*Update: We have received clarification that the Krugerrands in question were not underweight, rather they were underspec, meaning they were minted with watered down gold.
This obviously would be much less likely to be detected by a retail consumer, particularly as these were proof coins that would likely never be melted down.
As such, it is likely safe to conclude that this was an intentional skimming operation by the Reserve Bank of South Africa rather than a production glitch.
A national mint producing investment grade gold coins for several months with debased gold is not accidental. Period.
The Reserve Bank of South Africa has admitted that it produced underweight gold Krugerrands in April and May of 2011.
Perhaps they should have used a little tungsten rather than simply minting the coins underweight.
We’d like to know our readers’ thoughts on this:
Is this occurrence merely a production glitch, an intentional attempt by the South African Reserve Bank to skim some extra gold off each coin, or combined with the recent salted tungsten gold report, are the banksters attempting to condition the sheople that physical precious metals cannot be trusted?
Johannesburg – Some Krugerrands have been found to be underweight with too little gold used in their manufacture, the Sunday Times reported in its first edition on Saturday evening.
The newspaper said the SA Mint Company, a subsidiary of the Reserve Bank, had admitted that it made underweight proof or collector Krugerrands.
In a statement on Friday the Reserve Bank confirmed that the coins in question were produced in April and May 2011.
A Krugerrand sells for about R14 000 and is the world’s most popular gold coin and one of South Africa’s most famed collector’s items. According to the Sunday Times, coin dealers were called to the SA Mint Company last year and told about the problematic coins. Apparently they had to sign a confidentiality agreement that forbade them from talking about what they knew.
The Reserve Bank had told dealers that suspect coins would be exchanged by the SA Mint Company.
Read more:
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/live/s_silv.gif)
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/live/s_gold.gif)
If the reserve bank will accept exchanges for full-weight coins, then perhaps this was a production glitch. As much as I dislike banksters, I just can’t see them that united in order to pull off a stunt of conditioning people. They’re just greedy, so playing psychological games without a guaranteed benefit is not a serious objective.
A ‘glitch’? At the frikkin’ mint?! Maybe the glitch was a security glitch and someone working there sneakily stole it…otherwise…no way! Did the reserve bank try to pull a fast one? I seriously doubt it – it’s not their style of theft, which is conducted under the cover of full faith. (Nothing would undermine that full faith like a cheap theft of this nature.)
Number 3 is an interesting thought, but only makes sense if we consider the recent observations that smashing gold prices requires a sacrificial bank, in which case we know who the next victim is…
Also, this wee scandal provides a cover story for the sudden demise of any South African bank(s) being slaughtered. Hmm…time will tell…
That’s unreal, first the filled tungsten bars and now underweight. Coincidence I don’t think so. I believe there are some greedy people out there seeing that the markets hot. People are just buying and stacking them right now and not checking what thev’e bought,(been guilty of it myself) not like before when buyers where collecting and having them graded and an easy discovery by the grading companies. Bet that’s how it was discovered. Check your stash folks, I am.
Also seems like plain old counterfeiting is ramping up as well, now includes ASE’s. Good thread on Kitco.
Under weight gold coins made at a national mint for a period of 2 months… My initial thought was, yeah it had to be a glitch… Then my slow ass ran the info through the old brain again…. 2 months… They constantly weigh, measure, and re weigh while going through the manufacturing process with samples randomly and regularly being rechecked… There are back ups to catch this stuff… Many hands in the process… So my revised feelings on this are that the mint made an attempt to skim, got caught and issued a cover story of some sort to the dealers that were called in… And to make it look good there swapping out the coins chalking the experience up to, nice try but back to the drawing board… They can’t expect anyone to really believe that for 2 months everyone doing checks and certifications missed the suspect coins… Can they?
Happy stacking!!
A few years ago there was Russian Gold and Silver coins found with Rust on them. See Zero Hedge article:
http://www.zerohedge.com/article/rust-discovered-bank-russia-issued-999-gold-coins
If Central banks are trying to salt small coins – you know they have also tried it with Comex Delivery bars which are easier to get a way with.
The the Zero Hedge article only refers to the Gold rusting. But there was some silver coins that
turned up also – I only remeber because I have a few Russian Silver coins, so I took notice. If I remember correctly the Russian Mint said it was from the Equipment the coins where made on – but I don’t think people really believed that.
Romans tried clipping coins and pulled off that devaluation for a few decades but SA clipping Kruggers? SA is getting to be a real political mess with the SNC trying to nationalize mines, strikes at mines and some nasty tricks at the top levels of the government. The largest gold mine, Anglo Gold? or a name like that, has been under some heavy criticism lately. The politicians are looking with lustful eyes at the big gold producers and government unrest is looming.
The first thing to go when a government is in crisis is the currency and honesty. Seems like the good old USA is having some of the same problems. Debasing gold and silver coins is as old as time. I wonder how the American Eagles are faring?
One factor might be that the coins were encapsulated soon after production given that they were proof/collector coins. This is no excuse, but it might explain why the coins were not immediately detected as being underweight.
I think AGXIIK is right on. The Romans came to my mind right out the gate. I like to buy old silver to avoid allot of fake silver 15+ years or older. Before the chines trade started & silver value was low. I even prefer 2001 and earlier Eagles before our government ran out of silver to mint the Eagle. Who knows what there getting now. However I did see a video of the Perth mint and they had a box of blanks going to the US Mint. I Like to get old JM,Engelhard, US Stockpile from S.F., old Perth mint bars
Thanks God I don’t have any of those…
Perth Mint, US Mint & Canadian Mint have all weighed out for me..
“I like to buy old silver to avoid allot of fake silver 15+ years or older.”
427, i initially had the same leanings, but, just because a coin says 1900 on it, isn’t a guarantee that it really was made in 1900.
from what i understand, morgan silver dollars are frequently counterfeited.
someone posted a link to a youtube video on the doc’s thread about the gold bar with tungsten in it, on how to detect fake morgans.
One would think that a government mint would have quality control procedures up the yingyang and out the wahzoo and that their ability to implement these during every single production run would not be in doubt. It is understandable that there will be mechanical problems with any manufacturing process from time to time but that in no way excuses them from failing to catch such problems almost immediately and not distributing these underweight coins. Their main product is not coins but the trust that people place in them to produce a product that conforms exactly to the specifications for that particular product. If they fail to maintain these rigorous specifications, then their products are unworthy of our trust and cannot be purchased… ever. They need to identify these coins, recall them, melt them down, and remanufacture them correctly.
Ya (reflector) I know about counterfit morgan’s and there is allot more than those. Their is a fake 84 Engelhard Prospector floating around now to and allot of liberty typ rounds that I would question. Im old and I know old silver, what was around in the 70s-80s. From our 200th birthday in 76 silver got vary popular. Then to the 80s disco days and gold climbed way up. You were not cool with out your urbin cowboy look. A 1oz Pamp Suisse hanging on a gold rope chain and an 8 ball in your pocket. I have a hard time paying $20-$25 for $1.00 face junk silver, it was a dollar to me. I will not pay $35 + for a silver dollar. We bought made in the USA and were proud. Mid 80s the import gates opened wide pushing junk on us cheep.
My country is suffering from turbo charged levels of corruption. My guess it’s not the Reserve Bank’s Mint itself doing the thieving, but more likely a cabal within the Bank. More disgusting is that when the Bank’s top brass found out about the scam, they tried to keep the lid on it – but that’s how it’s done here – our media constantly finding out corruption, then the Gov denial and flat out lying, then the squashing of legal process against the thieves, then the reshuffling of the thieves to other Gov posts – our Govt, the ANC political Party, since it came to power in 1994, has followed a intense program of putting it’s loyal card carrying members into every corner of our civil service, where they plunder with impunity.
Meantime as the coffers run dry, our Govt naturally looks for new ways to steal like Nationalization of mines, banks and other commanding heights of the economy. Politics is dirty worldwide, but in Africa is has been honed to a fine art.
Here’s a bit more info from a local
paper:
Krugerrand
scandal rocks SA Mint
(http://www.timeslive.co.za/local/2012/04/15/krugerrand-scandal-rocks-sa-mint)
It
mentions that of the 1500 minted in that period (April – May 2011),
six were found to be below the required weight. If this is
true, it would indicate a quality control problem and technical
production issues.
Given the official ANC government policy of
Black Economic Empowerment (see Broad-Based Black Economic
Empowerment Act, 2003), many highly skilled and technical employees
have been progressively replaced with policy-motivated appointments. It is my opinion that this is not a deliberate money-clipping event,
but a drop in the technical skills level at the mint.
In
South Africa, the politically correct euphemism for this is commonly
know as “The learning curve”. “Learning curve”
mistakes are costing this country billions and are supported and
covered up at the highest levels.
Press release from the South African Reserve Bank:
http://www.resbank.co.za/Publications/Detail-Item-View/Pages/Publications.aspx?sarbweb=3b6aa07d-92ab-441f-b7bf-bb7dfb1bedb4&sarblist=21b5222e-7125-4e55-bb65-56fd3333371e&sarbitem=5019
Holy cow!? Aren’t Krugers the most minted gold coin? Who’s to say that was the only year they didn’t try this bullshizza. First world problems, I don’t own a single one. Shit I’d even take a light Kruger right about now.
Great posts from all. Could it be they tried to pull a sneaky and just got caught? Relate it to green beans. Three years ago a 16 oz. can of green beans cost ($0.60 a can). Fast forward 4 months and green beans still cost $0.60 a can. The difference was the new cans were only 15.5 oz. Nobody knew the difference for a number of months. Same price but less product. Glitch is usually a word used when there’s an intentional screw up and used as a cover later.
2 oz, this is the time of year to plant your garden and tell Big Ag & the grocers to f* off.
That does it, I am cancelling my order for that Monster Box of proof 2011 Krugerrands this morning!
If it was limited to a a small number of krugs, they will probably become collectibles, but they are no accident. Those blanks were deliberately ordered, or knowingly accepted by that mint. A slightly light bushel of corn is one thing, underweight gold is something else.
There seems to be a not so subtle plan to shoo you sillies away from PMs, get you back into paper.
Garden is planted Mammoth. I still watch the inflation prices closely. That 3 oz. Ruble you have has no rust I’m sure. LOL.
The Krugerrand deserves a boycott for what their mint has done. Even if
the weight discrepancy was insignificant, the fact that they tried to
keep it under wraps sends a message that they are not to be trusted.
The
color of the Krugerrand is also a drawback, because it does not give
the appearance of a natural 24K gold color. Pure (24K) gold is
frequently easily recognizable by its color.
Plebian… The Krugerrand is not 24K… It is 22K as is the American double eagle… The American gold coin was modeled after the Krugerrand, although the Krug does seem to have a unique off color all it’s own…
I have no Krugerrands. Whew! The impurities in the gold may partially attribute to the color. While stationed in Turkey, tri-colored gold jewelry was the fad. One jeweler I talked to explained this was due to the location of the mines and the mineral type in the ground. Sounds feasible but if anyone could shed a little light I would be interested. Danno is correct. 22K for the American Eagle.
It is a shame this happened as the kruggerand is a very well respected oz of gold. Hope they don’t try this again. I agree that the adulterated coins will become collectors items. I for one, would never buy a newer kruggerand on account of this. I fully expect that my old versions are just fine.
AndyZ clearly lives in SA and sees first hand the corruption endemic in this country. We would be wise to pay heed to his words. We are seeing this sort of corruption expand in the US I wonder if the American-produced coins will start suffering from this sort of counterfeiting?
Video report on this story:
http://youtu.be/y9PuUBd8wCY
PM Bug- video’s can be inserted directly into the comments section now using the insert video button on the toolbar:
The evidence looks stronger now for skimming … I still think there is more to it than they are letting on though… I bet we here more on this in the future…
It is absolute shocking, but mark my words, the estimated 6 coins that are underweight are going to be worth a lot in terms of collector’s value.
It must be underweight and/or under size if they have less gold in there, otherwise the principles behind the Fisch precision tool are based on quick sand, or do I have the cat by its tail?