Ten Reasons to Avoid the Gold ETF

"Given that the stated amount of gold in the GLD Trust has grown to over 850 tonnes, it appears that a lot of investors believe that investing in GLD is the same thing as buying physical gold bullion."

Dave Kranzler, www.lemetropolecafe.com, Little Bear Table, 2-10-2009

There may be many things to hope for in the oncoming Obama administration. Investing in the bullion ETF, GLD, is not one of them.

1. I'll start with the opening sentence of the gold ETF itself and work outwards to you. The opening sentence of the November 2004 gold ETF prospectus said, "This ETF is intended to track the performance of the price of gold." Note that it doesn't say it will own gold, or anything so prosaic. This Exchange Traded Fund that promises easy gold ownership for America is only going to track it. You know, like your cat tracking a crow in the back yard. And if GLD or your cat never quite gets there, well, it was an interesting exercise.

A careful reading of the first sentence should tell you that this is a document written by lawyers, and it is intended to be read by other lawyers who might be thinking of suing the guys represented by the first group of lawyers. The opening sentence is nothing if not defensible.

2. GLD Share Price: The current price of the ETF is said to be 1/10 of the price of gold. Yet, GLD's price is usually below the actual price of gold even as priced on the COMEX. Well, when GLD sells new shares that's the amount of money they get to buy gold. And they buy ounces of gold with it. This means that somehow, by some secret method, the guys managing a gold bullion ETF, while always behind the market, manage to pick up tonnes of gold at a discount to the COMEX price. This is not possible. The gold market is global and operates 24/7 all over the planet. If gold is under priced somewhere, it will be arbitraged like a Tonya Harding knee chop.

Think about it. Gold is currently very difficult to find under the earth. It's tough to mine profitably, much less mill and smelt, and insure, transport and store. Why would anybody be selling a bar of gold even near or below the price of an historically suspect pricing mechanism like the NY COMEX? Why is there no premium on these shares? The Central Fund of Canada (CEF) trades at a premium, but then, it goes to some lengths to actually buy and own gold bullion.

Only if there's some other "form" of gold being purchased, such as a derivative "promising" to deliver gold, can the pricing mismatch begin to be explained. (See #9 below, Jim Turk says there are only gold "deposits" involved here. And Jim Sinclair says gold derivatives are being used.)

Or perhaps the disparity of price could have to do with the shorting of GLD shares by those nefarious short sellers. With shorted shares, at the very least, you have two potential claims to ownership to a GLD share. If the shares were shorted naked, who knows how many claimants there could be. Want to go there?

3. Gold Acquisition: Then there's the amount of alleged gold acquired for GLD per se. Many sources, including the World Gold Council, the Sponsor of the ETF, have noted that the quantity of gold mined the past four years has plateaued somewhere below 2500 tonnes a year. Divide even that optimistic 2500 tonne number by 52 weeks a year, and you get about 48 tonnes of global gold production per week.

Yet, somehow, during the first two weeks of February, 2009, for instance, GLD said it acquired almost 103 tonnes of gold, more gold than was mined in the entire world during that two week period. (Don't ask about getting gold from above ground stocks. Do you think that owners of large piles of gold are selling these days?) GLD's purchases apparently left zilch gold for all those other gold bullion ETFs - the IAU in the U.S., and the British, Swiss, Indian and Australian gold ETFs in their respective countries.

These plentiful purchases of GLD occurred smoothly and instantly despite London Metal Exchange buyers, mining shortfalls, South African power failures, the dental profession, manufacturing, and even Central Bank buying. And GLD did all this buying without kicking up the price unduly?

India, which has been buying more than 25% of the gold coming out of the ground for years (said to be some 15 tonnes a week) apparently got none.

The OPEC countries, that have been buying a lot of gold through Istanbul, apparently didn't get any gold those weeks either.

And the jewelry industry, which supposedly absorbs over 70% of the gold mined each year, apparently surrendered its purchasing for the first two weeks in February so that ONE American bullion ETF could buy all the gold available.

Ever heard of a guy named Tino DeAngelis? Back in the 1960s, he said he had a lot of salad oil...and didn't. If you believed in Tino, and you believe in the GLD purchasing prowess, then you probably also believe in financial tooth fairies.

4. The Legal Structure of GLD. Who are these guys?

A. There is a Sponsor of the ETF - the World Gold Trust Services, a subsidiary of the World Gold Council in London.

B. There is a Trustee subsidiary that holds title to the bullion and issues shares - The Bank of New York (BK).

C. There is one listed Custodian - HSBC (HBC), and provision for one or dozens of "sub" custodians, Great, if something goes wrong, first you've got to find where which custodian allegedly had it. And while the custodian is charged with a duty of due care in hiring the subs, there's no assurance the subs won't screw up afterwards and there's no real recourse if a sub does. Which brings up...

D. There is a marketing agent, for the shares - State Street Global Agents, a separate creation of State Street Bank (STT) in Boston, but they really don't answer anybody's questions. GLD is considered a "permanent offering" and the aforementioned marketing team can say nothing about anything during a permanent "quiet period." This ETF took two years to get through the SEC...And I'm not sure it didn't get the benefit of grade inflation on the SEC view of crookedness as it went along. "Hey," the SEC said, "This ETF isn't absolutely, totally rotten on its face, let it go through. At least it's not a CDO. Hah, hah."

Each of these outfits have created separate subsidiary corporations to provide more limitation of liability for the parent. There were marvelous waffle words, and exemptions from legal liability for even these subsidiary players in the original S1 prospectus, filed on November 15, 2004. These have been carried forward and even improved upon. See the prospectus.

5. Sub Custodian Shenanigans: Assuming GLD managed to find some gold and buy it, and some sub custodian somewhere got possession of it, there's nothing in the legal structure that prohibits the sub from leasing or even selling that gold and putting an IOU in the vault claiming it still owns it. Central Banks and the IMF have been shuffling these cards for decades.

The Bank of England is listed as a sub custodian. Other sub custodians are the Bank of Nova Scotia (BNS) (ScotiaMocatta), Deutsche Bank AG (DB), JPMorgan Chase Bank (JPM), and UBS AG (UBS) (Page 47). All are known to actively lease or otherwise trade in the gold markets. I.e., I believe that investors should assume that there will be trading or leasing of GLD assets,

When the gold bull market ran out of gas back the early 1980s a lot of allegedly respectable gold dealers who claimed to be storing gold for their customers, fessed up and said they didn't have it, and went broke.

On June 12, 2007, Morgan Stanley announced it had settled a case wherein a Mr. Silberblatt was charged for storage and insurance on silver that Morgan had never bought. And Morgan claimed in its defense that its "practices" were the "industry standard."

Such disreputable practices occur in most precious metals areas with great regularity. You really ought to consider deep therapy if you believe the promises of a financial institution these days if it's talking about gold. Hell, if it's stonewalled and fibbed to Congress, regulators, auditors and the media about almost everything, why wouldn't it lie about gold? (That's a rhetorical question.)

6. "Regulation" of the ETF: After the Fed's failure to regulate much of anything, the SEC's treatment of Bernie Madoff, and its elimination of leverage maximums for brokers, the NYSE killing of the NYSE Uptick Rule and circuit breakers, and bank regulators' encouragement of cheating at Countrywide, I barely see the point of mentioning regulation. There is NO adult supervision of financial guys. Customers are absolutely on their own.

Oh, ok, the Trustee can monitor the custodian "up to twice" a year (Page 37 of the prospectus). Oh, the ignominy of a visit from an official every six months. And there's no mention of what will happen if an inspecting official finds some wrongdoing. Probably just drop a note in a file. The Trustee apparently does not have the right to visit the premises of any sub custodian for the purposes of examining the actual gold, but only to visit to look at records maintained by the sub custodian. And no sub custodian is obligated to cooperate in any such review.

Finally, the prospectus clearly states that the auditor's “responsibility is to express an opinion on the Trust’s internal control over financial reporting.” Boy, that makes me feel better. Their processes are good.

7. If Things Do Go Wrong: If the Sponsor, Trustee, Custodian, Sub custodian, or Marketing Agent folks fall over, they'll have high priced lawyers defending them everywhere. (Bankruptcy is not a totally unlikely scenario, considering the recent performance of Bear Stearns, AIG, Lehman Brothers, CitiGroup, Fannie Mae, etc.) Well, since the prospectus excuses all sorts of GLD malfeasance, non-feasance, negligence, and probably even manslaughter, customers would - at best - wind up as general creditors of a GLD party. And investors will be far down the list of creditors behind bank lenders, bondholders, preferred shareholders, and common stockholders. Have you considered Lottery tickets for your retirement?

Oh, and there may be a few delays and costs involved...in the bankruptcy filing of a giant financial institution with claimants from all over the planet. And I doubt if specific performance is available to claimants in a bankruptcy proceeding to help people get the actual gold they thought they'd bought. Wasn't gold ownership supposed to be for safety without counter party risk?

And this is an American ETF, yet most of the custodians are British, European, or Canadian. Eh? It will be difficult to sue them in U.S. Courts, and it will be expensive to sue overseas. What, there weren't any suitable sub custodians available in the U.S.? I hear Fort Knox is mostly empty, maybe the ETF could store its alleged gold there.

Also, there is no requirement that the Trustee, Custodian or sub custodians carry insurance or even a surety bond with respect to gold. (Page 11). So even if a liability is found...there probably won't be any deep insurance pocket money.

In summary, the GLD prospectus is a steaming pile of legal loopholes. Only a lazy mutual fund manager or a brain-dead pension fund manager would touch this turkey. It's also likely that retail investors, and their highly compensated advisors, are even remotely aware of the astounding risks declared in the ignored GLD trust documents.

8. There are other GLD critics, besides the Financial Foghorn here, who think that the gold ETF is untrustworthy. Dave Kranzler, from whom much of this dissertation has been respectfully purloined, has obviously analyzed the prospectus carefully and found it wanting.

James Turk, a former money manager for the Saudi Arabian Central Bank, long time precious metals market analyst, and the founder of www.goldMoney.com, has been critical of GLD since it was proposed in 2004. And he recently noted that the August, 2008 GLD updated prospectus, on page 3, says: "Proceeds received by the Trust from the issuance and sale of Baskets consist of gold deposits and, possibly from time to time, cash." A "gold deposit" is a word that has a precise meaning in the law, and is the exact opposite of "bailment".

A bailment is what happens when you give your car to valet parking. When you present the ticket, you get your very own car back. With a "deposit," a bank gives you a certificate of deposit, a checking account statement, a savings book or some other evidence of its debt to you. You are no longer entitled to get your very own dollars back, but have become a depositor and general creditor of the bank. Title/ownership has transferred from you to the bank, and the bank can do whatever it wants with your former dollars.

It is extremely unlikely that a highly paid passel of lawyers that worked over the GLD prospectus would offhandedly put in a word like "deposit" unless there was a good avoidance-of-liability reason to do so. If physical gold were actually in the ETF, the above statement would have read: "Proceeds received by the Trust from the issuance and sale of share baskets consist of gold (or gold bailments) and, possibly from time to time, cash."

Turk's point, and Kranzler's reference, is that "gold" is one thing and a "gold deposit" is something entirely different. "Gold" is physical metal stored/bailed in a secure vault. A "gold deposit" is a liability of a financial institution, and it's just another lousy paper gold IOU. Whoops.

Jim Sinclair has chimed in with his opinion on these issues at www.jsmineset.com. He says that the only thing GLD owns is derivatives on gold, and that allows for much game playing to fool the rubes.

9. But can you actually get real gold from GLD? Yes, Virginia, there is a provision in the prospectus for obtaining possession of the gold bullion your shares represent. Unfortunately, it's a cruel hoax. You must own a minimum of 100,000 shares (I believe it used to be 50,000 shares under the 2004 prospectus) to claim your bullion. Hmmm, 100,000 times $90 or so a share would be $9 million. Think the little guy is gonna put in for any actual gold? Think the mutual fund guy is gonna go to his boss and say he wants to take delivery of 10,000 ounces of gold? That's 833 pounds of gold. "Delivered here?" "Gonna put that in the conference room, Tom?"

10. So why do these gold and silver ETFs even exist?

My belief is that the real purpose of a bullion ETF is to be a sacrificial lamb. The growing number of gold and silver ETFs around the world will indeed accumulate some gold and silver, and under some Executive Order down the road, Da Boyz will swoop down and take it, just like 1933. They'll need the gold to back their spanking new, Global, Electronic, All-Beef currency. An ETF seizure will be much easier than going bank box to bank box to get citizens' gold.

Given the citizens' restiveness these days, it isn't hard to predict that it will be slightly more difficult in the 21st century to convince citizens to turn in gold than it was back in 1933. Our current politicos appear to have dissipated some of the trust people have traditionally had for their elected Representatives. (Insert your favorite, dastardly Congress-person examples here...)

And as far as legalities are concerned, the government will indeed comply with the 5th Amendment Taking-with-Due-Process issue by paying the investors for the value of gold on the day they seized it.

But that will be a far cry from the price of gold the day AFTER they seize it. The day after an ETF seizure, the world will realize that the paper jig is up, and everybody will want to own physical gold, or a real gold mining company. Why not do that now?

Disclosure: I don't own shares of GLD, I do own shares of CEF.

Comments

[auto44:]

There you have it. The risks of buying metals etf's are in TRUST. This risk is inherent in almost any investment. If you buy a gold mine do you TRUSTthe estimate of the value of the product in the ground and management to tell the truth. if you buy physical gold do you TRUST the seller to be giving you a product that is of the purity advertised. Is there a reason to TRUST the central fund of canada, a closed end fund, more than any other fund? A lot is said about due diligence. How do you do this,go in the gold mine and look around,go in the vaults and look around, preform chemical and specific gravity tests(EUREKA) on physical gold shipment? The author has given us a very valueable lesson and it fits more than just investing in etf's. I don't think I am going to sell my (GLD) but I am certainly going to be more wary. THANKS.

Feb 18 11:27 AM

[auto44:]

Paultaut, I took a brief look at ugl on yahoo finance and it appears to deal in derivatives. Admittaly I am a poor speller and also know little about such things. How would trust be any less of an issue with ugl. Any light you could shed would be most helpful.

Regards,

Feb 18 11:41 AM

[searcher:]

Gold deposit - gold bailment. ETF - ETN. Equity - Debt in producers and their 'reserves'. They are all 'representations'. If the 'reasons' are foremost in mind, then possession of physical gold is your only true option.

Feb 18 12:17 PM

[Augustus:]

GLD is not the same price now as 1/10th physical price as there have been storage costs since inception.

CEF is priced at about a 12% premium to NAV. What an opportunity.

Feb 18 12:24 PM

[whenmusicstops:]

Could the same be said about most commodity ETF's ie USO??

Feb 18 02:52 PM

[HBWOW:]

Well writtten article which outlines my feelings about the fund. Is anything trustworthy in today's market? I like owning foreign stocks which don't receive the massive insider withdrawal of corporate funds like here in the states. Appears to be a mad race to rape the cash and leave the banks and stockholders with a skeleton to pick over.

Feb 18 02:56 PM

[jt:]

Excellent article...am emailing MIDAS to make him aware and perhaps put a link in this evening's LeMetropole.

Augustus...with that comment, I think you are an ideal candidate to buy more GLD...or perhaps you work for one of the banks behind it?

whenmusicstops...yes, that is true about almost all commodity ETFs...CEF is and exception rather than the rule. That is why it is so important to own physical PMs if you're truly looking for a safe haven for your wealth. Even CEF should be a somewhat distant second to owning physical. But IMO, and many others who have been following the gold / silver / currency markets and the "strong dollar policy" for years, the ETFs were an obvious attempt by those suppressing the prices of gold and silver (the sum total of Rubin's "strong dollar policy" btw), to detour monies heading into the PMs into more paper that they control. Just look at the backing of the PM ETFs and you'll understand.

Take your money out of GLD, buy physical if you can, if you're limited by your IRA, buy CEF, or producing mining stocks...esp mid-and early/very near (with the capital to do it) producers. Forewarned in forearmed...jt

Feb 18 03:37 PM

[xtrmntr:]

any chance that it is constructed like USO ? meaning you don't own any physical things, but just futures that are rolled on ?

Feb 18 03:42 PM

[jt:]

Le Patron of LeMetropoleCafe (an outstanding subscription service well worth the yearly fee of ~$200 for pertinent daily commentaries from around the globe, btw) said he'll put the link to this article into tomorrow's MIDAS du Metropole...today's has already been put to bed.

jt


On Feb 18 03:37 PM jt wrote:

> Excellent article...am emailing MIDAS to make him aware and perhaps
> put a link in this evening's LeMetropole.
>
> Augustus...with that comment, I think you are an ideal candidate
> to buy more GLD...or perhaps you work for one of the banks behind
> it?
>
> whenmusicstops...yes, that is true about almost all commodity ETFs...CEF
> is and exception rather than the rule. That is why it is so important
> to own physical PMs if you're truly looking for a safe haven for
> your wealth. Even CEF should be a somewhat distant second to owning
> physical. But IMO, and many others who have been following the gold
> / silver / currency markets and the "strong dollar policy" for years,
> the ETFs were an obvious attempt by those suppressing the prices
> of gold and silver (the sum total of Rubin's "strong dollar policy"
> btw), to detour monies heading into the PMs into more paper that
> they control. Just look at the backing of the PM ETFs and you'll
> understand.
>
> Take your money out of GLD, buy physical if you can, if you're limited
> by your IRA, buy CEF, or producing mining stocks...esp mid-and early/very
> near (with the capital to do it) producers. Forewarned in forearmed...jt

Feb 18 03:54 PM

[richpee:]

FF

I have no idea or understnaidng why you've written your artilce as you did. Misinformed and misrepresenting your comments. Had you done any reserach you would have seen that the SPDR is holding GOLD on deposit at State Street Bank & Trust and the following links will show all of the readers interested on what's rela or not rela by reviewing the prospectus..
It's scary that artilce like this can be wriotten and present ed in a professinal manner..hopefully interested investors haven't been turned away from a legal enity that has been reviewed and approved for sale by the SEC in the USA.

I've passed your article on to the underwriters for further review and to adress your points and respond upon them

RIchpee

by looking at the prospectus...you can see

www.spdrgoldshares.com.../

Total Gold In Trust:
Tonnes: 1,008.80
Ounces: 32,433,843
Value US$: 31,260,874,923.52


www.spdrgoldshares.com.../





Please check this article out and give me your professional opinion as to the validity of this writters comments..

on the backing of GOLD metals if any on GLD ETF series...


seekingalpha.com/artic...

Feb 18 04:22 PM

[Sakata:]

On Feb 18 03:37 PM jt wrote:

> Take your money out of GLD, buy physical if you can, if you're limited
> by your IRA, buy CEF, or producing mining stocks...esp mid-and early/very
> near (with the capital to do it) producers. Forewarned in forearmed...jt


Has anyone else noticed the performance of CEF and GTU since the end of January. During that period GLD has gone up 6.13%. GTU, whose holdings are 95% gold bullion has gone up 13.95%. CEF, which holds both gold (56%) and silver (41%) bullion should have gone up 9.11% as compared to GLD and SLV but actually went up 11.30%. GTU is trading at a premium of 17% and CEF is trading at a premium of 14.0%.

There has been many posts here during the last month about how GLD is suspect for not having the physical holdings it claims. Are these figures an indication that people are beginning to listen and that a significant percentage are moving away from the US-based GLD and into the Canadian-based GTU and CEF? I, for one, switched my holdings from GLD and SLV into both GTU and CEF on January 22nd. Since switching I have made 20.33% on that portion of my portfolio. Had I stayed with GLD and SLV I would have made only 16.9%.

Feb 18 08:09 PM

[jt:]

Well rp, whoever you are, even if they actually "have" the gold...here's the scam...perhaps a "legal" scam...but "legal" only b/c these banksters have been allowed to operate outside the law for so long by those in positions of trust and authority who have benefitted from their bosses' created out of nothing funny munny. It's called "multiple ownership"...ie, the gold used is used by multiple funds / entitities, ie, is encumbered, ie, may be unallocated but may even be allocated to someone and likely will never be claimed (or allowed to be claimed) by anybody:

Bix explains it in tonight's LeMetropoleCafe:

I see a lot of discussion on whether or not the gold and silver ETF's actually have the physical metal that they claim. Although Jim Sinclair says that he doubts it, from my analysis of GLD and SLV I believe that the gold and silver bars may actually be real and the serial numbers they quote might actually exist. Boy, wouldn't that be a shocker!

The fraud lies in the multiple ownership aspect of those bars and the physical location of the inventories. Fractional Reserve Metal Banking is alive and well in the ETF world! From my discussions with David Kass of the CFTC it is clear to me that there is a direct connection between COMEX warehouse inventories and the ETF inventories where both are being double counted without regard to sole rights of ownership.

www.lemetropolecafe.co...

Here's the way I see it:

1) There are multiple claims of ownership of the GLD and SLV physical inventories including ETF shareholders, sovereign nation reserves, working manufacturing/refining inventories, pooled accounts, metal certificates, swaps, leases, etc. Although much of it may be stored in the ETF sanctioned warehouses in London, it is also in various other places (Fort Knox for example!). It would not surprise me to find out that the "metal leverage" translates into 3 or more claims on each individual bar listed in the ETF inventories. Neither prospectus requires physical audits, sole ownership audits or any strict storage location requirements.

2) The supposed naked short positions in gold and silver on the COMEX have been justified to the CFTC by the banking cabal (mainly JP Morgan) by claiming that at any time they can back those positions with the physical gold and silver located (and identified by serial number) in the metal ETF's. As the COMEX short position grows the inventories of GLD and SLV must grow as well to justify the naked short. The CFTC has never, to my knowledge, verified that the metal is real OR that there are no other claims of ownership on those inventories. Of course the obvious claim on that metal is the shareholders of the ETF through their "Authorized Participants"....don't even get me started on who those Authorized Partcipants are!

3) In the end, a gold/silver default is inevitable thus rendering the multiple ownership aspect of the manipulation plan a success. The default will happen in concert with the multiple other financial/currency defaults thus deflecting and masking the true nature of the scam. Of course, the losers will be those who thought they owned the physical metal but will never reap the rewards of it. The winners will be the countries in which the metal is stored because a collapse on a grand scale will surely promote the nationalization of all gold and silver the government can get their hands on for the good of their population. Thus the BIG winners in this game will be the USA with the COMEX inventories and England with the ETF inventories....no surprise there.

On a side note, it is very encouraging to hear so many new voices exposing the banking cabal after years and years of the GATA faithful fighting this battle alone!

Time to buckle up...AGAIN!
Bix

Feb 18 09:26 PM

[Aristophanes:]

I have been holding CEF (C$:TSX) for awhile and some of the difference in their appreciation can be attributed to their splits between C$ and US$ exchange as they sell and list on both currencies..

I like the CEF set-up. They have a physical address in Calgary.


On Feb 18 08:09 PM sakata wrote:

> On Feb 18 03:37 PM jt wrote:

Feb 18 09:29 PM

[snoopyjc:]

I am holding GLD with an options collar, so if GLD blows up and goes down to near 0, I can still sell it based on my Put option, so I'm safe.

Ok - I'm also holding some CEF, but I'm not happy with the "dip" when they issued more shares at NAV last month.
--joe

Feb 19 10:42 PM

[mr freddo:]

I was sleeping a little better knowing that my GLD would give me at least a grub stake in the brave new post apocalyptic world. But your article really points out the weakness of holding GLD. Counter party risk. Trust.

Thanks again! I will be moving out of GLD and SLV shortly.

What do people think about the bullion vault?

Feb 20 12:46 AM

[C.M.:]

It's a good short-term way to make a ton of money but you need to know when to get out before it crashes. Note, this fund is rigged and manipulated All the signs are there with the crazy spikes in this stock lately that it's being blown up like a bubble. When the COMEX crashes, real gold will skyrocket. Thanks for the article. I decided to pull out on the $2.20 upswing today. Though it may go up insanely the next few months, it's not worth the risk. I'm convinced this fund is going to crash.

Feb 20 12:06 PM

[C.M.:]

Just a note of caution, the North American Union may merge Canada into the US and change its laws as such. Things could change dramatically.


On Feb 18 06:10 AM sakata wrote:

> I agree with everything in this article and switched all my GLD holdings
> to CEF earlier this year for the very reasons cited. However, there
> is one other reason which is very compelling and not mentioned here:
> CEF is Canadian held, and so not subject ot USA law in the case of
> possible confiscation.

Feb 20 12:14 PM

[C.M.:]

You need to pull out ASAP. It's set to crash. It's not worth the risk. It's a scam and the US govt owns a huge amount of it. The gov't is going to confiscate the buillion. You need to buy gold coins before it's too late. I spent $26,000 on non-confiscatable gold and silver coins. It's real, this fund is not. It's a con! Please get out on an upswing before you lose it all.


On Feb 20 12:46 AM mr freddo wrote:

> I was sleeping a little better knowing that my GLD would give me
> at least a grub stake in the brave new post apocalyptic world. But
> your article really points out the weakness of holding GLD. Counter
> party risk. Trust.
>
> Thanks again! I will be moving out of GLD and SLV shortly.
>
> What do people think about the bullion vault?

Feb 20 12:17 PM

[Smilin' Jack:]

Well written and good advice for those open to advice.. For those who believe whatever Wall St PR firms publish (remember Lehman was "in great shape" two weeks before it failed...) status quo is fine.. For others, there may be smarter ways to protect against the risk of defaulting shorts and empty vaults...

Feb 26 02:05 PM

[AlphaDude:]

I use bullionvault, they guarantee they have the physical and publish an audit. However you can't take possession of the physical (unless you own a whole 400 oz. bar that is), but I still see it as a great way to get exposure to Gold with minimal premium and storage charge.


On Feb 20 12:46 AM mr freddo wrote:

> I was sleeping a little better knowing that my GLD would give me
> at least a grub stake in the brave new post apocalyptic world. But
> your article really points out the weakness of holding GLD. Counter
> party risk. Trust.
>
> Thanks again! I will be moving out of GLD and SLV shortly.
>
> What do people think about the bullion vault?

Mar 08 09:45 AM