Discount Gold and Silver Trading

American Survival Newsletter:
Combining the World of Finance, Health & Politics

American Gold

A weekly newsletter brought to you by
Discount Gold & Silver 800-375-4188
Edited by Alfred Adask
Friday, September 11, AD 2015
Between Friday, August 28AD 2015 and 
Friday, September 11, AD 2015, the bid prices for:

Gold fell 2.2 % from $1,133.80 to $1,108.70
Silver rose 0.1 % from $14.60 to $14.62
Platinum fell 4.5 % from $1,016 to $970
Palladium rose 1.4 % from $586 to $594
Crude Oil fell 1.2 % from $45.34 to $44.79
US Dollar Index fell 1.1 % from 96.15 to 95.18
DJIA fell 1.3 % from 16,643.01 to 16,433.09
NASDAQ fell 0.1 % from 4,828.32 to 4,822.34
NYSE fell 2.0 % from 10,242.10 to 10,040.20

"Only buy something that you'd be perfectly happy to hold
if the market shut down for 10 years." --Warren Buffett 

"If the markets shut down for 10 years, what investment would you dare to hold-- 
other than gold"? --Alfred Adask

IMF colonized Korea -- Part II Evidence

by Alfred Adask

I published Part I of this article (IMF Colonized Korea-the "Agreement") in the last issue. Here's Part II--the "Evidence" supporting my contention that the IMF colonized South Korea in A.D. 1997. This total article is a long, hard read. It's not for everyone. But if you want to catch a glimpse of how the world's central banks and economy really work, this article is worth your time.

In A.D. 1997, like several of the other "Asian Tigers," South Korea suddenly slid close to financial collapse. To avert national bankruptcy, the IMF offered to provide South Korea with a $55 billion loan "package"-$15.5 billion from the IMF, plus another $40 billion from other creditors that was arranged by the IMF. That loan was premised on Korea's acceptance of various new rules and some shocking political and economic concessions.

South Korea's economic survival was guaranteed-if South Korea agreed to surrender much of its economic and politi­cal sovereignty to the IMF. Eventually, faced national bank­ruptcy, Korea's government accepted the agreement, the "loan" was received, the Korean economy sustained, and sovereignty surrendered.

Although the proposed 46-page IMF agreement was marked "STRICTLY CONFIDENTIAL" and "NOT FOR PUBLIC USE," the Korean newspaper Chosun published a photocopy of the document on the Internet ( feature/imfscan/report1.htm). If that report is still available, I can't find it and it is no longer available at the original 1998 link. However, a description of that report can be found on the IMF website at:

* In A.D. 1998, when I first read the agreement between the IMF and South Korea, I received my first lesson on how "real world" economics works. There were no graphs or mathematical models. The IMF "agreement" was not an exercise in intellect, theory or persuasion-it was pure extortion. Like Don Corleone in the movie The God­father, the IMF made South Korea an offer it couldn't refuse.

Many may view the Korea's plight with indif­ference. But, it's apparent that the IMF and/or other central banking entities like the ECB still employ virtually identical strategies in order to extract similar political and economic concessions from any na­tion-including Greece and the US-that it seduces into massive debt.

The following excerpts are from the pages noted of the IMF/Korea agreement:

* Page 3. "Background. . . . since the beginning of 1997, 'an unprecedented number of highly leveraged conglomerates have moved into bankruptcy,' due in part to 'a weakening in profitability associated with the cycli­cal downturn.' These bankruptcies 'severely weakened the financial system. . . cut the value of the banks' equityand further reduced their net worth. . . . The weak state of the banking sector has led to successive downgrades of Korean financial institutions by international credit rating agencies and a sharp tighteningin the availability of external finance."

First, South Korea was not threatened with financial ruin because its government had borrowed too much "cheap currency" from the IMF. Korea was threatened with ruin because too many of its conglomerate corporations had borrowed more than they could repay.

Who made the excess loans to South Korea's conglomerates? Were these loans based on the bankers' benign intent to help South Korea? Or were the loans made with malignant intent to colonize South Korea?

Second, I suspect the IMF's "background" explanation contains a funda­mental lie. The IMF implies that the troublesome conglomerates were:

1) "highly leveraged". They'd had access to more creditthan their actual economic capacities warranted. Was their access to excessive credit merely a mistake made by the banking system or was excess credit an irresistible bait used to entice the "conglomerates" into a web of debt? Was the excess credit provided by Korean or foreign banks?

2) afflicted by a "cycli­cal downturn" (a recession) in the economy. The "cyclical downturn" was the "lone gunman" responsible for South Korea's financial problems); at a time when,

3) there was also a "sharp downturn" in access to credit from foreign banks (who were probably the source of the earlier, excessive credit); which,

4) precipitated the conglomerates' insolvencies; which,

5) threatened the Korean banking system (which had also made major loans to the conglomerates which would be repudiated if the conglomerates filed for bankruptcy); which,

6) forced the South Korean government to choose to either "do something"-or let their economy collapse and risk the wrath of the South Korean people. The only "something" available for "doing" was to surrender much of South Korean sovereignty and economic control to the IMF-and allow South Korea to become a de facto IMF colony.

That hypothetical chain of events sounds reasonable, but who ultimately provided the excess credit to the unworthy conglomerates?

The "usual suspects" would be the interna­tional(not Korean) banking community. That international banking community would almost certainly have strong ties to the IMF.

Q: Why did the Korean conglomerates fail to anticipate the economy's "cyclicaldownturn"? If the downturn were unexpected, the conglomerates might have been caught off guard. But, if a downturn was "cyclical," it follows that the downturn should've been expected as part of a predictable business cycle that all major conglomerates and banks should have routinely anticipated and guarded against.

A: The Koreans and most of Asia were beguiled by the label "Asian Tigers". They were so intoxicated by their previous business success, they didn't think they could be stopped by the business cycle. Therefore, they borrowed every dime they could find and failed to prudently re­strict their use of credit.

Result? When the cyclical/predictable downturn hit, the conglomer­ates became insolvent and discovered they had more in common with kittens than tigers. The entire Korean banking system trembled. This caused the international bankers to "sharply tighten" Korea's access to private, foreign credit and almost precipitated a national collapse. The threat of that collapse caused Ko­rean officials to "request" the benefit of IMF loans and protection.

This chain of events sounds a lot like standard sales techniques used by drug dealers. First, they give young girls free drugs to get them ad­dicted. Then, they cut off the free supply. Finally, they virtually force the girls into prostitution to support their addiction.

Foreign banks similarly loaned South Korea more credit (drugs) than it could handle, and then "sharply tightened" the supply of credit to force the South Korean government to "request" a job as an IMF whore. If that metaphor weren't roughly correct, why would the IMF impose financial and political restrictions that virtually destroyed Korea's claims of sovereignty?

* Page 4. "The [Korean] authorities' policy response [to the conglomerates' bankruptcy] was piecemeal and failed to

calmmarkets.... [and] did little to restore market confidence." [emph. add.]

That text included the first of fourteen references to the IMF document's dominant theme: The need to maintain public confidencein the market and financial system.

Why is confidence so vital? Because all modern banking is:

1) Based on debt. Debt is only a promise to pay, but those promises are, irrationally, treated as assets;

2) Overly indebted. Thanks to fractional reserve banking, there are at least nine debt-based dollars in cir­culation for every "paper" dollar that's deposited into bank vaults; and,

3) There are NO real, asset-baseddollars (gold, silver, or substance) to back up any of it.

The whole, global, fiat-monetary "system" depends on "confidence" because it's all based on the average man's irrational belief that the "dollars" in his wal­let and bank account are real (backed by assets). That belief is not merely false, it's a lie. No amount of talking or reasoning is likely to convince most people that their dollars, the debt-based monetary system, and the government that supports it aren't "real".

Nevertheless, in the event of a serious financial collapse, circumstances could quickly prove his "dollars" are illusory when he tried to extract his dollars from a bank and discovered that those dollars were not only missing, but had never really existed. Therefore, a financial collapse could be so re­vealing that it should be avoided at all costs.

* Page 5

To "save" Korea, IMF objectives included:

"... building the conditionsfor an early return of confidence ..."

Note that the IMF was not merely building confidence, it was building "con­ditions" that would instill public confidence. These "conditions" were structural changes in the Korean political and economic sys­tem. Those changes sounds nice enough, but "structural changes" in the "conditions" of an economy or political system can be fairly described as "revolutionary".

In A.D. 1997, the government of South Korea agreed to accept an IMF-imposed revolution.

(In A.D. 2015, Greece accepted another financial and economic revolution when it agreed to the ECB's bailout plan.)

". . . a strong macroeconomic framework designed to con­tinue the orderly

adjustment in the external current account;"

I.e., if South Korea and/or its conglomerates couldn't pay all of their debts when due, these debts would be mercifully "adjusted" to allow more time to repay. But, the "external" debts would be repaid and would not be expunged in bankruptcy. South Korea thereby guaranteed to repay the international bankers who improp­erly loaned Korea excessive credit in the first place.

"A comprehensive strategy to restructure and recapitalize the financial sector."

Sounded nice, but it meant the Korean banking system would submit to a reorganization including new (foreign) control. How else could the nearly bankrupt Korean banks "recapitalize" except by bor­rowing more foreign"money"? Once the Korean banks borrowed excessive foreign currency, they became servants to (and controlled by) foreign lenders.

* Page 6

Korea's "day-to-day conduct of monetary policy . . . will be implemented in

close consultation with the [IMF] staff."

"Close consultation" meant the IMF would essentially control Korean monetary policy. (I'll bet the recent Greek agreement with the EU and ECB also requires Greece to submit to "close consultation" with the EU and/or ECB.)

"... [I]ncreases in mineral oil taxes and excises yielding about, 'A percent of GDP [must] come into effect. Additional measures would focus on

reducing current expenditures [government benefits], rais­ing current revenues [taxes] by broadening the tax bases [taxing more people and products] rather than increasing tax rates . . . ."

As a "contingency measure," the Korean government could raise "indirect tax rates and excise tax ... by up to

30 percent."

Translation: South Korea would simultaneously increase the average Korean's taxes and reduce his governmental benefits. This squeeze would force common Koreans to pay for the excess, incompetence or criminal conspiracies of Korea's conglomerates, government, and bankers. The conglomerates, government officials, and Korean bankers may have volunteered to become the IMF's call girls, but the common people were involuntarily drafted into the ranks of IMF streetwalkers.


Taxes rose. More of the South Korean "mice" were drafted to power the "hamster wheels" and all those wheels had to spin faster to generate more interest and profits for the IMF.

* Page 8 Financial Sector Restructuring-the heart of the IMF's "loan package".

Remember the famous Baron Rothschild quote, "Give me con­trol of the nation's money and I care not who controls the govern­ment"?

Well, by "restructuring" Korea's "financial sector," the IMF assumed de facto control over Korea's monetary system. The IMF restructuring strat­egy comprised three broad elements:

1. A "clear and firm exit policy" which sought "to ensure the rapid resolution of troubled financial institutions in a manner that mini­mizes systemic distress and avoids moral hazard. . . . [M]erchant

banks that are unable to submit appropriaterestructuring plans within 30 days will have their licenses revoked. . . . [T]his policy will include mergers and acquisitions by domestic or foreigninstitutions. The supervisory authorities [IMF] will review such mergers and acquisi­tions to ensure that the new groupings are economically viable. This process will entail losses to [Korean] shareholders."

Q: Who determines what's "appropriate"?

A: The IMF

Any bank that didn't toe the IMF line within 30 days would be closed. Financially troubled institutions and banks could be acquired by


. No proposed merger between one or more Korean institutions or banks would be allowed without the IMF's approval. Korean stockholders were guaranteed tolose money.2. To provide "strong market and supervisory discipline," the Korean authorities "will request urgent passage of a bill to set up an agency that will
consolidate the supervisory functions presently dis­tributed among various agencies. The legislation will give the agency operational independence and adequate resources-in line with [the IMF's] Core Principles for Effective Banking Supervision-thereby free­ing it from outside [non-IMF] interference."Who would operate this new, independent, supervisory agency?


Directly or indirectly, the answer would be the IMF. The IMF thereby

took control of South Korea's merchant banking system

.3. Because circumstances were said to be "urgent," there was no time to waste on debate or consideration. Korea was forced to quickly pass laws to create a central, independent bank supervisory agency that is free from "out­side" interference of the Korean people or government and subject only to the IMF. I.e.,
Korea surrendered control of their entire monetary system to a new central agency that sounded very similar to America's "operationally independent"

Federal Reserve System.

* Page 9 "[T]o promote competition and efficiency in the financial sec­tor, the authorities will allow foreignersto establish bank subsidiaries and brokerage houses . . . ."

Thanks to the IMF, South Korea's previous policy prohibiting foreign banks was abandoned. After the agreement, foreign banks could feed off the Ko­rean people.

South Korea was thereby colonized.

* Page 10 Capital Account Liberalization. "The govern­ment has announced that the ceiling on aggregate foreigner's ownership of listed Korean shares would be increased from 26 percent to . . . 55 percent . . . . The ceiling on individual foreignownership will be increased from 7 percent to 50 per­cent.... [and] eliminate restrictions on foreignborrowing by corporations."


Formerly, the total, maximum foreign investment in any South Korean bank and/or corporation was 26% and the maximum any single foreign entity might own was 7%. Thus, each South Korean bank or corporation had to be owned by at least 74% South Korean investors. That meant South Koreans owned and controlled South Korea corporations.

However, under the IMF agreement, foreigners could own up to 55% of any South Korea corporate entity, and a single foreigner could own up to 50%; two or more foreigners could collectively own up to 55% (control­ling interest). Korean corporations, which could previously borrow only from Korean banks, would be allowed to borrow (and become servant to) foreign banks. Korea could be owned, operated and controlled by non-Koreans. (The sun never sets on the IMF empire.)

* Page 14 Staff Appraisal: "The bold actions already under­taken by the government, and expeditious implementation of the government's [actually, the IMF's] announced policy package should provide a solid basis for the early return of

confidence. Sustaining a strong macroeconomic stance is es­sential for restoring calmto markets and providing the stable financial conditionsto support much-needed structural reforms."

Translation: The IMF couldn't "colonize" Korea (i.e., implement "needed structural reforms") unless the country was sufficiently stable for ordinary Koreans to remain "calm". I.e., "structural reforms" couldn't take place if "blood was running in the streets".

This implies that economic colonization is a fine art: first, create a very serious threat of national bankruptcy; second, prevent that bankruptcy to prevent unpre­dictable populist forces from seizing control in the chaos; and third, under the guise of "saving" a nation, restore enough calm where the public will sit still while their nation is "restructured" into an economic colony.

(Reading the Korea-IMF agreement in A.D. 1998, I was reminded of what happened to the U.S.A. after the "Great Depression" and "New Deal" of A.D. 1933. Was that when our government sold our money, banking, and sovereignty to foreign bankers for a "political and financial restructuring"? Or does our own sale of sovereignty remain to be done at some later date?)

"It will also be critical for the major political leaders, who have pledged their support for the policy package, to garner public support for the program."

This is the only point in the IMF document where the word "criti­cal" was used. Again, the "critical" need for "public support" is just an­other way of reiterating the need for public "confidence".

Confident natives aren't "restless".

"Restless" natives riot, kill people and destroy corporate property. That's bad for bidness.

* Page 15 The IMF "policy package" also mandated elimination of "government intervention in lending decisions or subsidies and tax privileges to bail out individual corporations."

Apparently, prior to Korea's 1997 crash, the Korean government routinely bailed out favored ("too big to fail"?) Korean corporations which slipped into financial difficulty. The IMF said this kind of government favorit­ism was wrong and would be stopped.

Hear, hear!

But. What would happen when the spoiled, wealthy Korean corpora­tions couldn't get the bail-out money they needed to survive from the Korean government? They'd go to the Korean banking system which, for all practical purposes, was now owned and operated by the IMF. And I'll guarantee that the IMF gave the necessary money to corpora­tions it favored-provided those corporations sang the IMF's party line.

Point: By disrupting previous financial alliances between Korean corporations and the Korean government, the IMF diminished the government's power and relevance over private corporations, and subtly created an incentive for Korean corporationsto ally themselves with the IMF. Under the IMF's "beneficence," what had previously been "nationalistic" Korean corpo­rations would evolve into "multinational" (IMF) corporations with loyalty to no national government or people-except the IMF (and now, the New World Order.)

Can you say, "Divide and conquer," boys and girls?

* Page 16 "The present broad reform and liberalization pro­gram . . . will be key to building the financial and corporate sectors that are needed for Korea to meet the challenges of globalization."

Apparently, the IMF's real objective was not to "help" Korea remain Korean or sovereign, but to "help" Korea to become "globalized", colonized, and "homogenized" into the undifferentiated mass of "use­less eaters" who will one day populate the New World Order and spin the hamster wheels. ("Bet­ter living through banking," hmm?)

* Page 31 "To support these objectives and policies the International Monetary Fund grants this stand-by arrangement in accordance with the following provisions:
"For a period of three years ... Korea will have the right to make purchases
from the Fund in an amount equivalent to SDR (Special Drawing Right) 15,500 million ...." 
However, if Korea violates any of the terms of the IMF policy, "Korea will not make purchases under this stand-by arrangement."


In other words, if Korea didn't play nice, the IMF would withhold the credit needed to keep Koreans calm enough to suppress their urge to hang their government officials for treason.

The cowardly Korean government sold Korea to the IMF for a bowl of pottage. Korea actually bought nothingfrom the IMF ex­cept an illusionof (false) confidence to be instilled among the Korean people. In return for this magnificent illusion, Korea surrendered its sovereignty and banking system to control by the IMF.

Again, remember what Baron Rothschild once said: "Give me control of a nation's money and I don't care who controls the laws"? Well, the IMF had gained control over South Korea's money.

In essence, by cooperating with the IMF, the Korean government:

1) exploited its own people;

2) feared their people would discover the exploitation and lynch the government; and therefore,

3) sold Korea to the highest bidder (the IMF) to conceal the exploitation and save the government officials' skins.

Korea's rich and powerful were afraid they'd be held accountable for their finan­cial misdeeds and, rather than face the music, they sold their coun­try for 15.5 million of the IMF's Special Drawing Rights. (How much is that in pieces of silver?)

* Page 38 "[T]he contagion effectsof developments in South­east Asia contributed to the current crisis . . . ."

The regional economic problems simultaneously faced by Indonesia and Japan helped create a panic (failure in confidence) in the Asian economy in general and Korea, in particular.

Point: Because this fractional reserve, debt-based monetary system is (unknown to the public) built on nothing more substantial than promises (debt), it is extraordinar­ily fragile and vulnerable to any loss of public confidence that the promises will be kept since that loss is contagious. At some point, falling confidence in the promises to pay (debt-instruments) can cause prices to fall sufficiently to precipitate panic, panic begets more sales, and prices fall further, creating a dangerous, self-destructive downward spiral.

Once anyone dares to report the Emperor is parading around in his birthday suit, the entire popula­tion will suddenly admit seeing the Emperor's tinkler. At that point, the crowd will howl for the heads of the guys who charged taxpayers exorbitant fees to drape their favorite Emperor in nonex­istent clothing (fiat currency) . . . and the game would be up.

When I first read the IMF "policy package" closely, I couldn't help feeling a measure of remorse-not only for Korea, but also for every other nation seduced by the IMF and it's patrons-the central banks and multinational corporations. We've all been hustled. Americans pay some tax money to support the IMF. Foreign nations who receive excessive IMF loans will eventually surrender their economic wealth and political sovereignty.

And most fantastic of all, we are all being impoverished through the use of "loans" of nonexistent "money". You and I work long hours-we surrender our lives-to be paid in the pottage of intrinsi­cally worthless paper and digital "money". Korea and other banker beneficiaries (like Greece) surrender their political sovereignty and economic wealth to borrow the intrinsically worthless pottage (fiat currency) that we worked to "earn". Only a handful of bankers and multinational corporations benefit from this financial con-game. The rest of the world is driven deeper and deeper into debt, dependence and poverty.

And what is a "con-game"? It's a "confidence game"-a racket de­signed to extort wealth and property from the producers and lawful owners for the benefit of a nonproductive criminal element. And what word appeared fourteen times in the original IMF-Korean document?


Public confidencemust be maintained in the financial system. At all costs. At any cost.

Why? Be­cause the fiat monetary system is a con-game. Lose the confidence, and the system collapses and falls back into the hands of produc­ers rather than parasites.

What is the confidence in? It's in the promises in every paper debt-instrument that the debt will be repayed. We accept the central bankers' and IMF's paper debt instruments because we are "confident" that those debts will one day be repaid.

But what happens if the debt becomes so large, people begin to realize that the debt can't ever be repaid in full. Confidence begins to erode.

What happens if the public comes to understand that the only payment that the central bankers will ever provide is more paper debt-instruments-but never real assets like gold and silver? Confidence begins to erode.

What happens if enough people realize that the entire monetary system is nothing but a con-game? Confidence begins to erode.

And what happens if we lose enough confidence in a fiat monetary system that's unworthy of our trust? Confidence collapses. The bankers head for countries with no extradition treaties. The people look for folks to blame and possibly lynch. Nations, and possibly the world, degrade into panic, chaos and poverty as they await the arrival of a new set of smooth-talking bankers to restore "confidence".

* Once you start studying the money system, the implications are so fantastic that you may doubt the evidence and your own sanity be­fore you'll believe your eyes. The Korean/IMF agreement of A.D. 1997 helps expose and illustrate the irrational truths about banking and debt-based monetary systems.

I know that studying just excerpts of that original article is tedious and boring. And yet, if you're willing to see, the evidence therein is undeniable. The world's entire financial system is a con-game. We are being systematically impover­ished and virtually enslaved by the people who serve or control the monetary system.

When I first wrote this article in A.D. 1998, I was simultaneously convinced that:

1) the monetary system was a con-game run by criminal elements; and

2) almost totally unable to believe that first conclusion.

After all, how could such a massive fraud continue without the average American having a clue?

Today, I look at the system and wonder how anyone could not believe it. We all have clues. To some degree, we all know. Still, if we embrace the truth and lose confidence in the fundamental lie (that the debts will be repaid), the whole house of cards will collapse around our heads.

So, who dares to believe the truth while standing within a cathedral built of lies?

P.S. Near the apparent end of the Greek bailout drama, an August 18th, A.D. 2015 headline from the Associated Press read: "Greece gives German firm rights to run 14 airports". According to that article,

"Greece has agreed to sell to a German company the rights to operate 14 regional airports. The deal is the first in a wave of privatizations the government had until recently opposed but needs to make to qualify for bailout loans."

And what will Greece will receive as "bailout loans"? Pieces of paper. Debt-instruments. Promises to pay.

What will Greece give up in return?

Their ownership of productive properties, their sovereignty and standing as an independent nation.

Greece has just been colonized by a debt-agreement with the EU and/or ECB-just as South Korea was colonized by the IMF in A.D. 1997-and more than likely, just like several other, overly-indebted nations have also been colonized in the past 18 years.

Welcome to the New World Order.

Downtown Austin vault of precious metals turns up  mostly empty

By Eric Dexheimer - American-Statesman Staff

Gold first caught Ron Barbala's eye in 2008. With the housing values plummeting and the stock market cratering, the Phoenix engineer felt betrayed by the economy, which increasingly he considered little more than a mirage. "The standard American method of investing, all of it," he said. "I'd had it."

Desperate for something of value he literally could put his hands on, he began acquiring gold and silver bullion. "Its value is in its physicality," Barbala said. "It just is."

This is a photograph of precious metals that are purchased for investments, such as those once sold and stored by Over the next several years, Barbala bought more than $100,000 worth of precious metals through a little-known downtown Austin company. Started in 1999, Bullion Direct began as an online virtual trading floor where thousands of customers could buy and sell precious metals to each other, with the company taking a cut of each sale.

Later, it began selling the metals to customers directly. It also stored the commodities for those who requested it - such as Barbala - with the glittering coins and bars kept safely in individual piles for each investor in an old bank vault in its Lavaca Street offices.

At least that's what everyone thought.

By the time auditors and lawyers got access to Bullion Direct's 14th-floor offices six weeks ago, there were only a handful of gold and silver coins in an office safe. A second vault it had recently rented held only slightly more.

An estimated $30 million in cash, metal bullion and valuable coins, meanwhile, had vanished.

The cumulative weight of the unaccounted for metal is the equivalent of dozens of standard-sized gold bullion bars and hundreds of silver ones. Also missing are an estimated 1,400 ounces of platinum and palladium.

In recent weeks, as thousands of investors in Texas and across the country have absorbed their bad fortune, there has been no shortage of theories where the precious commodities went - including whether they ever existed at all.

The one person who knows for sure, company founder and owner Charles McAllister, recently moved from Wimberley to Alabama. Officials say that while he is being cooperative, many basic questions about the missing fortune remain unanswered.

McAllister's Austin attorney, Randy Leavitt, declined to make him available for an interview.

"We are cooperating with the investigations," Leavitt said.

Emails obtained by the American-Statesman show state and local prosecutors have met to discuss the company. Leavitt confirmed the U.S. attorney's office also has begun investigating Bullion Direct.

What is clear is that the news has devastated those who believed the company was safekeeping the futures they'd bet on the rounds and bricks of gold and silver. Some lost hundreds of thousands of dollars' worth of the precious metal with little apparent prospect of regaining it. Jesse Moore, an attorney representing several creditors, predicted that investors can hope to recover 2 or 3 percent of their money, at best.

Bullion Direct filed for bankruptcy protection on July 20, several days after the company abruptly shuttered its operations and let go its dozen or so employees. The company's new lawyer, Joe Martinec, has hired a local turn-around specialist to try to squeeze whatever value remains out of it.

Several weeks into the job, he has described the company's finances as a mess. Bullion Direct hadn't filed a tax return since 2010. What little has been unearthed suggests it was losing money almost from the day it opened its doors. Records also indicate McAllister paid himself hundreds of thousands of dollars in annual compensation.

Philosophically, the disappearance of their precious metal has left many Bullion Direct customers, who turned to gold as a safe port in a turbulent financial world, with a crisis of confidence. Attracted to an investment specifically because of its detachment from a government and financial system they didn't believe in, now that their treasure has disappeared they find themselves wondering what, really, is permanent.

"What's safer than some bars of metal in a vault?" said Kenneth Burns, a South Carolina physician. "They can't print metal out of thin air. It can lose value. But it can't get to zero. At least that's what I thought."

"A lot of the people who invest in gold and silver either distrust the financial system, or they're convinced the world as we know it will collapse, and gold and silver will be used for barter. A lot of survivalists," said Joshua Gibbons, who follows the industry from Massachusetts on his website, (Ag is the chemical designation for silver.)

Some advocate a return to the gold standard - tying the value of currency to the existing gold supply, a system the U.S. hasn't used for half a century. Precious metal forums host animated debates over the legality of the Federal Reserve, which controls the country's money supply.

Sam Painter of Augusta, Ga., said he became a Bullion Direct customer after reading "The Creature from Jekyll Island," a book that blames the Federal Reserve for everything from economic policy failures to wars. "It really opened my eyes," he said. "The dollar is just out there without anything to support it. You believe it's worth a dollar, and I believe it's a dollar. But it's really just paper."

Austin machinist David Kirschner said he started buying metals from Bullion Direct in 2010 to protect himself against the inevitable collapse of the financial system. "Somebody's going to get a big haircut, and I didn't want it to be me," he said.

Yet it's simplistic to dismiss gold bugs as financial conspiracy theorists. Collectors accrue gold and silver coins as a hobby. Many large investors buy bullion as a hedge to protect against the decline of other investments. Former Texas congressman and presidential candidate Ron Paul, among others, has advocated for the gold standard.

The Legislature also has succumbed the lure of physically possessing precious metals. Lawmakers this year passed a law creating a Texas bullion depository in preparation for accepting hundreds of millions of dollars in gold owned by University of Texas Investment Management Co., which manages the university system's investments. The approximately 5,500 gold bars are currently held in a New York bank.

"A state depository would remove much of the uncertainty and safety concerns associated with the storage of precious metals elsewhere," according to the analysis of House Bill 483. Yet state Sen. Lois Kolkhorst, R-Brenham, who co-sponsored the bill, said Texas's superior security was only part of the reason to repatriate the bullion.

"New York will hate this," she told the Houston Chronicle.

Indeed, for a certain percentage of investors, hoarding gold is as much a political statement as an investment. "The beauty of bullion is that it cannot be tracked; it cannot be accounted for," said Barbala. "It's called subversive investing. You are subverting the entire U.S. economy. It's the only, last investment vehicle outside of government control."

Bullion Direct promoted such light-handed regulation. The company "is not, nor required to be, registered with the SEC since we are not trading securities," its website promised. "Furthermore, we are not required to register with any other regulatory body."

Some who had assumed their gold and silver was safely under lock and key with Bullion Direct said they learned of the company's sudden collapse only when they happened to log on to its website this summer to check their holdings and saw a notice it had filed for bankruptcy. Others received an email.

"At first I thought it was spam," said John Washburn of Wisconsin. (Washburn, a political activist, made Texas headlines four years ago when he wrote a computer program to automatically request Rick Perry's emails at regular intervals, effectively preventing the governor from deleting any of the correspondence.) Washburn is missing 57 ounces of gold from Bullion Direct's vault - worth about $65,000 at current prices.

It is an indication of how unregulated the precious metal business is that investors and officials associated with the case say they know little about McAllister. Public records show that before Bullion Direct, he owned a Houston coin store.

McAllister and a partner, Vivek Katyal, incorporated Bullion Direct in August 1999. (Katyal, who now works for an accounting firm in California, stopped answering his phone after initially agreeing to discuss the company with the American-Statesman.) That same year, McAllister and Katyal also patented software allowing metals customers to buy and sell to each other.

Toupard said he did business with McAllister's new company. "We would sell to him, mostly bullion. He was always up front; always paid on time and in full" - a track record that made Bullion Direct's sudden collapse all the more incomprehensible. "I don't think (McAllister) is the kind of person who would embezzle or take money from the company," Toupard said. "That's not him."

For 15 years, Bullion Direct's public face was one of success. Customers said their orders were processed without a hitch. Those who requested delivery of gold and silver received it on time.

Painter, the Augusta customer, recalled the company hosted a forum in which customers could connect. "Many posted photos of their metals delivered, all wrapped up like a Christmas present," he said.

Over the years, Bullion Direct boasted an estimated 60,000 customers and handled transactions worth hundreds of millions of dollars.

A tale of two companies

Beneath the surface, however, financial documents from Bullion Direct's bankruptcy depict a startlingly different picture. James Hoeffner, an Austin attorney representing a Florida customer missing an estimated $250,000 in cash and metal from the company's vault, said Bullion Direct filed only a single income tax return, in 2010, covering the previous decade.

It showed the company lost money for all but two of those years. By 2009, the documents show, the company was carrying $17 million in losses - not counting the tens of millions of dollars' worth in eventually missing money and metal. Records also show McAllister had hired a bankruptcy attorney in 2012, but never filed.

At the same time, he paid himself as much as $365,000 annually, and borrowed an additional half-million dollars from the company, according to the documents.

Officials said they are still trying to reconstruct Bullion Direct's finances for the past five years. In the meantime, in creditors meetings and online forums, investors have traded theories in about what might have happened to their precious metals.

Barbala - whose 437 ounces of gold, silver, palladium and platinum in Bullion Direct's safe appears to have evaporated - hypothesized that fraud was part of McAllister's business plan from the start. "He saw all of us coming a mile away, and played his cards very well," Barbala said. "If you steal bullion, unless you're caught in the act, it's impossible to trace."

Martinec's reading of the company documents he's seen suggests something closer to "a slow-motion Ponzi-like scheme." McAllister scrambled to keep Bullion Direct afloat by dipping into investors' precious metals and cash to support newer transactions. The system appears to have collapsed this summer, Martinec said, when investors got spooked by a sudden rash of complaints over tardy deliveries and demanded the company ship their gold and silver immediately.

Yet even if McAllister wasn't siphoning off customers' gold and silver for his own use, and was trying to prop up his failing business, "this appears to have been going on 14 years," said attorney Peter Ruggero, whose California client had at least $344,000 in silver and gold disappear. "When is it reasonable to stop taking people's money?"

Bullion Direct's collapse has been life-changing for many. Barbala said his losses represented 2o years of savings. Burns estimated he will have to put off retiring by a decade to replace the worth of his vanished metal.

To some, it has been just as crushing to acknowledge the pieces of metal they thought would shield them from an uncertain world might have been only a glittering illusion. Martinec said he continues to field calls from Bullion Direct customers who can't grasp their gold and silver doesn't exist.

"They still think they have some ounces of gold or silver sitting in the vault, and just want to come pick it up," he said.

The acceptable limit
by Herbalist Wendy Wilson

Consumers are bombarded with scientific reports, terms and supposedly safe standards when it involves the chemicals in products.  How does the industry of science determine safe levels of toxicity? How does such an industry determine how other chemical sources will interact or do they consider such interactions? We have to ask these questions about the integrity of our food, water and medicine supplies. Something has gone seriously wrong when animal-by-products have excessive chemical levels. Our world has become so foreign and artificial that we cannot identify if our food or water is safe without attaching words such as "organic" and "filtered spring water" to them.
According to Dr. Ty Vincent of Thinking Outside the Pill Box, synthetic chemicals have an accumulative effect in human tissue and are called xenobotics. These chemicals cause oxidative stress, tissue damage and inflammation. They also interfere with our nerves and how they interact with our muscles. When we consume synthetic-type chemicals they can block or over stimulate cell receptors. They also interfere with our enzymes and can alter our cells. These chemicals are also known to influence our hormone levels (called xenohormesis). Synthetic chemicals can also cause an immune system imbalance. The chemicals can activate the immune system identifying the synthetic component as foreign and attack it. Doctors will diagnosis it as a food allergy. The prescribed medications are also synthetic and are somewhat more dangerous because they can cause a direct attack on tissues causing inflammation and an immune system response. Dr. Vincent also states that drugs can also mimic types of molecular responses. These synthetic chemicals which bombard the body regularly have an accumulative effect and produce chronic illnesses. Dr. Vincent warns that we have widespread subtle symptoms of chronic chemical toxicity in our bodies. Doctors just write more synthetic drug prescriptions or recommend no treatment at all. Antidepressants are usually prescribed for patients with chronic health complaints. Doctors are not considering the accumulative toxic poisoning from synthetic chemicals coming from multiple sources.
It is estimated that the average American has 200 or more synthetic chemicals in their body. The affects of these chemicals can be subtle and easy to ignore. However, on a metabolic or DNA level how will all these chemicals affect genetics and future generations? If we consider the risks of multiple chemicals invading our body without our knowledge or permission, would you consider it an act of chemical terrorism? Food preservatives and additives used to prevent moldy and rancid foods can increase risk to disease such as cancer. If consumers read over the health risks to many of the ingredients in foods, makeup, detergent, body soaps, perfume, air fresheners, deodorants and even pet food they would come to the understanding that there are no acceptable levels for such chemicals because of the toxicity. 
In 2001, the researchers at Cambridge, UK of the Royal Society of Chemistry looked into synthetic chemicals in our diet that cause cancer. Their research appeared in the journal of Environmental Science and Technology. The team was from the National Laboratory, Berkeley, California Department of Cell and Molecular Biology. The team found that there is high carcinogenicity in products contaminated with pesticides. This was in accordance with the EPA pesticide allowance for safety. The overall chemical exposure we face today creates health risks for multiple types of cancer, inflammatory diseases, bone disease, pulmonary disease and most internal medicine disorders.
The human body and animals have a system that works as a whole. Enzymes, hormones, acids and genetics play a role in our overall existence. An imbalance in any one area will influence the other areas. In 2012 a study in the Journal of Applied Toxicology brought to our attention the risks of hormone imbalance from preservatives in our consumer products. The study stated that thousands of these chemicals are added to products, which cause what is called "hormone-mimicking". The study focused on what they labeled as "parabens", which the researchers felt could influenced estrogen and the likelihood of breast cancer. Parabens are included in nearly all sundry items and cosmetics, prescribed medications and processed foods.  When they studied breast tissue from breast cancer victims they found it loaded with parabens. The team of researchers went as far as to suggest that the parabens cause breast cancer and could be from underarm deodorants. The WHO thinks that if you dose yourself day-after-day with the estrogenic influencing parabens to the point that you have 1 million-fold higher levels then they say is completely safe that this and a lower toxicity compared to other toxins. That's insanity! Breast cancer victims show they indeed have 1 million higher levels. A scary discovery in the report is that these chemical synthetic hormones (parabens) may be over-riding the natural progression of hormones in children.  So, how much synthetic hormone is in our children? Urine samples estimate that within the US children ages 6 and up have a saturation level of 99.1% methylparaben, which causes multiple complications in the body. Cosmetics are approved to contain 25% of the following synthetic hormones; methylparaben, propylparaben and butylparaben. Chemist Shane Ellison and author of Over The Counter Natural Cures warns people to not use any product that contains parabens because they are a huge hormone disruptor.  The conclusion from the study was that these multiple and constant low doses of synthetic chemicals in consumer products, which disrupt hormones, is essentially chemically-induced genotoxicity. Why do they consider this a form of genocide? The parabens prohibit cell replication to the point that our bodies cannot replace the dying cells fast enough with healthy ones. We age faster. They report this process is especially more detrimental to young children who do not have a mature immune system yet. So, what can we do if parabens are in lotion to food preservatives? Read labels and get the paraben-free products, avoid processed foods and cook with organic ingredients. We can also tap into herbs such as ginger root. A 2007 study reported that ginger root reverses the damage to kidneys and liver from chemical parabens. It is going to be important for consumers to arm themselves with medicinal herbs to protect themselves from synthetic chemicals that can harm and destroy prostate and sperm, breast tissue in men and women, protect fertility in women, protect mental health and our basic right to be healthy and exist.
The folks at Apothecary Herbs can give you a hand by offering you non-toxic Crystalux mineral deodorants, natural honey & oatmeal soap, organic organ detox products, immune system herbs and of course Ginger root tincture. Give them a call to order or to request their free product catalog 866-229-3663, International 704-885-0277,, where your healthcare options just became endless.
Herbalist Wendy Wilson on Herb Talk Live
Saturday morning show:
7 am EST on GCN
Weekday show:
7 pm EST on AVR
Shortwave show 8 pm EST WWCR 4840
Go to Herb Talk Live & Radio Archive area for network link access and past shows to download and share. For Android users you can download a FREE app for Herb Talk Live on GCN. See the download link under radio archives at top of page at

 at Apothecary Herbs

MORE HERB SECRETS IN THE POWER HERBS e-BOOK. By popular demand The Power Herbs e-book is available with symptom/herb reference guide, information on organ cleansing and how to make your own herbal tinctures plus a whole lot more. You must have email to order and receive the e-book a PDF version of The Power Herb book for just $14.99. At this time, we do not offer this title in hard copy. The book is now available in KINDLE and IPAD formats. Select the book you need on the drop down.

Try Dandelion Root Tincture for inflammation, blood purification, respiratory infections, digestion and cancer protection at Apothecary Herbs 866-229-3663 
MALE & FEMALE ORGAN CLEANSES KITS - Don't give disease a foothold. You will have the power to cleanse the bowel, urinary, liver, gall bladder and blood system with this cleanse package. For added cleansing, ask about how you can upgrade your order to include the prostate cleanse for men or the Kidney/Bladder cleanse for females.  Go to or call their 24-hour live customer service line 866-229-3663, International 704-885-0277. 
The information contained herein is not designed to diagnosis, treat, prevent or cure disease. Seek medical advice from a lincensed medical physician (if you dare) before using any product or therapy. 
All content is copyright © Independent News Journalist Disclaimers of FARE USE

Copyright Disclaimer Under Section 107 of the Copyright Act 1976, "Fair Use" Allowance is made for purposes such as: Criticism, Comment, News Reporting, Teaching, Scholarship, and Research. "Fair Use" is a use permitted by Copyright Statute that might otherwise be infringing. Non-profit, Educational or Personal use tips the balance in Favor of "Fair Use". Conclusions drawn from these articles or audio files do not necessarily represent the Opinions/Beliefs of those subjects People/Musicians/Participants/Entities therein. "Fair Use" says it all....Produced by FREELANCE AUTHOR.