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London Times Reports Bank Of England's Defective Gold

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Dear Friend of GATA and Gold:

The Times of London today picked up Metal Bulletin's recent story about the inability of Bank of England gold to meet the "good delivery" standards of the London Bullion Market Association. But the basic details about the quality and disposition of the gold remain unclear, even as the bank easily could clarify them, just as the disposition of U.S. gold reserves remains unclear and those reserves have not been audited in a half century.

There is a reason for all this unnecessary mystery, and it is that the British and U.S. governments simply do not want their citizens and the world to know what is really being done with the gold.

Now even Citigroup has conceded that this gold is being used for the surreptitious manipulation of markets.

Having just acknowledged one part of the gold story, maybe The Times will move on to the next.

The newspaper's story on the defective quality of the Bank of England's gold is appended.

CHRIS POWELL, Secretary/Treasurer

Gold Anti-Trust Action Committee Inc.

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All that Glisters May Not Be Gold

By Patrick Hosking

The Times, London

Saturday, September 29, 2007

http://business.timesonline.co.uk/tol/busi...icle2554723.ece

It has long been the plaything of kings, the spoil of conquerors, and supposedly the safest investment that money can buy. But for the people of Britain, our national nest-egg may not quite be what it appears.

Hidden away in vaults under the City of London, Britain's hoard of gold bullion, regarded as the best insurance against any turmoil in global money markets, is beginning to crumble. The deterioration, some experts claim, may suggest that it is not pure gold.

The Bank of England, guardian of the 320-tonne stash under Threadneedle Street, admitted yesterday that cracks and fissures had appeared in some of its gold.

Questions put to the Bank, made under the Freedom of Information Act, revealed that this deterioration would temporarily reduce the gold's L4 billion value and make it more difficult to sell.

The discovery is a further embarrasment for the beleaguered Bank, coming only days after it was blamed in part for the Northern Rock crisis. But it said that most of the hoard remained in mint condition. It denied suggestions by some experts that the deterioration was evidence that the gold may have been adulterated with base metal.

"This is not about purity; this is about physical appearance," the Bank insisted, saying that its bars were 99.9 per cent pure gold. The problem was due to the age of the bars, many of which were imported from the US in the 1930s and 1940s.

Although the gold carries assay marks, a guarantee from the refiner of its purity, there are no accompanying assay certificates, now regarded as essential by gold traders.

The Bank holds the gold on behalf of the Treasury, mainly in bars, but also in ingots and coins. Most of the hoard is thought to be stored in bars weighing between 10.9kg (24lb) and 13.4kg, and each worth between $258,000 (L123,000) and $317,000.

Revelations about its physical deterioration were secured by the trade journal Metal Bulletin, which has been trying to ascertain the truth since May. Rumours that the Bank's gold was not in tiptop condition have circulated in the gold market for years, but Stuart Allen, the Bank's deputy secretary, has now confirmed there is an issue.

To be traded, gold bars have to meet so-called London Good Delivery (LGD) standards, as laid down by the London Bullion Market Association. Mr Allen wrote to the journal: "There is some uncertainty about the status of LGD standards in respect of certain categories of gold bars that have been held in deep storage for many years."

The Bank was in discussions with the association to clarify how much of its gold was in substandard condition, Mr Allen added.

A Bank spokesman insisted it was not a big problem. The gold could easily be sent off to a refiner to be melted down and turned into new bars, he said. According to market observers questioned by Metal Bulletin, cracks and fissures suggested that the bars may not be pure gold. The gold in coin form may also be contaminated with base metal.

If 100 percent pure, the gold would be worth just over L4 billion at the current price of $738 an ounce.

The Government keeps reserves of gold and foreign currency to use to prop up sterling in times of adversity. In theory, in times of war, reserves could be used to finance emergency imports.

Britain's reserves have already been more than halved in recent years after Gordon Brown's controversial decision to sell 395 tonnes of gold between 1999 and 2002, when he was Chancellor. The soaring price since then has left critics questioning the decision and its timing.

Peter Ryan, an analyst at the consultant Gold Field Mineral Services, said: "I would guess that it would only be a small proportion that doesn't conform to standards and it would only be an issue if they needed to sell the gold. Some of this gold was acquired 30 or 40 years ago and standards do vary, but it is not difficult to fix." The gold price has been soaring recently as investors seek a hedge against the falling dollar and inflation worries. Strong demand from India, the biggest gold-consuming country in the world, has also boosted prices. There, gold jewellery, ingots and coins are a favourite wedding and festival gift.

Analysts suggested that the Bank, which declined to say how much tonnage was affected, would not be alone with its deteriorating bars. Many other central banks with reserves going back centuries could face similar problems.

Governments of Australia, Switzerland, the Netherlands, Argentina, and Belgium, as well as Britain, have sold gold reserves in recent years. Britain argued that gold represented too large and risky a proportion of its total reserves. But the fashion for selling reserves appears to have faded as the price has risen. Net government sales were only 328 tonnes worldwide last year, down 51 per cent, according to Gold Fields Mineral Services.

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I wouldn’t be surprised if they only had a few bars left and kept moving them between banks to show for the cameras, Sergeant Bilko style.

If they can’t audit Fort Knocks or the Bank of England you know it has to be true. <_<

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> "A Bank spokesman insisted it was not a big problem. The gold could easily be sent off to a refiner to be melted down and turned into new bars, he said. According to market observers questioned by Metal Bulletin, cracks and fissures suggested that the bars may not be pure gold. The gold in coin form may also be contaminated with base metal."

Utterly incredible investigative find!!!

The USA/Bank of Englands Gold is CORRUPTED - he said it came direct from the USA vaults!!

Here's the next run folks!!!

Just think of the bullsh'te Banker's 'spin' being put out . . . .

"A Bank spokesman insisted it was not a big problem. The gold could easily be sent off to a refiner to be melted down and turned into new bars"

Dig a 4,000 year old Gold Torque out of the ground, wash the soil off and it's as 'shiny' as the day it was made - if it's high quality content.

Look in the museums for yourselves. :o:ph34r::ph34r::ph34r:

Edit Oops!

Edited by erranta

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Just think of the bullsh'te Banker's 'spin' being put out . . . .

"A Bank spokesman insisted it was not a big problem. The gold could easily be sent off to a refiner to be melted down and turned into new bars"

Dig a 4,000 year old Gold Torque out of the ground, wash the soil off and it's as 'shiny' as the day it was made - if it's high quality content.

Look in the museums for yourselves. :o:ph34r::ph34r::ph34r:

I agree. Go to the British Museum and have a look at the 5000-year old stuff from Ur (jewellery and dishes) made of gold. No cracks to see there really, and I don't believe they really restaurated that stuff too heavily. The BoE gold must contain a high percentage of other stuff. For instance, look at this crap:

gold_bullion-3.jpg

Edited by Goldfinger

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Anyone know if this gold is counted as part of the BoE capital at all? If it is then perhaps the amount of BoE capital holding up the Northern Rock at the moment might also need to be temporarily recalculated.

EDIT: I have never heard of gold bars getting cracks in them before - especially of they have just been sitting inert in a bank vault for 70 years. Its not like they play football with them under Threadneedle Street. Problem is that the Gold lending market does rather depend on absolute trust in teh quality of the bars being lent and borrowed. Oh dear - could banks start refusing to lend and borrow gold between each other now.

Edited by Wad

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So we've got dodgy paper and dodgy gold from America now.

Gee, they see us coming every time don't they.

Hang on a minute! This is gold bought from the americans in the 30's when the

government was skint, and in the 40's when Britain was on the edge of invasion and

had to borrow $4 billion from the U.S. in 1946(at 2% interest) to survive the post war

period!!!

Wouldn't it have made sense to have bought low grade gold given how desperate

Britain's financial situation was at that time? After all, no one would ever know....

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Hang on a minute! This is gold bought from the americans in the 30's when the

government was skint, and in the 40's when Britain was on the edge of invasion and

had to borrow $4 billion from the U.S. in 1946(at 2% interest) to survive the post war

period!!!

Wouldn't it have made sense to have bought low grade gold given how desperate

Britain's financial situation was at that time? After all, no one would ever know....

Do you think this is really why Fort Knox hasn't had its gold counted?

Because, contrary to the usual conspiracy theory that says it is all gone/given to aliens etc., there is actually as much there as there was in 1920...

Theres a sensationalist paperback book in this I'm sure.

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Hang on a minute! This is gold bought from the americans in the 30's when the

government was skint, and in the 40's when Britain was on the edge of invasion and

had to borrow $4 billion from the U.S. in 1946(at 2% interest) to survive the post war

period!!!

Wouldn't it have made sense to have bought low grade gold given how desperate

Britain's financial situation was at that time? After all, no one would ever know....

Would have made more sense to give us fake gold because there was a chance it would never be returned.........

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This is very bad. Pure gold simply will not corrode, it is very unreactive. In fact what has been reported would not happen even to 9ct gold (which technically speaking is a copper alloy with a high gold content). It sounds like the BoE might have something like basemetal that has been gold wrapped (very thick plating).

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Do you think this is really why Fort Knox hasn't had its gold counted?

Because, contrary to the usual conspiracy theory that says it is all gone/given to aliens etc., there is actually as much there as there was in 1920...

Theres a sensationalist paperback book in this I'm sure.

Let's face it, as long as most people believe that there's gold in them there vaults,

it doesn't actually have to be there. It's all about confidence.

Not really sensational enough for a paperback I'm afraid, for me, fractional reserve banking

and CDO's are far more sensational.....up there with alien abductions and faked Apollo missions.

Anyway, the US and Uk governments should audit their gold stocks to stop these rumours

being spread via certain web sites...

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Don't we the people have a right to know what these central banks are upto with OUR gold?

If indeed they actually have any.

It really does feel like we've entered the twilight zone.

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Don't we the people have a right to know what these central banks are upto with OUR gold?

If indeed they actually have any.

It really does feel like we've entered the twilight zone.

If you are a citizen, you have accepted certain contractual obligations, so no. If you are not a citizen then it's nothing to do with you anyway.

Heads I win...tails you lose...

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The Times of London today picked up Metal Bulletin's recent story about the inability of Bank of England gold to meet the "good delivery" standards of the London Bullion Market Association. But the basic details about the quality and disposition of the gold remain unclear, even as the bank easily could clarify them, just as the disposition of U.S. gold reserves remains unclear and those reserves have not been audited in a half century.

There is a reason for all this unnecessary mystery, and it is that the British and U.S. governments simply do not want their citizens and the world to know what is really being done with the gold.

Debasement of Specie is nothing new, for those on this site who believe that nothing (economically) ever really changes and that our leaders never learn.

Kipper und Wipperzeit

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Don't we the people have a right to know what these central banks are upto with OUR gold?

If indeed they actually have any.

It really does feel like we've entered the twilight zone.

Good idea. Any idea how one goes about doing a request under the Freedom Of Information act?

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So who do you trust if you want to buy gold.

Whats to stop any merchant from adulterating gold during their refining process and selling on as investment bars - convenientaly wrapped in a protective plastic case?

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If the B.O.E. Gold is contaminated (and therefore possibly only worth 20% of each bar's uncontaminated estimated value) - which one of the managers is committing a highly fraudulent, treasonable offence by not reporting it to the General Public/House of commons for discussion?

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So who do you trust if you want to buy gold.

Whats to stop any merchant from adulterating gold during their refining process and selling on as investment bars - convenientaly wrapped in a protective plastic case?

That is why you stick to common coinage (basically already assayed for you) like Kruggers, Eagles, Sovereigns, Maples, and Britannias. I would stay clear of Pandas because there are so many fakes around.

Kruggers are the best as world over they are easily reconised.

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Don't we the people have a right to know what these central banks are upto with OUR gold?

Well it was mostly stolen in the first place, wasnt it?

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