Guest Post: GLD And SLV: Disclosure In The Precious Metals Puzzle Palace

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Cognitive Dissonance's picture

Welcome to Zero Hedge Catherine Austin Fitts. It's about time.

Thank you for lending your substantial intellect to the ZH discussion. You carry considerable moral suasion and your presence is most welcome.

Temporalist's picture

Agreed CD!

And I love the names; Fitts and Betts.  Rolls right off the tongue and strikes fear into the dark hearts of fraudsters.

LeBalance's picture

This article's author, Catherine Austin Fitts (CAF), appears to be struggling with the nature of "them," those who created GLD and SLV.  She is examining their "smoke and mirrors" documents and perusing those as if they will provide definitive clues.

There are clues there, but the clues as to the nature of "them" are much easier to come by.  Opium importation and sale in China was executed at the top levels by the Sassoon family.  This was done with the blessings of the Queen of England.  This story, the resulting opium wars and the acquisition of Hong Kong as part of the settlement begins to open one's eyes as to a method of operation and means used.  Fast forward to present day Afghanistan and a similar cash crop.  Its cultivation and therefore sale was cut when the Taliban (fundamentalist Muslims) took power.  This situation was untenable and "luckily" 9-11 allowed similar elements to Sassoon to re-enter that country and restart that income source.  It is a $950B a year business.  Who operated the Mena airport in Arkansas?  Its wide range of services included a $5B importation of cocaine by Bob Seals as well as ingress and egress routes for nearby training of Nicaraguan rebel forces?  Its all the same folks.

The above activities don't even touch the surface as our whole society is a production.  Who is the Council on Foreign Relations, the Trilateral Commission, and their stooges in "Congress" and "White House?" And that is only a minimal gloss of these stage setting organizations.  They are the directed creators of legislation, news, groupthink, tomorrow today.

After one does enough reading and thinking, our kindergarden picture of this world breaks down.  CAF has not reached that point of realization.  Or she is not willing to write openly about it.

It is the power elites and their minions, the creators, and the sheep, the customers of that reality, the junkies if you will.  It is a consensual relationship, both benefit.

I don't know what the point is, but maybe that's for each to decide.  Maybe it is just to experience and create, in whatever measure suits your soul's needs.

So CAF is searching and so are we all....

Get_to_the_choppa's picture

Just because someone isn't shouting 'conspiracy!' from the rooftops doesn't mean they don't 'get it'.  Discretion is sometimes the better part of valor and can get your message out to a much wider audience.   I'm not disagreeing factually with anything you've written above but your assumptions about CAF are piss poor.

Cognitive Dissonance's picture


I read your comments all the time and you are intelligent and thoughtful. You have explained the reason for your ID and avatar and I commend you on your efforts. Thank you for your constant ZH contribution.

The minds that must be opened are not blue collar America. Most of them understand in their gut they're being ripped off and the deck is stacked against them. It is the professional class, the base of the system of rot and corruption in America, that must be turned.

Ego's run high in the professional class, with many individuals wearing the badges of entry minted from various colleges and universities. They have been conditioned to think along certain paths and no amount of stark confrontation or presentation of ugly fact will convince them to walk away from the system that feeds and sustains their family and their ego. But many can and will be turned by logical and sustained argument.

Catherine Austin Fitts understands that no popular movement will be successful unless the professional class is securely on board. As distasteful as it may seem to so many of us that willingly see clearly, ego's will need to be massaged in order to do so. This includes talking softly, logically and making incremental steps towards conversion. The professional class is afflicted more than any other group with the hive mentality, where group think runs wild and consensus supports the current meme in a positive feedback circle.

As much as I love the idea of angry citizens carrying pitchforks and torches, without the professional class, any movement of the people will die from lack of support from the people. The tragic mistake we make is thinking that we must convince 100% of the people before change can be affected. This is wrong on every level. The herd can be moved by any force that acts upon it, not just from the powers that be above.

Catherine is trying to reach all classes but she understands that it is the professional class, where she honed her intellectual muscle, that must be won over if we are to be successful. So if you find her writing to be nuanced or muddled or not specific for your taste, please remember that she is writing it for a larger audience, once that either doesn't understand what's happening or doesn't want to understand what's happening. She is using some intellectual honey to attract the all important professional class bee hive.

Internet Tough Guy's picture

The professional class sold out first, and most eagerly. Their wealth is tied to the housing bubble, 401k/stock market ponzi. They have too much to lose to buck the system.

Revolutions don't start among the upper classes.

Cognitive Dissonance's picture

"Revolutions don't start among the upper classes."

I never said the revolution would start among the professional class, which BTW is now the middle class. I said the revolution would die without the professional class. Big difference.

Duuude's picture


It's perhaps slowly happening.

The Baseline Scenario

What happened to the global economy and what we can do about it

Who’s Got Those Pitchforks?

with 44 comments

By James Kwak

The Huffington Post Books section is hosting a discussion of 13 Bankers; there are links to all the posts so far here. Mike Konczal, usually of Rortybomb, weighed in with a post that included this chart:

People from the 90th to the 95th percentile make about 11% of total income; people from the 95th to the 99th percentile make about 15%; and people in the top percentile make about 23% (in 2006, presumably). But mainly, look at the way that black line shoots up relative to the others since 1980 (along with financial sector profits and per-employee banking compensation).

One of Konczal’s points is that one group that is opposed to Wall Street — and supports stronger reform — is people who are doing well, but not nearly as well as the bankers and fund managers in the top 1%. He focuses in particular on certified financial analysts — people who make a lot of money and know how the financial system operates, and are outraged at Wall Street. 68% of them support the Volcker Rule to prevent banks from engaging in proprietary trading. Konczal calls it the “rage of the 1.5% class.”

Duuude's picture

The battle is against this, note tha "invisible hand" of Hankster.

ARROYO GRANDE, Calif. (MarketWatch) -- Remember Nietzsche? "God is dead." Let's translate that 19th century Germanic philosophy into modern economics. In Adam Smith's 1776 capitalism, God was the Invisible Hand, a mysterious force running the economy from the shadows.

Flash forward to 2010: Capitalism is dead. The economy has a new Invisible Hand, the Goldman Conspiracy of Wall Street bankers.

Advisers face fallout over Goldman issues

Regulatory concerns surrounding the recent Goldman Sachs hearings leave financial advisers with some explaining to do. Steve Stahler, an independent adviser and President of The Stahler Group, explains how advisers can go about having these difficult conversations with clients.

This transfer of power happened suddenly. As recently as late 2008 the Invisible Hand was on life support, near death. Suddenly, miraculously the Treasury secretary, Goldman's former CEO, transferred the power into a new Invisible Hand of God, the free-market ideology of Reaganomics ... a power absolutely essential to the survival of Wall Street's mega-bonus culture.

Yes, that's why the Goldman Conspiracy must kill financial reforms ... why they will kill effective reform with the backroom support of Obama and Dodd.

Windemup's picture

I find optimisim in this discussion. Perhaps I may remove my shorts after the latest oil spill calamaty is over. I won't hold my breath though if one of the West coast cities erupts in an earth shaking moment.

LeBalance's picture

:) and :) and :)

No one is being "ripped off." Le Balance!  You receive that for which you long and give that which others long for as well.

The core of experience is love, we have just forgotten that love has many flavors.  We are tied in judgment and thinking there is something to achieve.  It appears that way to some and not that way to others.  Another in an endless stream of paradox.

I don't know why I am built the way I am and can't understand you.  I don't know what the important parts of the experience are, maybe its picking my nose.

As John and Paul wrote, "If you want money for people with minds that hate, All I can tell you brother is you have to wait."

Pitchforks and Torches are movements that are tools of unrealization.  Valid experience though they are they are a signal of not taking responsibility.  The Greeks might say, "I don't care how we got here, but how much do we owe?"  And then over time letting the "politicos" know, by example of responsible action as in payment of debt, that they do not have a host that needs their services.

That is not easy, is it?  Is Greece ready for such a mind warp change?  Is any group?

Maybe.  Maybe not.  Let's ask.  Anybody want to commit to being responsible for themselves?  hahahahaha.....

Out beyond ideas of wrongdoing and right doing,
There is a field. I’ll meet you there.
When the soul lies down in that grass,
The world is too full to talk about.
Ideas, language, even the phrase each other
Doesn’t make any sense.

------> Rumi <------

There is no them,

No other,

There is only you,

There is no external,  no internal, its all you.

What is it to strike out then?  Who do you hit?

Control of "your (paradox)" "own (paradox)" "actions (paradox)" therefore is all powerful.

Your own step, choice, and breath, guide the universe.

Make love, make war, hate, be passionate, they are flavors of the experience of love.

There is absolutely nothing outside of perfect harmony.

It is just too beautuful.

That is Le Balance.  That is ecstacy always.  That is satchidananda.  It is always going on, for everyone.

SWRichmond's picture

The single most important lesson learned by the ruling classes from the Soviet Experiment was that a critical mass of supporters could be held together, in the face of extreme repressive measures, only as long as that critical mass of supporters was comfortably living within the system.  As soon as the system was no longer able to furnish them with comfort, they stopped supporting it and the system collapsed.

So it is / shall be here.  Revolutions occur when the pain of maintaining the current system is perceived to be greater than the pain of overturning it.  TPTB can live with 20% real unemployment forever.  The government will (be) change(ed) when the economy collapses.

Cognitive Dissonance's picture

I basically agree that additional pain will be the catalyst for change. So do we attempt to prepare minds now during relative calm or later during panicky spasms of violence and hysteria. I'm not proposing idyllic solutions as much as realistic preparation.

If TPTB continue down this path, they are the one's causing the greater pain. While I believe that this pain is their ultimate goal, to spark change they think they can control, don't you think we should be preparing as well? As in martial arts, shouldn't we be using the larger opponents weight and bulk against him?

SWRichmond's picture

So do we attempt to prepare minds now during relative calm or later during panicky spasms of violence and hysteria.

We attempt to prepare as many as possible now during the calm they have given us. I am focusing on political activity as a means of building a critical mass of contacts at a less-than-federal level.  The federal system is doomed.  It is wholly owned by K street.  My congressman is a thief.  He knows it, I know it, and he knows I know it.  I will try to save my piece, and turn him into a miniature Gorbachev of irrelevance that is no longer needed or welcome.

As for the opponents' larger bulk etc, their increasing repressiveness will do our recruiting.  As for violence and hysteria, remember, the dependency classes, despite the loud and violent fringe, are largely passive as they are aware of their dependence.  They can be counted on to stay out of any real struggle, as can the limousine (and limousine-wannabe) left, who will quickly retreat to their private enclaves, sip shiraz, and complain to each other.  Rioting will be disorganized and pointless, will lack the resources needed for sustainability, and will burn itself out; expect threats to life and private property by rioters to be met very very aggressively.  Twelve billion of rounds of ammunition have been sold in the past year; very little of it will be expended, the point will be made.  When the food trucks stop delivering to inner city groceries because of security concerns, in a few days' time the only food available will be from the back of national guard trucks, and they won't be taking any shit from anyone.



fiftybagger's picture

"Catherine Austin Fitts understands that no popular movement will be successful unless the professional class is securely on board. As distasteful as it may seem to so many of us that willingly see clearly, ego's will need to be massaged in order to do so. This includes talking softly, logically and making incremental steps towards conversion. The professional class is afflicted more than any other group with the hive mentality, where group think runs wild and consensus supports the current meme in a positive feedback circle."


I work as a network engineer, Cisco.  They often tell us to keep things on a higher level and to not go into minutiae.  I always reply "higher level?  you mean for stupid people?"

mchawe's picture

Thanks to you both, CD and LeBalance. I agree with both your excellent posts.

A guy I know as just an example. I ask him how his stocks are going. He really believes in green shoots and we are coming out of the recession. Greece etc is just another Argentina. We'll get over it etc. "I'm buying bank stocks",  he says. If you question, he doesn't want to know. Another one a Civil Engineer, I gave the DVD from Architects and Engineers showing 9/11 was a controlled demolition (2 planes 3 buildings for starters), he says he watched it but still believes the official version. It is like they switch off and pull the key out of the ignition. The one thing in common I notice with these people...they all watch television.

Cognitive Dissonance's picture

"It is like they switch off and pull the key out of the ignition. The one thing in common I notice with these people...they all watch television."

The ultimate control mechanism. I'm sure to get vigorous and emotional disagreement from many but just as spending your money (borrowed or in cash) represents your (sub)conscious agreement or acceptance of whatever you are "purchasing", so does watching a one way information stream denote (sub)conscious agreement or acceptance of the content. The secret subterfuge lay hidden in the apparent diversity of 500 channels.

Alas, I may have a choice of hundreds of flavors at Baskins and Robbins but it's all ice cream.

whacked's picture



Long read but from what I understand of the market, nothing new. My reference btw [footnote omitted]


Crime of the Century's picture

It's all in the presentation, Holmes.

whacked's picture

Yes, covers ground lost me at the end when [footnote omitted]


Similar to other stories posted and now this, problem is the CFTC .. they will not move and have no intention of moving!

i.knoknot's picture

Ms Fitts,

welcome and thanks. having been educated to the potential (probable?) 'failings' of GLD/SLV a while back, i find your report very lucid and relevant.

having some remaining assets in an IRA, i wonder if you would lend us a nickle-summary of other options, e.g. CEF/PHYS/GTU/etc.

tnx in advance

justbuygold's picture

Central Group also has an all silver fund called Silver Bullion Trust which holds $63 MM  or over 3,000,000 oz of silver.   It seems Catherine forgot to use this in her calculations.  Its probably the best pure silver play of them all.

Johnny Dangereaux's picture

......2nd best maybe......ching ching ching......

43 Steelie's picture

The only thing is, while this initially started out as "the greatest fraud you don't know about", at this point this has to be one of the worst kept secrets to anyone who knows anything about PMs.

Has iShares or SPDR issued a statement even trying to reassure investors? Don't these subcustodians/bullion banks realize how massive this potential problem is and aren't they doing anything about it? 

This is obviously asking a whole lot out of organizations who have already proven their incompetence...I just would think that if I ran a multi-billion dollar fund which is being accused of potential fraud day in and day out I would at least try to reassure the millions of investors that think my ETFs are actually worth a damn.

i.knoknot's picture


suppose they collapse under scrutiny - ETF 'run' of sorts... and the SEC takes 5 years to fine them $3MM ... oops. sorry.

as if anyone watching doesn't see this coming...

useful as a day/swing-trade, but otherwise stay the f--- away.

go physical :^)

silvertrain's picture

   What the gld and slv are doing is nothing short of stealing and fraud..Considering the increasing demand in Industrial manufacturing of AG the slv is creating a false sense of supply..I think the medical community thats developing the latest and greatest breakthrough technology of the uses of Silver Needs to know the material may NOT acually be there 10 years from now..

  The Silver american Eagle that the us mint produces each year has topped 10 million so far this year.Its mandated that the Silver used in the Eagle production is to be mined in the US only..The US Only mines 40 million ounces a year.So it appears that all of the US Silver production is going to go for minting Eagles this year.


CatherineAustin's picture

Thanks. Delighted to be here. I appreciate the opportunity to post and the good conversation.

My preference for holding precious metals is physical. First, in your own possession if possible. Second, if not, then GoldMoney or a depository.  If using securities, I think the arrangements behind Central Fund of Canada and affiates Central Gold Trust and Silver Bullion Trust are good.  As our fundamental problem, beyond the debasement of the currency, is fundamental lawlessness, it is important to have diversification of places: See There are some good private funds with significant precious metals holdings, however, they are increasingly not available to US citizens.

On the covert side of the house, see:

(including my favorite documentation on Mena Arkansas drug runningin the resource section)

And for the more accessible:

I live in Hickory Valley, Tennessee. As a community, our "long" on lead is much greater than gold and silver.

Makes sense to me.



w a l k - a w a y's picture

It's great to see you here.

Would you consider a repost on ZH of your article, "The $64 Question: What's Up With the Black Budget?"

the world would be a poorer place without you

Barmaher's picture

I often see Goldmoney getting the nod and Bullionvault being overlooked.  I researched both and chose Bullionvault over Goldmoney for the following reasons:

1.  I was able to set and verify an account with Bullionvault completely online while Goldmoney required jumping through many more hoops both online and off.

2. Bullionvault has a 24/7 online market where the clients compete with Bullionvault which lowers the spread.  At Goldmoney the price is set by Goldmoney.

3. Storage fees at Bullionvault are much lower as are commissions to both buy and sell.

4. Bullionvault provides 3rd party (ViaMat, the certified custodian) audits every business day.  Goldmoney provides these quarterly.    If you compare these documents you will see that Goldmoney's clients' (Zurich vault) metal is on an adjacent pallet to Bullionvault's clients'. 

5. Bullionvault's level of transparency is far beyond that of any company I've ever seen.

6.  The only advantages of Goldmoney that I found were their limited commerce system, availability of Paladium and Platinum (both offer gold and silver), and the ability to sell in more currencies than BV (which is currently limited to USD, GBP, and Euros).

If you are holding large amounts of metal you will pay much more with Goldmoney. 

CatherineAustin's picture


FYI - You can do physical in an IRA through self directed IRA services and hold at either GoldMoney or Delaware Depository.



Cognitive Dissonance's picture

Welcome Catherine.

I'm a subscriber of yours and I'm delighted to see you haunting the halls of ZH. But I'm confused. You have been registered on ZH for over 42 weeks and these are your first comments as a member?

Did we stink that bad? :>)

MsCreant's picture

Consider yourself spanked. We have company. Straighten up son. Her choices are right for her and mean nothing about ZH. 

Cognitive Dissonance's picture


I have been respectful to CAF starting with the very first comment on this thread. While she may be a guest as far as contributing an article to ZH she is clearly (and surprisingly) a long term inactive ZH member (longer than both you and I) and my question, posted light heatedly and with a smile, was not out of line but in fact valid.

Your corporal punishment may work in your classroom but it's not deserved in this case. I did not attack CAF and in fact defended her in a comment above. My question concerning her long term silence is a valid question that may be asked of any poster without prejudice. Sounds like I hit a nerve with you though. I have no beef with you MsCreant so why climb down my throat? If CAF feels I was disrespectful, I will be the first to apologize. So maybe you need to reconsider your spanking and your role as self appointed head mistress.

MsCreant's picture

For CD, others may want to move along, not much to see here.

Eh, no where else to do this but here. Ah well. House keeping.

It is my faith in you that created the space where I could call you out. She owes us nothing regarding her lack of participation. You subscribe so you have a better sense than me how hard she must work. I am grateful she participated, here, now. I love it that the forces of good are aligning against the forces of fraud and would hate to seem "entitled" and ungrateful. It would not occur to me to question her participation because in the bigger picture, she is doing one hell of a lot, mega-participating.

I thought a spanking would be a funny or even flirtatious way to say it. We play kind of rough and tumble around here.

But you are correct, she is free to be scared off, free to ignore your post, free to explain, free to tell you to... well, you get the idea, but I did butt into your business, that is true and I own it. I felt strongly that she does not owe us anything so maybe I should have voiced that opinion without singling you out. Thing is, that would be passive aggressive and dishonest because you are the one who asked her why she does not participate here. 

In no way did I intend to be hurtful. Funny, yes. Friendly, yes. Tell you that she owes you nothing in the way of an explanation, yes.

I am also chagrined at the over explaining that I am doing in this post. You and I are way too similar in this regard. 

Cognitive Dissonance's picture

My apologies. I forget that you are just as fiercely protective of the ZH community as I am, only we're coming from different points of view. I misunderstood that your bared fang was not shown in anger but in love of that which we both cherish.

MsCreant's picture

I like SWRichmond's post below. 

In the final analysis, CAF answered you, and I made much ado about nothing. I have big issues with entitlement. My baggage, not yours.

Peace Bro.

Miles Kendig's picture

Entitlement and the score keeping that is associated with it.  MsCreant, I do believe I smell whatcha cookin'.

SWRichmond's picture

Here in Castle Anthrax we have but one punishment for setting alight the grail-shaped beacon:

Cognitive Dissonance's picture

Obviously I need to do a new cost benefit analysis on the personal and social value of spanking. I've been using very old data and it's hopelessly out of date considering the new findings you have presented. :>)

Once again Sir SWRichmond rides to the rescue and saves me from myself.

Miles Kendig's picture

Dr. Spock never could have imagined what his perspectives would weave..

MsCreant's picture

Ya know, I like the whole rock and roll, ex-CIA agent, motif. Pretty fun. Did Spock help weave that too?

Sounds like your real life is the better story.

Miles Kendig's picture

Life is often stranger than fiction dear friend, especially when we look at life in an outside in, inside out kinda way.  And I really don't see Spock as a master weaver of either one of our threads.

The Alarmist's picture

They are derivatives, pure and simple ... nothing more than notional contracts to settle in cash the difference between price P0 and P1 , and most of us know that.  If you read the hundreds of words about the physical stock of underlying precious metals, you should invariably come away with the gist being "We may or may not actually have the underlying commodity and you would be remiss to assume we do."

In other words, investors of today in things like SLV and GLD are only temporally separated from the bucket shops of old.  Your biggest risk is counterparty risk, and your best course of action is to trade in and out of them knowing that on any given day you can and may lose it all.


Alitak's picture

Despite all the dangers, which most prudent investors must now be aware, buyers keep piling into SLV and GLD. I would have expected a much deeper discount to the apparent asset value.