The continuing fraud foisted upon the world by LBMA member banks and their gold sales snagged another unsuspecting fool in the market place, The Central Bank of Mexico or Banxico. Mexico allegedly purchased 110 tons of a few months ago from the LBMA. However, they didn't know what they were buying. Turns out they weren't buying real, solid gold. Gold that has numbered bars and lists of the exact weight of the bars or any real measure of what they were purchasing. They were buying the underlying paper of the selling banks unallocated stored gold. Banxico recently admitted to the Mexican press that the gold they thought they purchased wasn't really gold, but a claim to paper gold...
The gold that composes the reserve in question is made up of bars that may have a minimum and maximum of gold. The bars with minimum content weigh approximately 10.9 kilos, while those with maximum content have an approximate weight of 13.4 kilos. The information is published by the London Bullion Market Association. ... Due to the variability of the content of gold in the bars, it is not possible to specify with certainty the exact number of bars purchased.
What Mexico's Central Bank actually bought under the guise of "physical" gold was a unsecured "bond" giving a claim, not on the purchased gold, but on the general assets of the selling bank.
The only way for Banxico to be sure that they have ownership is to demand physical delivery of their
purchased paper gold. This is exactly what Hugo Chavez has done with Venezuela's gold holdings, demanding physical delivery from Western banks that were storing gold for Venezuela. And this is what Mexico has to do.
This isn't the first example of the LBMA selling gold they didn't have in their vaults and it won't be the last. But it does underline the fact that paper gold like GLD or SIlver paper like SLV are, in the light of day, just paper. And with numerous reports of tungsten "gold" bars in circulation, you the reader are best served to protect your wealth with physical gold and silver coins held in your own safe on your own property. This scandal will erupt when members of the LBMA go belly up and they will take their brother member banks with them. If you are holding GLD or SLV beware, you will have nothing but worthless paper on your hands in the next banking crisis, unlike Banxico, who while admittedly embarrassed by their folly, is demanding thier physical gold, you dear reader will have nothing to stand on and your paper wealth will go poof!
http://www.gata.org/node/7908
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