frdm45

Porter Stansberry: Gold 'Nowhere Near the Top'

On Dec 20 08:17 PM ManAboutDallas wrote:

> Watch for China to undertake an experiment in a gold-backed currency
> by using their gold, newly returned to Hong Kong from the United
> Kingdom, as backing for the Hong Kong Dollar. It'll be an experiment,
> a "stalking horse" if you will, in preparation for backing the Yuan
> itself with gold.
>
> Hasn't anyone asked themselves WHY China has kept the Hong Kong Dollar
> alive all these years after they got Hong Kong, itself, back?

I agree that China will play a significant role in what direction gold and silver take in the next decade. But from what I read the amount of gold returned to Hong Kong from the UK was only small in terms of central bank holdings, like 3 or 5 tons? Is this enough to back the currency of HK? But again, I do agree, by getting all its citizens to buy gold and silver, over the long term (20 to 50 years, which is the timeline on which the chinese think), will facilitate the hard asset backing of their currency and help turn it eventually into the next world reserve currency. Sad but true.

Porter Stansberry: Gold 'Nowhere Near the Top'

On Dec 20 05:19 PM wakeup_call wrote:

> The questions should be asked "what gives gold value?". As far as
> I am concerned, they are only good for making jewelry at this point.
> The gold standard is a thing of the past and paper money is taking
> place as the medium of exchange. Why would gold be worth anything
> now if not for that it looks pretty. Ant what about the comment that
> all other countries are buying gold like crazy, is that really happening?
> I would be careful if some investment advisor tells me to buy something
> because everyone is expecting to buy it and that is why the price
> will increase. Also, finally, I think all interviews with investment
> institutions should disclose the institutions' position in the particular
> securities or commodities they are commenting on. Otherwise, who
> would know the institution is not engaged in a pump and dump scheme.

This post has so many holes in it, I'm sure other posters can help take it apart, where to start...............

So, fiat, paper money has intrinsic value? Gold has been accepted as a medium of exchange for 6000 yrs, and the US dollar? Anyway, no one is saying we are going to get rid of paper, it is just that in the future the paper we have will be tied to a fixed amount of gold and/or silver. That is the definition of a gold standard or bimetallic standard.

The author goes out of his way to say he "DOESN'T" recommend gold stocks, and there is full disclosure at the bottom of the article, the author only recommends bullion, so HTF can you pump and dump a commodity unless you have a few billion? Did you even read this article?

The poster "wake-up call" is really Jon Nadler who came up with this anonymous handle just to make this post?

Will Sprott's New Gold Fund Compete with GLD?

Courtesy of Le Metropole cafe

"I was somewhat shocked to read Adam Hamilton's freebie essay posted on www.goldseek.com/ in which he tries to discredit the growing chorus of analysts who are taking a close look at GLD's Prospectus and throwing up a big red flag on the GLD operations. It is readily apparent that Hamilton has not spent time reading the GLD prospectus. His criticism is of the fringe element out there hurling obviously unfounded accusations. Hamilton, in an uncanny display of incompetent analyis, completely avoids the obvious legal loopholes - loopholes large enough to drive a freight train through - and he fails to address the real problems with GLD's legal structure. If you're interested, please review my 12/2 post on GLD:


One of the biggest problems with GLD is the lack of any accountability from the Custodian, HSBC, for the location and physical inventory of the actual gold bars. Hamilton tries to address the issue of the lack of a bona fide audit of GLD by throwing up that he's an ex-auditor ("I eat breakfast every morning 300 yards from 3000 Cubans who are trained to kill me" - Jack Nicholson in "A Few Good Men"), and since GLD links its audit report on its website and he's read that audit report, it's okay.

HOWEVER, if Hamilton had spent time thoroughly reviewing the Prospectus, he would see that a physical audit is not required and that the annual financial audit is nothing more than an inspection of the financial records provided by the Trustee. As per the Prospectus, there are several ways in which the Custodian can throw roadblocks to an actual, bona fide physical audit. I leave it to the reader to look at my report on GLD and read the Prospectus for themselves.

Hamilton also points to the "Inspectorate Certificate" newly linked on the GLD website. But this "certificate" is a complete farce. Again, I admonish Hamilton for sloppy, incompetent work. The certificate clearly states "As per the records of the Custodian..." LINK. THE PRIMARY PROBLEM WITH THE VERY LEGAL STRUCTURE OF GLD IS THE WAY IN WHICH THE CUSTODIAN HAS NEARLY ZERO ACCOUNTABILITY. Do your goddamn homework Adam. This "inspection of the bullions bars" is nothing more than an inspection of the records - paper records - provided by HSBC. Anyone see a problem here? There is still NO bona fide physical audit of the actual bars. And the legal structure of GLD makes it impossible to force a genuine bar count AND formal assay audit.. We know we need an assay inspection of the bars because of all the "salted" London bullion bars being discovered in depositories across the globe ("salted" = gold plated tungsten).

One more point about Hamilton's defense of the audit firm and audit process of GLD. I guess he wasn't around when Enron imploded from massive fraud. I vividly remember Enron because I started shorting it in the $40's and made a lot money when Enron imploded a few months laster. In fact, the Enron Ponzi scheme took down its auditor, the formerly highly regarded Arthur Andersen. Next time an ex-CPA tries to defend his profession, grab ahold of your wallet and run. In my GLD report, written 10 months ago, I suggest that GLD has the possibility of being the next Enron.

When I first started exclusively researching/investing/... the precious metals and mining stock sector, I actually subscribed to Hamilton's newsletter for a short period of time. It didn't take reading too many issues before I understood that Hamilton's research and analysis of mining stocks lacks any real substance and due diligence. His reports are overly verbose, self-adulating and narcissistic. They do contain some excellent statistical work in which he meticulously massages empirical trading data in the context of simple technical analysis. This current commentary on GLD, however, reminds me why I haven't paid attention to his work for over 6 years. "

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.

...

Gold Shares ETF Sheds 14 Tonnes

I think they should rename the GLD etf, how does PAPR grab ya?

Gold: Despite Recent Rise, It's Still Under Water

This just goes to show you how dangerous stats can be in the wrong hands. An extremely disingenuous article, just goes to show you can manipulate any stat to prove your point.

Boyd, how long was that peak? How many days did gold stay above even $600 then?????? Uh, 60 days.

And gee, the Dow has done so well over the last ten years, what mark did it cross in 1999? Oh, 10,000 you say?

And how much has gold risen since it was allowd to float in 1971? What was then price then? $35? How is that for a return against your other asset classes?

What a joke of an article. Most posters here do a way better job. How did you get your job at the Globe and Mail?

Are Silver ETFs a Better Investment than Gold?

Is SLV unaudited like GLD?

I personally feel more comfortable actually holding large quantities of silver at home as opposed to gold, where I know unequivocally its location, how much is there, and who owns it.

For larger exposure in amounts that may preclude home storage I would feel more comfortable in shares of micro cap or junior silver mining companies; as I've mentioned before, RVM, tsx, still less than half of book value.

As Usual, Gold Is Cheap

$2300????????

People keep on bandying about the old inflation adjusted price of $2300. Of course that is one data point to consider, but just how significant is it?

Are the same factors that propelled gold to that level in play now?

For example, on the downside, back then there weren't as many (I'm assuming) paper substitutes for gold that actually steered money away from physical gold as now.
On the upside, I can't imagine foreign central bank demand was as strong back then, which has just started to come into play now, or that the prospects for the dollar were as dismal back then as they are now.


..

Smart Money Is in Precious Metals, But a Local Top Is Close

Why does this author talk about gold and silver tops in almost every single article? And he seems to take the same "on the fence stance" in each one as well, with each title sounding very ominous. I'm not trying to be disrespectful, just calling them as I see them. TAKE A STAND!

Gold Bears Stop Sector from Overheating

On Nov 24 02:48 PM LR European wrote:

> Well presented and thorough. Thank you. Perhaps my only quibble comes
> towards the end of your article when you ask the question:
>
> "How long will it take the 1.3 billion gold-starved consumers of
> China to buy their fill? Perhaps the better way to phrase the question
> is: how many thousands of tons of gold will it take to satisfy this
> bloc representing more than 20% of our entire population?"
>
> As I am sure you are aware, the vast majority of that 1.3 billion
> struggle to afford basic sustenance and have little hope of feeding
> their gold hunger.
>
> Nevertheless, within that massive group is a tiny percentage of many
> tens of millions of Chinese who can and do afford to invest and are
> certainly helping on the demand side of the equation. So your argument
> was right, but the quantum was just a wee bit over-exuberant. ;-)


Of the roughly 300 million chinese middle class, maybe 50 million could afford an ounce a year, but all the middle class and a portion of the poorer chinese masses will be able to afford and will want to own silver ounces. Silver has been a medium of exchange in china for thousands of years and as I heard someone else put it: THE CHINESE WORD FOR SILVER ALSO MEANS "BANK". Nice association, and what ideas have those wise asians ingrained into thier culture that we haven't?


.

Gold Bears Stop Sector from Overheating

On Nov 24 10:35 AM Johnny Oxygen wrote:

> OK. Admittedly I have a lizard brain but I don't understand this.
>
>
> "Nadler has worked for Kitco (a precious metals web-site) during
> a decade in which gold has quadrupled in price – and yet Nadler never
> states that “now” is a good time to buy gold."
>
> If Nadler is in the precious metals business why would he want to
> play-down the value of PM's? Wouldn't he be saying "Buy! Buy!"<br/>
>
> I don't get it.

I never understood what Nadler's deal was either, the guy isn't stupid, its just obvious he has some agenda, but what? Then I read the following on an SA post and understood a little better:

"One way that Kitco sells gold is through their "Pool Accounts." You give them cash for gold that they claim to keep in storage for you. As gold continues to climb there will come a point in time that many Kitco clients will demand to have their stored gold delivered to them. But will Kitco actually have it? Is there a good reason why Kitco's only gold annalist has been a gold bear all these years? Think about it folks. Does MacDonalds advertise that hamburgers are a bad product to consume? Does Ford warn their prospectve customers that cars are unsafe? Of course not! They are in the business to sell their products, not discourage people from buying. So why do you suppose Kitco pays Nadler to write a daily article on how gold is such a bad investment and highlights his writings in bold each and every day?
Perhaps there is good reason why GATTA awarded Nadler the moron of the year award the past two years in a row. But the truth is that Nadler is not a fool. He just has an agenda. If you can't see that by now then it is not he that is the fool. "

..

High Gold Prices: It's the Oil, Stupid

> Another point is that any responsible Iranian Government will certainly
> develop nuclear weapons.

Q: Where is the oxymoron in this sentence?

Beyond GLD: Four Alternative Gold ETFs

I'm not trying to be alarmist or a conspiracy theorist, just read the GLD prospectus and draw your own conclusions about what exactly you own and you rights associated with it:

Excerpt from the GLD prospectus on page 11:
www.spdrgoldshares.com...
Gold bars allocated to the Trust in connection with the creation of a Basket may not meet the London Good Delivery Standards and, if a Basket is issued against such gold, the Trust may suffer a loss. Neither the Trustee nor the Custodian independently confirms the fineness of the gold bars allocated to the Trust in connection with the creation of a Basket. The gold bars allocated to the Trust by the Custodian may be different from the reported fineness or weight required by the LBMA’s standards for gold bars delivered in settlement of a gold trade, or the London Good Delivery Standards, the standards required by the Trust. If the Trustee nevertheless issues a Basket against such gold, and if the Custodian fails to satisfy its obligation to credit the Trust the amount of any deficiency, the Trust may suffer a loss.

Silver: Use Leverage on the Laggard Metal

A great little silver producer with enormous ounces in the ground currently trading at less than half of book value:

Revett Minerals TSX-V: RVM

Yes, of course I own it. They had some issues but seemed to have overcome the worst of them.