frdm45

Nothing Like the Real Thing: Sprott Physical Gold Trust

GLD (and SLV from what I read) doesn't hold the actual bullion, it is held by "trustees", who are not audited. The fund is not actively managed, sure, but how do you know the trustees are not leasing the bullion out, if they are not audited. I posit you can't make any assumptions about the trustees if they are not audited. Most people familiar with these systems believe the bullion banks have acted as fractional reserve systems for gold and silver.

JPM holds one of the largest concentrated short positions in the history of all commodities in silver. And they manage the SLV. I wonder if they have encumbered any of the silver in the SLV with their large short position.

Why did JPM two months ago start accepting gold bullion as collateral when it had never done so before? It is desperate to get its hands on physical. Why is the comex now settling deliveries in shares of GLD? It doesn't have enough physical to satisfy delivery demands. I think it is fairly obvious there has been much more paper gold and silver sold than there is physical. If you feel comfortable holding SLV and have satisfied yourself that your paper shares represent actual physical holdings - great. However, if more people start to convert paper to physical and it is discovered there exists a large fractional lending system for physical gold and silver, I will feel comfortable in my physical bullion holdings and mining shares.


On Dec 13 05:27 PM kohalakid wrote:

> There is nothing is the GLD or SLV prospectuses that allow the trustees
> to encumber the gold. The prospectus of GLD says the fund is "not
> actively managed" and that the fund produces no income. Lending the
> gold would certainly be considered "active management" and the only
> reason to lend it out would be to produce income.
> It sure seems like Einhorn's move out of GLD and into physical was
> because it was cheaper for him to pay storage and insurance on physical
> than to pay the management fees associated with GLD. His move does
> show he has long term confidence in his gold holdings, and that's
> a good sign.

Nothing Like the Real Thing: Sprott Physical Gold Trust

Good. Sprott's gold will be "unencumbered", according to the prospectus.

Does the GLD say their gold is unencumbered anywhere in its prospectus?

I don't see why anyone would use GLD for any reason other than as a short term trading vehicle.

If I had owned GLD shares and had watched what David Einhorn of Greenlight Capital had done with his - dump them all for physical gold, I would have been extremely nervous about just what he had uncovered, and would have dumped mine in a heartbeat as well.

If you plan to keep your money in silver or gold etf for more than a couple of weeks, do your homework and get out of GLD and SLV, and consider something like this.

I have no affiliation, long or short positions in any bullion related etf.

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Gold Bugs Are Warned, Again

Oh, and try to lighten up as well.

Gold Bugs Are Warned, Again

BE WARNED!

Your article points to the manipulation of the gold market. This is a fact, not a conspiracy theory, JPM has sold more gold and silver short than one years total world gold production and a significant percentage of silver.

Yes, you're right, the miners have negative cash flow. Its because their costs are higher, and their commodity, gold or silver, is no longer allowed to find true price discovery on the metal exchanges. At the recent gold conference in London, the consensus of most of the miners was that costs are close to $900/ounce.

So be warned. Two things will happen:

One - the paper fraud will be exposed for what it is (naked shorting) and when cental banks and investors realize there is much less physical gold and silver floating around than claimed by the fractional reserve systems supposed to hold it, the price of gold will really start to move and the miners will move in accordance.

Two - the paper fraud will continue and if you see gold dropping towards $900/oz you will see much gold production and exploration come off-line, and what will that do to the price?

I doubt we will see gold below $900/oz again in our lifetime unless we have a complete collapse of our sociey in which case garden tools will be worth more than gold (which I don't think is likely).

So be warned!

PS - Can you please stop using that phrase? Most of us here respond to a logical argument and don't need to be condescended to by someone who sounds like our father or the school principal.


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Silver Prices Are About to Fall

Good bull and bear comments for the most part, IMHO. One quote comes to mind:

"It's not pulling back very much. And it's not giving people who haven't yet invested a chance to get in at a lower price.That tends to happen in a bull market; people wait around for a correction, but it never goes down far enough to give people an opportunity to get in at a more favorable price."


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