Sprott On Biderman On Paper Vs Physical Gold

Tyler Durden's picture

While Eric Sprott obviously has a modest axe to grind, his open and honest discussion with Charles Biderman on the difference between gold ETFs methods of owning gold, so-called physical vs paper gold, is noteworthy given the depth he goes into. After explaining the concerns of GLD, Pisani's putterings, and tax-related differences, Eric goes on to discuss his and other physical trusts and how he started down this route. The latter end of the discussion shifts from the practicalities of owning 'sound money' or 'hard assets' to the thesis for doing so - the debasement of fiat currency and the printing press fanaticism being exhibited globally. Concluding with his thoughts on what could change this thesis, he sees the greatest risk that "we come to our financial senses" - a highly unlikely scenario given the dominoes likely to fall should that occur.


Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
I think I need to buy a gun's picture

physical gold vs banker cock

misterc's picture

Whoah, I thought my head was falling off when I just read this on RanSquawk:

France's Hollande says ECB should cut interest rates and that ECB should lend money directly to states

Better get physical!

Mr Lennon Hendrix's picture

Big monie players have no balls.  If they did, they would never buy paper.  In fact, they would all go 100% of their investment towards bullion. 

No one is doing this.

If they did, London would not control the market - which they do.  London can drop price, yet they have no leverage.  The UK has no bullion; how many Brits own bullion?  Yet the paper market runs the house because people are not strong enough to take the bullion and stash it without using a vehicle.

Sprott uses a vehicle.  Many use tools.  Fuck these tools!  Buy the bullion, and save humanity, and yourself, from the tyranny of banking.


scatterbrains's picture

I expect Sprott to be Gaddafi'd at some point.


Dude, my WHOLE 401K is on Sprots PSLV... I'm down 50% but I feel safer than my peers that are all in on the equitys... PRAY FOR ME... BH AGE 53...


LowProfile's picture

You are either bad at math or full of shit, because even if you top-ticked it, PSLV isn't down %50 from the peak.

That said, maybe you're merely exaggerating, because it's down 40 some odd %.

In that case, I would look to scale out of PSLV and into PHYS, at least 50/50, better 20/80.  Gold is a safer bet, and less volatile.

sitenine's picture

Actually, I think we should cut him some slack.  Look at a PSLV 1 year chart, and you will see that it double tapped 22.0 last April, and it is now sitting at around 13.2 (roughly 40% as you point out).  Not to worry though, part of the dip is due to a very large recent purchase.  I believe Sprott plans two more big purchases in the near future?  Anyway, it wont be long before silver is still worth something and paper will be worthless, and the COMEX will be settling delivery of paper contracts with paper fiat.  I think you'll be as OK as holding paper can get for you so long as you can stomach the volatility UTICA.  Whatever that means ;) --- buy phyz *cough*

slewie the pi rat's picture

UTICA, why TF would you have bought Sprott, the dude is the master at talking his book and has a cult like following, if as noprofile sates you did toptick it where would you be if you had bought slv from those snakes at iShares?  If you want PMs just buy physical and bury them  in your back yard better still get some diversity and spend a few dollars on Faber's newsletter.


Speaking of Top Tick the timing of this article was fuking sprott-on  LOL



prole's picture

Uttica fake silver bug-

A- What 53 year old is familiar with Japanese Cartoon Characters later than "speed racer?"

B- What 53 year old sophisticated and employed enough to have a "401K" is all that worried about it at 53 with years of salary ahead of and behind him to cushion any effects of investment loss?

C- What same employed well prepared with 401K retirement plan etc etc speaks of his associates in "the equitys"

D- Smails, oops, I mean smell more like Trav Beavis to me or whatever random troll being "clever" (not) boohoo-- I listened to you silver guys now I'm losing my shirt!! PRAY FOR ME!!!

E- Anywone who has even heard of silver/Sprott financial products has also heard Doom Faber and Rogers preaching how VOLATILE silver is. Up and down 50% all the time. Paper silver products = DOUBLE YOUR RISK (actually that last sentence vibe is from Celente)

Uttica non-clever Troll: Where have you directed your income for the last 30 years? Where have you directed that income you sophisticated 401K having poster you? What have you been investing in since 1983?

Mr Lennon Hendrix's picture

You're down 50%.....why didn't you cash your 401k and buy bullion?

RowdyRoddyPiper's picture

Why not buy SII.CN?  That is Sprott's Asset Mgmt company.  New 52 week low yesterday at 4.46.  52 week high is 9.37. If you bought at the high that is a nice 52% loss.  Stock evens pays a divvie of 0.12/share.  2.69% yield.  Better than gold!

orangegeek's picture

Owning physical gold?  Is that the type with the embedded tungsten rods or the type without the tungsten rods?




If the world (aka the US) were to go back to a gold standard, how would the gold standard be monitored? 


Stick with the US Dollar folks. 

sitenine's picture

Being a noob is fine.  Being a troll is fine.  Showing your ass by spewing forth ignorant claims of paper superiority on a Sprott post at ZH is not fine.  Educate yourself.  Here's a good place to start: "Money as Debt" http://www.youtube.com/watch?v=Dc3sKwwAaCU

LowProfile's picture

Wow, he's been here a whole three months. 

I smell a....


TwoShortPlanks's picture

@TROLL...Pretty fucking hard to stuff a cigarette paper let alone a bar of Tungsten Bar into 5gms of Gold...If you're buying 1kg Bars you're crazy. A 1kg bar of Gold isn't money, it's a Target...even a 1oz Coin may one day be too expensive to carry around in your pocket.
Lots of little bars, and lots of holes.

Bobbyrib's picture

Yes, it certainly gets expensive buying fractional coins though. I think 1 oz and even 1/2 oz coins will be too much wealth for most transactions in the future.

Anne Ominous's picture

The salting of gold with tungsten is a positve for gold. When gold reserves have to be written down by whatever % of tungsten fraud you will see a reciprocal if not amplified upward move in the price of gold.


I will give you the benefit of doubt that you are sarcing here - if not I encourage you to aggressively buy US dollars - they should suit you very well and will no doubt give you the result you deserve.

zhandax's picture

I will not give him the benefit of the doubt and the way to insure the integrity of the gold is to have the US mint coin it and have everyone in the country have it in their pockets to use in transactions.  Even that is not infallible, but it is an improvement over where we are now.

scatterbrains's picture

Excellent observation. I hadn't considered that aspect. I did choose smaller denominated coin for it's potential easier exchange/barter purposes, but now add to that as you say, with certain forms of physical either being too hard or not worth salting, those forms will be in greater demand.

Libertarian777's picture

a REAL gold standard doesn't NEED to be 'monitored'

on the other hand the 'Bretton Woods' fixed exchange and bimetallic standard of days gone by do indeed need to be 'monitored'.

That was exactly Bernake's arguments about the previous gold standard not working. The fallacy of the argument is central planning of a gold standard won't work any better than central planning of a fiat currency. (and by the same token, the Greenbackers believe a 'US treasury' centrally planned fiat currency would work better than a Federal Reserve centrally planned fiat currency...)

it's the central planning stoopid

Clowns on Acid's picture

OJgeek - How would the gold standard be monitored ? How is the USD being "monitored" (versus inflation) today?

The concept of nominal value and real value is somehting you should research....for your own good.

ebworthen's picture

Orangegeek said:

"Owning physical gold?  Is that the type with the embedded tungsten rods or the type without the tungsten rods?"

It's the kind without little banker weenies and ground up pensioners.

Gavrikon's picture

Exactly.  BTW, so far, we have found exactly 2 bars with tungsten, a 500gm and a kilo.  As often as those sizes of bars are bought and melted down to make jewelry, or are assayed when traded between banks, etc., I assume we would see much more than what we have seen (stories of what is in Fort Knox notwithstanding).

I'd have no problem with buying either size bar from a reputable dealer, like the Kantonal banks in Switzerland, for example.

Of course, when the FRN becomes practically worthless, those smaller coins are going to be more useful on a day-to-day basis, and silver will be better still.

Marc_W's picture

I find the death of 4 billion humans due to world wide nuclear war more likely than the disappearance of fiat currency and $10,000+/ounce gold.  Australia and New Zealand are, after all, the refuge of the Anglo elite should the Northern Hemisphere become contaminated.  No nuclear power in either of those countries.


PMs are merely a hedge against the slim possibility that the central banks and other elites will fail in their quest to establish one world government under the New World Order.

prole's picture

Nonsense. Gold is money. Paper confetti sheets not so much.

Check 1833. Check 1933. Check 1973 and check today and get back to me

Gold is not a hedge. Gold is money. Paper is virtual money or fiat currency, or whatever it is, but with the stroke of a pen it can become totally valueless or vanish in one second.

Your entire post is an irrelevant triple false dilemma, or nonsense of the highest order

xtop23's picture

Where is MDB when you need him?

@orangegeek -

 You had to simply have forgotten to post the /sarc at the bottom because ..... and I mean this with the utmost respect.... you could not possibly be that stupid.

 Could you?

Red Heeler's picture

You could always use a coin balance.


Or you could choose to live in fear, stick with dollars, and starve.

Herkimer Jerkimer's picture

Has anyone had the nerve, to crack open those nice little Scotia Mocatto plastic cases, then cut the wafer in half?


There's a sucker born every day.


I'm gonna bet NOBODY's done that. I wouldn't. Buggers it all up. Now it has to be assayed and blah-blah-blah.


Imagine the scam, eh, to find out they're nothing but lead?


Ah.. I'm just kiddin' around.


Funny, when I went to Scotia Mocatto in Toronto one day, little old me, and according to the nice customer service rep, I bought every last piece of gold in the bank!? And it was no more than a few K's.


Yeup. Little old me. Kind of surprised me, too. Like going to a butchers shop and finding out you bought the last T-Bone. It happens. I guess.


But who's doing the ordering? Are they new? I've seen corner grocery stores that are better able to stock their shelves than these clowns.

Same happened to the silver I bought another time.


And then they're out for a few days?


It is what it is, but just what is it?






Orangegeek - You deserve to get bitch slapped into the middle of next week for that ridiculous diatribe. The US dollar is toilet paper. Inflation is killing it on a week to week basis until the entire fiat currency lemming horde runs off the fiscal cliff into the CDO and CDF OCEAN OF TOXIC FAKE PAPER BETS ON REALITY. You are a sad fucking state of affairs. I'll toss you a can of tuna when you are sitting in a van, down by the river, wondering what the fuck happened to all of your "investments" SARC full on for your paper "investments", you bottom feeding shill lap dog to the stars of ponzi paper. I fart in your general direction.

DoChenRollingBearing's picture

"Basic Facts: Platinum and Platinum Group Metals" at my blog.

Google it, or gmail me at my name.

yabyum's picture

I own and trade Sprott funds. Profit goes to the stacking 'O the Phys. I have not had much luck as of late, but it is better than the paper trade.

ChrisFromMorningside's picture

I'm perpetually suprised that more young people aren't leaving the U.S.

The Western economy has been completely re-structured and it is going to be DECADES before we return to sanity. Take away the population that either works for the government directly or is indirectly dependent on state-spending and what are you left with? Not much. That population isn't going to become productive overnight. Which is why the government will fight tirelessly, for decades, to the point of enforcing a police state if need be in order to keep this debt-based FIRE economy charade going. Economic mobility is no longer based on creativity or productivity, it's all about kissing-ass, politics and bureacratic maneuvering.

Young men who are ready, capable and willing to contribute in a creative, productive way to the economy should head elsewhere (East Asia? Latin America? SE Asian frontier markets?). Not only will you probably make more money but you'll be much happier in general.

bigbucksr's picture

yep....why do u think the TSA was created?   to prevent people from leaving the country (i.e. Soviet Union 1976 style) 

Marc_W's picture

Oh you can leave, you just won't be able to take your money/gold with you.

Popo's picture

Really?  You're surprised?  Yes there may be opportunity elsewhere -- but take a look at per capita income elsewhere.   The US sucks -- but it ain't like other places are so hot either right now.

The trick is to live within your means wherever you are.  Don't take on debt.   Learn to do shit on your own.  Learn to be frugal.  And never trust anyone *ever* from the real-estate or financial sectors.  They are the enemy.

trembo slice's picture

I agree with Chris' sentiment, but there are a few factors that have this able-bodied young man grounded:

Family - my immediate family is very close.  I would like to help my parents nestle into their retirement years and be comfortable.  Staying in the US (anywhere in the continental US) affords me this opportunity.  My oldest brother is currently in New Zealand and he and his wife have talked about how they didn't realize how important their family support system was to them; whether it be to allow their daughter to visit her grandparents, great-grandparents, or uncles and aunts; or for them to simply hang out with the family.  Airfare is so outrageously expensive (and will only continue to get worse) that moving abroad pretty much means cutting family ties.  If we could all settle on somewhere international it would be an easy decision -- sell all the property and get the fuck outta here before the police state comes on full Nazi style.

The language barrier makes places less attractive initially.  Although learning a second language is not a serious obstacle; especially if one is immersed in a culture and surrounded by it at all times.

It's definitely the smart move to get out, but there are things too important to leave for some of us.

Marc_W's picture

You can spend plenty of quality time with the inlaws while you're in the FEMA camp.

EvlTheCat's picture

Chris no insult intended but I believe you answered your own question.

Young people in the U.S. only understand economic mobility through, lying (you forgot this), kissing-ass, politics and bureaucratic maneuvering.  Your conclusions are really demographic specific.  I would say education and language deficits are the most limiting factors for young people in this country.

I am sure those with the motivation you are talking about have already realized this.  Believe it or not some have.  Several bi-lingual workers from my wife's company have gone where better opportunities are in Brazil for example.  We may just be seeing the beginning as a slow trickle.

Another consideration is support.  Moving from the U.S. to another country is a major paradigm shift.  Europeans don't have as much of a problem because most are within a few foot steps of another country with a completely different language and custom.  Asians have been training all their lives to interact with the dominant U.S. and other powerhouses around the globe.  Latin Americans have a large culture base to spring forth from within the U.S.

The reverse cannot be said for the average American. More pain will be needed in the form of austerity for young people in this country to do what you are thinking. My Opinion.

dwdollar's picture

In a fairytale world where Earth is infinite, or humanity has warp drive, running away makes sense. Alas, this is the real world and anywhere you go will have a large population of idiots. The only solution will be war. God help us.

Marc_W's picture

Fred finally wrote something worth reading.  Maybe I'll book mark his site again.


Seems like he's gone full blown, "don't give a fuck" in his old age and started shooting from the hip.  His article you linked would never be published anywhere in the main stream media as the first half of it is basically, "here is the empirical data proving blacks are intellectually inferior to whites."


But then again, as someone who lived in D.C. ("Chocolate City") for decades, he surely knows first hand just what it means to live and work with blacks.


"None of this improves, and it seems to be getting worse. On the Drudge Report and elsewhere on the web, video after cell phone video appears of pack-attacks by feral blacks on whites and Asians. These attacks often result in brain damage: the attackers are trying to hurt the victims badly, and usually laugh while doing it."


Around blacks, never relax.  I carry a gun everywhere and I'm in a fighting stance whenever a black man is near me in public, ready for the blind side unprovoked attack that so many whites have experienced at the hands of savage blacks.


One of the main reasons I'm moving to Australia.  93% white, 5% Asian.  Living around negroes isn't worth it, no matter how much money you're being paid.

prole's picture

Please take me with you....

Marc_W's picture

The end of the article is truly world class writing, and very prescient.


"The response of whites to riots by blacks has always been to back away. This prudence, as it is thought to be, has been enforced by the government. If a minority in Russia started burning cities, the army would shoot the rioters on sight. America doesn’t work that way, or hasn’t recently. The lack of consequences for beatings and flash-mobbings, the history of saying “racism” and walking, produces a sense of untouchability in blacks. It could be a mistake."

"A spring is being wound. On one hand, when you live in a sprawling tightly packed concentration of people like yourself, it is easy to forget that you are very much a minority, that the majority holds all the high cards, and that food doesn’t really come from Safeway."

"On the other hand, via the internet whites now know of the racial attacks, and grow quietly very sick of them. There is among many white men an undercurrent of “Bring it on.” This is not confined merely to cops, soldiers, conservatives, Southerners, westerners, the rural and the blue-collar. You can find it, carefully hidden, in federal offices and even among men in newsrooms. The extent of this sentiment is easy to underestimate. Those who share it don’t dare express it, and most journalists live in ideological bubbles."


I'm one of those quiet office jockey white guys praying for a race war.  And having lived and worked around blacks my whole life, I am not afraid of them.  Not in the slightest.  But if they want to start a race war, I will teach them fear.

JOYFUL's picture

Young Amerikans have been leaving the country in droves for a couple of decades now...at the behest of a government which dresses up their tours on behalf of it's PNAC foreign policy in the rhetoric of 'defending our freedoms' and then brings them back wounded in spirit and\or body to take their places on the bottom rungs of a economy powered almost solely by the twin engines of the 'defense' & 'financial' sectors  - vampiric entities feeding on the corpse of a hollowed out nation stripped of it's manufacturing base and turned into a malignant proxy of the money power through the traitorous maneouverings of it's political caste -

...while those not hoovered up into the war meat grinder are indoctrinated by means a broken and thoroughly useless 'higher education' system to take up their places in a fun house of distorted values where everything is tilted against making an honest living by producing real goods and services and obedience to the new ruling class is dictated by enforcement goons employed to break down the rule of law in favor of a law of the jungle.

Were it otherwise, those same young people would have long ago woken up to their disenfranchisement and taken the necessary measures to free themselves and their country from it's serial debasement at the hands of the moneychangers, thus eliminating the need to go elsewhere in search of opportunity...

but that ain't gonna happen, and  in the post-USD reserve currency world shortly to be upon us, there will be no opportunities abroad for young Amerikans either, because their tax dollars were used to fund the education of bright youths from other countries who will be increasingly able to supply their own innovative thinking and direct their fates without the help of economic refugees cast off from the drowning Empire of Emptiness. The Future is Foxconn, in a neo-fuedal nightmare where Amerikans jump out into the only freedom left to them, without a bungee cord.

http://youtu.be/-TRp3ZwTOfc [Floetry\It's Getting Late] AMERIKA!!!!!!!!!!

Gavrikon's picture

Germany, in my case.  And I am far from young.  In addition to my mother tongue (English), I also speak German and Russian.  If things tank too badly here in Germany, I am ready to move further East.  Being a computer weenie has its advantages, even if I do earn only about the same salary I did 20 years ago.

Thank the "Teuro" for that.

Now, if I just didn't have to file that damned US tax return every year. . . I never owe the US anything, but it is still a time-wasting royal pain in the ass.  And the requirement to report my checking account here to the douchebags in Detroit, with my account number, something you don't even have to do in the US, is another task that makes me uneasy.

jomama's picture

you mean give up your US citizenship.

and once you do, it's a pain in the ass to ever come back.

so, it's not just leave, it's leave all the people in your life behind.  and there are some pretty nice spots in the US, too.