BullionVault took my Gram (back)

A little while back BullionVault placed their bar lists under password protection, meaning that only registered users could download the full list. Automated downloading is the primary technique I use to get hold of my bar lists for the database, so for BullionVault I had to program a special emulation to bypass that requirement (this task was successful, but annoying). Part of the necessary parts was to have an actual account, so I signed up.

I was delighted when as part of the client experience, they gave me a gram of gold to start the account with. I felt richer, by the magnitude of one gram of gold, and to be honest felt a little smug having added some of the good stuff to my net worth, however small. I wondered a little about the business model but really gave it no second thought beyond the semantics of redeeming my one gram (the downloads were working, which was all I wanted).

About a month ago, I received the following email:

Dear BullionVault user,

We are about to reclaim the free gram of gold you received when you first registered your account 'BULLIONBARZ' with us.

As I'm sure you recall, it was given on a "Use it or lose it" basis.

And with new enquiries now running at very high volumes here at BullionVault, it's time to give someone else the same opportunity that you had.

Right, got it. Yes, of course the gift was conditional. Silly me. Not wanting to lose my strategic advantage, I managed to use the system to trade my gram of gold (at a loss, oops). I tried to fund the account but I don't have an offshore bank account, so I just had to let that sit new balance sit. I figured that because I had 'used' the gold, that I wouldn't 'lose' it. I figured I might buy low and sell high and somehow build my wealth. Nope, not safe as 'cash' either. 'Promotional Funds Expired'. Damn. This wasn't rehypothecation, but it felt like it.

The moral of the story is that gold is good, but the power to enforce claims to your advantage always wins. Like the people who keep sending us a bill for some random unknown medical test*, or the new $2 government surcharge per 1000 litres of water**, when govt changes superannuation rules***, or when the taxation people write you a letter informing you of how much you owe them. Don't be the muggins sitting pretty with the asset if others have the arbitrary/discretionary power to take it from you.

The database now holds information from 43 different funds/structures, I discover new bar lists two per month on average.

- Gold (17)
- Silver (13)
- Palladium (5)
- Platinum (8)

The amount of data is huge, it's a lot to process and index.

* Note to self: Always make sure the doctor informs you of the test they're sending off. We've had about three random ones from these people where the first we know about them is a bill saying 'you owe us this much'.
** We're not heavy water users, but the new charge adds about $600/year to our household expenses. If you include tax then the income gap required to service this new random liability is north of $700. Solution: live without water? Yeah, right. FCKERS.

*** Recently, the Australian government has made changes to the concessional cap amount for superannuation contributions - if you didn't know about them then you got taxed extra. They have also made a recent ruling on keeping coins as part of a SMSF (has to be bullion, or else meet with other stringent requirements like insurance).


Anonymous said...

When are you going to post an analysis on the bar lists you have been amassing? I'd love to know if you have seen any of the same bars going out and later coming back into the same or different ETFs.

Warren James said...

Yes, the bars do move around and I've got proof, plus names of bars. Part of the proof is the indexing and cross checks of all the sources, which is the time consuming part. Economies of scale for the data processing should start to come into play soon.

I've partially written about 4 articles which were never published, I'm going to have to adopt a 'trickle' strategy, just simply because the amount of data is too overwhelming. I will also be keeping this page up to date as part of the permanent record.

Part of my learning is that anyone with a belief of 'there is no silver in the ETF' generally has a mindset which resists proofs and exploration (Dave in Denver is a good example) so if I come out with a rebuttal then it has to be really good.

But when you swim in the data, there is just no freaking way it can all be fake. I mean with the coordination alone of the complexity of faking refiners, sequence numbers, and timings - you would have to be on powerful drugs to dismis it casually.

Unknown said...


One question one comment.

Question: is it possible they use computer algos to shuffle things in random ways to make the data-trickery that much more difficult to figure out?

Also, re: water, (I guess I lied, this is a question too), would it be possible to build a 10,000 gallon ferro-cement tank for a couple of grand and harvest your own rainwater for household use, the old Aussie-permaculture way?

Warren James said...

Hi again :)

Yes I'm already researching to install a giant 30,000 litre rainwater capacity! Council have many restrictions regarding building your own stuff, it looks like stainless steel tanks are the best option. We'll plumb these into the house to supply toilets and washing machine.

That's a good point regarding using today's advanced computing to keep the forgery syncronized. That is technically possible. The only trouble would be explaining how all independent parties keep coordinated. Spoofing a data warehouse internally is one thing, but keeping it consistent across multiple formats and timeframes with a wide set of stakeholders would be nearly impossible.

Part of what keeps that balanced is the relationships between refiners - apparently it's a very competitive market (as explained by Bron). You have a situation where if one single entry is wrong then this would cause an industry hoo-hah. What I mean by this is that the serial numbers from each refiner are independently verifiable by themselves. i.e. Perth Mint has a large market share and has the capacity to independently verify all the bar numbers which exist in the ETF's. Same for every other refiner. There's lots of different refiners with some merging or changing brands every so often, and different dates for accreditation to LBMA, Comex, etc. In short, a deception on such a large scale would have to involve so many different players (both current and historical), that it renders it incredibly improbable.

Having said that, there ARE some anomalies which require investigation. Take for example, the Solar Applied Materials bars present in Sprott's fund which have the same serial numbers as some found in SLV (but different weights) - first discovered by about.ag, here, an anomaly still present in the current 2012 bar list from Sprott (63 bars affected).

We are indexing the sequence year of manufacture of the SAMT bars, and sooner or later we should have a good explanation for that. My job is to show a trail of the reasoning (historical documentation) if I conclude that the two sets are legitimate sequences. This particular one should be easy, since Solar Applied Materials was only LBMA accredited (for silver) in 2008.

So of all the millions of rows available for analysis, I only have to find and prove a few anomalies to cry foul, so it's telling that nothing has really surfaced as yet. I'm still very much in Phase 1, although I have all the structures for Phase 2.

Warren James said...

Sorry, need a proof-reader. Perth Mint have the ability to check all their own serial numbers.

For people in the industry, any major discrepancies will be noticed reasonably quickly.

It's a very interesting industry and I'm enjoying doing this, mainly the historical aspect (plus the fact that I like gold). A good resource I'm using @ the minute is http://www.goldbarsworldwide.com/, run by Grendon International Research (of which Nigel Desebrock is involved).

I mention that just to demonstrate that the industry is well observed and can be studied objectively in great amounts of detail, which is kind of a relief. Making that boring data interesting and relevant to our modern relationship with silver and gold is what I'm exploring in this blog (and with my project). Cheers & beers.

Bron Suchecki said...

Looking forward to it Warren, particularly if there are a lot of bars previously held by "untrustworthy" ETFs sitting in PSLV, GoldMoney and BullionVault, which will cause disbelievers some cognitive dissonance as it means either:

1. SLV had real physical
2. PSLV et al don't have real physical

These network visualisation tools may help in the analysis


Anonymous said...

The fact that the trading strategy based on the GLD Puke Indicator (see GLD - The Central Bank of the Bullion Banks) actually works, is a nice confirmation that both GLD and SLV do indeed have the metal. The fax from HSBC you discovered about a year ago, is another confirmation.


Biosci said...

somewhat O/T, but I'm amazed to see Bron recommend cytoscape. It's an excellent visualization tool broadly used in biological network analysis, but I haven't seen it applied outside that context. Let me know if you find a use for it; the authors would be interested to know about the broader awareness of their tools. (The development of which, by the way, was government funded...oh, the horror.)

Bron Suchecki said...

I'm currently looking at network visualisation tools for a new Perth Mint Research section of our website to show some complex data.

Those two seemed the best of the free stuff. I think they would be good on this bar database, making it easy to see the related bars between ETFs.