Posted on 12/09/2005 10:49:04 AM PST by Travis McGee
I recently came across a photo which purports to show nearly a billion dollars in privately owned gold bullion, in one vault. The gold bullion is supposed to be held in trust for shareholders who purchase ETFs or gold shares in this company. Be that as it may, I don't want this thread to turn into a discussion of precious metal ETFs, or the price of gold, or gold versus fiat money etc.
I just have some questions which only an engineer can answer. Does this picture physically "add up?"
I rough-count approx. 150 pallets in sight, with approx. 80 bars per pallet. At about 100# per ingot, six pallets high, that makes each stack of pallets weigh about 48,000 freaking pounds!!
On plain wooden pallets! Not special steel pallets, or some other custom pallet designed to hold a billion dollars worth of gold in one room.
I once handled 10,000 pounds of lead in 50# ingots (for a boat keel) and it was impressively heavy when stacked up! Gold as we know is much heavier than lead, almost double. (Gold's specific gravity = 19.32, Lead = 11.34)
So I have a few phsical questions civil engineers might want to tackle. Can you determine likelihood that the gold bars are real, from this photo, based on the pallet materials, pallet construction and orientation, and the weight and distribution of the alleged gold ingots?
This is what made me wonder, when first I examined the photo.
#1: Look at how most of the wooden pallets' edges overhang the stack of gold bars below them. That is, the vertical wood risers between the two flat wooden "floors" are not directly on top of the gold below them. The vertical wood riser in the center is, but the risers on the sides are hanging out over space. Much of the crushing weight of those thousands and thousands of pounds of (supposed) gold is held on the thin horizontal wooden "floors." I think it could be shown (even with lead bars in a test) that such pallets, stacked exactly that way, would crack apart under the cumulative weight of gold. The gold ingots do not completely span the space between the risers, that is, they do not rest their ends directly over the wooden risers on the sides of the pallets, putting the risers in simple compression.
The vertical wood beams would have to be under the gold to directly support the incredible weight, and not hanging out over the edges, over thin air. That is my layman's opinion, anyway, based on stacking and handling 200 bars of lead, weighing 50# each, once upon a time.
Question #2: How did the forklift load those top pallets? The ceiling of the vault is seems rather low for a forklift to get them up there. Don't forklifts need some clear space above them for high lifts? At least 3 or 4 or so extra feet, I'm guessing from memory. So, did they use forklifts to carry the approx. 8,000# pre-loaded pallets into the vault? That is the clear implication from the orientation of every single pallet facing their open sides toward the camera.
OTOH, if you were loading empty wooden pallets by hand, bar-by-bar, every warehouseman should know (this is "warehouse 101") to alternate the orientation of the pallets 90 degrees, each pallet, to vastly increase the stability of the overall stack of pallets. If a stack of pallets broke or collapsed (crushed the wood and tumbled sideways, because they were all oriented the same direction) it could kill somebody under the ensuing gold avalanche. Remember, each pallet stack of gold weighs approx. 48,000#, based on my estimate of 100# per bar (which may be way off.) Alternating pallet directions for stability is a basic practice, if they were loaded in place by hand, bar-by-bar, and not by forklift.
So the only reason all of the pallets would be oriented this way toward the camera, would be because they were brought into the vault by a forklift, and not bar-by-bar, by hand. If so, could a forklift place those top pallets up there, given the ceiling space above the top pallets? And if they were loaded in place, bar-by-bar, what warehouseman would not alternate the pallet orientation, for stability and safety?
These question only raised my suspicions about the pictures. Now, an engineer might be able to total up the weight of the gold bars, figure out the crushing /compression strength of the wood, figure out how much of the total stack weight is carried to the floor through the vertical risers, and how much is simply downward weight upon the unsupported horizontal wooden pallet floors, and determine if this is a possible photo of actual gold, or possibly something else.
Since I can't go and physically inspect the ingots in this vault, I'm just curious what engineers think about the credibility of the photo, based on the physical sciences.
Remember, this is gold held in trust for investors, who pay their money, but do not, as far as I can determine, get to visit the secret vault and inspect it.
Maybe an engineering professor can give this question to his students, as a test.
I think there are 12 troy ounces in a troy pound, not 16
All they had to do was build their custom pallets with 5 riser webs.
It might be a set fake, but it's not a photoshop fake. The second photo with the people in it is taken from a slightly different angle, but closely matches in details that would be fiendishly difficult to fake in PS.
This isn't like, guess how many jellybeans and win a prize. I think maybe who ever was staking it, got worn out towards the end.
I was thinking that the base looked like 50k# on two 2"x40" boards --coming out to about 300 psi. No big deal for the base. For the pallet boards we got for each inch of width about 200 # distributed over a 3 ft. span --believable.
I say the picture can be for real.
What about the total load of the "gold" in the picture and its effect on the floor?
Upon request, interested investors and clients were provided tours of the gold vault. After several years of successful operation a prospective investor was examining the vault and requested A CLOSER LOOK.
He stepped forward and scratched a gold bar and his fingernail soon became coated in gold dust. This landed the bogus gold swindlers in the big house and left a crowd of many crying investors.
Yes, it is accurate, it was taken in my basement. ;)
Let's say each pallet weighs 3 tons. Six pallets high is 18 tons = 36 kips. Put that on square yard of concrete it comes out to about 30 pounds per sq.in. Structurally this is nothing. Everyone likes to go goofy over gold. Gold salesmen know this.
Span Elasticity.
Looks like the joists members are 12 inches apart and the pallet is more or less square, that makes the load area 4 square foot. We can plug in some numbers (from a hazy memory) in lieu of more information to check if this is reasonable.
1" APA rated plywood on 12" centers:
Select grade - 1200 psf - 4800 lbs.
Marine grade - 1500 psf - 6000 lbs.
Looks reasonable to me ...
Per the link ...
Total Gold in Trust:
Tonnes: 232.32
Ounces: 7,469,219
Value US$
3,851,491,895.52
IIRC, one tonne = 1000 kilograms.
Good point. But the fact is no holder of this amount of gold would ever reveal what the interior of the vault looked like, how the gold was stored, how the gold was inventoried, etc.
There's a prospectus available at the link which I cant download due to time problems (other things to do) but taking a non-engineer approach, it's most relevant to note that this is a NYSE company which is filing SEC reports.
That means an outside audit firm is certifying their financials. Auditing 101 requires the auditors to verify the inventory. If the auditors are sane they would count every single bar, weigh several picked at random and send several random bars to a professional gold assessor before signing off on the financials.
Both NYSE and the SEC are not entities to fool with and blatant inventory fraud is too easy to detect.
It's in the basement of a very large building, just look at how massive those columns are and how closely space they are. That's to hold up a huge building.
I didn't want to mentino the IGBE swindle, but since you have done so............
If this were a movie, you could bet the thieves were going to crawl into the vault through the air duct in the background.
Amazing-- that's what I came up with when I figured 3 rows x 6 stacks @ 36 kips = 21 x 36 x 1000 x 12 x $500 = $4bill. I hated structural analysis -- I had to take it twice to pass it once. I love investing. No heavy lifting and it pays better too.
If it isn’t a set or a bunch of props from a movie then they must have a pile of broken pallets setting someplace.
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