External auditors are investigating a discrepancy between the mint’s 2008 financial accounting of its precious metals holdings and the physical stockpile at the plant on Sussex Drive in Ottawa.

The mystery raises possibilities from sloppy bookkeeping to a gold heist.

Officials with the commercial Crown corporation are saying little and refuse to confirm the amount and value of the unaccounted for gold, silver and palladium.

“An unprecedented demand in gold in 2008 has led to an unreconciled difference between the mint’s financial statements and the physical count of precious metals. There’s a difference there that we’re looking into,” Christine Aquino, mint spokeswoman, said in a prepared statement Tuesday in response to questions from the Ottawa Citizen.

“We’re taking this very seriously. We’re conducting a thorough review and we’re expected to have that completed within the month. (It) includes the analysis of precious metal by-products and financial data. We’ve allocated all necessary resources to this review.”

She stressed police have not been called into what mint officials consider an internal matter. She would not say whether the gold and other metals in question were part of the refinery and bullion operation or one of the mint’s three other business lines: producing Canadian circulating coins, designing and producing coinage for foreign countries, and numismatics.

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US GOLD IS GONE TOO:

In the past few years, several gold traders have commented that a surprising number of coin melt gold bars were being delivered in London and Zurich markets, bars which almost certainly came from the U.S. Treasury vaults.

It is possible that some of these gold exports could be the repatriation of foreign central bank gold that had been stored with the New York Federal Reserve. Such transfers would be classified as “exports” for purposes of this report. The other possibility is that it could be gold formerly held by the only central bank in the world that had that much gold – the United States.

Wherever this gold came from, it is bad news for the U.S. government. If foreign central banks are pulling their gold reserves out of storage in the U.S., that signals lost faith in U.S. financial strength, which the U.S. government would not want the general public to learn about. If the U.S. government has actually been exporting its own gold, while still trying to pretend that the quantity in its vaults is unchanged, confirmation of such exports would clobber faith in both the U.S. government and the dollar.

The U.S. government has not had a genuine audit of its gold holdings in decades. In recent years, it has changed the description of gold holdings in reports so that now it is only described as “custodial gold” rather than gold reserves.

The so-called experts such as the World Gold Council, GFMS, and CPM Group do not include the appearance of all these gold supplies in their reports on global gold supplies and demand, which makes their analyses grossly inaccurate.

The U.S. government has a huge interest in hoping that the general public will not notice or care where all this gold came from. On the other side, for their personal financial protection, Americans urgently need to know the source of all this gold.
Kirby released his report last Friday. I expect that it will foster a clamor for disclosure. If the U.S. government resists providing the information, people will assume the worst – that the U.S. government has a lot less gold than it claims. It would be difficult for the government to lie about the source of this gold and get away with it – too many analysts will be double checking the information. Alternatively, the U.S. government could honestly admit where the gold came from, which I am confident will show much lower gold holdings than reported. No matter how the U.S. government responds, I anticipate that this matter will spark a sharp increase in the price of gold.
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