Did GLD And Other Gold ETFs Kill Gold Stocks?

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Mon, 12/19/2011 - 10:03 | 1993762 achmachat
achmachat's picture

Sometimes the choir likes being preached to.

Mon, 12/19/2011 - 10:17 | 1993802 Snidley Whipsnae
Snidley Whipsnae's picture

We now have a banana economy and a banana judicial system backing it. If you are holding FRNs they will be decimated when printing resumes. If you are holding paper PMs or even physical PMs with a warehouse receipt... good luck.

"Trustee to Seize and Liquidate Even the Stored Customer Gold and Silver Bullion From MF Global"

"The bottom line is that apparently some warehouses and bullion dealers are not a safe place to store your gold and silver, even if you hold a specific warehouse receipt. In an oligarchy, private ownership is merely a concept, subject to interpretation and confiscation."



Mon, 12/19/2011 - 10:23 | 1993824 mrgneiss
mrgneiss's picture

You have to hand it to the ponzi banker who dreamed up the gold etf's, especially the ones with their gold rehypothecated to infinity - kill the demand for physical gold and gold miners at the same time.  A central banks/fiat oligarchists wet dream.  I guess the major flaw in their plan was not forseeing the developing world wanting the amount of gold in their reserves to go from 0.5% or so to a lot higher, and actually demanding physical delivery.

Mon, 12/19/2011 - 10:34 | 1993854 Snidley Whipsnae
Snidley Whipsnae's picture

"I guess the major flaw in their plan was not forseeing the developing world wanting the amount of gold in their reserves to go from 0.5% or so to a lot higher, and actually demanding physical delivery."


Yes... and as the developing world central banks begin buying more gold for reserves what are we witnessing? Anyone believe that the Anglo Americans will sit by while the fiat schemes are destroyed? How much gold can foreign central banks accumulate when their economy and currency are destroyed?

+1 mrgneiss

Mon, 12/19/2011 - 11:11 | 1993977 Oh regional Indian
Oh regional Indian's picture

Hmmmm, yesterday RonP, today Gold. But I guess I like a little pushback.

Gold is falsely valued at this time and is only relatively priced. There is no absolute value/price for Gold anymore. Has not been since the Petrodollar economy flourished. 

3 swimming pools is a lie. Huge lie. 

And if gold is manipulated, you know how miners are manupulated. Heck, Barrick is a pappy Bush play, through and through.

Point being, there is really no pattern to discern in such a manipulated market (except opex times and the like). And in the true re-eval phase, the currency whcih we eval it in will be meaningless.

$55,000 an ounce. Right!



Mon, 12/19/2011 - 11:37 | 1994083 Thomas
Thomas's picture

Central Fund of Canada.

Mon, 12/19/2011 - 13:03 | 1994468 midtowng
midtowng's picture

That's what I use. They have a solid track record and hold both gold AND silver.

I've given up on most of my miners. They tend to track the S&P too closely.

Mon, 12/19/2011 - 12:13 | 1994283 Smiddywesson
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If the Bernak follows through on his 11/21/2002 helicopter speech game plan, and it looks like he will, we are going to return to some sort of a gold referrenced standard and ramp the price of gold to devalue our currency.  How much we devalue the currency, and how high gold prices go, depends upon the balance sheet and how many defaults are politically acceptable.  Given that it's easier to steal from people through debasement than default on government promises, I'd say your $55,000 price target is a distinct possibility.

Mon, 12/19/2011 - 10:34 | 1993857 uno
uno's picture

reason we are on the war tour through the middle east and soon Africa is to get the oil/gold other minerals, have to assume Venezula soon since they are getting their physical back

Mon, 12/19/2011 - 10:36 | 1993865 Monedas
Monedas's picture

A lot of artificial supply satisfied appetites for Gold and surely hurt prices for the real stuff and the miners ! The miners have problems of their own....sitting ducks for taxation, environmental regulation, competition, expropriation and share holder dilution ! I'll stick to the real deal !  Monedas 2011  Comedy Jihad Not Buying Sizzle Nor Glitter

Mon, 12/19/2011 - 12:16 | 1994294 Smiddywesson
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Perhaps, but the big Boyz own the miners too.  That's an argument for holding miners.  However, the Boyz can afford to avoid taxation, we can't.

Still, the risk is there, so a wise gold bug must keep some physical around just in case.

Mon, 12/19/2011 - 12:58 | 1994439 russki standart
russki standart's picture

One of the big problems facing junior miners are naked short sellers, who are able to pound the stocks down knowing full well that they must re-finance in the marketplace. Until the issue of FTD's is settled via criminal prosecution, this practice will continue to flourish on the TSX.

Mon, 12/19/2011 - 12:09 | 1994263 Nacho.Libre
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Soooo... a bit off topic, but along the topic of mining.  Can someone give me an idea or point me to a processing plant, preferably in Texas, that can process raw material to extract the metals, specifically gold, copper, and silver, maybe a little palladium?  Or some information on the extraction process that's bit more detailed than wiki?





Mon, 12/19/2011 - 13:48 | 1994645 mick_richfield
mick_richfield's picture

A Canadian place called Aurcana bought an old silver mine in West Texas that had been closed since 1942.

I do not believe that they have started production yet, though.  ( But they have started building... )


I don't think there are any other operating silver mines in Texas.

Mon, 12/19/2011 - 17:28 | 1995599 Nacho.Libre
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Thanks.  Actually, the deal is that I have an uncle with a claim, but it's in Mexico.  He can mine the rock, but doesn't have the equipment for final extraction.  With the cartel stuff in Mexico, I suggested he transport the raw material to Texas for extraction.  The samples they have sent to labs show it very rich in Gold, but because of the high copper content, it apparently doesn't leach well, so there needs to be some other method for final extraction and I wanted to make contact with a refiner in Texas.

Mon, 12/19/2011 - 11:08 | 1993961 GubbermintWorker
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All your gold are belong to us!

Mon, 12/19/2011 - 10:45 | 1993891 rosex229
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Wahoo! the Telegraph.co.uk site has referenced Zerohedge for the 2nd time in 2 weeks on their live debt crisis blog (its always the front and center "article" in their finance section)!

Check it out for yourself http://www.telegraph.co.uk/finance/debt-crisis-live/8965011/Debt-crisis-live.html (to speed up the process just hit Ctrl + F and type in "zero hedge" (two words).

I'd come here for my daily news fix regardless, but I'm having fun pondering zerohedges break into contemporary news sites.

Mon, 12/19/2011 - 12:33 | 1994332 jekyll island
jekyll island's picture

Tyler, What is GS trading desk position in regards to gold mining equities?  Are they buying?

I am now conflicted, I usually do the opposite of what GS recommends.  I see the miners as undervalued, i.e. International Tower Hill mining has 20mOz gold deposit and almost $100 million cash and they are at $3.67/share?  Give me a break.  ATAC is below $3/share, they were at $10 earlier this year.  Now GS says to buy 'em.  I am suspicious they will now go lower even after tax sale loss season ends. 

Mon, 12/19/2011 - 10:08 | 1993771 SheepDog-One
SheepDog-One's picture

Who cares about gold ETF's or gold stocks? If you want gold, then buy some gold.

Mon, 12/19/2011 - 10:22 | 1993821 Wolf-Avatar
Wolf-Avatar's picture

Gotta get y'r shiny on.          :-)

Mon, 12/19/2011 - 14:37 | 1994769 ArgentoFisico
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Italian gold&silverbugs on  >>>  argentofisico.blogspot.com

Mon, 12/19/2011 - 17:01 | 1995497 OliverTwist
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Ma senti un po ArgentoFisico: è vero che a Roma è difficile trovare dei posti affidabili dove puoi comprare l'oro/argento fisico?


Mon, 12/19/2011 - 10:40 | 1993845 Chester_McGoldsteez
Chester_McGoldsteez's picture

If you pick a well managed, non(minimal)-elitist controlled company, owning equity in a gold producing company is a good way to play the gold move , especially for person who is in a position where they dont have much cash to invest with. with these stock prices where they are, i think its pretty attractive, and definitely not a bad way to get in on the action, so long as you have the stomach to sit through the manipulation until the real crisis happens. Even though most sheeple cant sit through the short term volatility and usually get shaken out. 

Mon, 12/19/2011 - 10:44 | 1993890 Shineola
Shineola's picture

Then you get to pay your taxes on any imagined gains. Baaaa

Mon, 12/19/2011 - 10:56 | 1993923 Chester_McGoldsteez
Chester_McGoldsteez's picture

Easssssy troll. Physical is obviously king, but the huge gains i'v made still are unseen since im not stupid enough to sell my holdings, since the real value still has a long way to rise. So even though my value is up, my cash is still the same, day to day, im in no different position than I was before i bought physical. Whereas now i'v collected dividends on gold producing stocks. Im not advocating stocks to everyone, you have to know what you're doing. Since you were quick to brush it off, im sure you don't which is fine, but its Just another way to get on the game, while taking a little extra cash to play with. But by all means, Baaaa all you want.

Mon, 12/19/2011 - 11:19 | 1994001 Shineola
Shineola's picture

I'm sorry sir. I did not mean to offend you. Sheeple buy paper not gold.

Mon, 12/19/2011 - 12:49 | 1994405 jekyll island
jekyll island's picture


There are two types of posters who respond to articles about mining companies on ZH.  The apocalypse types who advocate possession of PMs only and those who probably have a good position in PMs and are now looking to leverage the miners for better returns.  Looking at the dozens of companies that had 1,000% returns or more during the last two minibull markets, I want some exposure to those kind of gains, which are usually in the junior miners.  Nothing feels better than hitting a home run: tripling the initial investment, getting shares of a spin out company and using profits to buy more gold.  Some posters on this board don't understand that process, but to each his own.  I personally think the charts indicate a distortion in the mining sector which will correct sharply to the upside as gold continues to assert itself as money.  I agree with you about being patient, this is one area where you have to be on board before the train leaves the station, even if that means short term loss as you build a position.  GLTA. 

Mon, 12/19/2011 - 10:49 | 1993901 XitSam
XitSam's picture

"If you pick ..."

Well, that's the problem isn't it. I don't know these people and company histories, don't have the time to find out and track them and make sure the press releases are the truth. Right now I'm all about wealth preservation.

Mon, 12/19/2011 - 11:01 | 1993941 Chester_McGoldsteez
Chester_McGoldsteez's picture

Alright, well i made the comment from a perspective of someone like myself, who takes the time to look into their investments, how companies are run etc. Now in no way am i saying that its possible to get a 100% clear picture of a companies managment, just like anything else in life, but I will say its not impossible to separate the complete shit companies from ones who are well run, and make money. If you do your homework that is. Again, physical is king, I was simply saying for those who are looking to get the absolute most out of the gold run, and are willing to put in the work and do their homework, its just another option. 

Mon, 12/19/2011 - 11:41 | 1994098 Shineola
Shineola's picture

OK, then! We've got that all cleared up. Drop by the bunker anytime. :)

Mon, 12/19/2011 - 11:41 | 1994103 Bring the Gold
Bring the Gold's picture

Hey Chester what do you think of Chesapeake and Pretium? I'm liking both of these plays my only concern is energy inputs going nuts at some point. It seems the slide into recession when oil hits a certain price tends to cap it as use drops when oil hits a certain price, whereas gold has moved up steadily since 2008. Most of the majors are pwned by blue bloods and I shy away from that. I like millions of ounces in the ground and more to be found. I also have some silver plays, but that's for a different post. One other gold play some may like is Sandstorm Resources as its a royalty play so they get even more of the upside exposure with fixed prices for the gold they get.

Mon, 12/19/2011 - 14:51 | 1994913 jekyll island
jekyll island's picture

I have been following Pretium for a while, I like it a lot, I like it a lot better under $9/share. 

Chesapeake is too leveraged for me, look at Africa Oil Corp. 

I have Sandstorm metals and energy, am waiting for Sandstorm Gold to fall below $1/share, looks really good at that price.

Mon, 12/19/2011 - 15:03 | 1994959 TheGardener
TheGardener's picture

You either buy physical , or you become a shareholder.

In the latter case, according to Davila, it doesn't matter
whether you are ruled by a few chairman or a politburo.

Mon, 12/19/2011 - 11:06 | 1993951 vipobviously
vipobviously's picture


...and if you want to put your head on the choping block and hope the guillotine does'nt fall, buy etf's/gld

Mon, 12/19/2011 - 11:37 | 1994082 blindfaith
blindfaith's picture

just got a call from znbc, your apperance has been cancelled.


Mon, 12/19/2011 - 13:45 | 1994638 vipobviously
vipobviously's picture

but...but...but..  my head is still attached to my torso, i thought that was the only requirement, along with being able to read the "party line" from the teleprompter

....have my people call znbc and reschedule please


Mon, 12/19/2011 - 12:59 | 1994450 jekyll island
jekyll island's picture

I do. The math is quite compelling.  The market cap of the entire gold mining industry is less than Wal-Mart's.  When confidence is lost in fiat currency, it will be nearly impossible to buy physical PM's, they just won't be available.  What's left?  Mining stocks.  What will happen when a couple of trillion dollars comes into a market that is valued less than $200 billion.  That is the definition of a parabolic move. 

Mon, 12/19/2011 - 10:09 | 1993773 DormRoom
DormRoom's picture

highly leveraged gold collateral trade collapses, then gold prices will collapse.

Mon, 12/19/2011 - 10:10 | 1993779 SilverIsKing
SilverIsKing's picture


Mon, 12/19/2011 - 10:25 | 1993833 Spitzer
Spitzer's picture

when the comex defaults, the paper price will crash to the low 100's. Meanwhile, the holders of physical gold will be holding the most valuable objects on earth.

Mon, 12/19/2011 - 11:19 | 1994000 Bendromeda Strain
Bendromeda Strain's picture

Decoupling, biznatches!

Mon, 12/19/2011 - 11:43 | 1994114 Bring the Gold
Bring the Gold's picture

And for those who can't get physical (the majority) a tried and true method of exposure - buying the miners - will see a moonshot that is truly breathtaking.

Mon, 12/19/2011 - 17:06 | 1995505 OliverTwist
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comment deleted

Mon, 12/19/2011 - 10:10 | 1993774 cossack55
cossack55's picture


Counterparty risk, anyone?

Mon, 12/19/2011 - 11:45 | 1994136 Bring the Gold
Bring the Gold's picture

Well if you are a citizen and hold your gold in an NWO controlled country, or one with a dictator, then confiscation is also a risk. There is no such thing as a lack of counterparty risk on this planet. People who think otherwise are delusional. Can you limit it by living off the grid and burying your loot? Yes, you can limit, but never truly remove counterparty risk in the form of the strongman whether governmental or non-partisan thug. The greatest illusion of all is perfect safety.

Mon, 12/19/2011 - 15:14 | 1994993 TheGardener
TheGardener's picture

But goldbugs are supposed to be true reactionaries defending
a lost post. You can't possibly win, but you chose to fight.

Mon, 12/19/2011 - 10:10 | 1993775 SilverIsKing
SilverIsKing's picture

There's no time like the present to buy up physical and miners at artificially distressed prices. Woulda, shoulda, coulda will be on the lips of those who sat idly by when then could have been taking advantage of the opportunity of a lifetime.

Mon, 12/19/2011 - 10:12 | 1993783 cossack55
cossack55's picture

IMHO, gold is a store/reflection of sovereign wealth.  When the nation in which you reside loses its sovereingty, guess who else does.

Mon, 12/19/2011 - 11:10 | 1993966 vipobviously
vipobviously's picture

Not in America cossack, chisholm v. georgia

Our soverienty is not granted by the state, but in all fairness not recognized by  such w/out a legal battle

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