Is Gold The Biggest Fraud In History?

For over two and a half thousand years, gold has been used as money Today every country and central bank invests in gold because its value is considered so stable – it helps to offset more volatile investments that succumb to financial crashes

Currently, all the gold in the world is worth over $8 trillion In short, it is a hugely important part of the global economy But Chris Powell, Secretary of the Gold Anti-Trust Action Comittee, says 80% of the gold owned in the world simply doesn’t exist If he’s right, it is the biggest case of fraud in history Is Gold The Biggest Fraud In History? Over 2,000 tonnes of gold are mined every year

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Around half of that becomes jewellery, a tenth of it is put to industrial use, and a third of it goes into bars and coins to be held in monetary funds and central banks across the world Gold is traded on the market every day, bought and sold by individuals as well as funds and banks Like any commodity, the price of gold depends on the demand for it As a mineral, there is a finite amount of gold available So far in human history, over 170,000 tonnes of gold has been mined

All the gold that has ever been mined could fit into three-and-a-half Olympic swimming pools The remaining gold in the ground is expected to run out shortly after 2030 The trend over the last century is that the price of gold steadily increases When it runs out, the price could skyrocket But the market could collapse even before then

Tens of billions of dollars’ worth of gold is traded every day in special markets According to Chris Powell, sales of gold are basically underwritten by the central banks In 2009, market analyst Paul Mylchreest calculated that bullion houses who buy and sell gold have only 15,000 tonnes of gold to trade He also worked out that 2,134 tonnes of gold were traded every day on the London market alone At this rate, the entire world’s stock of investment gold changes hands every week in one market

But gold is bought as an investment, to hold onto as it steadily increases in value What’s more, all this gold is held by the bullion trading houses, not given to the people who buy it Analyst Adrian Douglas said this means that when you buy gold, you’re really buying a document that just says you own it – paper gold Douglas also argues that the amount of gold sold each day compared to the amount of gold that exists, means that every ounce of gold has at least four owners In effect, they are selling gold that doesn’t exist

This might sound far-fetched, but there is a precedent for it In 2005, Morgan Stanley was sued by its clients for selling them non-existent precious metals For two decades, Morgan Stanley sold investors gold, silver, platinum and palladium and charged them storage fees for holding it When the clients asked for the metals, nothing was ever delivered Morgan Stanley settled the case out of court

Meanwhile, JP Morgan Chase & Company is currently being sued for manipulating the price of silver In January 2017, Keith Neumeyer, the CEO of silver mining company First Majestic, said the same manipulation is being carried out in the gold market If more gold is being sold than actually exists, it could have disastrous consequences If Adrian Douglas is correct that each ounce of gold is owned by four people, each one of those owners has a right to claim that ounce of gold If people simply asked to be given the precious metal they officially own, the banks and bullion houses would not be able to give it to any of them

They would become bankrupt The price of gold would then rise to stratospheric heights As Chris Powell put it, “There may not be enough zeros in the world to put behind the gold price” This could have the effect of devaluing currencies around the world, since a country’s ability to purchase one of the world’s most important commodities would be drastically reduced However, the effect might not be that cataclysmic

Almost every country in the world has abandoned the gold standard This means their currencies are not tied to the value of gold, rather the value of money is tied to the worth of the goods and services countries provide Moreover, the price of gold is less stable than its reputation suggests, yet economies have continued well in spite of this If the price of gold went sky high, it would cause the collapse of the gold market and the gold mining industry, but probably not the economy Nevertheless, in recent years Russia and China have been buying up gold – the real thing, not paper gold – and increasing their national reserves

They seem to be doing this to strengthen their own economies, in particular against the US dollar The balance of power seems to be shifting If Eastern nations decide to tie their currencies to the value of gold, it could cause a collapse in the western economy If, after that, it were revealed that gold is far, far rarer than the markets pretend, the global economy would be seriously under threat The USA still has by far the largest reserves of gold in the world, and is one of the biggest producers and third biggest consumer of gold, after India and China

Yet China claims to have only half the amount of gold we expect it to have, from the quantity it’s been buying And it appears to be an open secret that the gold market is manipulated Perhaps the whole system is based on a lie And perhaps that lie will have consequences

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