On April 11th, the CME and England’s Royal Mint announced that
they were testing a blockchain-based platform for trading gold. The
product to be traded is a new crypto-coin called, Royal Mint Gold
(“RMG”). The token will be issued by the Royal Mint and will represent
the digitized version of 1 gram of gold. The gold will be stored in the
Royal Mint’s vaults.
This news announcement, which was reported by The Daily Coin “CryptoGold and Thieving Banksters”
certainly caught our attention. The fact that the CME is involved is
enough to shine the light of truth on precious metals trading and
ownership. This is because the concept of a “new alternative way to
trade gold” is an extension of the “fractional gold and silver bullion
market” that is driven by the paper derivative precious metals products
traded on the Comex and the LBMA.
The truth is that this new “blockchain-based” technology is nothing
more than a mechanism to divert investor money away from taking delivery
of actual physical gold and silver in the form of Royal Mint bullion
coins and LBMA bars, thereby removing the availability of physical gold
and silver that can be used for hypothecation. Furthermore, the new
product is an extension of the institutional-level fractional bullion
system that utilizes Comex/LBMA paper gold and silver contracts in order
to fabricate the illusion that the buyers of those contracts have
purchased legal ownership the underlying bullion bars. Below is an
excerpt from the
Royal Mint’s website which promotes the new concept:
RMG®, an innovative new product launching in 2017,
will provide the investment performance of the London Gold Market with
the transparency of an exchange-traded security.
will negate counterparty risk, by having direct ownership of physical
gold bullion where each RMG represents ownership and full title to 1g of
physical gold bullion held in the form of fully allocated, LBMA Good
Delivery Bars within The Royal Mint’s vault.
We believe these features, coupled with the guarantee of
zero ongoing annual management fees and free storage, represents one of
the best and cost-effective ways to invest in physical gold today.
At any time RMG can be redeemed for physical gold bars and coins produced by The Royal Mint, with physical delivery.
The basic tenet of the RMG is that “counter-party” risk is eliminated
because the buyers are purchasing direct ownership of gold that is
stored in the Royal Mint’s vault. However, the idea of custodial
possession – where the owner trusts the safe-keeping of an asset with a
third party – is in and of itself a primary source of counter-party
risk. The first law of ownership of gold is that you do not fully “own”
it until it is in your personal possession. Just ask the German
The second myth in that statement above by the Royal Mint is the gold
is held in the form of fully allocated LBMA Good Delivery Bars (in the
Mint’s vault). This is GLD’s holy grail claim as well. The problem,
again, is accountability. Until gold custodian’s are willing undergo a
fully independent 3rd party audit at any time and without advance
notice, it’s silly to assume that these custodians possess full, legal
title to the gold they are reporting to be in their vaults. The
poster-child example is the U.S. Federal Reserve, which has spent
millions to avoid the prospect of a legally enforced audit of its gold
vaults by a third party, fully independent auditor.
The Shadow of Truth discusses this new mechanism of deceit in today’s
podcast and we explain why it’s riddled with counter-party risk and the
potential for fraud on the same scale as Comex and LBMA gold and silver
Rory Hall, Editor-in-Chief of The Daily Coin, has written over 700 articles and produced more than 200 videos about the precious metals market, economic and monetary policies as well as geopolitical events since 1987. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver and Silver Doctors, SGTReport, just to name a few. Rory has contributed daily to SGTReport since 2012. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Gerald Celente and Peter Schiff, to name but a few. Visit The Daily Coin website and The Daily Coin YouTube channels to enjoy original and some of the best economic, precious metals, geopolitical and preparedness news from around the world.
Dave Kranzler spent many years working in various Wall Street jobs. After business school, he traded junk bonds for a large bank. He has an MBA from the University of Chicago, with a concentration in accounting and finance, and graduated Oberlin College with majors in Economics and English. Dave has nearly thirty years of experience in studying, researching, analyzing and investing in the financial markets. Currently he co-manages a precious metals and mining stock investment fund in Denver and publishes the Mining Stock and Short Seller Journals. Contact Dave at firstname.lastname@example.org.
The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.
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