLC; handled physical metals transactions)
    • NTR Futures (owned by NTR Metals, LLC; handled futures contracts)
    • NTR Metals (d/b/a only?)
    • NTR Metals, LLC
    • NTR Metals (Americas), LLC (now Elemetal Direct Americas; Sam Lewis, President)
    • NTR Metals Belgium Holdings, LLC
    • NTR Metals Canada Ltd. (dissolved 18 Jul 2013)
    • CI NTR Metals Colombia S.A.S. (founded 24 Aug 2011)
    • NTR Metals Europe, LLC
    • NTR Metals Group, LLC
    • NTR Metals HK Ltd
    • NTR Metals (Hong Kong) Limited (started October 2009)
    • NTR Metals International, LLC
    • NTR Metals Investments, LLC
    • NTR Metals (UK) Ltd. (is/was wholly owned by NTR Metals International, LLC)
    • NTR Metals Latin America (parent company of NTR Metals Zona Franca S.A.S; President Mr. Barrage)
    • NTR Metals Miami, LLC
    • NTR Metals Pacific Rim, LLC
    • NTR Metals Real Estate, LLC (appears to own 10720 Composite Drive, Dallas)
    • NTR Metals South America, LLC
    • NTR Metals Texas, LLC
    • NTR Metals USA, LLC
    • NTR Metals West, LLC
    • NTR Metals Zona Franca S.A.S. (Columbia; subsidiary of Elemetal, LLC)
  • DGSE Companies, Inc. (Elemetal is a majority shareholder; had 69 employees as of December 31, 2015)
    • Dallas Gold & Silver Exchange, Inc. (9 stores around Dallas; now just 4?)
    • Charleston Gold & Diamond Exchange, Inc. (1 store in Mount Pleasant, SC)
    • Fairchild International (wholesale watches; website not responding 14 Mar 2017)
    • Southern Bullion a/k/a Southern Bullion Coin & Jewelry (defunct; acquired in 2011 with 23 locations)
    • SBT, Inc. (Southern Bullion Trading, related to Southern Bullion Coin & Jewelry, Inc.; was owned by NTR)
    • U.S. Bullion Exchange (DGSE Company's online trading 'arm').  

Full research HERE

 

Florida...Climate change can't swallow it fast enough

Good Luck

UPDATE 1:  DGSE is a retailer in serious trouble itself.  Posted today are the S&P Top Ten Retailers at Risk of Default per the WSJ.  DGSE takes second place. Somehow, we doubt the complicated structures and the DGSE buyout aren't to make things more transparent for investigators  

  1. Sears Holdings (SHLD -3.5%) with a 23.84% probability of default.
  2. DGSE Companies (DGSE -1.2%)
  3. Appliance Recycling Centers of America (ARCI -1.1%),

DGSE Companies, Inc. (NYSE MKT:DGSE) (“DGSE” or the “Company”), a leading wholesaler and retailer of jewelry, diamonds, fine watches, and precious metal bullion and rare coin products, today announced that it has entered into a non-binding Letter of Intent with Elemetal, LLC (“Elemetal”) to acquire the tangible personal-property assets of Elemetal and Elemetal Recycling, LLC (“Recycling”) at 2101 W. Belt Line Road, Carrollton, Texas, the equipment at 10707 Composite Drive, Dallas, and certain accounts receivable of Recycling. The total estimated cash proceeds to Elemetal and Recycling from the sale and from the payment by DGSE of approximately $3.8 million of obligations owed by DGSE to Elemetal is $19.8 million. In addition, DGSE would assume certain accounts payable of Recycling.

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RedBaron616's picture

If the press demonizes gold, the gold bugs go 180 degrees out and see anything and everything as bullish for gold. Both are equally bad.

MrBoompi's picture

Ok we'll try this one more time.  The price of gold will not be affected by the removal of gold produced by "illegal" mines because supply and demand of physical gold does not set the price.  It is the paper futures market that determines the price, and it is still subject to manipulation.  

cheka's picture

US mint should sell their bullion eagles direct.  where is ron paul when you need him?

83_vf_1100_c's picture

  I've been buying from Privident going on 3 yrs. No more til this shakes out. JM Bullion is me new regular supplier for now.

  Provident has been excellent but they are in thr NTR, Elemetal family and may get drug down with them. NWT, Tulving, Bullion Direct... don't get screwed over like their customers.

GRDguy's picture

I was wondering where the Gold Cartel was getting its physical to deliver, thus keeping the price smashed since 2011.

Lets Buy The Dip's picture

govt will be hiding gold somewhere, but here are 10 CRAZY facts about gold you did not know! :-o => http://bit.ly/2oOvdGR

flyingcaveman's picture

So they are telling their suppliers to hold off on shipments through the regular channels, but in the mean time, here's a list of 100 of our subsidiaries you may be interested in doing business with.

decentralisedscrutinizer's picture

 

Almost all the world’s economic and political problems revolve around the hegemony of a global corporate cartel, which is headquartered in the US because this is where their military force resides. The only way to regain our sovereignty as a constitutional republic is to severely curtail the privileges of any corporation doing business here. As a free nation, we really have to stop granting corporate charters to just any “suit” that comes along without fulfilling a defined social value in return. The "Divine Right Of Kings” should not apply to fictitious entities just because they are “Too Big To Fail”. We can't take the incorporation of private transnational banks for granted anymore. The government must be held responsible only to the electorate, not fictitious entities, if we are ever to restore sanity, much less prosperity, to the world.

 

 

 

It was a loophole in our Constitution that allowed corporate charters to be so easily obtained it created a swamp of corruption around our capital. It is a swamp that can't be drained at this point because the Constitution  doesn’t provide a drain. This 28th amendment is intended to install that drain so Congress can pull the plug ASAP. As a matter of political practicality, because they defend each other with battalions of corporate lawyers, and because said corporations virtually constitute a global empire, we can't outlaw corporations through the States’ amendment process but must rely on the Article 5 Convention for which the electorate will need to prepare for consensus beforehand. Seriously; an Article 5 Constitutional Convention could solve that problem in days. This is what I think it will take to save the world; and nobody gets hurt:

 

 

 

28th Amendment

 

Corporations are not persons in any sense of the word and shall be granted only those rights and privileges that Congress deems necessary for the well-being of the People. Congress shall provide legislation defining the terms and conditions of corporate charters according to their purpose; which shall include, but are not limited to:

 

1, prohibitions against any corporation;

 

a, owning another corporation,

 

b, becoming economically indispensable or monopolistic, or

 

c, otherwise distorting the general economy;

 

2, prohibitions against any form of interference in the affairs of;

 

a, government,

 

b, education, or

 

c, news media, and

 

3, provisions for;

 

a, the auditing of standardized, current, and transparent account books, and

 

b, the establishment of a state and municipal-owned banking system

 

c, civil and criminal penalties to be suffered by corporate executives for violation of the terms of a corporate charter.

 

 

 

Think about it: The Founders had to fight a bloody Revolutionary War to win our right to incorporate as a nation – the USA. But then, out of legislative inexperience, our Founders granted unrestricted corporate charters, (with enough potential capital & power to compete with the several States, smaller sovereign nations, and eventually buy out the Federal government itself) to thieves and con men. Ooooops! Now they all got together and want to buy the whole shrinking Planet, coalition armies and all! How whacky is that?! God bless the Divine Board of Directors !

    

Conax's picture

If you can't scare off the customers you can always go after the dealers.

They're Baaaad.

Karl Marxist's picture

1,000 years from now when mankind is extinct and/or planet itself, what difference does all this make? These are activities for the short term only, i.e. all criminal as all things are, a mad rush to the End of All. Since power itself is utterly corrupt, the future of any promise is long dead. There are no protections, no enforcement. Everyone's on the take. Your children are bred for slaughter. Good people are left in the dark on purpose. We can't know and even if we did, no one has any real power to do one Goddamned thing about such massive environmental rape, system rigs, bullshit economy, frankenfood, bubbled everything -- all earnings are taxed to pay interest to central banks. No roads will ever be repaired, the people will never have proper medical care, homelessness is the new standard as well as Islam and Sharia law supplanting all actual laws and codes of ethics and justice.

ToSoft4Truth's picture

It matters to you. 

 

Moreover, NK is going to get their gold taken.   I looked it up on Wikipedia. 

 

"In gold alone the nation is estimated to hold around 2,000 metric tonnes of reserves."

 

https://en.wikipedia.org/wiki/Mining_in_North_Korea#Gold_mining

bookofenoch's picture

The USA seems to dismantle any country who has the audacity to refuse to exchange their gold for joobux.

The USA is going to free the shit out of NORK's gold, just like Ukraine and Libya.

Uchtdorf's picture

Straight to Ft. Knox? Do you think the Chinese will get a cut for not preventing the US attack?

techpriest's picture

The PLA has a gold mining division. Maybe it will be their first foreign deployment.

It's not Right to hate - it's Left's picture

At least ProvidentMetals.com is still in business. (My Fav).  This is a bummer.  I liked the elemental logo and preferred their 10oz Ag bars.  The website makes no mention of being owned by Elemental, though they do have a big elemental offering.

So let me get this straight:  if you can find some folks who are willing to mine gold and sell it to companies cheaper and they pass that discount on to consumers, it is illegal and you are a drug king pin?  Who cares if the miner guys buy cervesas or cocaine with their paycheck.  I guess big bro must get his cut or else.  Its all monkey hammered anyway

stacking12321's picture

normally, i'd agree with you - i could care less if something is designated as "illegal" by a bunch of armed thugs called government.

but, there are a couple of legitimate issues peripheral to illegal gold mining.

one is, pollution, some use mercury or cyanide to extract and process the gold, and these are dumped without concern for who is being harmed by the dumping

two is, the use of slave labor in mining.

FIAT CON's picture

Is this the gold Eric Sprott couldn't figure out where it was coming from that was sold to the East?

wattie's picture

www.goldclassaction.com

www.silverclassaction.com

Every precious metals investor should join the global fightback!

detached.amusement's picture

I just laughed, I mean, they own the courts, what the fuck are the courts going to do?

silverserfer's picture

Illegal gold...hmm you mean gold sold freely away from the crony junta governments? 

 

Oh and the article is missing a division, 

 

Elemental cocane and heroin distribution divison LLC

38BWD22's picture

 

 

Afraid so.  I bought a couple of times from Provident, paying with Bitcoin (one of the reasons I chose to buy from them, to learn BTC).

The service from Provident was very good.

ClowardPiven2016's picture

I've placed 5 small orders ($200-$300) with Provident since 3/13 without any issues. 

 

Tapeworm's picture

 I do not know them but what happened to Tulving is instructive. There was another big dealer in Florida that went belly up thus stealing the customers' money and metals.

stacking12321's picture

tulving was shady, i'm glad he's out of the picture.

provident, on the other hand, is impeccable, at least the service i've received from them, maybe 10 or 20 orders so far.

jmcwala's picture

And Provident will buy gold and silver at the spot price, as long as it is items that they sell on their site.

techpriest's picture

I've had a good experience with them also. You can't walk up and buy though, if you live nearby.

philipat's picture

This piece augments very nicely the Grant Williams video on Gold "Nobody Cares".....

Jimmy Jimmereeno's picture

This article is one of, if not the, most bizarre that I have ever read about gold.  Bar none.  Incidentally, who is Vince Lanci?

BobEore's picture

Simply the best voice out there right now - for stories about shiny metals minus the usual "master's voice" of shilldom.

Vince has put a few nuggets of good info into circulation since appearing on these pages earlier this year. This however, is not one of his better pieces. Particularly in relation to his stroking of perma-shill site "Silver Doctors"... whose gambit is to "doctor" the perceptions of their witless reader victims with endless stories by the like of Bill "Empty" Holster regarding the theme of "THIS IS IT!" ad naseaum.

Far from "exposing" any rackets, those shills are in the business of covering them UP! The trail, for instance, which leads all the way from the original two-bit coin dealership of "A-MARK" metals, through a string of buyouts....acquisitions... mergers... SEC cases... "Everbright"...and then ultimately - going "black" with the split by which Spectrum and A Mark go their NOT SO SEPARATE ways..

all via the tender machinations of Greg Manning/then uber-scammer Greg Roberts...

bingo! A chain of retail gold shops all controlled by a nexus of criminals whose puppeteers lead us into the shadowly world of JPM/China and their paid coverup agents of the gold media mafiya.

Back up the truck.... cause there's never been a better time... to fool all de bugz... all zee time!