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Trace Mayer  

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  • Silver Backwardation Ends [View article]
    Long Silver John, I do agree with you that the patents make use of the safety and security of one's bullion provided in the legal documents. The following speaks only to the business advantage and not the safety and security of the bullion; I (not a patent attorney) along with a few friends of mine from law school (who are now patent attorneys) chewed on the various patents for a bit and all came to the same conclusion and do not think their patent(s) will withstand intense scrutiny in a good patent battle.

    I provide a link in the article to where I went through the GLD prospectus with a fine toothed comb and pointed out the problems. I also followed up the article with another article where I concluded "Under the GLD prospectus and latest 10-K it appears that the Trust neither needs to own actual physical gold that constitutes atomic number 79 nor allow their auditors to see and touch the undefined ‘investment in gold’."

    This is contrasted with GoldMoney users which receive an extremely thorough SAS 70 Type II audit report from a big four accounting firm and have the ability to demand physical delivery at any time as found in Section 8 E of the User Agreement:

    "E. A User may, by providing GoldMoney with delivery instructions, which instructions must be in the form prescribed from time to time by GoldMoney and the Vault, at any time request GoldMoney to change the goldgrams and silver ounces in his Holding into grams of gold or ounces of silver that are available for physical delivery to the User, provided that there are sufficient goldgrams and silver ounces to take delivery of a London Good Delivery bar of gold, which bar weighs approximately twelve thousand five hundred (12,500) grams, or bar of silver, which bar weighs approximately one thousand (1,000) ounces. GoldMoney will not charge a fee for its service, but fees may be charged by the Vault for acting on the delivery instructions."

    I think GoldMoney sets the standard for third-party bullion storage in the industry and in the interest of competition I would like to see their lead followed by additional entities like the Perth Mint, various pooled accounts, etc.

    On Jun 07 02:08 PM Long Silver John wrote:

    > I haven't yet put any money into GoldMoney, but I did read their
    > patent. Notably, their patent rights depend on them maintaining 100%
    > ratio of electronic gold grams and actual physical grams in storage.
    > That point of discipline would help keep in check any tendency to
    > begin issuance of electronic goldgrams in excess of stored physical
    > inventory (i.e., fiat money creation). The other thing is that their
    > inventory is audited, unlike Comex.
    Jun 7, 2009. 02:21 PM | Likes Like |Link to Comment
  • An Argument for Manipulated Gold and Silver Prices [View article]
    What do you think Legal Tender laws which violate Article 1 Section 10 Clause 1 of the US Constitution are? Of course there is massive manipulation in the metals market.

    Alan Greenspan testified twice before Congress over a decade ago about the central bank gold price suppression scheme saying, "Central banks stand ready to lease gold in increasing quantities should the price rise'.

    But it begs the question; If you own a lot of something then why run a cartel to keep the price down? Well, in this case the answer is simple: the power of the central banks to issue irredeemable tickets that the world uses as currency is infinitely more valuable than the price of a portfolio asset.

    All the evidence of the central bank gold price suppression scheme is there. Any rational person who continues to dispute the existence of the rig after exposure to the evidence is either in denial or is complicit. Here is a start:

    Be prepared or get financially wiped out.
    Jun 5, 2009. 12:37 PM | 3 Likes Like |Link to Comment
  • Gold Is Moving, Treasury Bubble Bursting [View article]
    User 142738, Your assertion and implied inference that the original article lacks competent academic prowess is completely unsubstantiated. Like usual in my articles the academic prowess is present with credible and verifiable citations from the German and US Constitutions, three Supreme Court cases, German legislation, the New York Times (what is that worth these days?) and a video with Obama speaking.

    In the original article you hear straight from Obama's mouth his new position on preventive detention. Preventive detention is a grave assault on Habeas Corpus. Hitler laid the foundation for his political persecutions and rise by removing Habeas Corpus with the Reichstag Fire Decree in 1933.

    In the original article the chain of facts and inferences are laid out crystal clear to show Obama's aggression against the Constitution, rule of law and individual rights which increases political risk and reduces the favorability of the economic climate for investors.

    In this case, Obama's new stance regarding preventative detention is leading to a reduced demand for investment in America just like Hitler's stance and rise led to a reduced demand for investment in Germany.

    I am not sure why Seeking Alpha would censor this type of important credible and verifiable commentary but it may be because in the eyes of the editorial staff it is seen as tangential and non-actionable to the Treasury and gold commentary. Another reason is they may be afraid of being preventively detained; this type of governmental policy does have a chilling effect on the freedom of speech and press. I do not think the reason is important but it is what it is and the original article was heavily edited in this syndication.

    GeminiAtlas, I agree that the Second Amendment is the flip side of the coin and is another essential check and balance; power of the purse and sword.

    On Jun 02 11:33 PM User 142738 wrote:

    > (Translation: I’m trying to compare Obama to Hitler by referring
    > to a piece of hearsay.)
    Jun 3, 2009. 12:27 AM | Likes Like |Link to Comment
  • Precious Metals ETFs Lack Proper Insurance [View article]
    Whippet, Only underinsured? This is from my original article critically critiquing the GLD ETF prospectus that stirred up a lot of this talk:

    "Just as you though it could not get any better, it states on page 9 of the Risk Factors, “The Trust does not insure its gold.""

    Why the Trust is paying for insurance when it does not insure its gold may be a whole different issue .... (of course, that may be a little out of context but it is fun!)

    It is important to consider the shady characters when deciding on where and how to buy gold or silver. A key issue is whether one can demand physical delivery at any time. I have some additional tips here:

    Despite the author's bias I think the article hits on a material issue which potential GLD ETF owners should be aware of before choosing that vehicle and current GLD ETF owners should use in reevaluating their decision. Thanks Mr. Coleman.

    On Jun 02 03:09 PM Whippet wrote:

    >And I agree with your premise that GLD and SLV are
    > underinsured (I use them only as option-based swing trade vehicles,
    > which they are wonderful for).
    Jun 2, 2009. 05:19 PM | Likes Like |Link to Comment
  • Gold Is Moving, Treasury Bubble Bursting [View article]
    Due to Seeking Alpha editorial considerations significant portions of the original article have been omitted regarding the increase of political risk due to Obama's assertions regarding preventive detention assertions. For those interested in the full article with its full political glory you can find it here:
    Jun 2, 2009. 05:14 AM | 2 Likes Like |Link to Comment
  • Drowning in Derivatives [View article]
    Whippet, and to think that of the gold available for sale were distributed according to a standard bell curve if one has 0.8 ounces, current market price of about $740, then they would be in the top 80%. Cash balances in checking accounts are surely higher. Of course, there is not too little gold or silver; only too much paper which will evaporate.

    erniem, you argument is effective currently only in the micro but not the macro. There has never been a single period in the history of mankind where all of humanity assigned no value to gold. Sure, you could assert the black swan argument. I suppose with nanotechnology, free energy and Star Trek replicators that gold could become valueless but I would not apply that future hypothetical to current events and calculations of value as that would be insane. You or Cetin can do it though as my portfolio, investments and trading activities are doing very well and I need someone to take the other side of the trade.

    On May 14 10:32 AM Whippet wrote:

    > There are only 2 ounces of gold on the planet for each living person,
    > and one has been mined. There are 34 ounces of silver per person.
    > The only risk to the long term values of these assets is a Steven
    > King "The Stand"-like scenario.
    May 14, 2009. 04:43 PM | Likes Like |Link to Comment
  • Key Ratios Between Gold, Silver, Oil and Stocks Are Moving [View article]
    Yes, extremely important. I was going to include this issue but was too loquacious so it will probably require an article all by itself. The end of this 30 year bull market in bonds is not going to be pretty. "I love the money fire!"

    On May 08 01:30 AM Adrian Douglas wrote:

    > The fact that the bond market is about break down is a very important
    > additional consideration.
    May 9, 2009. 01:17 AM | Likes Like |Link to Comment
  • Key Ratios Between Gold, Silver, Oil and Stocks Are Moving [View article]
    Roger, The Onion? Serious ... completely. It truly is America's Finest News Source.

    At least one pencil is sharp enough to write ....

    On May 07 11:37 AM Roger Knights wrote:

    > The author wrote, "by The Onion: America’s Finest News Source." Everybody
    > knows "The Onion" is a satirical paper, so the author was obviously
    > being deliberately facetious. (This is reinforced by his also linking
    > to the over-the-top absurdist video about the money hole.)
    May 7, 2009. 12:25 PM | 1 Like Like |Link to Comment
  • Bankrupt Banks and How Asset Values Are Deteriorating [View article]
    oldtimertoo, I clarified the conversation with my colleague and he responded the building is ~120,000 sq. ft. and in Del Mar, CA.

    While I would not consider Oceanside 'an armpit of a place', that title is reserved for places like Barstow, Omaha or El Paso, it being in Del Mar makes a little more sense as Del Mar is, in my opinion, one of the nicest places in the world although it can get a little expensive.

    As I responded in the second comment, rather than 'give away CA real estate' they would rather demolish it. I suppose it keeps the comps up and TARP juice flowing.

    On May 01 11:25 AM oldtimertoo wrote:

    > Maybe you screwed up some facts, but there is no way an office building
    > in Oceanside would ever be worth $640/sf. That is more of a Manhattan-type
    > valuation. Suburban CA office prices tend to run in the $200/sf
    > range, and less in undesirable places like Oceanside.
    > A lack of comps makes values uncertain, not zero. Please give me
    > a call if anyone decides to start giving away CA real estate. I'll
    > be happy to take it off their hands.
    May 1, 2009. 05:57 PM | Likes Like |Link to Comment
  • Bankrupt Banks and How Asset Values Are Deteriorating [View article]
    fatcat, I think we are in agreement. The condominium example also applies to a lot of these houses. I got distracted and forgot to mention how banks are actually demolishing brand new homes because they are worth less than worthless. Great way to use TARP money! Anyway, hopefully a comment will do the point justice.

    On May 01 02:44 AM fatcat wrote:

    > Agree with your article thing is wrong....a house
    > in Detroit ,boarded up and carried on the banks a tangible
    > asset,but is worth zero...they won't even repo it,because they would
    > have to pay taxes and city mandated repairs and maintainence...better
    > to leave it in the mortgage holders name.
    > Sad...
    May 1, 2009. 03:04 AM | 1 Like Like |Link to Comment
  • Leviathan Is Killing Itself [View article]
    Very well reasoned article. The gold derivatives and gold leasing by central banks are a key contributor to the current state of affairs and dwarf AIG's contributory effect. I am not sure about Gresham's law still being in effect because the great credit expansion of a millennium has ended and the great credit expansion has begun. During the very beginning of the great credit contraction there are examples of good money driving out bad and I think the trend will only continue and accelerate.
    Apr 17, 2009. 11:45 AM | Likes Like |Link to Comment
  • Digital Entities in a Physical World [View article]
    justsaying, you have a meticulous eye and would make a great legal secretary. Thank you for catching the minor typo which was probably residual dust from an earlier draft.
    Apr 13, 2009. 04:41 PM | 1 Like Like |Link to Comment
  • Did the ECB Save COMEX from Gold Default? [View article]
    Very well written article with powerful analysis. These vampires operate in the shadows so sometimes circumstantial evidence is the only way to triangulate their position.
    Apr 3, 2009. 02:34 PM | 1 Like Like |Link to Comment
  • Short Squeeze in Silver - How to Profit [View article]
    Thank goodness it is JP Morgan and not Morgan Stanley & Co. as JP Morgan is so much more trustworthy!

    "For example, in June 2007 Morgan Stanley & Co. settled a class action lawsuit for $4.4 million where the complaint alleged ‘that Morgan Stanley told clients it was selling them precious metals that they would own in full and that the company would store. But Morgan Stanley either made no investment specifically on behalf of those clients, or it made entirely different investments of lesser value and security.’ While the efficacy of the claim may still be at issue the Better Business Bureau-like complaint from unsatisfied customers who initiated litigation does not inspire confidence for those seeking to reduce risk."

    Gold is an extremely transparent asset, it is either in your hand or not, but as GATA proves the gold market is the world's most opaque.

    On Mar 20 08:28 PM Jason Hamlin wrote:

    > Mike L,
    > Thanks for the link and I was wrong, they do publish a bar list via
    > JPMorgan, for what its worth. That still does not guarantee that
    > the metal itself is not leased out or otherwise encumbered.
    > Correct?
    Mar 22, 2009. 03:36 AM | Likes Like |Link to Comment
  • Short Squeeze in Silver - How to Profit [View article]
    "Gold and silver occasionally slip into backwardation, but rarely for this long."

    Good article. This sentence seems to be a little inaccurate so here is an example of a correction: "Gold and silver [very rarely] slip into backwardation, but [never] for this long."

    With such long consecutive silver backwardation it will be interesting to see how this issue is resolved. With nickel the LME punished the longs. The resolution will likely be with serious pain and may be inflicted on the long investors who settle for either futures like Gumpwine asks about or SLV.

    With the counter-party risk escalating because of the instability of the owner is it any wonder SLV may be on the market for sale? Make no mistake; SLV is not silver and it is silver that individuals want in their possession and are willing to pay a significant premium for (backwardation).

    While markets can usually stay irrational longer than investors can remain liquid the physical commodities are different. Those that own completely and possess physical silver can stay liquid longer than those who are required by contract to deliver. I wonder if Congress will pass a silver bailout?
    Mar 19, 2009. 09:29 PM | 3 Likes Like |Link to Comment