A story came out yesterday that nearly 40 tons of gold was airlifted last Friday out of Ukraine and into the United States.  This was originally reported by a Russian newspaper then commented on by William Kaye and King World News.  This very well may simply be false information since the “first casualty of war is always the truth,” it is an interesting thought though.  Think about it for a moment, what happened to Iraq’s gold?  Or the Libyan’s gold?  We swept in to “liberate” their people from evil dictators (who both threatened to sell oil for Euros rather than dollars) but in retrospect the only thing that got “liberated” were their gold hoards.

This is all speculation mind you but if it is true then you might ask some interesting questions.  First, how in the world did they ever get 40 tons in an airplane up in the air?  I thought that the Germans were told that it could never be done which is why they’ve remained “silent” (comatose) over the lack of deliveries from the NY Fed?  Are we in America so technologically behind the curve that our planes can only carry 5 tons at a time?  I got to thinking though, how much is 40 tons actually?  88,000 pounds or so right?

When I was in college I worked summers with an asphalt and concrete crew.  I got to drive some of the heavy equipment which included the dump trucks.  Most of the trucks were rated “10 tons” which we almost always overloaded with too much waste asphalt or new, hot asphalt to put down.  We regularly carried 11 to 12 tons but let’s just say that we loaded 10 tons.  Adding the weight of the truck itself and the load we were about 20  tons or thereabouts so my boss always said that a 30 ton bridge was crossable but don’t try one rated at 20 tons if we were loaded.  My mental picture is that 2 fully loaded dump trucks is roughly 40 tons, but who ever heard of flying a dump truck right?

OK, let’s do a little math and assume that all humans are the nice round number of 200 pounds each.  Let’s also assume that these passengers all fly with 2 bags that equal to but don’t exceed the 50 pound limit (because they don’t want to pay the extra baggage charges).  This equals 300 pounds per passenger + baggage right?  If we are talking about one of the “big boy” planes like a 747 or DC-10 they can carry 300 passengers or more.  So, 300 passengers x 300 pounds each… (I’m calculating)…..equals 90,000 pounds or …….just over 40 tons!  So the moral to this equation is?  Can this be right…can a fully loaded 747 with “baggage” carry 90,000 pounds which is just a shade over 40 tons?

I did the above math in my head but since we live in the internet age I decided to refine my “back of the napkin” math.  To my surprise, 747’s can carry as many as 400 passengers and carry a total payload of…wait for it…123 tons!

This of course got me to thinking, since there are 400 seats in a newer 747, you could put 200 pounds of gold in each seat which would total 80,000 pounds and just spread the other 8,000 pounds around in the overhead storage bins and PRESTO, 88,000 pounds of gold!  Do you want to know what the best part is?  90% of the gold could have nice soft seats to sit in (of course, only the lucky ones will truly get 1st class treatment) and only 10% of the gold will be required to “rough it” and complain to the gate agents!

Since 1969 there have been 1484 of these 747’s delivered worldwide. Finding an idle one to use shouldn’t be much of a problem for the NY Fed to deliver Germany their fully “promised” 37 tons.  Even if it was hard to find a willing 747, I am sure that one could be “bribed” since the cargo would be gold…and he who has the gold makes the rules right?  Plus they would save on food and beverage costs, heck, the flight attendants could just kick up their feet and relax (and dream golden dreams) so there wouldn’t be any complaints there either!

Seriously, I am sure that because of insurance reasons, shipping $1.5 billion (at current prices) would maybe not want to be done all in one shipment.  But how about in 3 shipments?  Or 5?  We’re not even talking about a lot of money here.  $1.5 billion is way less than the Fed prints and pumps into the system through QE alone…EVERY SINGLE DAY!  The so called “logistics” problem that we have been fed as to the reason for not shipping Germany’s gold is a line of crap.  Simply doing the math in my head or on the back of a napkin is proof positive yet the Germans are not questioning it!

Since we have cleared the “logistics problem” out of the way, now we have to look for other “reasons” that Germany has not received their gold.  The problem is…there are NO other possible reasons that Germany has not received their gold with the exception of one.  Unfortunately the ONLY possibility is the really scary thought that there is no gold left to ship.  I say “scary” because if you think this through, we are not talking about Germany’s 37 tons this year or even the total 300 tons we were “holding” for them.  Please follow this logic through.  If you were a Ponzi operator like Bernie Madoff and someone came to you asking for a relatively small withdrawal…you would steal it from “somewhere, somehow” right?  I mean think about it, if someone asked you for $1 million back and you supposedly managed $50 billion, would it be worth this investor running around town flapping his mouth that he couldn’t get his money back?  Of course not.

So, in understanding that a Ponzi operator will do ANYTHING to keep his scam from being exposed, the only explanation for not sending an investor their money as “cover” is because there is no money left to send, period.  I ask you this, what possible upside is there to the NY Fed not sending Germany their gold?  “There is none.”  Get the play on words?  Because “there is none.”  I guess I’ll finish with this as I didn’t even know it was a play on words until I wrote it.