deuxsous

Central Fund of Canada: Going for Gold

OG,

There are perfectly US-legal ways to buy designated stored gold bullion inside an IRA. I can't speak for 401k's. Any seach internet engine can tell you where to look.

Central Fund of Canada: Going for Gold

optionsgirl,

Good points all, including the Hunt screwing by Paul Volcker and COMEX! Did you notice Paul Volcker sitting quietly by Obama's side at one of his "mouth-offs" this week? I got the message.

And notice that NO ONE will ever comment on CEF premiums or possible Canadian government policies. CEF has a golden protectorate of posters, bloggers, and sellers. It's a family business too.

Do you buy a REIT to live in? I don't think so. My advice is if you want to own gold, buy actual gold, not CEF or GLD or IAF or SLV.

Central Fund of Canada: Going for Gold

Peter,

There are two somewhat connected questions I have about CEF that I never see anyone discuss:

1. Why should a fund containing only gold and silver bullion trade at such a high premium to the metals holdings?

2. Why is it assumed that some future Canadian government might not seize private gold in a real pinch?

As I say, these questions may be connected in that the otherwise surprising CEF premium may come from very firm belief that private gold and silver could never be seized by the sovereign state. And yet we know that governments in Canada can and have "changed the rules" on various investments over the decades. The 2007 changes in tax treatments for Canadian exchange-traded energy trusts come to mind as an example.

Anyone other than Peter is welcome to address these questions.

Thanks in advance.

Bob Moriarty: Gold is Safe Haven for Looming Crash

Both CEF and ASA are, for US investors, "passive foreign investment companies" (PFIC) and require one to make formal "elections" on a special form to the IRS of one of several choices of how to be taxed. All of the choices are, in my opinion, unfavorable compared to normal US investment taxation. Making no formal election also has adverse results.

In my opinion, and I am only a private investors and NOT an attorney nor an accountant, it would be preferable for most US investors to own CEF and ASA only in tax-deferred retirement fundds such as IRAs, 401Ks, etc.

Here is an explanation of the tax treatment of PFICs which ASA has published at its website:

www.asaltd.com/Tools/L...