Canada’s Only Bullion Bank Gold Vault Is Practically Empty
April 8th, 2010WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
DISCLOSURE: I am a BullionVault client and affiliate.
During the interview, Lenny Organ states that he was in the ScotiaMocatta vault in 2008. What’s the situation now??? Anyone dealing with precious metals, especially precious metals certificates, should listen to this.
Central Fund of Canada investors, who aren’t just using that thing as a blinking number that updates in realtime, also need to listen to this.
Via: ZeroHedge:
Continuing on the trail of exposing what is rapidly becoming one of the largest frauds in commodity markets history is the most recent interview by Eric King with GATA’s Adrian Douglas, Harvey Orgen (who recently testified before the CFTC hearing) and his son, Lenny, in which the two discuss their visit to the only bullion bank vault in Canada, that of ScotiaMocatta, located at 40 King Street West in Toronto, and find the vault is practically empty. This is a relevant segue to a class action lawsuit filed against Morgan Stanley, which was settled out of court, in which it was alleged that Morgan Stanley told clients it was selling them precious metals that they would own in full and that the company would store, yet even despite charging storage fees was not in actual possession of the bullion. It appears that this kind of lack of physical holdings by all who claim to have gold in storage, is pervasive as the actual gold globally is held primarily in paper or electronic form. Lenny Organ who was the person to enter the vault of ScotiaMocatta, says “What shocked me was how little gold and silver they actually had.” Lenny describes exactly how much (or little as the case may be) silver was available – roughly 60,000 ounces. As for gold – 210 400 oz bars, 4,000 maples, 500 eagles, 10 kilo bars, 10 one kilogram pieces of gold nugget form, which Adrian Douglas calculates as being $100 million worth, which is just one tenth of what the Royal Mint of Canada sold in 2008, or over $1 billion worth of gold. As Orgen concludes: “The game ends when the people who own all these paper obligations say enough and take physical delivery, and that’s when the mess will occur.”
Also note the interesting detour into what Stephan Spicer of the Central Fund Of Canada, said regarding his friend at a major bank, who wanted access to his 15,000 oz of silver, and had to wait 6-8 weeks for its to be flown in from Hong Kong.
It is funny that central bankers thought they could take the ponzi mentality of infinite dilution of all assets coupled with infinite debt issuance, as they have done to fiat money, and apply it to gold, in essence piling leverage upon leverage. They underestimated gold holders’ willingness to be diluted into perpetuity – when the realization that gold owned is just 1% of what is physically deliverable, you will see the biggest bank run in history.
Research Credit: Pookie
What has Bullion Vault done to insure that their holdings are real?
Good question Yuri. This is unsettling.
http://www.bullionvault.com/audit.do
The counts from the ViaMat vaults are posted daily. Every bar is listed with its serial number. The full ViaMat reports are available as PDFs.
All of the owners of all of that gold are listed in plain sight with public nicknames. This is how BV reconciles client holdings.
FYI: If you don’t know your public nickname, log in to BV, click on Settings and look at the Preferences box for “Public nickname”. You can scroll down and find your public nickname in the list at the link above.
The totals from all of those BV users are checked against the vault audits daily.
I don’t know, but I don’t think the Central Fund of Canada (CFC) is affiliated with that of ScotiaMocatta, located at 40 King Street West in Toronto, where GATA has learned the vault is practically empty.
CFC, in my mind, is not affillited with the Canadian government, except by perhaps locale.
CFC, Just like Buillion Vault is an independent entity, and is subject to all of the sturm and drang of independent public auditing of its accounts and metal holdings. It is also accountable to the American Stock Exchange where it sells shares.
I sent Kevin a kind of shock and awe email last night that he posted this article.
I don’t have any money in Buillion Vault, but I do have an IRA somewhere else in metals.
How can I believe it if I don’t see it?
Well, all I can say is the world has been investing in funny money (electronic transactions) for years. If you don’t want to invest money where you can’t see it, or hold it in your hands, well then. You shouldn’t be in the stock market or Buillion Vault, or wherever the hell it is you’ve put your investments.
But my prayer to the universe is that those of us who have taken our investments out of the stock market, and have trusted in the ethics of our metal managers, whether electronic or physical, have done the right thing. And if you have doubts, put it back into paper.
And if you put it back into paper: good luck to you and amen.
I’ve read the article and all the replies and am now thinking – bring it home.