In Gold We Trust?

Anyone in this business knows the hardest part is trust. It doesn’t matter which side you’re on, from thousands of fake sellers asking you to visit them with no proofs to give, to joker broker CIF buyers, to fake documentation (SKRs, SBLCs, MTs etc). Its a bit of a minefield!

The easy ones to spot are your common scams like the 200MT HSBC Hong Kong deal, or your bullion in Switzerland at -5%. The common African scams are also easy as you know they can sell on ground at -2% (in Ghana for example) with lots of reputable buyers in town, why offer it out? Only one fraudulent reason..Obviously.

So…what do you do? After 12 years in business I have 3 main nuggets of advice.

(1) If its an email offer or LinkedIn offer, and you don’t know them VERY well, its a fake.

(2) If its too good to be true, it is! Guaranteed. Check the maths, big profit = fake, there’s too much on ground competition for those margins.

(3) If you’re doing a gold deal, check out who you’re working with. Professional background, company, personal and licencing checks. They are a fraction of a percent of a deal from a company like ours.

Committing Fraud

This post NEEDED writing, to be honest I could have written an essay but Ill make this as short as possible. Every Day on LinkedIn and through our website we are seeing countless Gold offers being advertised. Most of the time we’ve seen the same offers already from the same people. (Almost) without exception these offers are fraudulent. Most of the time its easily provable as the figures, percentages, locations or prices don’t add up, yet still people argue with us about its legitimacy. When you are arguing with the worlds largest online Gold Fraud website and a qualified Gold Fraud officer with over a decade of experience and having seen and checked well over 10,000 deals. Think Again! We gain nothing from a fake offer, our only remit is to stamp out fraud by helping others not to fall for it. We get reports of over a million dollars each week being lost to these scams. ALSO and I think quite importantly you should consider the fact that posting the idiotic fake offer you’ve just received by email is a criminal offence. You are committing fraud across international boundaries. Why do you think the seller themselves didn’t sell it, a big company like ours is easy to find, why do you think they aren’t selling it for more money locally to the many on ground purchasers (like us)??? These guys aren’t stupid, in fact I work with a lot of very shrewd Africans every day. Wake up people and stop letting your greed outweigh your intelligence.

Gold Retains Its Value

This is a repost from July 2011.

An article that caught my eye on the BBC and the reason I am writing today is the recent find of a hoard of Gold coins in France.

“A French couple have found a hoard of gold coins worth at least £89,000 in the cellar of their home in the town of Millau.
They were working on their drains when they dug up the 34 coins in a little clay pot”

Whilst 34 coins isn’t bad, I’d hardly call it a hoard. As you can see from the pictures its barely a handful, yet at an average of over £2,600 per coin that’s a pretty good find!

These coins date from 1595 to 1789, around Louis XIII to the French Revolution. We know they are worth £89,000 now, but what did that mean to someone then?

It took a lot of digging as people mainly were “self employed” back then as blacksmiths, farmers, etc, so there really wasn’t an average wage to compare it to. So using a few different sources of information I managed to compile a guide to its value, though with my limited knowledge of 17th century France it’s a bit of an educated guess.

In the early 1600’s a labourer on the land would have earned around 3 sous a day, but with the latest coins dated in the late 1700’s it was around 15 sous per day. With 20 sous in a franc and a Gold Louis XIII coin worth about 20 francs. That’s a yearly wage of about 14 Gold coins. So this hoard represents under 2.5 years of savings (assuming you spent nothing at all!)

Not in my mind this raises 2 main points which are food for thought.

Firstly you have savings in coins that stretched over 200 years but STILL retained value and were legal currency. In fact they still have value NOW 400 years later! Try paying in shillings now, only 40 years later.

Secondly a farm labourer in the 1700’s would have earnt (the equivalent of) £89,000 in less than 2.5 years or £36,650 a year. That’s almost double the average annual wage now.

Thanks BBC, if I ever wanted an article to prove my arguments that;
(1) Gold retains it’s value over time
(2) Gold always has been and will be redeemable
(3) Inflation devalues your currency

Hopefully a lesson learnt today and I don’t mean that if you earn less than £36,650 you earn less than an 18th century farm worker, I mean GOLD IS MONEY.

Doesn’t matter how big the number you get in your wage packet is, if there is no value behind it. Things are coming to a head at an ever increasing rate, don’t get left empty handed when the crash comes.

EU Web of Debt – Repost from 2011

Here’s a post I wrote back in 2011, with everything going on in the UK and the EU today I thought it seemed pretty relevant. Lots of interesting facts to make you smile!

It’s 2011, you cannot turn on a TV, listen to a radio or open a newspaper without the European Union Debt Crisis being thrust down your throat.  Depending on where you live, you are either being told your taxes will need raising to pay for it, or more austerity and cuts will be needed to avert it. Most likely both!

One minute it’s PIIGS, then Greece is tipping us over the edge single handed, before Italy starts to feel left out and piles into the melee. The joys of a unified currency.

Those of us sitting prettily in the UK wiping the sweat from our brow, not having joined the Euro, can stop looking smug. We are owed 120 billion Euros by Germany, 186 billion Euros by France, 93 billion Euros by Ireland and that’s just a few of our neighbours! We are up to our necks in Euro debt.

With such huge figures being thrown about, you begin to wonder how all this debt was created? Where did it come from? Who had all this money to lend to the European Union?

Ridiculously the answer is every country in the EU! As debt costs nothing to create, you can theoretically lend an infinite amount of money to other countries even though you never had it in the first place. It’s just numbers on a computer. We mentioned earlier that France owed Britain 186 billion Euros but Britain owes France 194 billion Euros.

I’m sure it’s not just me that had the Eureka moment just then, that if you owe someone £10 and they owe you £8 you can work out that you actually just owe £2 and they owe you nothing? Pretty basic maths by anyone’s standards!

You may be thinking that it’s just not that simple, surely it can’t be? Well you are right. Countries lending is also based on the term of the loans. If you have a 1 year loan for £100 at 10% interest and a 3 year loan for £100 at 10% interest, then the 3 year loan is worth more to you, as you are gaining more interest overall and therefore earning more money.

A minor adjustment is required to the original Eureka moment. To cancel debts you need to sort them into short, medium and long term loans and then we are able to cancel debts of similar values.

Getting into the swing of it, there is an even deeper level of debt cancellation! If Mr X owes Mr Y £100 and Mr Y owes Mr Z £80 and Mr Z owes Mr X £50 then you can partially cross cancel debt by agreement of 3 parties.

Before going any further, it is time to assess what we are working with. How much debt is out there? Trying to get the answers to this is astronomically difficult but a great visual representation from a report entitled “The Great EU Debt Write Off” (May 20th 2011, Anthony J Evans & Terence Tse) is shown below:

Though this only takes into account the major European countries, these are the ones with the largest debts; Britain’s debt alone is shown as nearly 1 trillion Euros. (As of November 2018 Britain now owes over 2 trillion Euros to the rest of the EU)

Debt doesn’t really matter though if you are owed more than you lent out. (theoretically)

Another factor to take into consideration is that debt is normally measured against the GDP (Gross Domestic Product) of a country. A large country like Britain can afford a greater debt than Greece as the economy is proportionally bigger. The IMF states that to be considered for membership to the EU your debt to GDP ratio should not exceed 60%, where as currently Ireland is well over 100% and climbing.

So once you narrow it down and take away the layers of concealment you reveal the countries with the real underlying debt issues. Put simply, those who owe more than they are owed.

Shown below, using the same visual representation after our debt cancellation procedures have been taken into account.

Just using the basic principles of debt cancellation previously mentioned we can clearly see certain countries are MUCH better off than before.

France has actually managed to reduce its debt to less than 1 billion Euros! Even Britain has reduced its debt by more than 50%.

Further debt cancellation is also possible using 4 parties or more, though in this scenario it has not been taken into account.

Another small contributing factor to the debt reduction above was allowing countries to have the option to negotiate debts of different lengths at different values. As an example a short debt of 3 billion for a long debt of 1 billion, as they will earn the country a similar overall interest.

Overall Findings

  • Total debt can be reduced by over 59%
  • Average debt to GDP can be reduced from 35% to 12%
  • Ireland, Italy, Spain, Britain, France & Germany can reduce overall debt by more than 50%
  • Irelands debt to GDP ratio goes from 140% down to 20%
  • France can virtually eliminate debt to less than 0.1% of GDP

Other Interesting Facts

  • 50% of Portugal’s debt is owed to Spain
  • Ireland and Italy can write off all their debt to other PIIGS countries
  • Greece can reduce their debt by 20% with 60% owed to France and 30% to Germany
  • Britain has the highest debt before and after the debt cancellation but can reduce their debt to GDP by 30%
  • Germany can reduce their debt to less than 5% of GDP
  • Prior to adding bailouts, Greece’s debt to GDP is only 36% before and under 30% after

Fraud Services

A lot of our work lately has been fraud related. Assessing potential deals for clients. Invariably these turn out to be fraudulent as are 99.9% of all deals. Any client wishing to secure a gold deal would be better off hiring our ‘on ground’ services in Africa dealing direct with sellers rather than waiting for the next scam email. Save yourself the headache let the professionals do what they do best.

Christmas is a coming

The recent rise in gold price has bought a lot of interest to the gold markets. Most predictions for the coming year are for a rise in the price. Though we have a number of offers currently being processed in our sector there is often a slow down as Christmas approaches. With a number of projects already pencilled in for 2019 it looks to be a busy year. Contact us soon if you’d like to know more.