Gold And FOREX Manipulation: LIBOR Scapegoat Found Guilty, Sentenced To 14 Years

LIBOR Scapegoat Found Guilty, Sentenced To 14 Years

Koos Jansen: Gold Price Manipulation Goes Mainstream On German TV $TNR.v $MUX $GLD $GDX $ABX

  

  Koos Jansen continues his great work for the benefit of all Gold community.  His work is highly recommended and he is the person to Follow in Gold market and China. He has allowed us to use his articles here, but visit his website for more info - it will be the great investment in your education. 

  Manipulations cannot go forever. Just today in the news that Goldman Sachs, JP Morgan and Morgan Stanley are exiting the Commodity business. More and more FOREX traders are being investigated now and we guess that Commodity business is not as profitable without its manipulation?

Kirill Klip: Market Manipulations, NI 43-101 And How The Honest Person Can Survive In Junior Mining. TNR.v ILC.v MUX

 "We have another "freedom fighter" joining our blogosphere and raising concerns about the ongoing manipulations in all markets, including Gold, and junior mining particularly. The only weapon against the darkness is the light. Lets support the Voice, donate your tweets and likes and follow for this one. Respect. By the way US Dollar is ... up now at 79.25! No there is Nothing to talk here about!"

In Gold We Trust:

Gold Price Manipulation Goes Mainstream On German TV

Public TV channel 3sat, which is a cooperation between Germany, Austria and Switzerland, broadcasted a short documentary on gold price manipulation on May 9, 2014. More and more mainstream news outlets are covering the allegedly gold price manipulation, after evidence is pilling up and many other market manipulations, like LIBOR, are coming out. From the Financial Times February 23, 2014:

Global gold prices may have been manipulated on 50 per cent of occasions between January 2010 and December 2013, according to analysis by Fideres, a consultancy.

The findings come amid a probe by German and UK regulators into alleged manipulation of the gold price, which is set twice a day by Deutsche Bank, HSBC, Barclays, Bank of Nova Scotia and Société Générale in a process known as the “London gold fixing”.

Fideres’ research found the gold price frequently climbs (or falls) once a twice-daily conference call between the five banks begins, peaks (or troughs) almost exactly as the call ends and then experiences a sharp reversal, a pattern it alleged may be evidence of “collusive behaviour”.

“The behaviour of the gold price is very suspicious in 50 per cent of the cases. This is not something you would expect to see if you take into account normal market factors,“ said Alberto Thomas, a partner at Fideres.

Oddly enough this article from the Financial Times was removed from their website two days after publication.

One of the most extensive researches that has been done on gold price manipulation is by Dimitri Speck in his book “The Gold Cartel”. On his website there is a chart that illustrates what Fideres’ found about the London gold fix. Dimitri Speck was, amongst others, interviewed by 3sat for the documentary.

I do not agree with everything that’s being said in the video, for example they state Chinese gold demand was 1066 tonnes in 2013, which is based upon numbers from the World Gold Council I happen to disagree with, or that it’s not necessary to invest in physical gold stored outside the banking system, though I thought it was worth sharing this clip with subtitles for the English speaking world. Germany is one of the few Western countries where there is a broad consensus about the importance of gold and sound money.

Press the captions button and choose English. Translated by Behfar Bastani.

Transcript:

Presenter: Good evening and welcome to the business magazine Makro. For many people, the purchase of gold represents a safe reserve for bad times. No wonder that, at the height of the financial crisis savers were queuing up at gold dealers. Throughout history, gold has served as a promise of reliability and stability. But today there are considerable doubts as to whether that promise remains valid, because an examination of gold prices reveals machinations fit for a financial thriller.

Narrator: London, the most important gold market in the world. Whether the price of gold rises or falls is determined here. Twice a day, a handful of bankers confer on the phone to fix the daily price of the precious metal. Thus arises the most important reference value for physical gold, used by businesses ranging from jewellers to gold mines. There is no public oversight for the “Fixing”. Apparently, this lack of restraint has led to serious manipulations of the gold price, as pointed out by a current investigation which has detected strange price movements spanning a number of years.

Rosa Abrantes-Metz: The setting of the gold fixing is, in my view, problematic. It opens the door for abuse and manipulation. There is absolutely no transparency in the arrangements made during the private phone conversations of this small group of participants as they decide what the price of gold should be.

Narrator: Experts have long complained that this system is particularly susceptible to manipulation. Only five banks participate in the London gold fix, thus far including the Deutsche Bank. In the more extreme futures markets, where bets are made on gold price developments in future months, the quantities that exchange hands are of quite different magnitudes.

Folker Hellmeyer: We have a situation where this market is dominated by three essential players, three banks, in the USA. These banks have a market share on the order of 80 percent. In other words, we are talking about an almost monopolistic structure which of course also provides the power to manipulate the market.

Narrator: And which power is apparently being abundantly used. The futures market, intended to provide predictability and stability for future prices, is controlled by the following three banks: HSBC, Citibank, and JP Morgan. Their tool: paper gold securities.

Thorsten Schulte: It is possible to simply sell scraps of paper, thereby creating fear, especially fear among those who possess gold in its physical form, and who may then arrange to sell their metal, eventually resulting in such a a wave of fear …

Narrator: The gold price has been attacked in this fashion time and again, often with massive price declines within a matter of a few minutes. Yet, there is quite a bit more to the story.

Dimitri Speck: Gold is the opponent of debt based moneys, i.e. currencies, and in particular the US Dollar. Therefore, the US Federal Reserve has an interest in a weak gold price, and the US government protects the manipulation of the gold price by the private banks.

Narrator: For years, the US Federal Reserve has served as the lender of last resort. Gold must be weak if a loss of confidence in the US Dollar is to be averted. It has been difficult to prove that this is a rigged game with a stacked deck, but if the gold market manipulations are indeed encouraged in addition to being condoned, that would explain why oversight bodies have thus far turned a blind eye to it, despite years of massive conspicuous activities in the futures markets, as with the gold fixing in London.

Presenter: Incidentally, the Deutsche Bank intends to withdraw from the gold fix. As of now, no other bank has expressed an interest
in filling that spot. Too many banks are scared to damage their good reputation in London. Gold is a speculation commodity with a high symbolic power. Its price is therefore strongly influenced by many fears and hopes. Here are a few facts about that from our Makroskop.

Narrator: 31.1 grams, the weight of one ounce of refined gold. The precious metal is regarded foremost as protection in times of crisis. Gold climbed rapidly during the financial and economic crisis. Currently gold trades for about USD $1300 per ounce. Yet the more hopes grow for an end to the international economic slowdown, the more the price of gold declines. The US government continues to hold the largest governmental gold reserves at 261.6 million ounces, over 8100 metric tonnes. The US is followed by Germany, Italy, France, and China. But the largest demand comes from the Middle Kingdom. From gold coins to gold bars, the Chinese are accumulating large quantities. In 2013 the Chinese acquired 1065.8 tonnes, moving for the first time ahead of the Indians who purchased 974.8 tonnes in 2013. Jewellery accounts for the highest portion of the demand. In China, jewellery sales have tripled since 2004. They represent about 30 percent of worldwide demand. About 400 tonnes was purchased by businesses. In particular, China’s electronic manufacturers need industrial gold for production. Meanwhile, in the mining sector, China has risen from being a small player to become the number one gold producing country. In the past tens years, Chinese gold production has more than doubled from 217 to 437 tonnes.

Presenter: Today, the course of the gold market is being set by China. What are the worldwide consequences of this? Let’s talk about that with the chief editor of the Frankfurter Börsenbrief.

Presenter: A very good evening to you, Mr. Bernhard Klinzing. These days the flow of gold seems to be from the west to the east, as we have just seen. There are considerably more buyers in Asia than in the developed western countries. What do you attribute this to?

Klinzing: The reason is that India and China, which together make up half the gold market, do not have state provided elder care, which is valued differently there. Inflation fears are another factor. “The Chinese are the Germans of Asia”, it is said, and so they sit on gold.

Presenter: We have seen that the price of gold is heavily manipulated. There are manipulators that are apparently backed
from the highest places. Do you believe that, or do you regard it as a conspiracy theory?

Klinzing: I don’t believe that based on the Deutsche Bank and the London fix, but based on what we just saw from the Americans I absolutely do see that danger, because there is a quasi “Edward Snowden”. His name is Paul Roberts and he worked at the US treasury department and he has confirmed that the Fed, together with a number of banks, are preventing gold from rising above $1400 per ounce by continually providing gold bids which put downward pressure on the price.

Presenter: Given the unsound loans that came to light in the Libor scandal or the forex markets, do you believe that this is only the tip of the iceberg in the gold trade?

Klinzing: I would say that we are only seeing a snow ball from the iceberg while a lot more is hidden at the bottom. The banks earn a hefty sum whenever they fix the gold price by as little as 1/10th of a US Dollar upwards or downwards. You can see that with Goldman Sachs who published studies predicting gold’s decline to $950 per ounce while at the same time increasing their own gold positions by 20%. That does not match up. Presenter: What are some consequences for other market participants? You stated that the banks are lining their pockets, but what are some of the consequences?

Klinzing: Yes, there is a hedge fund manager by the name of William Kaye who has said that the German gold is no longer stored in the vaults of the Fed in New York, but has already found its way to China because the Fed needed the gold in order to carry out its market manipulations. This is as yet only a suspicion, and it may even be a conspiracy theory, but the Germans were denied an opportunity to touch or take samples of their own gold in New York.

Presenter: One could hardly think up a better plot for an economic thriller. I would like to talk about investors again. Is gold a good investment for the, let’s say, small investor?

Klinzing: One should not construct a portfolio with only gold, that much should be clear. But of course gold is a very attractive portfolio addition, whereby investors can insure the value of their portfolio against currency risks. Because if the Euro rises, the value of gold falls, so you can participate only less than possible, therefore invest always in a currency protected fashion.

Presenter: How can I do that as an investor?

Klinzing: There are certificates for doing this, there is no need for an investor to store gold in their own vault or under their pillow. For that there are very good solutions on the financial markets.

Presenter: Before we wrap up, what are your thoughts on how the gold price develops further from here?

Klinzing: We can see that in China the standard of living is rising, the middle class will grow from 300 million people to 500 million by 2020, and urbanization is accelerating. This means that there will be much more demand for gold from China, as well as from India. I don’t believe that gold will break $1400 per ounce this year, but we will see a new gold rally in the next few years.

Presenter: An overview of the gold price from Bernhard Klinzing of the Frankfurter Börsenbrief. Thank you for being on the show with us tonight. Dear viewers, if you have any questions for our studio guest, please visit the Makro blog where Mr. Klinzing will be available for a little while longer after the show. On our homepage you will also find additional background material on the topic of gold.

In Gold We Trust"

US Dollar Exit And Gold: ZeroHedge - Moscow Says Massive "Holy Grail" Gas Deal With China Is 98% Ready

  

  Update May 21st, 2014.

ZeroHedge:

Russia And China Finally Sign Historic $400 Billion "Holy Grail" Gas Deal

  ZeroHedge reports on further developments around the US Dollar Exit and geopolitical Chess Game - it is all about Resources and Energy is the most important of them. Today we have the very important confirmation to our previous discussion - this is what will drive the Old Good Street On Street Fight in our former Global Village for years to come:

Currency Wars: Russia Holds "De-Dollarization Meeting": China, Iran Willing To Drop USD From Bilateral Trade

  "C.S. We are going into the next stage of The Currency Wars when our previous discussions on this blog are getting into the headlines from Kremlin.Geopolitical map of the world is being re-drawn as we speak now. Our Global Village  is getting to the good old street on street fight. The reason is simple: There Is Not Enough. You can print money and manipulate equity market in to the All-Time-High for a while, but you can't print Oil, Copper, Gold and other commodities without which any growth is impossible. We all need to eat in between of our sessions on Facebook and even Google search will not bring us food into the mouth yet. Our dear Apple is really great, but we can not eat iPads even if their prices are "deflationary". We need Gas, Fertilisers and even more Oil to grow our Food and deliver it. 

  Have you noticed that with global growth in economy being barely above the water and China's "Collapse" Oil prices are strongly north of $100 mark? Where is all that Shale Oil and Gas? What will happen when economy will start growing for real?

  China knows is too well that is why it is buying resources all over the world, including Copper and Lithium. It has the military plan of Electrification of its Transportation and for Alternative Energy. Just check the numbers on Wind and Solar Power installations in the world. Energy Storage is the next stage and Lithium is at the core of it. Now China benefits from all these games and manipulations in the Gold market and buying best Copper deposits in the world.

  Have we mentioned already that poor Ukraine has been caught between the rock and the hard place? That nobody really cares about its Independence or its Proud People? That Joe Biden son has joined the board of the major Gas producer  in Ukraine? Or that it is all really about China? Empire has the only one resource left - its Military Complex (Industrial part of it gone, but Nukes are here) and it is playing the very dangerous game to leverage it and slow down China.

  Can even the good Golfer who is spending more time on the Greens than in the War Room fight with the Bear Hunters or Shaolin Masters? This is the question two charts are talking about. US Dollar above, which is playing with dangerous 80.00 level after breaching 79.00 once already these weeks; and Gold below, which is harder and harder to break down below MA200. 
  Nobody knows the future, but the one outcome is already here: due to stupidity and arrogance the world has another Tsar  and will have one more retired Golfer ... Read More"

ZeroHedge:

Moscow Says Massive "Holy Grail" Gas Deal With China Is 98% Ready

"We have previously profiled the "holy grail" gas deal between Russia and China on several occasions, and with its announcement scheduled for next week (barring some unmitigated disaster) during Putin's first visit to China since Xi's appointment as president last March, it is time to do a status update on where it stands even ifaccording to SCMP, at this point finding the "holy grail" is merely a formality.

The Hong Kong publication reports that China and Russia hope to sign a massive deal for natural gas supply when their leaders meet in a regional summit in Shanghai next week, a senior diplomat has said. Under the deal, Russia will supply 38 billion cubic metres of natural gas annually to China for 30 years. Deputy Foreign Minister Cheng Guoping told reporters yesterday that President Xi Jinping would discuss the deal and other points of co-operation with his Russian counterpart, Vladimir Putin, who will visit Shanghai on Tuesday. Read More."

Powered By Lithium: Top 10 Electric Cars 2013 (6 months of sales) LIT, ILC.v, TNR.v, RM.v

  Electric cars are here and now you have different models to chose from. Tesla is leading the electric mobility revolution with Model S. It is not surprising considering the quality of proposition from Elon Musk even with the highest price range. Quite interestingly is Ford's quiet rising in the ranks of electric cars makers: it has gained a significant presence across all its electric models.

Powered by Lithium: Elon Musk: Electric Cars Majority Sold in 10 Years TSLA

"Elon Musk is very bold with his predictions and people should listen now. Every single new Tesla Model S is proving his point. Tesla Model S is driving the electric revolution now and Tesla Gen 3 Model for mass market will be the game changer for electric cars."

Global demand for lithium expected to rise significantly LIT, ILC.v, TNR.v, RM.v

"Euro Pacific Canada has produced the very interesting report Lithium Industry - A Strategic Energy Metal, we can expect now the push of Lithium Investment story into the market place on the back of Tesla Model S success in the market place. International Lithium is mentioned as well with its strategic partner from China Ganfeng Lithium in the report."

Powered by Lithium: Elon Musk to make electric cars affordable? TSLA

  Tesla Model S is the very serious technological achievement and Elon Musk's motivation is pretty simple: "My kids are driving this car every day." Now we need his Gen 3 - new Electric Car for the mass market to make electric revolution happen.

Powered By Lithium: The Tesla Model S Just Got The Best Safety Rating Of Any Car In History

"Business Insider reports on another milestone for Electric Cars - Elon Musk is ahead of the game in the safety standards as well."

Global demand for lithium expected to rise significantly LIT, ILC.v, TNR.v, RM.v

"Euro Pacific Canada has produced the very interesting report Lithium Industry - A Strategic Energy Metal, we can expect now the push of Lithium Investment story into the market place on the back of Tesla Model S success in the market place. International Lithium is mentioned as well with its strategic partner from China Ganfeng Lithium in the report."

Beijing´s largest car manufacturer to test market for electric cars

  Electric Cars is the only viable solution for the personal mobility in China. Pollution has reached already very dangerous levels in the main Chinese cities and it is only getting worse with the number of cars rising every year. Chinese companies are very active in securing the lithium supply for the electric revolution.

International Lithium Corp. Receives $250,000 Advance From Strategic Partner, Ganfeng Lithium Co. Ltd. ILC.v, TNR.v

   

Lithium Catalyst: China charges into electric cars

Electric Cars can provide the real solution to mobility problem in densely populated urban areas in China and India. Recent pollution outburst in Beijing leaves no other options, which are commercially viable now. People would like to have the right to mobility and Electric Cars can provide it now.

The man who wants electric cars to be art

  Great ideas to make the urban mobility Green, electric cars technology provides the base for the most innovative design ideas. It is still in the future, but Tesla shows that it can be very close already.

Powered By Lithium: How the Tesla Model S is Made

"WIRED has produced the brilliant documentary about how the electric revolution is made."

Elon Musks: Tesla Adds Charging Stations Coast to Coast

 Electric cars are not toys any more.

Lithium Catalyst: Electric Car Sales Have Doubled, Thanks To High Gas Prices

Will Tesla Model S Bring The Life Back To Lithium Miners?

"Now the only time is required for general public to realise that shale oil is the dead end and find out why China and Japan are securing the Lithium supply now. Way Of The Future came out with the great article putting Lithium Big Picture together."

Bob Lutz: Disappointed With Electric Cars, Automakers Are Making Bad Bet On Fuel Cells

  

  Bob Lutz knows what he is talking about. He is credited for launching and saving GM Volt during the financial crisis, now GM Volt is the most sold Plug-In Hybrid in the U.S.

  We have wrote about Hydrogen dead end before and it is the right time to revisit this issue again. Guess who is going to produce and sell Hydrogen to us Again? All the same faces - Big Oil. That is why this idea "Never Dies" and come back in circles again. The most viable economical way of Hydrogen production is from natural gas and here we will be deciding whether to Eat or Drive like with bio-diesel. Natural Gas is the basic commodity for fertiliser production as well.

Intelligent Electrification by Bob Lutz - VIA Motors - Powered by Lithium

Powered by LIthium: Automotive leaders on new Cadillac ELR

"Bob Lutz has become the real troubadour for Electric Cars and it is rightly so. Only thanks to him personally GM was convinced to move into GM Volt at that time."

  

  "There are still a lot of questions about the future of transportation: whether it will be Electric Cars based on Energy storage solution - Batteries or Hydrogen can power the fuel cell and it will be the most efficient way of transportation in post carbon society. Better Place has its own answers for us today. 

Better Place:

Plug-in battery electric vehicles are far more energy efficient than either hydrogen fuel-cell or hydrogen internal combustion engine vehicles."

< Download PFD

Hydrogen is often touted as “the next big thing” in transportation fuels, used either in a fuel-cell-powered electric car, or as fuel for vehicles with an internal combustion engine (“ICE vehicle”). This technical note examines the relative merits of using hydrogen to power our cars in either of these ways, compared with using electricity in battery electric vehicles, looking at the entire supply chain (“well-to-wheel”) for both energy sources. Whilst there can be no doubt that hydrogen cars themselves are clean – their direct emissions are mostly water vapour – it is critical for any comparison to examine the entire energy life cycle. This raises the question: are hydrogen cars the best way to use our limited energy resources and how do they compare with electric cars?

HYDROGEN PRODUCTION

Hydrogen gas does not occur naturally on earth. To use hydrogen as a fuel, it first needs to be separated from other atoms with which it is bound up, and isolated it in its elemental form: H₂ (hydrogen gas). There are two main ways to make hydrogen gas: from a fossil fuel, or from water by using electricity. Both methods involve a large inherent efficiency loss.

From fossil fuel: Hydrogen gas can be extracted from natural gas (methane) by mixing it with steam under very high temperature and pressure, leading to the production of H₂ and carbon dioxide (CO₂). Further processing separates the H₂ for storage and distribution. Whilst natural gas is both plentiful and cheap, this method of hydrogen production produces vast amounts of CO₂, both as a byproduct from the process itself, and also from the production of the electricity and heat required to drive it. As a result, a hydrogen-based transportation system delivers few environmental benefits if the H₂ is formed in this way, and it will not be considered further here. It would make much more sense to put the methane directly into the car rather than turning it into H2 first, but even this is far less efficient than using the gas to produce electricity for a pure electric car.¹

From water: Electrolysis – where an electric current is passed through water to produce H₂ and O₂ – is a more environmentally friendly method of hydrogen production. However, since this is the reverse of the combustion reaction, it uses a significant amount of energy to drive the process. The efficiency claims for hydrogen produced in this way are in the range of 50-80%,² so a massive amount of energy is lost in order to produce the hydrogen from electricity.

HYDROGEN DISTRIBUTION, STORAGE AND SAFETY

Hydrogen is a dangerous and difficult substance to handle, and therefore costly to safely store and distribute. In principle it would be possible to produce hydrogen gas locally, at filling stations or even at homes, in the latter case even perhaps using solar power. However, the cost and safety considerations would be considerable, and so for the purpose of this document we will presume that the hydrogen is produced at central facilities optimised for economical operation and safety.

Distribution: Building a network of underground pipelines for distribution of hydrogen to service stations would be extremely expensive, and would likely also pose a grave and unacceptable safety risk given the explosive nature of the gas, and its tendency to leak through many materials. The only alternative to pipelines would be to distribute the fuel by truck, but because of the low volumetric energy density of compressed H₂ and the heavy weight of the steel pressure tanks, it would take more than 20 tanker trucks to distribute the same amount of energy that can be distributed by a single petrol tanker. Hydrogen is easier to transport in large quantities if it’s liquefied, but this requires further large amounts of energy to cool it below -250°C under pressure.

Storage: Wherever it is produced, hydrogen gas must be compressed and liquefied for storage in a vehicle’s specially designed high-strength fuel tank. Once there, it must be used quite quickly, as it otherwise boils off over time.

Safety: There are many issues surrounding the storage and transport of hydrogen in a vehicle. With a gravimetric density 14 times lower than air, H₂ has to be compressed to extremes to provide a driver with reasonable range. There is only one hydrogen-fuelled car that has made it past the concept stage: Honda’s FCX Clarity. The pressure inside its tank when fully fuelled is 5000 psi,³ which is 350 times atmospheric pressure. This pressure requires a tank with very thick walls to contain it, which in turn adds considerable weight and bulk to the vehicle (and further reduces its efficiency). The Clarity needs a 173 litre tank (compared to 50 litres in a similarly-sized ICE vehicle) to contain 4.1 kg of H₂ that delivers a range of 300 km.

VEHICLE EFFICIENCY

Considering all the inefficiencies of generating, transporting and distributing hydrogen, and comparing them with generating and distributing electricity, how do the “well-to-wheel” efficiencies compare? Ulf Bossel, director of the European Fuel Cell Forum, has published just such a comparison.⁴ He found that “the power-plant-to-wheel efficiency of a fuel cell vehicle operated on compressed gaseous hydrogen [produced by electrolysis] will be in the vicinity of 22%”, and that “using liquefied hydrogen does not improve the situation… the power-plant-to wheel efficiency of a fuel cell vehicle operated on liquid hydrogen will be in the vicinity of 17%”. In comparison, he finds that electric cars are a much more attractive proposition: “with these numbers, the power-plant-to-wheel efficiency of an electric car with regenerative braking becomes 66%”. This means that a driver could travel three times as far in an electric car as they could in a hydrogen-powered car using the same amount of electricity. Hydrogen-fuelled ICE vehicles are even less efficient than hydrogen fuel cell vehicles,⁵ and thus provide even poorer overall efficiency again: around 14% and 11% for compressed and liquefied hydrogen respectively.

The distance driven by a vehicle is proportional to the mechanical energy available. Even for the most favourable comparison, being against a hydrogen fuel-cell car, the electric vehicle can drive three times further per kWh of electricity consumed. Compared with a H₂-fuelled internal combustion vehicle, the electric car can drive around five times further (see graph below). The fundamental problem of using hydrogen as fuel is that the process uses electricity to produce H₂, then more energy to compress and transport it, and more energy again to convert the H₂ back into electricity that is finally used to drive the same electric motor that is found in a battery-powered electric car. That is in part why, when concluding his paper to the IEEE entitled “Does a hydrogen economy make sense?”, Bossel answered with one word: “Never.”⁶

Forbes:

Bob Lutz.

Disappointed With Electric Cars, Automakers Are Making Bad Bet On Fuel Cells

Well, we’re hearing it again: the hydrogen fuel cell represents the future of automotive transportation. Japanese and German automakers have formed new alliances to develop fuel cell technology, and the father of the Prius, Toyota’s Takeshi Uchiyamada, is saying that it holds more promise than battery electric vehicles, which he says haven’t worked out to be “a viable replacement” for gas-powered cars. Clean, silent, (well, OK, a high-pitched whistling sound), uses no fuel whatsoever, except hydrogen, the most plentiful element on the planet, and emits only water vapor. The range is way more than that of almost all electric vehicles!

It’s the hydrogen future! Who wouldn’t want all that?

'Dying' EV Industry Set for GrowthJohn GartnerContributor

What's Gone Wrong With The Electric Vehicle Market? Nothing.Bob LutzContributor

Trouble, as always, is that there are some major speed-bumps on the way to fuel-free utopia.

First of all, there’s the gas. Hydrogen is plentiful, but it’s never found in a “free” state. It’s always part of a compound, as in H2O. Separating it from its partner requires energy, usually electricity.

Then, it has to be stored, and, because it’s lighter than air, it needs to be compressed or cryogenically tanked, again under massive pressure. All that compression to 10,000lbs/inch and freezing once again requires? … Anyone? You got it! ENERGY, again mostly electrical, and in fairly massive quantities. Thus, the hydrogen fuel cell, by the time the “fuel-free” vehicle hits the road with its massive wound carbon-fiber tanks, has already amassed a considerable carbon foot-print.

If the EPA uses the same calculation for fuel cells as for battery vehicles, whereby the energy used to charge the battery is counted and deducted from the mileage label, fuel cell vehicles would be rated at about 80 mpg. Not bad, but far less than a Chevrolet Volt, and at a much higher cost.

A fuel cell is conceptually not unlike a lead-acid car battery in reverse. Put your car battery on a charger and electricity goes in, and hydrogen escapes. (This is why you don’t smoke cigars around a car battery that’s being charged. Ask me how I know!)

In the fuel-cell stack, hydrogen goes in and electricity comes out, which then powers the car. So, a fuel-cell vehicle is really just another electric vehicle that produces its own electricity from all that compressed hydrogen it’s schlepping around.

But, that’s the good news! Now let’s ask the big question “Where do I fill it up?”

High-pressure hydrogen fueling stations are thin on the ground, despite the former California “Governator’s” initiative of creating a “hydrogen highway,” linking the Golden State, north to south, with all those future fuel cell vehicles silently hissing their way from pump to pump.

But even if more stations are built: How does the hydrogen get to those fueling points? Why, by cryogenically cooled tanker trucks, of course, which use … energy, mostly in the form of diesel or liquid natural gas, both “evil,” planet-melting fossil fuels. Not exactly the convenience of fully-electric or extended-range electric cars, which find outlets a-plenty in every home and garage.

The fuel-cell stack itself is an expensive proposition, being coated inside with rare metals like rhodium and platinum for the necessary electro-chemical reaction to take place. When GM built a fleet of 100 fuel-cell Chevrolet “Equinoxes” a few years ago, each one cost over $1 million. Assuming that success in cost reduction and new materials will eliminate 90% of the million, the manufacturer is still left with a $100,000 vehicle … a problem!

A vehicle which emits nothing but “clean, pure water vapor,” known, by the way, to be the planet’s No. 1 green-house gas.

My prediction: unless something close to magic happens in Japan or elsewhere, the fuel-cell vehicle will forever be a wall flower at a party dominated by fast, fun, powerful conventional cars and clean, high-range, rapidly-rechargeable battery vehicles.

I could be wrong. But I don’t think so."