Black Gold? Massive hoards hidden for ages? Not!

This is a repost that was originally published on 2/25/11:

A few thoughts on "Black Gold." I hate to draw attention to ridiculous notions with no basis in history or logic. But apparently this notion of massive secret storerooms of gold is still providing some with the comfort they seek in their aversion to taking action to protect their own wealth. So I suppose it is worth a brief comment.

I have noticed that the most cynical among us tend to view the world as an ant might view the giant humans that massacre hard-working legions of his own kind whenever passing by. And while I can, and often do, entertain such perspectives without accepting them, for the purpose of exploring probability, I can find no logical train of thought that leads to the existence of massive stockpiles of gold as the source of power for our evil overlords.

In fact, massive stockpiles of easily printed cash make a lot more logical sense!

The history of gold mining is well documented, as is the amount of gold in existence during various eras in which it was openly used as currency. So the existence of hidden quantities of the stuff has a tremendous logic threshold to clear before Occam's razor can even be considered against the supposed "evidence" rebutting massive quantities of known history.

And because of the non-clearance of this threshold combined with the relative scarcity of time, I find it extremely wasteful to explore the voluminous fiction that exists on this topic. And I am comforted to share this perspective with ANOTHER, FOA and Randy Strauss (see below).

This topic seems to pop up periodically, each time some poor soul stumbles across one conspiracy-oriented site or another. Each time it is presented, again, with the same zest as the last. And each time, logic, history, reality and fine minds stand firmly in the way.

Remember this Foundation X story from last November where a mysterious organization claiming massive secret gold offered to bail out the UK? I wonder why that story just kind of disappeared. You see, when stories are false, there is a lack of "infinite resolution" to be mined. Perhaps this story went nowhere because scam artist Ray C. Dam of the mysterious OITC that claims to have control of millions of TONNES [see pg. 195 in linked pdf] of secret gold was arrested in Cambodia on December 18, 2010.

This is the kind of resolution you find when you dig into fantastical stories like this. What a waste of time! You can learn a lot about the credibility of the Seagraves who wrote "Gold Warriors" by simply reading the negative reviews on Amazon.com, a big time-saver! Here's one:

Many of the earlier reviewers of "Gold Warriors" have admired the voluminous references presented by the Seagraves to support their incredible assertions. However, I'd like to point out that my personal investigations into a sample of their sources have exposed the Seagraves' quite cynical "research" methods. They are prepared to use sources that are laughably insubstantial, and then present these sources as if they are highly credible. The Seagraves also deliberately misrepresent the words of a source to make it fit the story that they wish to convey.

The whole of page 62 of "Gold Warriors" is given over to the Seagraves' theorising that nearly 400 Allied Prisoners of War were massacred after stowing gold bullion in a mine on Sado Island, Japan. This is outrageous. The source that they use, "Betrayal in High Places", is a book that looks extremely unreliable when first picked up, and its claims fail to be confirmed by any other historical source. In any case, "Betrayal in High Places" does not actually claim that any stolen gold was stored by the POWs!
I am one of the authors of a recent historical paper, published in the Journal of Military History, which has proven the Sado Island Massacre story to be pure fiction. The Seagraves are smart enough to have worked this out for themselves, but they have chosen to legitimise this fantasy in order to sell their books and CDs.

The Seagraves further illustrate their manipulative ways when they cite an innocent travel book as the source of their further assertion,
"more than a thousand Korean slave laborers ... on Sado Island also vanished without a trace" (bottom of p62).

This is just another dishonest misquote. The travel book (Waycott: "Sado: Japan's Island of Exile") actually says, "...During these years, forced labor was certainly used: of the tens of thousands of Koreans imported to work for Imperial Japan, more than 1,000 are known to have been sent to Sado. Of these, 145 are said to have 'escaped' (but where to?) and a dozen or so - surely a low estimate - were killed. Their existence became public knowledge in 1991, after records were released of Mitsubishi's distribution of cigarette rations to its workers."

Westcott's travel book is actually quite pleasant and informative, and there is nothing dishonest about his speculation - but it's only a travel book! Historically, it's clear from post-war Korean records that many "escapes" were indeed successful (often into the local community, or by fishing boat back to nearby Korea). It's also true that a relatively small number of Koreans were killed in mining accidents, and that no "massacre" occurred. Waycott doesn't allege a massacre in any case - but the Seagraves do!
(Page 62 of "Gold Warriors" can be previewed online here on Amazon, for those who would care to check for themselves...)

The Seagraves are obviously misusing these sources quite deliberately. I think it's very reprehensible for modern authors to push this type of mean deception masquerading as history. This is not a victimless crime. (My mum's brother died as a prisoner of the Japanese in WW2, and it is upsetting to see authors such as the Seagraves take these liberties with the emotions of dead POWs' families.)

Not content with pocketing their customers' money for this book, the Seagraves also use their book to continually push their privately-sold CDs, which they claim contain the "evidence" to back up their assertions. In fact, most of the documents on the CDs are just correspondence between "treasure hunters" - who also make their money by selling their Treasure Maps to the gullible... These are hardly independent or authoritative people! Many of the "certificates", which have been laboriously translated (possibly to tire out the reader) can easily be seen to be fakes once you look at images of the "originals". They have cut-and-pasted values for the gold on deposit!

The CDs even torpedo the Seagraves' own assertions in some places. On CD#1 (Jones.PDF file, page 65), a 1997 letter from "R. A. Medland, Senior Manager, Commonwealth Bank Group Investigations/Security Dept." [Melbourne, Australia] says that the gold deposit certificates are, "utter rubbish"! There's also a scary-looking photo of a sleazy Indonesian "lawyer" displaying the "certificates", and a hilarious document very reminiscent of a "Nigerian Letter", purportedly from President Suharto of Indonesia, on the same CD.

Gee, it's a pity these Certificates are rubbish - they were for 420 tonnes and 120 tonnes of Gold !
(US total annual production in 1940 was 155 tonnes, just to show how incredibly unrealistic these numbers are.)

With the kind of resolution one finds when only scratching the surface of these fantasies, I have to wonder that the appeal of such stories must come from their ability to assist in the smoothing of the rough edges of some other square peg these cynics are trying to jam into the round hole of reality. But again, it is a big waste of time to go any further than this when even the simple threshold of logic hasn't been cleared.

Before getting to the archived arguments, I would be remiss not to mention Costata's comment from the end of the last thread:

costata said...
Bron,

I have read the book [Gold Warriors] that FGA and TDF are referring to. It is mostly BS. The authors (husband and wife) have written about some interesting people and events in Asia. The husband was a journalist who had some good contacts. Some of the stuff they have written about did step on a few important toes but a lot of it is "ancient history" now. IMO Lords of the Rim is probably their most accurate book. It's the story of the Chinese diaspora.

The Yamashita gold story was actually true up to a point. The Japanese did loot gold in China and SEA.

My source was part of the occupation forces in Japan after WWII. He was an officer in charge of a unit involved in decommissioning chemical weapons and logistics. The Japanese stockpiled a lot of materials and valuables in old mines that had been worked out long ago.

A lot of the valuables the Japanese looted during the war were used to fund their war effort. Apparently gold was held in higher esteem by their suppliers than IOUs from the Emperor (despite his unique lineage). Bear in mind too that Japan had some incredibly rich gold seams in their local mines as well. Nothing like the scale of a Boddington of course.

Here's a WA connection you might be interested in. After Australia began to trade with Japan again post war some of the big Japanese trading houses had maps of promising resource regions in WA that the locals had never seen before. The story goes that prior to, and during WWII, the Japanese put teams of engineers into remote areas of WA to identify promising areas for resource exploration. There could be other ways they acquired the maps but as the saying goes "never let the truth get in the way of a good story".

Cheers

And now I take you back a decade to early 2001, when FOA and Randy "@ The Tower" Strauss took on the reality-challenged cynics of the day with the sharp razor of raw logic and known history. Dismiss these great Freegold minds at your own peril. The comments are presented here in the order they were posted. And as is usually the case, the discussion evolved to the point of depositing the strongest arguments at the very end. My favorite line of the bunch comes from Randy: "…it remains my objective view that such tall tales must have long bodies and necks because they certainly have no evolutionary (historical) legs to support them."

FOA (01/10/01; 17:50:30MD - usagold.com msg#53)
24 hour hike.

Black Gold?
If I understand the reasoning, some people think there is a mass of physical gold out there and it's being used as underground money. This is what explains the low price of gold today, as all that black market gold surfaces?

Well, that may not be the proposition, but if any of you want to know; none of our evil outlaws are so stupid as to use gold for trading when there is literally "TONNES" of cash circulating around the world. Please, give all of us a "logic break" for a minute? Why would I, as a crook, carry even one ounce of gold when three crisp $100 bills can take its place? Even ten $100 bills are easier than gold priced at, say $1000. And there is no shortage of that cash stuff around! Hell, I bet there really is more tonnage of "Black Market Cash" in the world than all the gold still in the ground. Cash for ounce,,,,, gold still priced in the thousands! Believe it!

FOA (1/11/2001; 11:35:06MD - usagold.com msg#54)
The Curve!

OK,,, I had my coffee and morning walk in the woods to see the wildlife,,,,, packs on,,, let's go.
It's always great to spend time out here,,,, away from the city,,,, out on the Gold Trail.

-----------------------

One more point on Black Gold as we walk:

All that gold, more than triple what we think is out there, would have been in existence for some time prior to our life spans,,,,,, given the timeline required to produce the stuff. Remember, Black Market production could not have existed prior to, say 1971, as even public mines were not making cash profits. Also, it takes real cash and investment to produce both White Gold as well as Black gold.

Indeed, simple extension of physics concludes that nowhere near that much "EXCESS" gold could have been dug over the last 25 years. It didn't happen, even with slave labor. Because, as in above, even lawbreakers have to sell most of the gold in the open just to cover the illegal "Cash" they invested in digging the ore in the first place. These guys don't do such a "wash" business when their cash works just as well in the first place?? Get my point?

Also, the gold would have been moved into the open as the majority of goods and services bought with illegal money, to create their evil lifestyle, must involve the White Market Economy too. Black market wealth is mostly in cash, it's just too easy to move and spend. So, there is no reason to go through gold first, just to buy in the real marketplace.

Further;
With all that gold out there, the Dollar powers would not need to create paper gold debits to placate strong dollar backers. In fact, I suspect they would have created channels to flush all that gold into the market. Illegal or not, this action would have suited their end result.

No, the natural trend of easy money humans, both good and bad would be to spend said gold for other consumable wealth and keep cash in the background. Indeed, this is truly what has been happening as regular investors trade physical for non-physical substitute gold. The small amount of physical supply vs the monstrous paper trading denotes how such existing gold has bridged the industrial use gap. It didn't take a vast new unaccounted supply to make paper seem real, just moving the existing into new hands did the trick. OK, we finished burning that story in the fire.

Randy (@ The Tower) (1/16/2001; 4:07:45MT - usagold.com msg#: 45719)
ORO: some of my thoughts on being "not ants"

In your post you make many worthy comments, and certainly the essence of human motivations driven individually by self-interest has not likely changed substantially through time or by geography. This issue of black gold, however, requires an additional depth of understanding suggested earlier this weekend--that we are not ants.

Loosely, I suggest that from the perspective of "antkind" in its struggle for survival, the world is the same as it ever has been...particularly with respect to the "rules of the jungle". And further, seen from the perspective of "the world" itself, the essence of antkind behavior and its impact is also the same as it ever has been (for most practical applications).

In stark contrast to antkind's "same-as-it-ever-was" interaction with Mother Earth, any meaningful assessment of mankind as a whole reveals a performance more akin to the evolving development of a single entity (such as a butterfly) throughout a single lifespan of that entity.

More fully said, as evolving civilization establishes new "rules of the jungle" (laws of the land), men -- like butterflies -- do behave differently depending on the specific "rules" for the stage of the game faced at the given time in life, even while their self-interested motivations remain. Such self-interest may require a body to crawl hidden and eat leaves under one set of rules while exposure to another following set of rules (i.e., opportunity) enables that body to fly forth in a display of nectar-sipping "birth" into the seeing world. And yet, even as the caterpillar's nature is inclined to a hidden existence during a particular stage, a premature and unintended flight into the open can occur even under the old rules of the jungle through discovery/conquest by superior forces (e.g., a bird in this extended metaphor).

Concerning gold and mankind, a rich history of conquest (generally by "official sectors") and of rule changes through time and geography have given ample opportunity for significant gold exposure--by force or by choice. It must certainly be acknowledged that once our civilization's "lifespan" developed to such a point where incentives arose for some gold to be kept hidden at the time of its discovery, clearly the stronger precedent of experience was that such gold was useful when "revealed" (spent) as a suitable alternative to its owners starving in the dark...and this would hold true for any point in this would-be black gold's post-discovery coexistence with mankind.

"Black markets"... "white markets"... go back far enough and you find there were simply "markets". Looking back to one full century after Europe limped through the economically plagued 1300's, estimates from historical evidence suggest there to be found at the time less than 150 tonnes in total gold. Over the next 350 years, and prior to the productive gold rushes of the mid-late 1800's on the several continents, the free and open coinage of precious metals brought to mints for ease of circulation (use as currency) in this more highly sophisticated stage of mankind's existence provided reasonable records and estimates that gold in known use in the civilized world increased by only 3,000 tonnes. Then, the "easy pickins" of the gold rush years prior to the cyanide leaching process instituted from 1890 onward yielded barely a tenth of today's highly scrutinized corporate production totals of roughly 2,500 tonnes per year. (By 1908, the new gold discoveries and extraction techniques had helped companies boost global gold production such that above-ground gold supplies swelled to nearly 18,000 tonnes.)

We must ask, when considering the political backdrop of this turn of the previous century, where was the incentive for significant quantities of that newly unearthed gold (or previous hoards) to be kept hidden ("black") from free coinage or other wealth-utilization? Arguably, only with the cyanidation process of the single past century do we get gold production volumes remotely capable of feeding black supplies on a level suggested recently by some posters here.

Equally important, only with our very modern era of fiat currencies and tax policies do we face "rules of the jungle" in this collective lifespan of mankind whereby self-interested motivations would favor a degree of unreported/hidden new production. Certainly too little, too late to provide the levels of black gold cited to exist beyond that which is commonly acknowledged as historically produced totals.

To wrap up this commentary, one other element warrants brief discussion. You said in your #45689:
"The supply of actual gold, not only paper gold, relative to dollar denominated debt had to be substantially greater than "officially" stated, else the system would have collapsed long ago as a result of over-leverage."

Could it be that you are overlooking an important phenomenon--growth of the (bullion) banks’ operating sophistication through global integration, and with it the growth of the participants’ confidence which counts for everything? For possible validation of this thought, look no further than the similar absence of U.S. bank collapses against the backdrop of meager "physical" vault cash which has been bolstered by sophistication of operation throughout the latter two-thirds of the Twentieth Century. To be sure, now that the banking structure has gone global beyond the safety of any deep-pocketed lender-of-last-resort, only additional time has been bought by the over leverage, and the eventual failure will be all the more spectacular when it occurs. My friends and myself in The Tower hold physical gold in anticipation of that day. The latest shifts in the "rules of the jungle" indicate the day is near at hand.

Randy (@ The Tower) (1/19/2001; 15:55:58MT - usagold.com msg#: 45942)
A simple notion for barnacle bill

Inspired by your comment:
"...until there is a clearer picture on the Marcos Gold situation. If those million tons of gold are really there; and they are in the camp of the enemy, then this manipulation can go on indefinitely."

As can be gleaned from my last post, the most powerful nation on Earth -- blessed with a large and technologically clever populace, abundant natural resources, and a vast network of supportive infrastructure -- is only able to produce 355 tonnes of gold per year through the highly scrutinized efforts of its publically owned mining corporations. Fanciful notions notwithstanding, where in space and time did mankind EVER find either the human inclination or capability to gather a million tonnes of gold from the firm embrace of Mother Earth?

Certainly, do not trust the precision of the conventionally accepted numbers of 130,000 tonnes as sum total of all past accumulations, but they come nearer the mark than the output numbers that could only be achieved through the efforts of Paul Bunyan and Babe, his blue ox. (I have it on good authority that Mr. Bunyan spent his days lumberjacking, not secretly mining or panning.) Let your common sense as born and raised unto the physical world be your guide in this and all things... Numbers are, after all, just numbers.

Randy (@ The Tower) (1/19/2001; 18:18:52MT - usagold.com msg#: 45952)
RossL...fun thoughts

"Randy. 200 tons a year for 5000 years. I don't know how the pyramids were built either. They look impossible to me also."

Sure, any combination of production values over years will provide the fanciful number, but will not provide for the sustained secrecy that must accompany it...otherwise this would not be "black gold" above and beyond the recognized yet still impressive (impossible?) historical production. One would think the history books and archeological evidence would be rich with tales and displays such overwhelming pre-Columbian bounty, no?

What say we ask YGM, our most favorite miner, if such numbers are viable without the aid of modern infrastructure and technology?

Otherwise, we are left only to ponder the grandeur of the black pyramids which as assuredly were built above and beyond those that have been accounted for, and the accomplishments of many moon landings that did not survive the oral traditions of our cave dwelling ancestors reaching back into antiquity...leaving us only with imaginations to fill in the gaps of astronautical marvels of what surely occurred prior to 1969.

Randy (@ The Tower) (01/28/01; 15:38:58MT - usagold.com msg#: 46755)
auspec...another read-through may prove more luminescent

You said:
"Trail Guide has several times mentioned he was going to weigh in on the Black Gold issue, but I have yet to see anything of substance."

Have another look at FOA's latest (msg#56 "The Gold of Troy!") at the Gold trail. While he does not explicitly state that this commentary is to address the "Black Gold" issue among other things, it clearly forms the foundation of thought that more thoroughly builds the necessary historic context that I myself so failed to impress anyone with in several commentaries during recent weeks.

His skill of presentation in this effort greatly exceeded my own attempts, and I was quick to call attention to this fact in my early morning post Friday the 26th. Again, (but perhaps to my rooftop eye only(?)) this post serves to prepare the reader for engaging in critical analysis as to whether such magnificent tales of great storerooms of "black gold" can stand upon their own firm legs in a real world historically shaped by human motivation. For reasons I have previously expressed (however poorly), it remains my objective view that such tall tales must have long bodies and necks because they certainly have no evolutionary (historical) legs to support them.

Randy (@ The Tower) (02/01/01; 16:36:19MT - usagold.com msg#: 47141)

Hello Trail Guide. Thanks once again for providing a well-lit walking tour through the past
In days past, when I finally chose to weigh in on the fanciful debate over the (un)likelihood of copious amounts of stockpiled "black gold" in existence in bunkers somewhere, I tried to put forth a focus on two elements that would satisfy any farmer regarding the veracity of such claims. (Why farmers? It has been my experience that a majority of farmers are endowed with common sense, and more importantly, they do not hesitate to use it!). I talked against the presence of massive black gold stockpiles due to 1) the many technical/logistical obstacles which do not support such levels of production in human history, and 2) the socio-political-economic realities of our ancestors which would not be conducive to the permanent suppression of any such easily and secretly mined wealth against exposure to the light of day--implying that the ancient chain of owners ALL denied themselves the improved life that would have come from spending what it was they held..."money". Not likely.

In conjunction with your #56, I hope that readers of your latest message come away with a clearer sense of the realities of point #2....that gold would not sit idle or hidden in those days if it could (and it COULD!) be used to purchase a better lifestyle. Truly, while human motivations remain similar through time, the socio-economic environment that we shape for ourselves has evolved, and with it, so too has evolved changes in our behaviors as guided by our unchanged human-creature motivations.

I am certain you have opened a door to greater understanding when you explained how the item selected to be spent for other goods was that item which would bring the best trade. For travellers on the road, the necessary convenience of gold dictated its superior performance and hence, its use, whereas in town, one would likely see a flourishing free-for-all "bartering" economy where gold needed not pass from hand to hand for each transaction.

The small parallel we might find helpful to draw is that modern times and commercial banking has given us all the "town" mentality whereby we set our gold aside as the function of our modern currencies allow us to bargain for the best trade for an improved lifestyle. But importantly, we must all recognize that there are distant towns that offer goods to improve our lifestyle, and also recognize that specialization/division of labor has helped to make us each "towns unto ourselves". It is in this sense, therefore, that it remains in our best interest today to hold these golden "hunks of metal" because as travellers in this modern-life environment we are ALWAYS "on the road" figuratively speaking.

But clearly, the problem many people seem to have with this concept is recognizing the necessary transitionary period we are in regarding a shift in popular western thought.

Thanks again for your sharing your considerable talents for elucidation.

It is quite common for unstable, overly cynical persons to seek out extraordinary explanations for ordinary events and conditions that seem to them like giant humans must seem to simple ants. But even so, it is extremely arrogant to believe that such enormous secret stockpiles of, to date, foregone wealth will be deployed in our time, in our "crisis," when it somehow remained hidden through so many generations faced with much more existential challenges than we face. It borders, in my honest opinion, on lunacy.

I highly recommend reading Gold Trail Three - The Scenic Overview which, as Randy noted above, was written by FOA partly in response to all this "Black Gold" talk in the forum. There you may gain a much wider view that actually does have infinite resolution, founded on both logic and history.

Finally, I will close with one last Thought for you. The actual quantity of the gold stock in the world doesn't matter nearly as much as its flow, or velocity, when it comes to storing value. In fact, the greater the stock relative to the same flow, the greater the price stability and therefore the greater the potential value. Again, the greater the stock:flow, the better the store of value. (See: How Can We Possibly Calculate the Future Value of Gold?) So imagine, if you will, a single individual who controls an amount of gold equal to, but separate from, the known stockpile. Mr. X has 160,000 tonnes, and the rest of the world has another 160,000 tonnes. Mr. X is the de facto "King of the World." From a game theory perspective, what would be Mr. X's best move, at any given time in history, with his gold?

Sincerely,
FOFOA