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What Happens If GLD Doesn't Have The Physical Gold To Back Its Investment Funds???
This is the final installment of my interview with the CEO of GBI: Gold Bullion International, a Wall Street firm that facilitates trading in actual physical gold for retail and institutional investors directly through their brokerage account. This segment covers:
- the ownership structure of GBI,
- a direct comparison of direct ownership versus the GLD ETF,
- a clarification of counterparty risk,
- what happens if GLD et. al. are found out not to have the physical gold backing their fund that many parties anticipate,
- and the ability of GLD and related ETFs to actually print thier own money..
If you have not seen the first four parts of this interview and the supplementary information (ex. the Sprott Physical Gold Trust comparison), I invite you to peruse them now...
- Trading Physical Gold As Easily As You Trade Stocks: Is Gold Becoming A Tradable Currency After All?
- Trading Physical Gold vs Investing In A Physical Gold Trust: Which Is Better?
- Reggie Middleton Interviews GBI: Gold Bullion International part 3 of 5
- Trading Physical Gold: Is Gold In A Bubble?
»
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GLD prospectus says they do not audit their warehouse inventories, held in vendors' offsite facilities. They are just collecting on fools' dreams of owning gold. I sold all my GLD and won't buy anymore worthless paper gold.
REGGIE IS AN IDIOT
Who needs real gold when you have vector gold?
www.tradewithdave.com
If they don't have enough gold, the pull a "Corzine Maneuver"!
It's like the Picard Maneuver from Star Trek the Next Generation, except with Sovereign Debt instead of phasers.
Chairsatan and the Suicide Vampire Squid of the Great Wal Mart of China built the Paper Mache and the physical golden calf.
...and the Israelites that escaped out of Egypt danced around it, kissed it, gave offerings to it, having sacrificed nothing? LMAO http://www.youtube.com/watch?v=eQos00X5O78
What is being secured? The principle of Broken Tablets? Lol
...could it beeee ....the wine of wrath?
WHY? Wallow in mud now that VIX futures are out?
http://www.youtube.com/watch?v=NjvbA-Xebfg
if you have ADD or ADHD at the 7 minute mark is when the GLD conversation kicks off.
and then again at 11 minutes.
LMAO, that was the biggest laugh anyone would hope for.
(goto 0013:17 in the vid http://www.youtube.com/watch?v=NjvbA-Xebfg )
http://bible.cc/hosea/13-2.htm
http://www.youtube.com/watch?v=_2_gOpU0eWU
GLD trust shares are cash based and you can't take delivery of phyisical with this ETF like you can with a futures contract. So it doesn't really matter whether there is enough gold behind the trust. It's just commission generating paper with numbers and a basis against the underlying physical.
Folks, it's not that GLD doesn't have physical, it's how many (prior) claims exist on that physical. The answer to that is it's all taken, and when the rubber hits the road physical for all but the biggest and most connected players will not be available.
GBI is a scam. Look at the directors and advisors...this is just another Wall street white collar welfare operation.
Didn't the University of Texas Teachers Pension Fund do a study only to find that if 5% of managers did what they did (convert to physical) that the CRIMEX would be unable to meet delivery demands????
http://www.zerohedge.com/article/1-billion-gold-bars-taken-delivery-pens...
CRIMEX is an EXCHANGE, ok? They are not on the hook to deliver, the SHORTS are.
Are you thinking about Kyle Bass? He is on the Univ of Texas investment policy commit and was the one who told them to buy $500 million in gold - now worth over $1 billion. He asked some questions and did the due diligence about having them store the gold. He essentially said BS - deliver it to us. He did not trust them at all. I am not sure if it was the COMEX/CRIME-x or who was going to store it for them.
I may be wrong, but I believe it's being stored in New York for safe keeping.
No, seriously.
You are correct..It is stored in NYC...
Paper share of Gold = Imaginary Money Pit.
Attempt to redeem for Physical = WTF!?
Prices of Physical = To the Moon
Paper = Incinerator.
If that does not bring about the train wreck that was supposed to happen years ago, I don't know what will.
What's the fuss?
GLD's prospectus explicitly explains that its ability to replicate the value of gold depends on its counterparties ability to perform.
Works until it doesn't.
Good luck everybody!
Let me put it this way, Gromit. The 9000 series is the most reliable computer ever made. No 9000 computer has ever made a mistake or distorted information. We are all, by any practical definition of the words, foolproof and incapable of error.
Open the pod-bay door please, Hal ...
I just detected a fault in the AE-35 unit.
the GLD and SLV as well as their correspondant "spot price" are 100% manipulated. They are just printing more and more paper backed by absolutely nothing. I don't know who the entity is that determines spot price, but it's pretty self-evident that it is not determined by supply and demand
The ETF's were engineered by the World Gold Council....with the help of State Street Global Advisors. Their mission was to help the Comex Casino with a backstop relief valve should a large amount of contracts remain standing for delivery....and neither the metal or the cash was available to settle those contracts. At least that is my own speculation....based on the timelines of the inception dates of the ETF's....and the Comex Rule 104.36 that allows for EFP swap arrangements making it copacetic for the Comex to settle contracts with ETF shares as an alternative to cash.
I think Zerohedge covered it all last year. Either way....reading the prospectus on these ETF's should be enough to scare off investors....without the added double-'Hamy' of the CME casino using them as a closing mechanism safety valve.
The number of ways the Custodian and Sponsor can weasel their way outta responsibility....and just pull the plug should things not go according to plan would really surprise most....if they took the time to read the "Protect-Us"
I would submit that pouring fiat into the ETF's actually gives the Bullion Banks extra ammo to manipulate the PM markets at their leisure. Not that I'm personally broken up about it....I did rather enjoy the lifespan of cheap prices in the physical.
Why did Reggie post this on ZH? Annoying.
Becuase Reggie has a nagging doubt (maybe conscience) and he's clearing himself of any charges if GLD really doesn't have the gold. Perfectly normal behavior for your everyday Wall Street "Advice Pirate"!
subscriber count for doomer bloggers is evaporating maybe? So, he'll tell us all something we've already known and talked about for years here? Hoping to drum up more people willing to part with money for advice to short SPG?
Private
GBI FTW
Them's dissapearing words and I appreciate your efforts and willingness to expose the cockroaches for what they are. Stay in lit public places! Or is that stay lit in public places? No more Maguire stunts.
If???
Its not an if, its a "when".
http://boombustblog.com/blog/item/5970-trading-physical-gold-is-gold-in-... is a URL that will work for the video.
Video is private.
If you trade gold ,you are a traitor.
I heard The Bernank say that right after Bald Bennie said "Gold is not money."
Don't fight the FED, if he says gold is not money he must be able to make it so
So don't trade, just "consume".
Then your shit will finally be worth something - sarc
You mean trader.
Reggie, What % of gold do you recommend in one's investment portfolio?
TIA
David Morgan says 10% and Max Keiser says 90%, so anywhere between 10-90% should be fine.
Reggie is awsome at analyzing the banking system. However, his tirades against Apple sound like a first year engineer who doesn't understand marketing. Apple makes products while everyone else makes technology. No contest. They can copy Apple, but Apple will always out-innovate in manufacturing and human usability. Google vs Apple is like Microsoft vs Apple, and we know how that's turning out.
Likewise for investing. Reggie can tell you what going on in the banks, but that doesn't mean he knows how to save yourself from the implosion. You have to put a filter on Reggie, just like everybody else on the internet. The amount of gold you need depends on your circumstance: how old are you, how much do you need to live, where are your other assets, how many other people depend on you, do you have income or do you live off your investments etc. etc.
The problem with apple - ignoring critical consumer considerations (primarily, liberty) - isn't that they are unable to design well done products.
Rather, the problem is that apple is OVER-cashed.... fuck, they themelves said, that they by now have more capital, than they actually need. Apple IS a bubble.... not a bubble in the sense that it is a scam, that is worth shit.... but instead bubble in the purest sence: There is nothing wrong with them financially.... it's it that there is too much right in terms of capital. It is an example of even well doing companies being susceptible to overenthusiasm and hype.
In PM's:
Chris Martenson = 75%
Ben Davies = 80%
Eric Sprott = 85%
What % of your purchasing power do you want to protect?
What percentage would you have if you had known what Mugabge would do in Zimbabwe? Well we have a muslim Mugabe in the USA.
"This Video is Private"
Reggie. A click on the video brings up a black screen declaring "This video is private". Even going to your web site and finding the web page with the video/article doesn't help.
http://boombustblog.com/blog/item/6012-what-happens-if-gld-doesnt-have-the-physical-gold-to-back-its-investment-funds???
Can you help?
Read some JIm Willie http://www.goldenjackass.com/main5.html
GLD was bullshit from the start like whats left of the comex. Can't wait for the ETF that trades real thin air.
The video is now public. I apologize for the snafu.
Thank you for jumping on it so quickly. It is an informative video series that presents new-to-me faces.
Would it be rude to replace faces with feces?
Not only rude, but worse - irrelevant, hors-propos, juvenile and useless, a waste of bits and of time.
"If your words wouldn't improve on the silence, shut the fuck up" might have very well applied here.