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Has The iShares Gold ETF (IAU) Been Covertly Depleted Of 90% Of Its Physical Holdings, With Banks Like JPM And Goldman Pocketing The Actual Gold?
A few days ago we presented an interview of Harvey and Lenny Organ with King World News, in which the Organs recounted their personal visit to Canada's only bullion bank vault - ScotiaMocatta. According to them, the vault contained roughly 89,000 ounces of gold, in the form of "210 400 oz bars, 4,000 maples, 500 eagles, 10 kilo bars, 10 one kilogram pieces of gold nugget form." As GATA's Adrian Douglas confirmed, this was equivalent to about $100 million at today's gold price. Yet what we find perplexing is the disclosed gold holdings of the iShares Gold Trust, also known as IAU. According to the NYMEX Daily Report the Gold Stock data for the IAU is as follows:
Note that in the above spreadsheet, the iShares total holdings in ScotiaMocatta are presented as 457,173 TOz. In fact, of the total 2.476 million ounces backing the entire IAU ETF, ScotiaMocatta accounts for 18.5%, while Canada in its entirety is responsible for 75.3% of the total underlying "assets." We wonder just how much actual gold is really held in all of Toronto.
Not very surprisingly, in the IAU Prospectus we read the following:
An investment in iShares is:
Backed by gold held by the custodian on behalf of the trust.
The iShares are backed by the assets of the trust. The trustee’s arrangements with the custodian contemplate that at the end of each business day there can be in the trust account no more than 430 ounces of gold in an unallocated form. Accordingly, the bulk of the trust’s gold holdings is represented by physical gold, identified on the custodian’s books as the property of the trust and held by the custodian in the vicinity of New York, Toronto, Montreal, London and other locations that may be authorized in the future.
Furthermore, it seems that Authorized Recipients, a list consisting of only the following institutions: Barclays Capital Inc., Citigroup Global Markets, Inc., Credit Suisse Securities (USA), LLC, Deutsche Bank Securities Inc., EWT, LLC, Goldman Sachs & Co., Goldman Sachs Execution & Clearing L.P., J.P. Morgan Securities Inc., Knight Clearing Services LLC, Merrill Lynch Professional Clearing Corp., Newedge Group USA, PruGlobal Securities, LLC, Scotia Capital (USA) Inc. and Virtu Financial BD LLC, can do something technically known as "Withdrawal of Gold" (actually, the activity is pretty much as expected: it consists of actually withdrawing gold in exchange for paper shares of the ETF).
Authorized Participants, acting on authority of the registered holder of iShares, may surrender Baskets of iShares in exchange for the corresponding Basket Gold Amount announced by the trustee. Upon the surrender of such iShares and the payment of the trustee’s applicable fee and of any expenses, taxes or charges (such as stamp taxes or stock transfer taxes or fees), the trustee will deliver to the order of the redeeming Authorized Participant the amount of gold corresponding to the redeemed Baskets. iShares can only be surrendered for redemption in Baskets of 50,000 iShares each.
Before surrendering Baskets of iShares for redemption, an Authorized Participant must deliver to the trustee a written request indicating the number of Baskets it intends to redeem and the location where it would like to take delivery of the gold represented by such Baskets. The date the trustee receives that order determines the Basket Gold Amount to be received in exchange. However, orders received by the trustee after 4:00 p.m. (New York time) on a business day are treated as received on the next following business day.
The custodian may make the gold available for collection at its office or at the office of a sub-custodian if the gold is being held by a sub-custodian. Gold is delivered at the locations designated by the trustee, in consultation with the custodian. Redeeming Authorized Participants are entitled to express a preference as to where they would like to have gold delivered, but have no right to receive delivery at a specified location.
Unless otherwise agreed to by the Custodian, gold is delivered to the redeeming Authorized Participants in the form of physical bars only (except that any amount of less than 430 ounces may be transferred to an unallocated account of or as ordered by, the redeeming Authorized Participant).
Redemptions may be suspended only (i) during any period in which regular trading on NYSE Arca or the COMEX is suspended or restricted or one or both exchanges are closed (other than scheduled holiday or weekend closings), or (ii) during an emergency as a result of which delivery, disposal or evaluation of gold is not reasonably practicable.
As for the actual IAU shares, well gold old Cede & Co., (DTCC) is in control of those. So in essence purchasing one stock of this particular Gold ETF results in the surrender of all stock certificate rights to the DTCC, even as the Authorized Participants have every right to demand withdrawal of physical.
Now as pertains to who makes sure that physical delivery would be met once the demand is there, we read the following:
In addition to the public nature of the pricing, futures exchanges in the United States are regulated at two levels, internal and external governmental supervision. The internal is performed through self-regulation and consists of regular monitoring of the following: the open-outcry process to insure that it is conducted in conformance with all exchange rules; the financial condition of all exchange member firms to insure that they continuously meet financial commitments; and the positions of commercial and non-commercial customers to insure that physical delivery and other commercial commitments can be met, and that pricing is not being improperly affected by the size of any particular customer positions. External governmental oversight is performed by the CFTC, which reviews all the rules and regulations of United States futures exchanges and monitors their enforcement.
Gold futures opened for trading on the COMEX on December 31, 1974, coinciding with the lifting of the Government’s ban on gold ownership by private citizens in the United States.
So now we go back to the matter of the slight discrepancy between what IAU discloses is held in ScotiaMocatta and what, according to the ns, is actually held there. In a high aggressive case, in which we assume that at least half the gold in the vault is the property of the iShares ETF, that would mean that 44.5k ounces are deliverable to IAU holders at any given moment. Yet according to the COMEX the IAU has 457,172.6 ounces deposited in the vault: a 10-to-1 dilution. Should one continue this line of thought and extrapolate a comparable dilution of IAU holdings in all the other vaults, it would appear that instead of holding just under 2.5 million TOz of gold, the ETF only has access to one-tenth of this amount, or just under 250k troy ounces. What this also means is that total net assets of the fund at nor $2.9 billion as disclosed, but more like $290 million, and that in the spirit of Fractional Reserve Robbery and Dilution, each and every holder of the IAU really has asset coverage of just 10%. Should there be a full physical delivery demand by every single holder, the result would be the unpleasant discovery that in this ETF alone all the holders have been forcefully "diluted." And where did the extra physical bars go? We do not know, but the phrase Authorized Participants (including JPM and Goldman) comes to mind. Are precious metal ETFs nothing more than a perfectly legal way for the big banks to transfer paper in exchange for actual physical gold holdings? Have the big banks already defrauded the IAU (and, quite possibly the GLD and SLV) ETF by 90%? Is this the greatest precious metal robbery ever conducted, all before the wide open eyes of the CFTC and other regulators, even as actual holders are blissfully unaware that by holding such ETFs they have nothing more than access to some pretty pieces of paper (which even are not their property, but, when push comes to shove, that of the DTCC).
When the dilution is complete, and when ScotiaMocatta is empty of all gold, perhaps then finally the great wealth transfer process will finally be done, as at that point fiat currency can finally be debased- after all the morts will have access to exactly zero physical when they demand it. It will all have long been pocketed by the Authorized Participants of the world.
With thanks to MarketSkeptics and h/t Satchmodian
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banks . governments, hedge funds pocketing gold
master bates putting hand in pocket
Now we know why silver is heading up. Either way, better dump that paper NOW!!!!
Remember this WSJ story
A Mad Rush as Gold Bugs Get the Boot
http://online.wsj.com/article/SB125902295608261455.html
"Fleets of armored trucks piled with gold bars and coins have been streaming out of midtown Manhattan in one unexpected consequence of the gold craze."
One has to question who's gold was in all those trucks and whether this story was a decoy.
Humans rob each other blind and no one cares. But let a hungry dog kill one chicken and they hunt it down and shoot it.
Conversly, PETA (liberals) and the Right to Lifers (conservatives) are mostly opposite and exclusive people.
The liberals decry cruelty to animals, but endorse killing unborn humans.
The conservatives decry killing unborn humans, but endorse hunting animals.
The other two quartiles of this behavioral "Punnett Square" are certainly more silent, if not less populated.
yes, but can a wolf ever be happy without a chicken between its teeth?
Just 10 to 1? What are these a bunch of cowards?!? Real men leverage at least 100 to 1.
Would love to see what happens to the trustee. Wonder if he will have an "accident" right after the fraud is publicly disclosed when there is a run on IAU.
this was posted on you tube today. apparantly the physical novia scotia holdings disclosed in the interview were back in sept 2008.
http://www.youtube.com/watch?v=DNSakO8Z11o
next stop - they decide they need more by way of confiscation.
anyways, happy friday song
space truckin live 1973 - http://www.youtube.com/watch?v=3aF7j7FKzno
These are free markets, dammit, so everyone is authorized to participate, but some participants are more authorized than others.
True, though it is fraud to offer paper gold with nothing backing it. Of course the fools who choos to throw money at GLD may be in for a VERY rude awakening:
ASK YOURSELF: do you really trust that these ETFs have the gold they claim and GLD's counterparties that store said gold are not leasing it out or creating/forming/leveraging some other paper gold on top of their paper gold. As an example, GLD can hold NOT GOOD bars for proper delivery to the market and they do not insure their gold holding. Add to that, there are many other serious situations one should consider before choosing GLD or other ETFs.
Read GLD's 10-k filing at www.spdrgoldshares.com/media/GLD/file/10k_Sept08.pdf and pay special attention to pages 54 to 62.
Bottom line, if you want to invest in gold i would do as GLD's largest shareholder did about a year ago.... they sold their GLD holdings and purchased physical metal and took delivery. In this day and age counterparty risk is to be avoided imho.
is a counterparty anything like a rave party?
I can't wait for Master Bates (gag) to jump in here and start screaming a blanket denial of this story, along with inserting several puerile and arrogant disparagements of gold or anyone who holds gold. Trolls will be trolls.
While I would be surprised, he may eventually see the light. Even Dennis Gartman, who has disparaged GATA for years, has now admitted that it appears that they (fed) are manipulating. But I guess he must be a kool-aid drinker too now, huh? Even though before the CFTC hearing he wasnt at all for last many years.
sell your paper shares immediately.
I'd really like to believe that regular readers here are not dancing with the devil in the paper PM market. And if they do, this story is not going to change their mind.
oh I think they are out there. The ironic thing is they would face an instant dilution even though they are "right"
All etf's, futures, funds, whatever, are just as vulnerable as any other fiat currency.
This is actually a much bigger scam than say, working a job, paying taxes, and contributing to a 401K mutual fund.
for many with constrained IRAs/401ks, these paper vehicles are the only way to play PMs. I see many references to personal stashes of real metal too. i suppose if you're nimble or lucky, you might be able to play the price and be out before the expose'. I only play central-fund (esp. CEF) but in all of these deals, it may just be paper... hope not.
i cashed half of my IRA last year and am toying with cashing in (tax hit, etc) the rest this year, so i'm aware that you are never completely stuck.
but ... i'm also thinking when all of these IRAs/401ks get sucked into Social Security vs 2.0, having an IRA will probably insure participation in the new plan... vs not having one probably insures that you won't... hmmmmm. cash out, or probable new program... cash out or ...
IRA's and 401K's will be confiscated within 2-3 years and be forced into treasurys, which are essentially a proxy for Zimbabwification and a pass thru to the SS ponzi, with of course a cut to the NY cartel along the way. Your best bet is to cash out ASAP, buy some physical gold and hold some cash. In that case you are covered both ways, ie a deflationary collapse or a Bernanke led hyperinflationary fiat explosion.
The key is to remove as many assets as possible from the "system", and convert either to physical gold and/or cash. With your new found "real" wealth, you should easily be able to provide for security measures around your house.
I believe that is Harvey and Lenny "Organ" not "Ogden."
Jesse I enjoyed reading your posts (yours too x-Pat) at iTulip regarding the silver price manipulation. Very lively debate and very informative.
The best way to rob a bank is to own one
Make sure you have a good quantity of bullion, and carry one or two coins around with you in the course of the day to remind yourself of what real gold is like.
Each of us has to Authorize ourselves to be a Participant.
There is no place like home....there is no place like home....there is no place like home....
I am not getting why ZeroHedge would make such unbelievable accusations without the proof to back it up.
Either someone here is going to blow the lid off of some unfathomable stuff, or we're taking a bad trip down a sour road.
There must be pictures or something. How do we know that the Canadian bank only let him see what they wanted him to see? How do we know that he wasn't shown a vault of custodial gold as opposed to all the holdings?
Forgive me for being skeptical but now we're accusing the Squid of hanging on to real money while issuing IOUs in lieu of metal. I can't believe that the Canadian Banks would fall for that old trick.
If it is true and indeed that is the case, then say good-bye to the CFTC, the SEC, the FBI and the United States Treasury Department, top it off with the FRBNY and then the Fed itself.
If true, all these ramifications sound out to cleptocracy and elitism: the gold swaps, illegal leases, manipulating the gold price to manipulate interest rates, Robber Brown and the BoE, IMF unloading...
IF they really stole all the gold, there will be hell to pay.
No. I mean hell.
This is all certainly sordid business.
Is the rationalization simply that ETF's for precious metals are simply operating like a betting parlor?
No one expects to take physical delivery, it is only a short term bet on the price movement.
Given the recent reports of manipulation in the gold and silver markets, it's easy to visualize the "game" being played by the "trading desks."
Risky, but apparently very rewarding so far.
What would the real price of gold be if physical delivery (or actually accounting for the physical) with regard to each open long position was required?
Same concept for oil. Why is a financial institution's "trading desk" buying oil futures for non-end users?
Gambling, pure and simple. Maybe it used to be hedging for end-users, but it has gone way beyond that.
it's not gambling, when the opponent knows what is in your hand, because he controls what you get, and he controls what shows up in his hand. it's not a game when the outcome is known, it's just a process. the etf's are just another layer, of the price manipulation mechanism. it only took me 18 months to discover this.
Layer after layer, the manipulation and theft runs deep. They didn't just start last year, last decade or last century. It's always been there, growing like a bad case of mold in the walls and ceilings. It's just that now it's becoming visible. Once you reach the point where you think you have a mold problem, you have a survival problem.
Or more to the point, the mold has a human problem, who are now competing with the mold for existence. My money's on the mold. There isn't enough bleach nor will power to use the bleach to eradicate this outbreak. Get ready to be "absorbed" by the invader.
There must be some way to account for it in physical bullion. Class-action suit or something...but that wouldn't work because then they would move enough gold in for the show and ship it back out again.
I have read for years that all the gold is gone from Fort Knox. I have read about gold swaps and leases of gold by the Fed, illegally to Germany and other foreign powers.
With all this coming to light, it should be obvious that there has been a global conspiracy amongst those with the gold and silver, palladium and platinium. Maybe Larry Edelson is right and the central banksof the world basically stole all the gold in exchange for paper that they never intended to give back. Then, they can revalue the international standard price of gold and all their troubles go away over night.
The thing is, the spot price will shoot right through the roof, becoming worth at least $10,000 an ounce. Of course, the little man doesn't have any in his possession- only paper, or a few ounces at best. They have it all in the vaults and can now dictate global economic policy.
The plot would not be too difficult to pull off. The "community" is really a very small number of actual persons, so silence could be easily maintained and their machinations could go unnoticed.
If these things are true- that government oversaw and regulated the theft of millions of ounces of gold from the people by evil banks- then it can be proven. A clear paper trail must exist. An immediate worldwide tally and audit of all the gold in the world would surely show discrepancies.
I wonder if Matt Taibbi could get his hands on the records of the gold vault transactions at Goldman-Sachs around the second week of Spetember, 2001. That would probably make for some interesting reading.
Orly,
What do you do when you call the police and they don't come? What do you do when you go to the attorney general and he won't prosecute? What do you do when you go to your Congress person and he shuts the door? What do you do when they decide you are spoiling the party?
The real question to ask is this. How far are you willing to go to demand; no, not demand, take back your rights? Are you willing to put yourself into harms way? What is your limit, the farthest you will go? Are you willing to kill or be killed? Are you willing to knock on doors endlessly to find a few souls who will fight along side you? Are you willing to be shouted down by cowards and turncoats, to face public ridicule by people who would sell their soul for another day of suffocation and oppression?
I'm not trying to scare you nor am I trying to say it's hopeless. It's not hopeless. I'm trying to find out if you feel that it's hopeless. One must look into the mirror and ask themselves these questions and then answer them honestly. Because what's coming around the bend will be the measure of all people and unfortunately most will be measured and found to be lacking.
But that's OK, because it doesn't take everyone. It just takes a few more than there were yesterday and a few more than there will be tomorrow. But the first thing that must be put aside is false hopes and self delusions. And that's good as well. For once you rid yourself of these self imposed constraints, you can clearly see the course ahead and move forward with purpose and strength.
You are the one who will save yourself. There is no one else. It was always a myth that the system would protect you, be fair to you, deliver justice for you. It can not and it will not in it's present form. Once we accept this unfortunate fact, we are free of our own restraints. And then they will be the ones who are frightened.
It isn't hopeless. In fact, far from being hopeless, I now feel more enthused than I have in a long, long time.
There is no way I would give up now, when I have been setting myself up for public ridicule literally for years. I have railed against government-induced conspiracies and have been called all kinds of names. Only now are things finally starting to fall into place.
As an example, I am listening to Dylan Ratigan on my other tab (via prisonplanet.com) go on about the "Godfather" Greenspan and the mobsters dressed up as bankers taking you for a ride. Yeah, it is rudimentary and yes there is some hyperbole for "entertainment" purposes but what is happening is all these things I have railed about forever are finally getting mainstream scrutiny. Joe and Mary Sixpack are finally starting to get it and most of them are hearing this for the first time.
In defense of my country and family, I am willing to go as far as I need to go. This is a fight for priciples I have always believed in: truth, justice and the American Way. If you think that last statement naive, then I feel bad for you. The ideals of this country are founded in goodness, which leads to greatness. To say these banksters are of the American ideal is absolutely false. These criminals are nothing to emulate.
We are approaching a critical mass now, I can sense it. Ratigan, ZeroHedge getting shut down, people talking, that certain unease in the air. You can feel it. It's building.
Since 2001, I have learned to be very, very patient. I am not going to jump the gun now when the moment of victory is nearer every day. Maybe I don't have to show anything to anyone any more. Maybe I have done my part. Maybe you have, too.
The best approach going forward for me may be just the opposite of what I speculated on the other day about being more vocal in my immediate surroundings. Instead, maybe I should be quiet now and let the rumble resonate. There is a definite rumble going on out there.
I will, though, put up my Gadsden flags this week-end so the noobs to our cause don't feel alone. That's a sucky feeling.
I say let's have hope. Let's be patient and wait. Let's listen for the build. I have a feeling that this is where it gets the most interesting.
"We are approaching a critical mass now, I can sense it. Ratigan, ZeroHedge getting shut down, people talking, that certain unease in the air. You can feel it. It's building." & "I have a feeling that this is where it gets the most interesting. "
Orly, I concur, but the main question remains: where exactly are the metals gone and why NOW ?
Something is brewing for sure, but expect the worse ! This built up of events has not been done to satisfy the sense of justice of the little man in the street.
Assuming someone made off with the gold, eventually they will have to exchange it for something.
And while it's possible to melt numbered bricks down and hire someone to stamp them out into rounds (or whatever form), they would then have a *lot* of rounds to move.
It may have been easier to steal than a pile of FRNs, but it will be harder to launder.
Right. The physical location of the all the gold is not the problem because it doesn't really matter.
They could have written derivative off of derivative into the hundreds of trillions of dollars but that doesn't matter. It is now that we have to stop these slips of paper from being honored through the US Treasury.
If JPMorgan lost trillions on gold derivative positions to Goldman Sachs and Goldman lost trillions to UBS and UBS lost...
Frankly, I couldn't care less. All of these CDSs and MBS squared junk has been the ultimate circle jerk for three years now. The problem gets to be when the Fed volunteers the US taxpayer as peacemanker and funder of last resort- holder of the shitbag, as it were.
I hope Morgan and Goldman and every other criminal enterprise profiting off of this mess while doing God's work goes down in flames. They mean nothing to me.
The homes and other properties they hold derivatives on are still there. They're not making any more land. Same with the gold. It is still there and will eventually turn up. In the meantime, we just have to make sure that we don't pay them one thin dime on these ludicrous contracts.
It is a few short months until the November elections. Tell everyone you know to vote for the candidate who runs on the platform of full disclosure, transparency and prosecution of the criminals in Washington and Wall Street.
+1
Oh, goodbye, goodbye, goodbye, goodbye and goodbye and I hope I never see you again, and I hope you have a lousy trip and I hope you are flying on a TU-154 and can you take the whole congress and administration and supreme court and circuit court and appeals courts with you when you go goodbye, goodbye, goodbye, ad infitum, etc.,,,,,,so long.
I forget about where the morts came from ... thanks ZH for the flashback!
The visit to the ScotiaMocatta vault was in September of 2008 - so those numbers are quite a bit stale.
Also of note is that ScotiaMocatta has vaults outside of Canada - including among other locals New York. It is in the New York facility that
From iShares daily PDF list of gold bars: http://www.scotiamocatta.com/scpt/scotiamocatta/prec/iSharesGoldBarList.pdf
Vault Location: Total Bars: Total Gross Oz: Total Fine Oz:
BANK OF ENGLAND, LONDON, GB 1,200 485,088.675 483,821.225
SCOTIAMOCATTA DEPOSITORY, NEW YORK, NY, US 4,895 583,020.515 582,318.185
SCOTIAMOCATTA TORONTO VAULT, TORONTO, ON, CA 3,504 1,408,112.833 1,407,708.989
Total 9,599 2,476,222.023 2,473,848.399
So, you are really looking for ~1.4M oz at the ScotiaMocatta vault in Toronto - not the 457K you reference.
Now - as to the authorized participants list - that is a reclusive list that you will find on *every* ETF (not including ML HOLDRs which anyone can convert to of from underlying assets for a $10 fee). Whether the gold bars are all there (the auditor says that they are http://us.ishares.com/content/stream.jsp?url=/content/repository/material/gold_vic_123109.pdf&mimeType=application/pdf) or not is something I can't speak to - but the market certainly believes that they are there (http://finance.yahoo.com/q/bc?s=IAU&t=5d&l=off&z=m&q=l&c=GLD), and if there was the slightest wiff of a depleted base, it is exactly the authorized participants who would arbitrage the paper for the physical (to profit from the eventual disclosure), and you would see the outstanding share count on IAU dropping with each 50K creation unit being destoryed.
However, looking at the historicall shares outstanding for IAU - it peaked at 26.15M in October 2009 and is now at 25.25M - quite close to its all time high. So, one would need to believe that none of the authorized participants who could hansomely profit by turning paper that they knew was not backed by enough gold into gold are aware of this scam, and that it is only people reading ZH who know about this theft....
I'll take the bet that the gold is all there (in the form of buying IAU whenever it diverges from either GLD or the NAV).
I guess the question is "did ScotiaMocatta add ~1.3Moz to its Toronto vault in the last ~18 months?", assuming the Organs view was accurate in Sept 2008.
Reading the terms of the prospectus, some of which is cited above, all of the underlying need not be held at the vault in question, as may also be held by "sub-custodians". LMBA recognizes an approved list of custodians which have a physical vaulting capabilities around the globe, including but not limited to NYC, London, Zurich, Ottawa and Hong Kong.
Further, the "count" of physical ounces and shares must be of the same exact date so as to render creation of additional shares and/or redemptions thereof moot.
Moreover, under the terms of many of the ETF's/deals, access to the vaults in question is severely limited to periodic audit and trustee/manager checks. Thus, the question does arise whether the vaulting facility viewed was the one and same holding the allocated/unallocated physical in question.
Importantly, I too as any other holder of such deals, harbor the concern as to the integrity of the underlying holdings. That consideration is a normal manifestation of the human condition...else there are bridges for sale that we'd all be buying.
Importaantly, I'd "speculate" that such concerns are not held exclusively by ZH, GATA and gold bug audiences/readers. As the scope of these deals has expanded so greatly over the past several years, one really has to question whether a scam of the proportions assumed by many could have conceivably remain intact this long. Way too many folks involved with no skin in the game. Not to suggest the system is not rife with undesirables and nefarious illegal activities, but just assuming all is totally corrupted is illogical.
Occam's Razor forbids such conclusion.
complexity facillitates fraud, not effeciency
Got (physical) popcorn?
Yeah, but I'm getting tired of the opening credits dragging on so... lets get to the main feature!
I'm new to this, but if paper fiat money is worthless and devalued, and there is no physical gold to back it up, and Greece and the PIIGS are close to default, and Europe as a whole has insolvent banks, and China is in a bubble then... might we have just passed "healthcare" as an immediate trillion dollar tax with actually no intention of providing the entitlement? And since this tax isn't enough to float us, we are now immediately discussing a VAT? Thoughts?
I think that sums it up pretty well diesel, you just forgot to mention 1200 on the S&P 500 and Dow 12K. Oh, and the 10 year north of 6%... oh and your forgot the cap&tax energy bill... israel bombing iran.........
Are you sure ScotiaMocatta is the only bullion bank vault in Canada?
It's not.
As posted repeatedly in the original 'vault is empty' article, the Canadian Imperial Bank of Commerce (CIBC) also has a gold bullion vault and are the administrator for Central Fund's gold. There was a question as to whether CIBC is also an LBMA member (I don't know that - though Scotia is) which MIGHT account for the confusion (though I doubt it). In addition to that there is the government - the Royal Canadian Mint.
Anyway, my husband works at Scotiabank (not Scotiamoccata though) and thought the idea of their bullion vault being empty to be pretty laughable.
I think the people working at Bear Sterns where laughing too when they where told that they would recieve $2 for their stock.
Yes we were. Not a fun day.
The Royal Canadian Mint holds all of Sprott's gold. Apparently that has been audited, though the auditors are E&Y.
There was a big story here a few months ago following an audit at the Mint when it appeared that several million dollars worth of gold went missing from the Mint's own inventory. After some follow-up deeper audits, they announced that there was none actually missing and the gap was due to accounting and counting and inventory management errors. That made us all feel much better;-)
canadian mint, said the missing gold, had been sold as slag. how much slag do you get with 24 carat gold bars
Maybe it was sold off by the same civil servants who were diligently spring cleaning at the Governor General's residence and decided to sell off some old "junk" that later turned out to be antiques on loan from the Queen over in England. But then again, who can blame them? If you've ever lived through a Canadian winter and survived without going to Florida or Cuba for a break, you understand the tremendous urge to purge everything old once spring arrives. Renew! Renew!!
Wow, following this gold story is like being on an acid trip.
It's getting weirder by the day...
LOL.....
It's like a bad flashback.... because 1/2 of the information Tyler pulled is wrong, and the information about the gold in storage is from September 2008 (and not verified by anyone else, with no indication as to whether the guy so all or just part of the vault).
So yeah - it is like an acid trip... where much of the hype and angst here is likely due to a pure halucination.
Part of me can't help but think ZH just enjoys feeding the gold bugs and watching the show. Whether it's correct is another matter. But entertainment these days is not usually judged on accuracy.
Is it not obvious that ZH is in cohoots with the bankers, just forcing idiots to short to provide ACTUAL LIQUIDITY and then they cover. Now ZH is probably helping to pump up the gold market so that those who bought early can unload.
yeah, but there are differences. The acid trip is way more fun while the gold story could be way more profitable...
Being a "silver/gold bug" myself even I find this article a little too hypothetical question esk. As for the information, as people have pointed out their are major flaws. That being said I think the comments are more acid trippy than anything else.
Why does almost every gold article get hijacked by truthers of some sort and long tangents about the power elite. Just stick to the god damn topic for once. /end rant.
It is the story, burn. One and the same.
Reports of a massive move of gold from the WTC complex just days before 911 should be just the glue you need to "hijack" the truth for yourself.
Look it up.
It is the story, burn. One and the same.
Reports of a massive move of gold from the WTC complex just days before 911 should be just the glue you need to "hijack" the truth for yourself.
Look it up.
Yes, of course it's a scam.
What I find most interesting is the psychology: scam after scam after scam -- Lusitania, Pearl Harbor, Gulf of Tonkin, Oklahoma City, Babies torn from incubators left to die on cold floors, No Child Left Behind, War on Terror, Weapons of Mass Destruction, 9/11 -- and still the lumpen people believe the next lie.
It must be fascinating for the liars.
But in the age of the internet, for how much longer? Not much, I suspect.
The US population (and to a lessor extent the developed world) has been reduced to infantile responses. Lies of this magnitude require a compliant and willing population if they are to be accepted if not believed.
Daddy, tell me another lie so that I may pretend it's the truth.
Internet is full of the truth, the question you have to ask is does it matter?
My experience is that the Internet is great for finding out how to do something, but not so good for finding out what to do and when to do it.
PS: I still think Al Gore is a freakin' genius for inventing the Internet and all his incredible Nobel-Prize-winning work on climatology and global warming. Probably the smartest fat kid I have ever heard of. When does he sleep?
And BHO (through the dept. of the interior) is holding up the issuances of EIS's so you can't mine additional gold reserves - starting to sound like a real gubbamint conspiracy.
the internet will be gone first, and they will lie to us about the cause.
Should we short Google?
When APPL hits $300.
Not so sure about that. The Internet is a very valuable input device to measure in real time what is going on on sensitive subjects, and manipulating opinions. As we write, all that chatter is being fed to supercomputer farms and minced by algos with lovely names....
Don't think a minute such an important asset will be killed !
If any of you really think it is a scam, buy physical gold and buy a bunch of October 80 PUTs on IAU for 5 cents per option....
http://finance.yahoo.com/q/op?s=IAU
Did anybody bother to read the fine print where it said only gold bar(s) could be redeemed physically?
What silly shit would invest that many worthless $'s in GLD or AIU with the expectation of redeeming a gold bar?
I'm assuming that's a tungsten filled 400 troy oz ingot.
I certainly hope that Goldman Nut Sachs or Junior Partner in Crime Morgan has heisted all the gold. Some people just need to be taught a lesson.
The stories just keep getting more outlandish in the final attempt to levitate the price of gold and suck in the last remaining dumb money. Buy more gold dummies. The crash is right around the corner.
Sounds like small man syndrome... er, small stack syndrome?
How long have you been saying that now?
A lot of people - even here - think gold will collapse along with everything else - in a deflationary apocalypse.
Take a gander at the next 30 years funding requirements of fiat governments. (from ZH earlier today). So, who wants to go short PMs?
madcow, my table saw and other tools will not collapse, nor our ability to trade goods for silver or gold. Paper is good for starting fires and wrapping fish. Got milk?
right, but who determines the price of things, suddenly you will find yourself very ripped off if there's no paper mechanism that everyone accepts. In shocks, only seller sets the price of goods, buyer has no influence. Buyer has to buy at any price.
Dennis Gartman . You, Masterbates, and Gartman can all have a pickle party.
I'm mesmerized by those few here who mock "gold bugs."
This is a commodity that has quadrupled + in value over the past ten years, and doesn't show any signs of slowing down.
Plus the newspaper headlines every day show the world increasingly on the brink of monetary collapse, which is what gold prices thrive on.
What am I missing? Are they just bitter they missed the gold boat? It hasn't even left the harbor yet.
Probably because it feels like California or Miami in 2005-6? Remember! They aren't making any more land!
(Or Vancouver, BC now)
Or north of Toronto! Average houses go for 500-600K now. Houses in shitty areas go for 350. I'm not sure where did the average house price of 350K come from, I just don't see prices like that anymore.
Not much longer, that party is in full force here, it's JUST starting in Canuckville.
They have not dodged a damn thing, their just at the end of the line.
Folks on Howe Street talk about it often.
not only that, they dont use facts or logic, its usually some ad hominem attack.
Yes, the same tactic that Master Bites, Jory --- and Jon Nadler --- love to indulge in at every opportunity.
How much is anyone willing to bet that all three are really just one and the same?
Stop using the dollar to measure value, it makes no sense anymore. The dollar is the commodity wich is in oversupply all over the world since it is free to produce. Gold is money and wealth.
IAU.pk will trade on!
Yeah that September 2008 discrepancy really sticks out. I mean the gold price was $870 back then, I can see why the vault would be empty. But when it's bumping $1200 I'm sure it's so full of gold they can barely get the door closed. Honest.
Another good article by ZH. Thats why I like miners not funds.
I own physical gold, paper gold and shares of various miners... but if you are worried that the paper gold funds don't hold the physical that they claim to, then you should be even more concerned that the miners estimates of gold that can be extracted from their mines economically is accurate.
At least bars in vaults can be inventoried - but in the ground deposits are at least as much an art as a science.
I personally think that the Gold bugs are dismissed by the mainstream (and the regulatory bodies) not as part of a massive conspiracy, but because the Gold bugs are in fact insane.
Well I guess when you look at the human history for six thousand years humans could be described as insane... so Gold bugs are normal.
It is indeed insane to earn a 400% return in 10 years.
Scoreboard, slut.
and how much is gold up since, say, 1980 versus the increase in number of circulating FRN's to today?
Scoreboard, slut.
Insane is expecting or truly believing Fiat Paper / Debt Based Monetary systems NOT to implode.
Fiat Currency - 0 -
Gold 5-6000 yrs.....
I think the REAL insanity is dismissing several thousand years of human monetary history, and somehow believing that today's obviously failing fiat currency regime is "forever", and that gold has been relegated to the dustbin of monetary history because, all evidence to the contrary, "everything is different" this time.
No, gold advocates are not dismissed by mainstream paperbugs because of a massive conspiracy, but because the paper pimps realize that seeing the believers in honest money taking their financial future into their own hands through precious metals ownership constitutes a "vote of no confidence" in their manipulative Ponzi paper schemes, and threatens the pro-fiat, pro-corruption agenda of the establishment, and risks finally exposing those scams to the light of broad public scrutiny. That is why so-called "goldbugs" (define that word for me please) are furiously attacked by the powers-that-be in its controlled and co-opted "mainstream" media, as well as by hordes of their shrill and defensive, paper-pushing troll minions online.
Verbal attacks speak of insecurities on the part of the attackers.
We are ignorant on many levels. Most people i know have never seen or owned gold or silver.
Some of them now own at least one silver and i hope it will arouse their curiosity.
Thoes of you who have, give a coin now and then to an unsuspecting stranger. Strenghten your country by doing that!
I am not sure why this is a suprise to anyone. None of the major banks store anywhere near the physical amount of precious metals that are needed to back the certificates they sell. Trust me I worked for one and I would say the the ratio of 1/10 th would be the maximum ratio. The minimum might be as low as 1/100th.
All as I can tell you all is that if you had any brains at all , do NOT keep holding those certs. At best you will get cash ( paper) for them, at worst they will fail comepletely and you will get NOTHING. Convert them to physical , it is an easy process , and there is no surchage for bigger bars. If you convert now , if your lucky you will get your physical in 2-4 months. They will use every excuse in the meantime.
Its absolutely true, physical is really drying up in a hurry.
If you were anywhere near WT4 on 9-11. You were in hell.
I just got my account tonight so I could respond to the original interview from a couple of days ago. No one will see it there so I will repost it here...
I caved in and got myself an account here so I could respond to some of the misleading information in this interview... although it took two days to get the account so it may be too late for anyone to care anymore, but here goes anyway:
I work around the corner from the Royal Canadian Mint. It is my client so I try to keep up with the gold industry to some degree, more lately than ever before. The large Canadian charter banks (RBC, Scotia, CIBC, TD, BMO) are also clients so I am quite familiar with how they operate too.
Scotiabank (The Bank of Nova Scotia) is one of the big charter banks, all concentrated in downtown Toronto. It bought Mocatta a few years back, which was an international gold dealer. Now they refer to themselves as "Canada's only bullion bank" because they are the only one of the big charter banks that actually sells gold to the public. The "bullion bank" label is just a marketing term. In reality, you would be hard-pressed to call it a bullion bank at all. They carry their inventory of coins and wafers and bars that they sell out of a trading desk in Scotia Plaza downtown Toronto and through an online service, so that is essentially what the "bullion bank" is - their inventory. There are many other such gold dealers in the country (ever heard of Kitco in Montreal???) and vaults with stores of gold. After all, they make it here!
These banks are all primarily retail business in Canada, in large, modern office towers and relatively small vaults. They are not equipped to store large volumes of gold bullion or anything of the kind. The only other bank with a visible store of gold in downtown Toronto is the RBC Headquarters (Royal Bank of Canada). Their office towers are all glass and each pane of glass is dipped in a bath of 24k gold. It looks nice but a window washer would need to be scraping for months to get enough to make a ring!
Mocatta also introduced gold "certificates" as have many other organizations around the world that work with gold or other financial instruments. Even the Mint has introduced a pilot project with these types of certificates. Contrary to what the guys in the interview claimed, there is nothing anywhere that says these certificates are for allocated gold. In fact the literature is quite clear that it is for unallocated gold, backed only by the assets of the bank. One of the selling points is that you don't have to pay for storage or insurance, again contrary to what the guys in the interview claimed. If you do convert to physical gold, then you have to pay the full freight, which is what happened to them.
In most of these cases, I don't believe these things are so much scams as they are mis-understood by the average investor who typically doesn't spend much, if any time looking into what they are buying. That doesn't mean that these certificates don't involve risk. Personally I viewed those gold certificates in the same light as "deeds to land on the moon" or "certificates of ownership of a star" that you can buy from novelty dealers. But people spend money on those too!
Another comment made in the interview has been mis-interpreted in such a way as to undermine the credibility of CEF (The Central Canada Fund) by painting it with the same brush. CEF is one of many gold funds in the country, and around the world for that matter as it trades mainly in the U.S. It started in 1961 in Toronto as a mutual fund holding Canadian equities. In 1983, after the last gold boom busted, they decided to remake themselves as the "Sound Monetary Fund" and converted to all physical gold and silver. Then they moved their management to Calgary where a branch of the CIBC (Canadian Imperial Bank of Commerce) had a giant underground vault, suitable for the conditions of the wild west.
CEF is one of the few funds that goes to great lengths to demonstrate that it possesses actual, unencumbered, fully allocated gold for its shareholders. (Sprott is building another one.) The gold holdings are audited twice a year by an independent auditor. The prospectus is quite clear that no gold is leased, loaned or otherwise encumbered in any way. The one risk I did notice is that when they issue new shares to raise funds, then buy more gold, they count the gold as holdings before they receive physical delivery, which may take some time.
Other than that, it is fully protected in the underground vault by herds of wild moose. And if you get past them, you have to deal with bunches of savage Canadian beavers with the great big buck teeth. If you happen to make it through those defences and get some gold and try to run away, as they say in the Alberta prairies: when your dog runs away, you can see him running for three days! So in that time, the Mounties on horses will surely catch up to you. After all, they always get their man. And these days, once they do, they can marry him too. That means two more gold rings sold, pushing demand up even higher!
Hope that helps.
I feel better already. I would like to try some of that Canadian beaver though. Care to hook me up?
You often see them hanging out with the cougars.
Hillarious and informative! (as opposed to the usual speculative or just insane ramblings usually found here)
Thanks for the post.
PenisPenis,
see if you can type a post without using the word "insane."
Earlier, you wrote:
Zamboni> What I find most interesting is the psychology: scam after scam after scam -- Lusitania, Pearl Harbor, Gulf of Tonkin, Oklahoma City, Babies torn from incubators left to die on cold floors, No Child Left Behind, War on Terror, Weapons of Mass Destruction, 9/11 -- and still the lumpen people believe the next lie.
It's hard to think of a more apt word than insane when reading this drivel. I'll give it a try though:
idiotic, moronic, stupid
Good to hear about Sprott, someone on ZH wrote here the Royal Mint had never heard of Sprott when he called them. I Spoke to Sprott and he is pretty convincing the gold is stored at the mint. Can anyone confirm this for sure?
From the paperwork SGOL seems OK as far allocated etc, but anytime I see JPM and UBS as custodians i think fox garding the chickens.
The Mint is a small, but state-of-the-art manufacturing facility in Ottawa across the street from "Fortress USA", also known as the American Embassy. The Mint has a vault to hold its own inventory and the gold and other metals it uses to produce coins. The vault is apparently large enough that they provide storage services for companies who want to have a place for their gold. Individuals cannot access this service but large entities can. Sprott is the only one I am aware of who uses this service at the Mint. The Mint itself was built over 100 years ago and although small, it is heavily fortified and guarded (although not nearly as heavily fortified as the fortress across the street!)
Around the corner is the Bank of Canada, that officially claims no gold reserves as far as international records identify. However, it sits on top of another huge underground vault that is understood locally (and by BOC officials unofficially) to be fully stocked. Hopefully some of that is for the Canada Pension Plan!
Great info ! Thanks. PHYS is a go. It had a nice run this week.
I've said it before ,Lets invade Canada to pay off debt...Gold, Beaver Bitches
They claim immunity by being an agent of the Central Bank...so lets AUDIT
http://www.gata.org/files/GATALawsuitVs.Fed-12-30-2009.pdf
I've been to Ottawa and took a tour of Royal Canadian Mint. I didn't immediately connect that there's USA embassy fortress across it as we were traveling on one side, then another. But maybe there's a bigger safe of gold in the embassy ;p
Is this the same Royal Mint that "lost" millions of dollars of gold bars? The RCMP investigated but the explanation was lame when I heard it.
txs wmu
A bit tangential:
http://www.globalresearch.ca/index.php?context=va&aid=4034
Adrian Salbuchi explains how the power structure works.
After reading the above, I add to this important topic that in deflationary depressions(do not confuse price inflation with credit collapse)the power money(hard assets like land, gold,silver,oil etc.) become exceptionally strong in a period where money supply collapse is battled by sovereign debt.
Now, money supply is collapsing(assets and credit=money supply) but at some point none of these countries(greece as a canary...)will be able to pay excessive debt back. This includes the USA.
But it doesn't matter-the game continues long enough for the following:
-in conjunction with the article, the power structure collects precious metals first(Soros etc.)
-Paper gold defaults are dealt with in government CASH(booyah!)
-The printing machine provides enough liquidity for the power structure to collect ownerships in companies(necessities like railroads)as equities
-The government is reclaiming land via MBS trades for "cash"
-At some point as this is a long process, all sovereign debt is worthless
-The above is moot, as the default will be reallocated to a global governing and financial system(IMF-type entities)
-What it means for us is-autocratic socialism for the benefit of the alpha class. Higher taxation to pay the global power structure the debts of the defaulted nations. The rich are high above the tsunami-have the gold(real money) and have us in debt with our labor
So you setup several levels of multilateral agencies who keep dodgy debt at par, and just do updates in a database, boom, debt is settled and everyone is happy.
OK what the hell is this "Financial Vulnerabilities Project and New International Financial Architecture that he's talking about in that link. Controlled financial splash down? Is the above bullet list a cliff notes on this? It was always common sense to buy real assets, well until 2008 at least, where the mad rush for cash made a permanent scar. What's more likely? If what you say and fiat printing will go on to acquire all real wealth by the money printers, than one really should not be fearful of another huge asset deflation and dump all cash for real assets. So forget P/E ratios, lose all cash?
+1000000
Awsome! Thanks
When are sheeple gonna learn? If you don't physically have possesion of that gold, you AIN'T GOT no gold!!
As soon as they learn that scammers and thieves and liars and cruel people have been in charge of he money most of history and that those fucking turd sucking flys invented the term "possession is 9/10ths of the law" after they receipted out gold in every civilization from the romans to today.
If believed, it seems to me one of the implications is that the 'creation unit' process is a complete fraud. That is, as money flows into or out of an ETF actual metal is, by contract, supposed to be bought or sold (i.e., the PM - Bank of New York Mellon - is required legally to do this per the prospectus). I understand much of this circular, that is, if only paper backs paper, then only paper backs paper; but, and it's a bug but for me, could it really be true that the basic ETF share creation process is completely fradulent, yet it has only come to light recently? For me, I wouldn't think it is in BNY's interests to perpetuate such a fraud, as they would likley be on the hook for any class action suit after the fact (i.e., assuming they were really TBTF). JP Morgan and Goldman I could see possibly benefiting because of possible other operations and their organizational incentives and structure, but BNY would likley go bankrupt over such a fraud (90% of about $42 billion is about a $38 billion shortfall currently, while they make a small fraction of that managing the trust). While I believe many things I wouldn't have believed just say five years ago, it just dosn't add up for me as to incentives or rationale for BNY. Of course, incompetence I could believe, but incentives no.
Also, as a poster pointed out, if we are to believe this then why buy shares of miners as they are almost fully based on the promise of what the company says is in the ground? Under complete and total suspicion of anything to do with precious metals you can only take delivery and wait.
If you are following Armstrong's writings "from the hole" we may see a turning point for gold, not to mention the Dow, as we approach his Pi cycle target next Friday. One of his recent writings said gold would have to exceed 1162 on a weekly close to signal that it is going to test its earlier highs. Today it appears to have closed at 1161.4. If he's right, it may go higher next week but reverse by Friday and close below 1162 again.
The last time this Pi cycle date came around was September 11th, 2001, so if you know of any "bullion vaults" that have extra room because the gold is all gone, you may want to rent some space to hide out.
Snowdude. Excellent account. Well done. I also agree that Central Fund's credentials are rock solid.
I could debate a few small points however. When a bank sells a gold cert it is in effect short that amount of gold. It then has to hedge, either with physical, or with more paper or it will lose money if gold goes up. Very little hedging is done with physical. So lets say they hedge with paper, the banks or whomever sold them the paper is also leveraging for the most part with more paper, etc etc. It is much the way that $1 gets leveraged 10-20x or more through the money system. When a client want to exchage for physical ( which isn't there) it creates a whole chain of unravelling the leverage the original sale created. In the end the bank that made the original sale must deliver the physical. Furthermore ,many contracts state that there is no delivery charge if you pick it up at the head office ( for example Scotia Mocatta downtown Toronto). If you want to move it to another vault or pick it up at your branch in Montreal ( for example) then you must pay the charges.
In the end, if everyone would just trade in these certs for physical ( and take possession) we would really find out who was "swimming naked " per se.
Thanks, justbuygold. I agree completely! And I believe the big skinny-dipping party will end in the not-too-distant future. But I have no idea when that will be.
"the big skinny-dipping party will end..."
+10... heh
or they simply bought gold certificates from someone else before and just SOLD THEM, leaving them with less of a long position, or no position at all.
Here is another scenario. A bank sells a gold certificate for $100,000 . They then hedge off most of the risk using some gold derivative . The bulk of the money is invested in 10 yr treasuries at 3.85 % yeild (for example purposes).
Now what happens if 10 yr yields quickly rise over a year or two to 8%. The client decides to excercise that certificate and take possession. The banks may have earned 3.85 % / yr but now it has to sell the t-bill at 50 cents on the dollar.
Multiply that problem by whatever the massive paper short in precious metals is ( $500 BB ? a Trillion ? ) and you can see what negative effect it might have. This is a simple example, in real life that money is leveraged 10:1.
Even the gold derivative the bank used to hedge the risk might end up defaulting . Much the same way that if everyone has earthquake insurance and a 9.8 earthquake hits L.A , you are wiped out becuase the insurance writers are all bankrupt.
BTW, how did we let April 5th pass with out a celebration of the anniversary of this day?:
http://en.wikipedia.org/wiki/Executive_Order_6102
Forget about July 4th, April 5th, 1933 and August 15, 1971 are the 2 of the most important/infamous days in American History and yet no one, absolutely no one gives a damn.
What if a Sons of Gold Liberty movement was created to take public physical delivery of gold and silver?
if everyone, who could afford it, bought 10 oz's of silver,( 40 million people approx)= 400 million oz's, I think that would cause the house of cards, to start to collapse. JMHO thats only $200 each. a national short squeeze
That's a great idea.
:D
It would have to be on the same day, to really trouble the waters.
Independence day...I'm in for 20g's
It's not IAU (the article is about GLD), but for those who believe gold ETFs are not backed by anything, or 10% or less, physical I would recommend the following rather long article:
http://www.24hgold.com/english/news-gold-silver-gld-conspiracy-theories.aspx?contributor=Adam+Hamilton&article=2509109754G10020&redirect=False
I think he makes a good point about why would those who actually play the paper shell game not expose this if it was true?
Verdum,
I respect Adam over at Zeal. They do excellent work.
However, the article does not deal with the biggest concern about GLD or SLV. The custodians have no power to audit the 5-6 subcustodians. Check the prospectus. These sub-custodians can therefore do paper leases at their hearts consent. Even the custodians can be shorting paper against it. ONLY THE PHYSICAL IS AUDITED. Is the GLD gold actually in segregated vaults ? I don't think so .
The latest 10-K ( Commission File Number 000-32356) on pages 26 and 18 respectively: ” Gold held by the Custodian’s currently selected subcustodians and by subcustodians of subcustodians may be held in vaults located in England or in other locations.” and “In addition, the Trustee has no right to visit the premises of any subcustodian for the purposes of examining the Trust’s gold or any records maintained by the subcustodian, and no subcustodian is obligated to cooperate in any review the Trustee may wish to conduct of the facilities, procedures, records or creditworthiness of such subcustodian.”
There is also no guarantee of the quality of the bars. The prospectus even warns against the fact that they may not actually be GDB's ( good delivery bars)
As custodians JPM and HSBC have a lot of questions to answer here. The story to the CFTC that they are hedging clients smells really fishy considering their roles with GLD and SLV. Its a red herring !
Here are two articles of many on the subject.
http://seekingalpha.com/article/149209-are-gld-and-slv-legitimate-invest...
http://www.marketoracle.co.uk/Article9030.html
Justbuygold:
Thanks for the links, I had not read the first one before and forgot about the second. I skimmed both, and aside from the first being somewhat long (although about as bad as the one I suggested), there seems substantial overlap. For me, and given the focus of this Zero Hedge piece was on whether actual physical bullion actually exists (albeit for IAU not GLD, which the articles we are referencing are focused on), I focus on the fact that the one thing GLD does do is have a physical audit.
Of course, as you mentioned, with JP Morgan involvement, for example, that is always a concern, especially these days. Clearly my bias here is that I agree with the general premise put forth by Adam Hamilton that trust is a funny thing, especially these days, yet there comes a point when one must ask a few fundamental questions, for example, at least: (1) about incentives, and (2) whether one thinks that you can trust whomever is selling a financial product (in this case an ETF based on a GATA idea to derive its value supposedly directly from the physical spot prices, i.e., GLD and SLV specifically). As you may have guessed I own some of these as well as physical. For me, I am nervous about them, but desire the exposure and reluctantly accept the counterparty issues, which is why I appreciate the links and thoughts. I never want to be married to my positions and am always trying to rethink but not overthink the financial markets; but I should mention that I find it unnerving to say the least when these types of articles pop up and challenge my assumptions. I should say that it is both good and bad (good to rethink the matter, and potentially bad if it just hardens my bias or resolve to hold).
Most distressing for me, and again I agree with Hamilton, is the issue that these types of breathless finance pieces tend to scare investors that haven't much thought these things through (and some that have, or at least think they have, like myself), but if unsubstantiated they largely play into the hands of those that are short PMs (e.g., JPM). Anyway, thanks again and if you car to please indicate the probability you think that GLD and SLV are frauds (yes, I am serious, and no I won't hold you to it, I am actually curious because I would put the odds well below 10%, but am interested in another opinion).
Zerohedge posted this story in excellent fashon. The title of this post ends with a question because, we really dont know. But when we consider the lawlwssness that pervades the worlds great financial institutions, we begin to realize that the law is not on your side.
Protect yourself. Hold physical PMs.
Don't wait only to discover that you were investing in a Ponzi scheme because you will only find out when its too late.
And a side note; The government confiscated gold before. I don't think they will the second time around, but its not impossible.