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Mark Anthony, is an IT professional and who had a scientific research background before joining the information revolution. Visit his blog: Stockology (
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  • More Grave Warnings to Precious Metal Investors 10 comments
    Jun 17, 2011 6:34 PM | about stocks: CDE, ABE, FAS, FAZ, FSLR, GLD, GOLD, PAAS, PAL, PALL, PPLT, SLV, SSRI, SWC, TBT, UDN, UNG, USO, UUP

    I always believe that the right way of investing in precious metals commodities are to either hold the physical stuff, which means stockpile oil barrels in your own backyard, or buy silver and palladium coins and stuck them under your mattress, or alternatively, buy stocks of producer companies who can leverage on the appreciation of the price of the commodities.

    As the fiat currencies of the world keep losing value, investors turn their attention to precious metals and commodities. In meeting this demand, various ETFs mushroomed out of no where every day. I am skeptical why the banks are so eager to take the troubles to create new investment vehicles to help OTHER investors make money, while as sponsor they have very little to gain other than a very moderate management fee. Have banks become nice Santa Clauses?

    I remain skeptical to ALL ETS vehicles. There are two categories of ETFS. One that holds nother but paper: future contracts or other derivatives. I completely reject this category of ETF as worthless paper, as they are merely gambles and they can be created out of thin air. This kind of paper based ETFs all tend to spiral down to zero over the long term. Good examples are like UNG, USO, FAS, FAZ, ZSL and many others. I would not touch any of them as a legitimate investment, as they all tend to spiral down in the long term. Recently I even poundered of shorting a cotton ETF, called BAL, but I missed a good short entry.

    Another category of ETFs seems to be a bit more legitimate. Those are ETFs that claim to have physical commodities to back up the asset values, for example, GLD, SLV, PPLT and PALL, and a number of others. These ETF would seem to be good investment vehicles, if they indeed hold the commodities that they claim to hold. But the problem is such ETFs are sponsored by questionable entities with questionable motivations. If you do not want a fox to look after your hens, why would any one believe in the silver ETF, SLV, sponsored by a certain large bank widely believed to hold a huge short position in silver?

    I wrote in the past to raise red flags on SLV and other physical commodity ETFs, there is no credible evidence they hold the physcial metals. And there are plenty of good reasons why they don't have the metals. Read here, here and here.

    In the last article, I raised several issues regarding the SLV silver audit certificates, and compare it to the audit certificates of The anormalcies include that there is no audit job reference number, and that the audit was drafted in American English instead of British English (Inspectorate International is based in UK and the vaults are in UK), and that the document seems to be a digitally composed document, instead of a scanned paper document, among other things.

    A few days after I posted that article, and after I emailed Inspectorate International, I received an email claiming to be from the secretary of Paul Alston of Inspectorate International, which simply stated that the SLV audit certificate was authentic, without elaboration. The email does not appear to be from an IP address based in UK, so I could not be certain it was indeed from Inspectorate International.

    The email did NOT settle the question of authenticity of the SLV audit certificate, as the legitimate suspicions of the anormalcies remain un-answered. Further email to seek explanation went un-answered.

    Today, upon a Eureka moment, I find a few more evidences which I believe finally nail the SLV audit certificate as counterfeit documents. Not only that, the certificate presented by ETF Securities looks to be counterfeited as well.

    Among other things, the supposed to be signature of Paul Alston is NOT actual hand written signature on a paper certificate scanned into a PDF document, but rather a digitally doctored signature directly implanted in the PDF file.

    Before I continue, here are the links to the several Inspectorate International audit certificates:

    1. The audit certificates on web site.
    2. The silver audit certificate presented by ETF Securities, and the one for gold.
    3. The SLV audit certificate download page, and the zip file of the two certificates.

    Please download them, save to your computer. Then let me show you how to expose the phony signature of the counterfeit document.

    First open one of the audit certificate. Scroll the screen display so you can see the Paul Alston signature and portion of the document text. If you use a PC computer running MS Windows:

    1. Hit Alt-PrtScn to capture the screen snapshot of the document display.
    2. Start the Paint program by selecting [All Programs] ->Accesories->Paint
    3. Ctrl-V to paste the screen snapshot into the Paint program.
    4. In Paint, select the bucket "Fill in color" tool, then click to select a light blue color for the fill. Click any point on the while background.

    This is what I got from the audit certificate. Everything looks normal and the way it is expected in a scanned paper document:

    This is what I got from the SLV audit certificate. Some thing is not quite right:

    Notice the halos around the signature and around the text. Notice how the halos have very regular, straight edges, implying such halo edges are the result of manual editting. Those halos are not expected in a normal scanned document.

    This is what I got from the ETFS audit certificate. Same thing is not quite right:

    Again notice the halos around the text and around the signature. Especially pay attention to the straight edge of such halos to the left of the signature, and that under Paul and Alston respectively. Those are artificial straight edges resulted from manual editting, suggesting that some one captures the signature from a different document, edited using computer software to remove some stuffs, and then pasted the signature image onto this new PDF file.

    I think that is enough evidence to conclude that both the SLV and the ETFS audit certificate are counterfeit documents doctored using computer programs, not authentic scanned document from an authentic paper audit certificate. That is my opinion. I will let readers draw their own conclusion, and let both ETF sponsors to come up with a logical explanation of what I exposed.

    Buyers be ware, if you invest in any ETF funds. I personally would not touch them after I see what I see here.

    Full disclosure: I am bullish in palladium and silver and have heavily invested in palladium mining companies SWC and PAL, and own silver mining stocks like SSRI, CDE, PAAS etc. I have no position in GLD, SLV, PPLT, PALL or any ETF.

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Comments (10)
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  • Skolar
    , contributor
    Comments (14) | Send Message
    what a load of rubbish
    18 Jun 2011, 07:53 AM Reply Like
  • Vuke
    , contributor
    Comments (1662) | Send Message
    Hardly rubbish. It looks more like very clever detective work on some suspicious documents.


    Everyone in the industry has a pretty good idea how these PM ETF's work. Buy a few bars in case someone calls for delivery and hold the rest in the form of digital storage promises - which hold some value until the Ponzi scheme collapses or fades away.


    Just calculate the number of armoured cars and guards required to transport SLV's supposed "inflows" and "outflows" to see how transparent the story really is.


    It's easy, no-risk money. If the ETF goes bankrupt all will be in compliance with security laws but YOU made a bad business investment in another paper promise. You may get back the price of the paper, but not that of the commodity.
    18 Jun 2011, 08:39 AM Reply Like
  • Mark Anthony
    , contributor
    Comments (3595) | Send Message
    Author’s reply » And of course, the phony audit certificates could not list an Inspectorate International audit job reference number, because no such number existed. Legitimate ones all have job reference number.
    18 Jun 2011, 06:12 PM Reply Like
  • Skolar
    , contributor
    Comments (14) | Send Message
    I really cant believe you are that daft. If someone forged Inspectorate paperwork why havent Inspectorate simply challenged the ETF Issuer and also at worst sued them? I can not really see how you can believe this stuff.
    27 Jun 2011, 09:22 AM Reply Like
  • Mayascribe
    , contributor
    Comments (11198) | Send Message
    Mark Anthony, Private Investigator


    How you ever figured to do what you did boggles my mind.


    18 Jun 2011, 06:30 PM Reply Like
  • Skolar
    , contributor
    Comments (14) | Send Message
    Guys get real.


    First all creations are done by third party market makers. There are probably well over 30 per fund. The fund NEVER buys metal itself and never creates units unless metal is delivered and allocated.


    Secondly you guys clearly dont understand how the LBMA clears metal movements. You highlight delivery based on metal movements. Don't forget all metal bought or sold by market makers for the funds are done through the LBMA. This trading is a fraction of the LBMA volumes. The LBMA does not move metal between custodians for each trade. They all have accounts with each other and move when efficient to do so.


    My objection to this 'rubbish' is its very typical of people who are looking for a conspiracy. 911, JFK etc. You can always find inconsistencies, but these are always very explainable and really dont amount to much.


    My advice is if you don't trust the financial system then don't use it.
    20 Jun 2011, 06:20 AM Reply Like
  • Gaucho
    , contributor
    Comments (879) | Send Message
    You are the "fool them every time" guys that will end up with nothing at the end of the day.


    Just repeat this ever morning and you will keep you fantasy bubble in tact.


    The Government will never lie to us.
    The US went to Iraq for WMD's that just disappeared
    Trust the bankers behind SLV and GLD since they have a sterling reputation
    Call everyone who exposes the bubble I live in a CONSPIRACY nut
    Believe every thing that the corporate media prints
    21 Jun 2011, 11:07 AM Reply Like
  • Skolar
    , contributor
    Comments (14) | Send Message
    Ok. I am happy to debate all this.


    What has the government got to do with this. ETFs are issued by capitalist companies.


    You talk about bankers behind metal ETFs. The Issuer is not owned by the bank. Its a Trust. The banks are service providers only ie custodians. They are paid a fee for their services. The ETFs are not created by the custodian they are created by the market. In fact the custodian has no idea of a creation until the day the order is sent at which time the metal has already been bought in the LBMA.
    27 Jun 2011, 09:26 AM Reply Like
  • Mark Anthony
    , contributor
    Comments (3595) | Send Message
    Author’s reply » Skolar:


    GLD and SLV produced an alleged gold bar audit report, in a PDF file. It is supposed to be a scanned image of an actual paper audit certificate issued by Inspectorate International, with some one's hand written signature endorsing it.


    I exposed that the image of the document is counterfeited, with the signature digitally implanted from some where else. It is not an original hand written signature, but a copy and paste of a section of an image using a computer. This suggests a couterfeit document.


    Now get over it! Readers can judge by themselves.


    This is a more recent investigation by CNBC which raises more questions:
    3 Sep 2011, 10:44 AM Reply Like
  • Mike Stansbery
    , contributor
    Comment (1) | Send Message
    Mark, it is obvious that you are a very smart fellow, but I have to question you on your conclusions. Let's assume that everything you say is true: that the entire document is not legitimate and that your methods for determining that are sound. Being a smart guy, unless you have your own ulterior motives, you should ask yourself a few questions based on your findings.


    If one assumes that text and Paul Alston's signature were pasted into the document from another source, one would have to assume that Paul Alston is complicit in the forgery. Were he not, he would quickly disavow that he had signed the document, thus exposing it as a forgery. I'm assuming he has not done that. Otherwise there would be nothing to discuss here. And if he were complicit, then there would have been no need to paste his signature into the document. He would simply have signed it.


    Perhaps you didn't expect that someone would actually try to replicate your above results, but I downloaded one of the documents in question and I have indeed replicated the steps you took to "prove" it to be a counterfeit document. However, my results do not confirm yours. I do NOT see the halos you show in your images above. In short, your conclusions have been debunked using your own suggested methods.
    8 Sep 2011, 04:00 PM Reply Like
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