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According to the article, the gold bars are actually high-purity real gold. Then the difference in price must be the small markup that branded stamped gold bars

According to the article, the gold bars are actually high-purity real gold. Then the difference in price must be the small markup that branded stamped gold bars get. This seems very different from the normal forgery I would expect where the forger gets a large fraction of the bar's value. If the bar is actually real gold, the nature of the damage is different. It's less about undermining gold than it is about undermining the brand of the stamp.

jki275 7y ago
I think it's not only that, it's allowing smuggling of gold that isn't sourced ethically, which is quite important to some people -- and also does, as you say, undermine the brand as well.
- turk73 7y ago
  For all of human history, most of the gold was not sourced ethically. Whether you are talking Conquistadors or Nazis ripping out fillings, the whole point is plunder. It's like it is built into our very DNA. That is the "brand."
peterburkimsher 7y ago
It's about money laundering. The stamps give a sense of authenticity, that the gold came from legitimate sources. By faking the stamp, gold from other sources (e.g. conflict zones) can be passed off as being from Swiss refineries, and thus used to launder money.
- ryandrake 7y ago
  Sorry, but as a layman I don’t get it. How does putting a fake stamp on a real commodity item help me to launder money? Is it like shoes where an identical product with the right logo costs more? This wouldn’t seem to affect anyone except the refinery who wanted to charge more for a logo, and I don’t see how it ties in with money laundering.
  - jotm 7y ago
    The way I see it: Say you've got a source of gold that no one else will touch (illegal mine, sanctioned country, slave labour, stolen gold, etc). It costs you way below market price, but no one will buy it from you. You pour it into bars, stamp it with fake brands and sell it at market price to anyone you want. Instant profit and your hands/money are clean.
    - petre 7y ago
      Certain parties operating in the UAE will touch it. This is just one further step away from selling it as jewlery. https://www.hrw.org/news/2016/04/12/dispatches-child-labor-dubais-gold-supply-chain https://www.hrw.org/news/2016/04/12/dispatches-child-labor-d...
    - otherme123 7y ago
      I tend to think the article is trying to inject some shadow over gold market, like in "careful with buying gold, you'll probably end up buying a bar of rusty iron". You have to read four paragraphs to read the first explanation that there's no problem with the gold quality. Gold may be the dirtiest commodity out there. There are plenty of people that buys gold without worrying about its origins, to immediately melt it into something else. People that doesn't care where a meth head got this 24k gold necklace, will trade it for about 10% its value and melt it into jewelry again. I'm sure the last worry of people buying gold bars is the source of them, specially if you can get them at a small discount. "Hey, look: I'm getting rich selling tobacco to children, weapons to both sides of a war, paying doctors to prescribe my drugs, flooding the oceans with crude oil... but that gold origin is what worries me at the end of the day."
    - SilasX 7y ago
      So, like Die Another Day, where that villain takes blood diamonds into Iceland to obscure their origin and sell them like they came from there?
  - kd5bjo 7y ago
    Some unsavory regimes are in control of natural resource mines (like gold or diamond). In an attempt to withhold funds from these regimes, it’s common to not buy gold or diamonds that came from these places, despite them being the same physical product. By counterfeiting the stamp, gold from these places can be passed off as being from one of the acceptable regions of the world. This is effectively smuggling items through a metaphorical blockade.
mc32 7y ago
As others indicate the problem isn’t the gold, the problem is the provenance of the gold. It’s used to launder money.
- matt-attack 7y ago
  Sure. But if you’re accidentally in possession of one of these bars, it’s not like you’ve been scammed into buying lead with gold paint. You still own the amount of gold you thought you owned.
achow 7y ago
If one replaces gold with crude oil then the gravity of this becomes clear. What if Venezuela is smuggling its camouflaged crude oil inside Norwegian oil tankers?
- vardump 7y ago
  Different wells produce very characteristic product that's hard and expensive to mask. You could tell it from API gravity and sulphur content, among other things. See: https://en.wikipedia.org/wiki/List_of_crude_oil_products https://en.wikipedia.org/wiki/List_of_crude_oil_products So I don't see how you could economically camouflage crude oil from relatively simple chemical tests.
  - rtkwe 7y ago
    The question is are governments/companies checking and monitoring that actively enough to catch it or do they only check when they have suspicions about the provenance of some oil already.
- Fjolsvith 7y ago
  Big deal. There's a glut of oil and a dearth of gold.
  - achow 7y ago
    Big deal for Maduro.
  - Eliezer 7y ago
    I hear rumors that there are exactly as many units of oil sold as units of oil bought, and the same holds true for gold. I honestly have no idea what you could mean by saying that there's a glut of one and a dearth of the other.
    - dagenix 7y ago
      By that logic, you could never have an excess or dearth of anything.
ryanmercer 7y ago
>This seems very different from the normal forgery I would expect where the forger gets a large fraction of the bar's value. The only way to make passable fake gold bullion based on weight is to use tungsten clad with gold, and even that is trivial to detect with any proper equipment (which can be hard commercially starting around the cost of an ounce of gold) if the cladding isn't sufficiently thick. Silver is faked way, way, way more wildly. I'm a mod of /r/silverbugs and I've been compiling a list of fakes members of the sub have found over the years, there's some really fake gold in there too https://www.ryanmercer.com/ryansthoughts/2014/8/22/fake-silver.html https://www.ryanmercer.com/ryansthoughts/2014/8/22/fake-silv...
- deleted 7y ago
  [deleted]
- microtherion 7y ago
  > The only way to make passable fake gold bullion based on weight is to use tungsten clad with gold <hat scientist="mad"> Couldn't you, say, mix plutonium with a small amount of lead to dial in the weight you need? </hat>
  - philipkglass 7y ago
    Metallic plutonium is far rarer and more tightly controlled than gold. There is no civilian market for it. Building a new plutonium separation-and-metallization facility for processing spent civil nuclear fuel is more expensive than a new gold mine. Plutonium is also easy to detect by its radioactivity.
    - microtherion 7y ago
      Yes, I know all of that, was just asking why this would be detectible by weight. Picked plutonium for the lulz. It looks like osmium or platinum would be cost effective, at today's gold prices.
      - philipkglass 7y ago
anonu 7y ago
Totally agree. This is more akin to "conflict diamonds" - where the provenance is important. Ultimately, the powers that be want to control the money supply and dollar flows. If gold is coming from an "unauthorized source" this disrupts the stability of the system. I know this sounds a bit "conspiracy theory"-ish but I've come to view the global banking system in such a light: there are a few powerful players (namely the US) that need to know where money is flowing at all times.
- notyourday 7y ago
  That's not the case : people like to say that it is the case but "conflict diamonds" are used all the time, all over. It is the open secret in diamond district in NYC and among the dealers to the stars in LA and European capitals.
notyourday 7y ago
> Then the difference in price must be the small markup that branded stamped gold bars get. The bid/ask spread on the gold bars at the same dealer is close to 30%. The other markup is peanuts. That's why it gold as the "investment" is mostly sold via day time infomercial on second rate TV networks ( the ones that currently broadcast in 480i ) and second rate cable channels as well as promoted by the likes of Glenn Beck right next to "have your own seed bank so you can plant your own garden for food when the economy collapses". JPM made a lot of money serving those outfits but for it gold bar is just a blob of a certain weight and certain purity.
- DennisP 7y ago
  Someone else suggesting gold as an investment is Ray Dalio, who runs the world's largest hedge fund. As part of a portfolio, it helps because it's a largely uncorrelated asset that tends to do well when everything else is crashing. Of course, if you're doing that you're probably going to buying GLD or IAU, which closely track the spot price of gold. Or maybe you'll use an outfit like BullionVault, which has a spread comparable to large stocks, nowhere near 30%.
  - notyourday 7y ago
    > Or maybe you'll use an outfit like BullionVault, which has a spread comparable to large stocks, nowhere near 30%. Which does not provide delivery of the gold bars.
  - DiogenesKynikos 7y ago
    In a negative-interest-rate environment, gold is also more attractive, since 0% interest is better than -X% interest.
- johnrgrace 7y ago
  You are looking at the wrong dealers, the non "scam" dealers for say 1 ounce gold coins have a 3-5% difference between their buy and sell prices. https://www.providentmetals.com/1-oz-us-american-gold-eagle-coin-dates-our-choice.html https://www.providentmetals.com/1-oz-us-american-gold-eagle-...

jki275 7y ago

I think it's not only that, it's allowing smuggling of gold that isn't sourced ethically, which is quite important to some people -- and also does, as you say, undermine the brand as well.

turk73 7y ago
For all of human history, most of the gold was not sourced ethically. Whether you are talking Conquistadors or Nazis ripping out fillings, the whole point is plunder. It's like it is built into our very DNA. That is the "brand."

peterburkimsher 7y ago

It's about money laundering. The stamps give a sense of authenticity, that the gold came from legitimate sources. By faking the stamp, gold from other sources (e.g. conflict zones) can be passed off as being from Swiss refineries, and thus used to launder money.

ryandrake 7y ago
Sorry, but as a layman I don’t get it. How does putting a fake stamp on a real commodity item help me to launder money? Is it like shoes where an identical product with the right logo costs more? This wouldn’t seem to affect anyone except the refinery who wanted to charge more for a logo, and I don’t see how it ties in with money laundering.
- jotm 7y ago
  The way I see it: Say you've got a source of gold that no one else will touch (illegal mine, sanctioned country, slave labour, stolen gold, etc). It costs you way below market price, but no one will buy it from you. You pour it into bars, stamp it with fake brands and sell it at market price to anyone you want. Instant profit and your hands/money are clean.
  - petre 7y ago
    Certain parties operating in the UAE will touch it. This is just one further step away from selling it as jewlery. https://www.hrw.org/news/2016/04/12/dispatches-child-labor-dubais-gold-supply-chain https://www.hrw.org/news/2016/04/12/dispatches-child-labor-d...
  - otherme123 7y ago
    I tend to think the article is trying to inject some shadow over gold market, like in "careful with buying gold, you'll probably end up buying a bar of rusty iron". You have to read four paragraphs to read the first explanation that there's no problem with the gold quality. Gold may be the dirtiest commodity out there. There are plenty of people that buys gold without worrying about its origins, to immediately melt it into something else. People that doesn't care where a meth head got this 24k gold necklace, will trade it for about 10% its value and melt it into jewelry again. I'm sure the last worry of people buying gold bars is the source of them, specially if you can get them at a small discount. "Hey, look: I'm getting rich selling tobacco to children, weapons to both sides of a war, paying doctors to prescribe my drugs, flooding the oceans with crude oil... but that gold origin is what worries me at the end of the day."
  - SilasX 7y ago
    So, like Die Another Day, where that villain takes blood diamonds into Iceland to obscure their origin and sell them like they came from there?
- kd5bjo 7y ago
  Some unsavory regimes are in control of natural resource mines (like gold or diamond). In an attempt to withhold funds from these regimes, it’s common to not buy gold or diamonds that came from these places, despite them being the same physical product. By counterfeiting the stamp, gold from these places can be passed off as being from one of the acceptable regions of the world. This is effectively smuggling items through a metaphorical blockade.

mc32 7y ago

As others indicate the problem isn’t the gold, the problem is the provenance of the gold. It’s used to launder money.

matt-attack 7y ago
Sure. But if you’re accidentally in possession of one of these bars, it’s not like you’ve been scammed into buying lead with gold paint. You still own the amount of gold you thought you owned.

achow 7y ago

If one replaces gold with crude oil then the gravity of this becomes clear. What if Venezuela is smuggling its camouflaged crude oil inside Norwegian oil tankers?

vardump 7y ago
Different wells produce very characteristic product that's hard and expensive to mask. You could tell it from API gravity and sulphur content, among other things. See: https://en.wikipedia.org/wiki/List_of_crude_oil_products https://en.wikipedia.org/wiki/List_of_crude_oil_products So I don't see how you could economically camouflage crude oil from relatively simple chemical tests.
- rtkwe 7y ago
  The question is are governments/companies checking and monitoring that actively enough to catch it or do they only check when they have suspicions about the provenance of some oil already.
Fjolsvith 7y ago
Big deal. There's a glut of oil and a dearth of gold.
- achow 7y ago
  Big deal for Maduro.
- Eliezer 7y ago
  I hear rumors that there are exactly as many units of oil sold as units of oil bought, and the same holds true for gold. I honestly have no idea what you could mean by saying that there's a glut of one and a dearth of the other.
  - dagenix 7y ago
    By that logic, you could never have an excess or dearth of anything.

ryanmercer 7y ago

>This seems very different from the normal forgery I would expect where the forger gets a large fraction of the bar's value. The only way to make passable fake gold bullion based on weight is to use tungsten clad with gold, and even that is trivial to detect with any proper equipment (which can be hard commercially starting around the cost of an ounce of gold) if the cladding isn't sufficiently thick. Silver is faked way, way, way more wildly. I'm a mod of /r/silverbugs and I've been compiling a list of fakes members of the sub have found over the years, there's some really fake gold in there too https://www.ryanmercer.com/ryansthoughts/2014/8/22/fake-silver.html https://www.ryanmercer.com/ryansthoughts/2014/8/22/fake-silv...

deleted 7y ago
[deleted]
microtherion 7y ago
> The only way to make passable fake gold bullion based on weight is to use tungsten clad with gold <hat scientist="mad"> Couldn't you, say, mix plutonium with a small amount of lead to dial in the weight you need? </hat>
- philipkglass 7y ago
  Metallic plutonium is far rarer and more tightly controlled than gold. There is no civilian market for it. Building a new plutonium separation-and-metallization facility for processing spent civil nuclear fuel is more expensive than a new gold mine. Plutonium is also easy to detect by its radioactivity.
  - microtherion 7y ago
    Yes, I know all of that, was just asking why this would be detectible by weight. Picked plutonium for the lulz. It looks like osmium or platinum would be cost effective, at today's gold prices.
    - philipkglass 7y ago

anonu 7y ago

Totally agree. This is more akin to "conflict diamonds" - where the provenance is important. Ultimately, the powers that be want to control the money supply and dollar flows. If gold is coming from an "unauthorized source" this disrupts the stability of the system. I know this sounds a bit "conspiracy theory"-ish but I've come to view the global banking system in such a light: there are a few powerful players (namely the US) that need to know where money is flowing at all times.

notyourday 7y ago
That's not the case : people like to say that it is the case but "conflict diamonds" are used all the time, all over. It is the open secret in diamond district in NYC and among the dealers to the stars in LA and European capitals.

notyourday 7y ago

> Then the difference in price must be the small markup that branded stamped gold bars get. The bid/ask spread on the gold bars at the same dealer is close to 30%. The other markup is peanuts. That's why it gold as the "investment" is mostly sold via day time infomercial on second rate TV networks ( the ones that currently broadcast in 480i ) and second rate cable channels as well as promoted by the likes of Glenn Beck right next to "have your own seed bank so you can plant your own garden for food when the economy collapses". JPM made a lot of money serving those outfits but for it gold bar is just a blob of a certain weight and certain purity.

DennisP 7y ago
Someone else suggesting gold as an investment is Ray Dalio, who runs the world's largest hedge fund. As part of a portfolio, it helps because it's a largely uncorrelated asset that tends to do well when everything else is crashing. Of course, if you're doing that you're probably going to buying GLD or IAU, which closely track the spot price of gold. Or maybe you'll use an outfit like BullionVault, which has a spread comparable to large stocks, nowhere near 30%.
- notyourday 7y ago
  > Or maybe you'll use an outfit like BullionVault, which has a spread comparable to large stocks, nowhere near 30%. Which does not provide delivery of the gold bars.
- DiogenesKynikos 7y ago
  In a negative-interest-rate environment, gold is also more attractive, since 0% interest is better than -X% interest.
johnrgrace 7y ago
You are looking at the wrong dealers, the non "scam" dealers for say 1 ounce gold coins have a 3-5% difference between their buy and sell prices. https://www.providentmetals.com/1-oz-us-american-gold-eagle-coin-dates-our-choice.html https://www.providentmetals.com/1-oz-us-american-gold-eagle-...