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Trace Mayer  

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  • Covered Call Options: Generating Income From Owning Gold [View article]
    Michael, you do realize that in the CNBC visit Bob Pisani held up gold bar with serial number ZJ6752. After investigation that bar was determined to be owned by ETF Securities and they had not given CNBC or anyone else permission to handle the actual bullion.

    What a surprise to see their gold bar on CNBC!

    Of course, what is whose down there in the vault can get a little murky. Just ask people who had allocated customer segregated accounts at MF Global. So yes, GLD is a 'very practical substitute' until it is not. And when that happens physical possession is the only thing that matters.
    Jun 30, 2013. 01:10 PM | Likes Like |Link to Comment
  • Covered Call Options: Generating Income From Owning Gold [View article]
    OnMargin is getting at the real issue which is that gold and GLD are not the same instrument for one's portfolio.

    The negative correlation between gold and equities is helpful to keep in mind. Gold will likely perform well so long as negative real interest rates persist. Given the status of Europe and likely outcomes that is probably the play; short Euros long gold.

    Calls/puts may be helpful for smoothing currency exchange rate risk for a portfolio using gold as the numeraire. IMO, for making cash-flow style profits with covered calls there are easier ways like using a Canadian oil underlying like PWE, PVX or PGH.

    But I do find it rather humorous that you are long GLD and conflate gold and GLD. GLD is not gold but merely a gold price proxy, for now. Of course, this distinction does not really matter much until it is the only thing that matters. Just ask the people in MF Global's bankruptcy line who thought their paper gold instrument was gold .... suckers. Plus, it happened to many who should have known better.

    Here are some excerpts from a couple articles I wrote about the GLD ETF that may be relevant to the discussion:

    Page 11 states “Neither the Trustee nor the Custodian independently confirms the fineness of the gold allocated to the Trust in connection wtih the creation of a Basket [issuances].” Page 12 “In issuing Baskets, the Trustee relies on certain information received from the Custodian which is subject to confirmation after the Trustee has relied on the information. If such information turns out to be incorrect, Baskets may be issued in exchange for an amount of gold which is more or less than the amount of gold which is required to be deposited with the Trust.” There is no assurance that the ‘gold’ held in the ETFs is actually the same gold as defined under the periodic table.

    The latest 10-K ( Commission File Number 000-32356) on pages 26 and 18 respectively: ” Gold held by the Custodian’s currently selected subcustodians and by subcustodians of subcustodians may be held in vaults located in England or in other locations.” and “In addition, the Trustee has no right to visit the premises of any subcustodian for the purposes of examining the Trust’s gold or any records maintained by the subcustodian, and no subcustodian is obligated to cooperate in any review the Trustee may wish to conduct of the facilities, procedures, records or creditworthiness of such subcustodian.”
    Nov 25, 2011. 10:26 AM | 1 Like Like |Link to Comment
  • Gold Bug Feeding Frenzy [View article]
    kohalakid, please provide a credible and verifiable citation for your assertion that 'The GLD prospectus specifically says the fund does not lease gold and does not use futures or forward contracts. The only way to create GLD shares is to deliver physical gold to the trustee's custodian depository.'

    I have thoroughly analyzed the GLD documents for the prospectusly impaired:

    Additionally, in a report from Deloitte, a big four accounting firm who also performed the audit of GLD's 2008 10K, there is a statement in direct opposition to your assertion. On page 4 it states, "If the proposed ETF tracks a commodity, it buys ***or borrows*** certificates of ownership of that commodity." [emphasis added]

    (page 4)
    (audit statement on page 70-71)

    Consequently kohalakid your statement appears to be unsubstantiated, unverifiable and in opposition to recognized authoritative statements contained in the official documentation and in reports by recognized authorities.

    Doc224899, the illusion of security and stability is there isn't it! You heard about the Royal Canadian Mint scandal right? Darn Canooks!
    Nov 2, 2009. 08:15 PM | 3 Likes Like |Link to Comment
  • Gold Party Intermission Is Nearly Over [View article]
    Looks like this article was syndicated through SA a little late as I published it Oct 28 on Gold has since risen from about $1,030 to $1,060 or about 3%. Sorry SA readers for missing the actionable trade. If you want to get free email updates when a new article is posted just head over to the blog and sign up.
    Nov 2, 2009. 12:29 PM | 3 Likes Like |Link to Comment
  • Gold: You Can't Sell High If You Didn't Buy Low [View article]
    Dudley, Even at $1200 the price of gold will be extremely low because of the unwinding of the gold carry trade. Mr. Alan Greenspan testified twice before Congress saying 'Central banks stand ready to lease gold in increasing quantities should the price rise.' Central banks carry gold in the vault and gold out on loan as the same line item; in effect they report cash and accounts receivables as the same thing. As a result, central banks have only 1/2 to 1/3 of the physical gold as reported on their balance sheets. This means they hold not 30,000 tons but more like 8-15,000 tons of physical metal. All of this has been thoroughly documented by publicly available documents. The unwinding of that massive central bank position will be extremely bullish for the monetary metals priced in their fiat coupons.
    Oct 7, 2009. 10:54 AM | 3 Likes Like |Link to Comment
  • Is the GLD ETF Really Worth Its Metal? [View article]
    Consider_this, exactly. Given some of the unethical behavior of the players involved in the ETF which I discussed in the first article even more cause for prudence and caution may be required.

    The due diligence does not matter until it is the only thing that matters.

    On Feb 19 09:39 AM Consider_this wrote:

    > In that spirit, I applaud the author for bringing up issues to be
    > examined. With Wall street integrity the way it is, We need more
    > inquisitive minds like these.
    Feb 19, 2009. 10:02 AM | 7 Likes Like |Link to Comment
  • Gold ETF Reaches New Inventory High [View article]
    Too bad there is no guarantee that the gold held by the ETFs is actual gold or that there is even any in inventory. Of course, it does not matter until it is the only thing that matters.

    Seems a lot of Merrill Lynch's customers are getting skittish about the ETFs.

    Jan 9, 2009. 01:42 AM | 3 Likes Like |Link to Comment
  • Four Reasons for an Immediate Rise in Gold [View article]
    Precisely. The world is returning to sanity and reality which is a commodity backed currency. The FRN$ system does not so much collapse as evaporate but, as you tangentially point out by referencing the interim deflation, the FRN$ will be the last layer to evaporate. I think we may have longer than 12-24 months but things are happening a lot faster than I ever expected.

    The world has been in an inflationary credit expansion for decades and perhaps centuries. However, the zenith was reached and now the equal and opposite reaction has started which is a deflationary credit contraction.

    On Dec 30 12:13 AM EricH wrote:

    > The current fake and tyranical monetary and finacial system is breaking
    > down. Eventually (at the very last possible second) the blind and
    > noisy multitudes are going to see this, and when they do there will
    > be the biggest PANIC and flight to precious metals than known in
    > recorded history.
    Dec 30, 2008. 01:03 AM | Likes Like |Link to Comment
  • Four Reasons for an Immediate Rise in Gold [View article]
    It probably is a scam and probably will not be there. Read the prospectus. Of course, it does not matter until it is the only thing that matters.

    On Dec 29 09:56 AM sdavid0419 wrote:

    >My only fear now is that this GLD
    > fund turns out to be another scam and all the gold I think I own
    > isn't really there.
    Dec 30, 2008. 12:58 AM | Likes Like |Link to Comment
  • Own Gold? Time to Fold [View article]
    "When I first wrote up my negative view on gold, the price was slightly higher and the dollar was 5% stronger vs the euro and 10% stronger vs. the yen. At any rate, it wasn't a day-trading view. I will be concerned with the technicals if we take out 860."

    Well, after Lyle Gramley mentioned a possible Fed revaluation of gold it should scare just about everyone to buy some.

    But slightly higher than the $860 spot gold hit today? Up about $90/ounce or 12% since the article was published last week. One of my friends bought about $200k of physical gold on the 5th so he treated me to lunch and offered some Sugar Bowl tickets :)

    Anyway, I would not worry much. Gold is the 'smallest pool being played by the largest money'. The real way to play it is to accumulate physical on a regular basis with profits made trading other vehicles. The price is extremely manipulated by government players. Just look what happened when Bear Stearns failed; gold was down like $90/ounce. Actually, when the news is really bad gold always goes down and it is so blatant it is almost laughable.
    Dec 17, 2008. 02:37 AM | 1 Like Like |Link to Comment
  • Own Gold? Time to Fold [View article]
    There is some fairly obscure information that appears lacking, or at
    least unaddressed, in your article. It is unfortunate that most of the 'gold bugs' resort to ad hominem attacks with name calling. Resorting
    to such tactics usually stems from intellectual impotence.

    Issue 1: Whether the central banks still have the gold they claim. The assertion is made that the case has been pretty much cracked that
    central banks have only about 33-50% of the gold they claim to have.

    Issue 2: 'Conspiracy' to keep the price low. I addressed this issue
    in a 2 minute interview on the Korelin Economics Report.

    Issue 3: Gold's use as a currency in ordinary daily transactions. Currently the use of gold as a currency in ordinary daily transactions
    is extremely low but it is gaining velocity at an exponential rate.

    Issue 4: If you hold gold its time to fold. I assert the onslaught of a deflationary credit contraction. As such moving from physical gold would be against economic law.

    Assuming you have not been exposed to these assertions, because they are not addressed in the article, they should be something interesting ideas for thought.
    Dec 13, 2008. 05:30 AM | 2 Likes Like |Link to Comment
  • ScotiaMocatta: Gold Trends to Snowball [View article]
    "gold will be withdrawn from the system and returned to central banks."

    I am not sure the central banks will be able to get the gold back. There is a difference between gold and paper gold. Generally the people with the gold own it unencumbered and are hanging onto.
    Dec 12, 2008. 04:52 AM | Likes Like |Link to Comment
More on GLD by Trace Mayer