Gyroscopic Investing

UPDATE June 2, 1014

Goldcoinbalance.com has discovered a fake gold eagle one oz that passes the tests for weight, size and thickness. Henceforth, we can no longer guarantee Eagles or Kruggerrands that pass the three Gold Coin Balance tests. Here is a photo of the fake coin, we have filed the edge to expose the core of Tungsten. If you look closely at this photo there was a slight bubble and color is off. The ring test also is a giveaway. Someone is using a Tungsten core to create the fake American Gold Eagles.
What does this mean? That someone is trying to destroy the gold coin market and hence gold? Now that I have exposed the fakes, the cat is out of the bag and we will soon provide a tester to catch these fakes. In the mean time please look at 99.9 gold one oz coins. We continue to buy any thought to be fakes that are in this category.
http://www.goldcoinbalance.com/http:/ww ... gold-coins

Oh man!

I appreciate the heads up.

It is a terrible photo, I wish they would provide high resolution ones with a real coin side by side, as I often wonder if these fakes are really that good and would only fool newbies.

bronsuchecki wrote: It is a terrible photo, I wish they would provide high resolution ones with a real coin side by side, as I often wonder if these fakes are really that good and would only fool newbies.

It's possible they're just hyping a new crisis that can only be solved by buying their new product.

Bron  - curious if you've ever seen the tungsten plated coins coming out of China.  Is it easy to tell the fake by a ping test?

FarmerD wrote:

bronsuchecki wrote: It is a terrible photo, I wish they would provide high resolution ones with a real coin side by side, as I often wonder if these fakes are really that good and would only fool newbies.

It's possible they're just hyping a new crisis that can only be solved by buying their new product.

Bron  - curious if you've ever seen the tungsten plated coins coming out of China.  Is it easy to tell the fake by a ping test?

I thought China had a ban on exporting gold, although I could definately be wrong.

Maybe it's best to just avoid any Pandas.

Kshartle wrote:
I thought China had a ban on exporting gold, although I could definately be wrong.

Maybe it's best to just avoid any Pandas.

These are Eagles, not Pandas.

rickb wrote:

Kshartle wrote:
I thought China had a ban on exporting gold, although I could definately be wrong.

Maybe it's best to just avoid any Pandas.

These are Eagles, not Pandas.

The Chinese are minting Eagles?

Here is one instance where I would trust the US government more.

bronsuchecki wrote: It is a terrible photo, I wish they would provide high resolution ones with a real coin side by side, as I often wonder if these fakes are really that good and would only fool newbies.

Disclaimer: not a coin expert, not a professional dealer. Just some dude who finds coins interesting.

I have had the chance to view a couple of counterfeits and while they were an improvement over the comically bad fakes you see on ebay, anyone with a little knowledge (or a side by side comparison with a genuine coin ) should able to weed them out:

1. The fake coins have a dull, almost grainy look to them. There is not much luster for a coin with no wear.

2. The gold color is off, most authentic eagles have an orange tone to them, where as the fakes are just yellow

3. Some of the fakes I've seen have lots of little bubbles on the surface of the coin. They remind me of the cast counterfeits you see in numismatic circles, which may be a hint as to how they were produced.

4. The strike is probably the best indicator. The fakes I've seen have way too little detail compared to an authentic example.

Personally, if anyone is concerned they may not be able to tell the difference, consider buying a slabbed gold eagle to use as a benchmark to judge future purchases.

FarmerD wrote: Bron  - curious if you've ever seen the tungsten plated coins coming out of China.  Is it easy to tell the fake by a ping test?

I've never seen them in the flesh, but as Early Cuyler says, it seems easy to spot them if you have a real one to compare to. I suspect trying to fake 99.99% pure coins would even be harder.

Early Cuyler wrote: Personally, if anyone is concerned they may not be able to tell the difference, consider buying a slabbed gold eagle to use as a benchmark to judge future purchases.

I very much appreciated your comments.  Thank you.  Outstanding information.

As another thought...
Eagles and Krugerrands are pretty durable.  Not necessary to slab if you aren't horrible to them.  I carry a few coins in my day belt.  I have an audio spectrometer app on my iPhone. (SigScopePro).  Drop an Eagle on the counter and you will see 3 clear spikes at different frequencies.  If you don't want to carry one in your belt for reference, just test at home and write down the frequencies.  If you drop test your own coin first, though, it will give the vendor some incentive to let you test his coin.  I wouldn't try dropping a maple or a buffalo, but it is just fine to give an Eagle or Krugerrand a small drop.  I can't imagine any way to fake that.  That means that it can't be done

Looks like a neat app. Whoa, $75 for iOS and $300 on the Mac. 

Some gold dealer shows some fake Eagles that came into his store.  These are pretty good fakes.  Scary!

https://www.youtube.com/watch?v=2P1h6uXDACY

Do we need to rethink the "safety" of purchasing physical bullion for our PP in light of the fact that we may be buying fakes and can't tell the difference?

Reub wrote: Do we need to rethink the "safety" of purchasing physical bullion for our PP in light of the fact that we may be buying fakes and can't tell the difference?

I don't think we have to go that far yet.  So far only a few fake Eagles have been found.  There have been no reports of fake Maples, Phils, or Buffalos.  And to be super cautious, if you purchase current year dated Buffalos, they almost certainly come directly from the US mint so I don't see any real way they could be faked. 

FarmerD wrote:

Reub wrote: Do we need to rethink the "safety" of purchasing physical bullion for our PP in light of the fact that we may be buying fakes and can't tell the difference?

I don't think we have to go that far yet.  So far only a few fake Eagles have been found.  There have been no reports of fake Maples, Phils, or Buffalos.  And to be super cautious, if you purchase current year dated Buffalos, they almost certainly come directly from the US mint so I don't see any real way they could be faked.

The US mint cannot allow any possibility of being accused of making fakes at this point. That would just about be the end for them.

Reub wrote: Do we need to rethink the "safety" of purchasing physical bullion for our PP in light of the fact that we may be buying fakes and can't tell the difference?

Do you stop using currency because there are counterfeits? If the coin is so good to fool you, it's good enough to fool the next guy you sell it to

Kshartle wrote:

FarmerD wrote:

Reub wrote: Do we need to rethink the "safety" of purchasing physical bullion for our PP in light of the fact that we may be buying fakes and can't tell the difference?

I don't think we have to go that far yet.  So far only a few fake Eagles have been found.  There have been no reports of fake Maples, Phils, or Buffalos.  And to be super cautious, if you purchase current year dated Buffalos, they almost certainly come directly from the US mint so I don't see any real way they could be faked.

The US mint cannot allow any possibility of being accused of making fakes at this point. That would just about be the end for them.

Why would a coin dated 2014 almost certainly come directly from the mint? Don't counterfeiters know what year it is?

Reub wrote:

Kshartle wrote:

FarmerD wrote: I don't think we have to go that far yet.  So far only a few fake Eagles have been found.  There have been no reports of fake Maples, Phils, or Buffalos.  And to be super cautious, if you purchase current year dated Buffalos, they almost certainly come directly from the US mint so I don't see any real way they could be faked.

The US mint cannot allow any possibility of being accused of making fakes at this point. That would just about be the end for them.

Why would a coin dated 2014 almost certainly come directly from the mint? Don't counterfeiters know what year it is?

The US mint only sells current year coins then distributes them through their authorized dealers.

http://www.usmint.gov/mint_programs/ame ... le_bullion

So the chain of custody here is US Mint---->authorized dealer------->you. The only realistic way a fake coin dated with a current year could be introduced would be if some end customer sold back a current year dated coin.  I imagine there are extremely few people who have bought a current year dated coin earlier this year then quickly resold back to a dealer.  So I'm 99.9% sure the current year dated coin is from the mint. 

On the other hand, for a random year dated coin, the chain of custody is US Mint------> authorized dealer----->customer------->some other customer------>some other customer------>dealer------->you.  The longer the chain, the more opportunity there is for a fake to be introduced into the system. 

While it doesn't apply to pedestrian bullion, this is another reason to stick to slabbed, graded and certified semi-numismatic gold coins besides getting a juice kicker on the upside.

This new type of fraud has me concerned. I was thinking of buying a few coins, but now I will wait until a secure method is developed to weed out the fakes.

And there is another worrying aspect. Gold funds will be vulnerable to fraud as a few crooked fund employees will receive bribes to accept fake coins. Once the fake coins are in the vault, mixed in with the legit coins, it will be difficult to detect the fraudsters. Not a pleasant situation.

The ancient rule is, "bad money drives out good." 

goodasgold wrote: This new type of fraud has me concerned. I was thinking of buying a few coins, but now I will wait until a secure method is developed to weed out the fakes.

And there is another worrying aspect. Gold funds will be vulnerable to fraud as a few crooked fund employees will receive bribes to accept fake coins. Once the fake coins are in the vault, mixed in with the legit coins, it will be difficult to detect the fraudsters. Not a pleasant situation.

The ancient rule is, "bad money drives out good." 

The gold etfs don't deal in coins, which are pretty darn difficult to fake convincingly (the tungsten filled coins that started this thread apparently look obviously fake if you know what a real one is supposed to look like), but in 400 oz gold bars - which are much easier to fake (you coat a tungsten "blank" with as much gold as necessary to be able to create the fabricator stamp - or drill out a real bar and fill it with tungsten).

IMO, this is very serious risk with the ETFs.  Not so much if you buy gold coins which you can actually see and hold yourself.  My understanding is a tungsten coin kind of goes "thud" if you drop it and doesn't sound even remotely real.

goodasgold wrote: This new type of fraud has me concerned. I was thinking of buying a few coins, but now I will wait until a secure method is developed to weed out the fakes.

Maybe I wasn't clear in my earlier post.
Audio Spectrum is 100% accurate.

If it even remotely looks like an Eagle, then if the audio spectrum has the three spikes in the right place, it IS an Eagle.  Realistically, you don't even need the iPhone app - your ear is pretty damn good.  Drop your known good eagle a couple of inches onto the counter, do the same with the "Device Under Test".  Impossible to fake.

If the app that I mentioned earlier is too expensive, then pick another one.  It's a very simple function and any "audio equalizer" type of app should work just fine.

You can test this with your pocket change.  Drop some quarters and dimes and pennies.  Every year that they changed the metal content produces a different audio signature.  It's clear and obvious.

What does "slabbed" mean?

dualstow wrote: What does "slabbed" mean?

A slabbed coin is one that has been graded and encapsulated by a major grading service such as pcgs or ngc.

Early Cuyler wrote: A slabbed coin is one that has been graded and encapsulated by a major grading service such as pcgs or ngc.

And they are tamper proof, or at least show evidence if it's been tampered.