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Non-investment use accounts for well over three-quarters of demand each year, and a big chunk of that is met in the form of Good Delivery bars. Yet there are no reports from jewelers, chip fabricators, dental suppliers or any other end users of the bullshit currently trying to pass as “insider news” on the web.

Bottom line? Good Delivery does what it says on the tin. The wholesale market is liquid and cost-efficient precisely because it’s warranted by the chain of integrity. The question of full re-assay is redundant. And on top of that, we guarantee every gram of BullionVault gold.

“Satisfied” – what does that mean? Did they actually properly assay any of these bars? As in “drill a hole in it and test the material thereby extracted”. What he is actually saying is that they go through the vault and check the serial numbers. From then on Mr Ash is surprisingly short on actual details in his answer to your question – a question from a concerned client. It may also be that they physically check the bar densities, by measuring the mass (on some scales) and the volume (e.g. through measuring the displaced volume of water according to Archimedes principle). At least that’s how I’d do it. We can rest easy, he says – this assay would detect the difference between Tungsten at 19.25 g/cm3 and Gold at 19.30 g/cm3. Now, call me a geek, but it took me about 30 seconds to discover that there are at least two metallic elements with densities considerably higher than Gold – Osmium and Iridium weigh in at about 22g/cm3 and can each currently be bought for about $400/ounce. Here is a recipe to consider: Melt some tungsten. Add about 2% Osmium so as to bring the room temperature density of the resulting alloy to exactly 19.30 g/cm3. Now coat it with gold to a total mass of 400 oz and stamp a serial number on it. Hey presto – an object that is indistinguishable from the equivalent gold bar, unless you melt it down or drill a hole in it. How often does that happen? Let me hypothesise that not one gold bar has ever been assayed in this way within the good delivery system. I stand hopeful of being corrected by Mr Ash here. Perhaps he has some data, such as the serial numbers of those bars properly assayed by BullionVault? Or perhaps I am just missing some important fact?

Mr Ash also made the point, “We only ever accept bars from accredited vaults and refiners, and anyone who delivered us a gold bar which later turned out to be bad would be liable for the loss.”

What if I’m correct and these bars are never properly assayed? They wouldn’t ever found to be bad, at least until such time as the fan blades are straining to chop a whole lot of other manure. What if it is then found to have originated from a sovereign government which is busy defaulting on all its debts?

Life is all about risk/reward. For anyone thinking of swapping good delivery bars for tungsten clones with the same markings and weight and then recycling the real gold as scrap (say) the risk of detection could be very small and the reward is currently $450,000/bar

He concludes with a disturbingly vague, “it’s unlikely (my emphasis) that any such metal could ever make it into accredited storage”. Would he care to quantify the risk associated with his phrase “unlikely”?

And how about those thousands of tons of “gold compounds” being exported from the US annually, according to the US Geological Survey report. Were they actually bars of gold? Was there a corresponding drop in gold at Fort Knox or could some Tungsten alloy bars have been used to keep the numbers up? OK, maybe that’s a bit out on the conspiratorial fringe but the whole system does look terribly opaque to a concerned client who just wants to know that the bar of gold that BullionVault is holding for him isn’t actually a tungsten brick.

Thank you for your email, which Paul’s asked me to answer.

As you may know, we send independent assayers into the vaults every year to check all the gold bars, and they send their report to our auditors who publish it – on their website – with the full financial audit.

To read the Assayer’s Report
http://www.albertgoodman.co.uk/bullionvault/

Last year, the assayers were 100% satisfied with every bar. They are now due to return to the vaults later this month, coinciding with our 2009 financial audit. Meanwhile, we only ever accept bars from accredited vaults and refiners, and anyone who delivered us a gold bar which later turned out to be bad would be liable for the loss.

On top of that, we guarantee every gram of BullionVault gold ourselves:
http://bullionvault.com/help/terms_and_conditions.html#Warranted%20gold%20content

With regards to the alleged tungsten fraud, such fakes could perhaps circulate outside the Good Delivery circuit. But it’s unlikely that any such metal could ever make it into accredited storage.

Accredited custodians only take in bars from other accredited vaults, and metal only enters the system from accredited refiners. Even when they bear the correct bar stamps, large gold bars are not usually accepted from people outside the Good Delivery circuit, which is why taking a Good Delivery bar into private possession seriously dents its value. Any potential buyer, lacking the accredited storage history which ensures integrity, would rather deal accredited metal from an accredited source. It’s this warranty — that delivery is good — which makes the professional wholesale market cost-efficient and liquid.

You can learn more about Good Delivery at the London Bullion Market Association (LBMA)’s website. You’ll note just how exacting the criteria for refining and assaying are:
http://www.lbma.org.uk/delivery

The Physical Committee’s detailed work on weighing scales is also worth reviewing. Because at these tolerances, the difference in density between gold and tungsten would show in a 400-ounce bar. Their very different melting points (1064°C for gold, 3422°C for tungsten) also make the alleged fakes unlikely, as do their physical states when cooled (gold is soft, tungsten brittle). Following back along the chain of integrity – the formal history of who held the bars, when, and in which approved facility – would ultimately lead to the producing refiner, and no amount of “tungsten” fakes would be worth the law suits, let alone the loss of LBMA accreditation.

As regards the rumours and stories themselves, “Impeccably reliable sources” would never tell an internet blogger that “a number of well-heeled market participants bought…gold futures on the London Bullion Market (LBMA)”. Not because they wouldn’t want to share such information, but for the simple reason that London dealers don’t offer gold futures. Spot, forwards and options, yes. But futures, no.

Nor can anyone trade gold “on” the LBMA, because it is a trade association, not an exchange or the market itself. Nor is gold dealt at the London Metals Exchange (LME) as some authors state. It offers base-metal contracts.

Reliable sources of information would know this. They’d at least look it up before publishing.

Kind regards,
Adrian

New guidance drawn up at the request of the Department of Health urges councils and other public sector bodies to “collect data” on properties where children are thought to be at “greatest risk of unintentional injury”.

Council staff will then be tasked with overseeing the installation of safety devices in homes, including smoke alarms, stair gates, hot water temperature restrictors, oven guards and window and door locks.

Boilerplate assurances that America won’t default on its debt or inflate the shortfall away are apparently not cutting it. Nor should they, when one owns nearly $2 trillion in assets denominated in the currency of a country about to double its national debt over the next decade.

Hourly wages below a dollar. Firings with no notice. Indifferent bosses. Labor brokers that leech away months of a worker’s hard-earned wages. A corporate shell game that leaves no one responsible.

Such conditions are widespread at the contract factories cranking out some of the most popular gadgets on the holiday season’s gift lists, according to labor rights activists and workers interviewed by GlobalPost.

Whether it’s your cherished iPhone, Nokia cell phone or Dell keyboard, it was likely made and assembled in Asia by workers who have few rights, and often toil under sweatshop-like conditions, activists say.

A plan to quadruple the penalty from the current maximum of $250 per day for a first violation is scheduled for consideration at Tuesday night’s town council meeting.

A repeat violation by the same person would be boosted to $5,000 a day maximum from $500 per day.

If the code enforcement board finds that the violation is irreversible — the unapproved removal of an historic tree, for example — the violator would face a maximum fine of $15,000. The current maximum penalty is $5,000.

“That’s outrageous,” said Stefan Harzen, a member of the property owners association for the Woodland Estates neighborhood. Increasing the fines will not result in prettier neighborhoods, he said. “This is an easy way for the town to get more money,” Harzen said.

Higher penalties are needed to deter flagrant violators, said Councilman Robert Friedman. A landlord who allows too many people to live in a house simply sees the current fine as a cost of doing business, he said.

…

The 18-month project to develop two sensor systems is being carried out at the City University London, and is being led by Professor Tong Sun. The project has funding from the Home Office Scientific Development Branch.

After a feasibility study is complete, two devices are expected to be designed to identify the fear pheromone in human sweat; one by laser absorption, and the other by a portable optical fiber instrument. The devices could be used to help police identify abnormal behavior at big events such as the 2012 Olympics.

The research project follows on from evidence gained last year in the US by scientists who collected the underarm sweat of 20 novice skydivers about to make their first jump. They then asked other volunteers, ignorant of the experiment’s nature, to smell the samples via a nebulizer, while their brains were scanned. The study found the smell of fear is real, and that the parts of the brain associated with fear responded to the smell of fear.

The British scientists hope to use the effect to develop security systems that can detect the fear pheromone. The challenge, according to Sun, is in identifying and characterizing the specific chemical signature for human fear, especially fear related to criminal acts.

The research will also examine potential problems such as interference by deodorants and perfumes, and will look at variations in pheromone production in different people.

Obama is pursuing, with unprecedented vigor, the same policies that have for decades undermined our industrial base and yoked us to an unsustainable consumer/credit driven economy. This doubling down on Washington’s past failures is destroying jobs at an alarming rate. We learned that the September trade deficit surged by 18.2%, the largest gain in ten years. Much of the deficit resulted from Americans spending Cash-for-Clunkers stimulus money on imported cars – or “American” cars loaded to the sunroof with imported parts. In exchange for more domestic debt, we have succeeded only in creating foreign jobs.

An article in last week’s New York Times by veteran writer Louis Uchitelle confirmed a fact that I have been alleging for years. Uchitelle pointed out that foreign outsourcing of component manufacturing has led to consistent overstatement of U.S. GDP and productivity. The connection goes a long way to explain why we keep losing jobs even as GDP is apparently expanding.

As our economy becomes less competitive due to higher taxes, burdensome and uncertain regulations, and capital flight, more manufacturing and services will be outsourced to foreign firms. However, the flaw in GDP calculation allows the output of those foreign workers to be included in our domestic tally. Since we count the output but not the worker responsible for it, government statisticians attribute the gains to rising labor productivity. To them, it looks like companies are producing more goods with fewer workers.

The Ecuadorean claimants said the company illegally dumped toxic waste from its oil production, which filtered into the lakes used by thousands of people for washing and drinking.

The result, they claimed, was one of the worst environmental disasters in history, which led to a public health crisis with rising levels of cancer, birth defects and miscarriages.

Some 30,000 Amazonians are behind a case to be heard by an Ecuadorean judge. Experts said the company might have to pay damages of up to $US27 billion ($29 billion).