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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.



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Thu, 04/19/2012 - 22:26 | 2360179 I think I need ...
I think I need to buy a gun's picture

physical gold vs banker cock

Fri, 04/20/2012 - 02:54 | 2360438 misterc
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!

Fri, 04/20/2012 - 05:26 | 2360523 Mr Lennon Hendrix
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.


Fri, 04/20/2012 - 06:24 | 2360542 scatterbrains
scatterbrains's picture

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

Thu, 04/19/2012 - 22:31 | 2360187 UTICA CLUB XX PURE

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...


Thu, 04/19/2012 - 23:26 | 2360272 LowProfile
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.

Fri, 04/20/2012 - 01:15 | 2360306 sitenine
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*

Fri, 04/20/2012 - 07:10 | 2360564 slewie the pi rat
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

Fri, 04/20/2012 - 09:35 | 2360851 fuu
fuu's picture

Fake Slewie.

Fri, 04/20/2012 - 11:28 | 2361298 prole
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?

Fri, 04/20/2012 - 11:55 | 2361357 fuu
fuu's picture


Fri, 04/20/2012 - 05:28 | 2360525 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

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

Fri, 04/20/2012 - 09:01 | 2360746 RowdyRoddyPiper
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!

Thu, 04/19/2012 - 22:33 | 2360191 orangegeek
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. 

Thu, 04/19/2012 - 23:02 | 2360240 sitenine
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"

Thu, 04/19/2012 - 23:30 | 2360275 LowProfile
LowProfile's picture

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

I smell a....


Fri, 04/20/2012 - 01:55 | 2360405 TwoShortPlanks
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.

Fri, 04/20/2012 - 06:55 | 2360554 Bobbyrib
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.

Fri, 04/20/2012 - 00:17 | 2360329 Anne Ominous
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.

Fri, 04/20/2012 - 05:48 | 2360530 zhandax
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.

Fri, 04/20/2012 - 06:33 | 2360546 scatterbrains
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.

Fri, 04/20/2012 - 00:23 | 2360334 Libertarian777
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

Fri, 04/20/2012 - 00:34 | 2360346 septicshock
septicshock's picture

Ron paul 2012!!

Fri, 04/20/2012 - 00:53 | 2360357 Clowns on Acid
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.

Fri, 04/20/2012 - 01:18 | 2360373 ebworthen
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.

Fri, 04/20/2012 - 03:28 | 2360460 Gavrikon
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.

Fri, 04/20/2012 - 09:42 | 2360873 Marc_W
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.

Fri, 04/20/2012 - 11:37 | 2361317 prole
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

Fri, 04/20/2012 - 01:48 | 2360402 xtop23
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?

Fri, 04/20/2012 - 08:13 | 2360624 Red Heeler
Red Heeler's picture

You could always use a coin balance.

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

Fri, 04/20/2012 - 09:00 | 2360749 Herkimer Jerkimer
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?





Fri, 04/20/2012 - 12:07 | 2361380 SILVERGEDDON

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.

Fri, 04/20/2012 - 01:26 | 2360192 DoChenRollingBearing
DoChenRollingBearing's picture

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

Google it, or gmail me at my name.

Thu, 04/19/2012 - 22:36 | 2360193 yabyum
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.

Thu, 04/19/2012 - 22:41 | 2360202 ChrisFromMorningside
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.

Thu, 04/19/2012 - 22:54 | 2360229 bigbucksr
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) 

Fri, 04/20/2012 - 09:59 | 2360931 Marc_W
Marc_W's picture

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

Thu, 04/19/2012 - 22:57 | 2360231 Popo
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.

Fri, 04/20/2012 - 09:29 | 2360830 trembo slice
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.

Fri, 04/20/2012 - 09:59 | 2360935 Marc_W
Marc_W's picture

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

Thu, 04/19/2012 - 23:20 | 2360264 EvlTheCat
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.

Fri, 04/20/2012 - 00:50 | 2360355 dwdollar
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.

Fri, 04/20/2012 - 03:33 | 2360462 Gavrikon
Gavrikon's picture

And it appears to be a race war.

Fri, 04/20/2012 - 10:07 | 2360970 Marc_W
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.

Fri, 04/20/2012 - 11:42 | 2361335 prole
prole's picture

Please take me with you....

Fri, 04/20/2012 - 10:17 | 2361006 Marc_W
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.

Fri, 04/20/2012 - 00:09 | 2360318 JOYFUL
JOYFUL's picture

Young Amerikans have been leaving the country in droves for a couple of decades 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. [Floetry\It's Getting Late] AMERIKA!!!!!!!!!!

Fri, 04/20/2012 - 00:37 | 2360347 ManOfBliss
ManOfBliss's picture

Leaving to go where?

Fri, 04/20/2012 - 03:38 | 2360464 Gavrikon
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.

Fri, 04/20/2012 - 01:25 | 2360382 jomama
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.

Fri, 04/20/2012 - 03:40 | 2360469 Gavrikon
Gavrikon's picture

And from what I understand, it i getting to be an EXPENSIVE pain in the ass to renounce it in the first place.  We can't have our slaves escaping.

Fri, 04/20/2012 - 09:55 | 2360912 Marc_W
Marc_W's picture

The U.S. is beautiful with a wide range of geographic diversity.  However, it has been ruined by the creeping fascism of the police state in which we find ourselves today.  That and illegals, socialism, and our totalitarian government.


I wish I had taken the blue pill and remained ignorant as to the state of affairs in the U.S.  I could have been a happy little sheep.  Sigh, it is not my lot in life it seems.

Fri, 04/20/2012 - 09:48 | 2360889 Marc_W
Marc_W's picture

Go where?  To do what?  The few young people in America that have jobs are making minimum wage doing menial labor.


So you want them to move to China and clean the toilets of the Chinese elite?  That's your plan?


Young Americans have no money.  And most won't get any family support when their plan is to leave the U.S. and rarely/never see their family again.


And, of course, few native born Americans speak anything other than English and Spanish, and that won't get you very far in the non-Anglo first world nations.


I am a young American and I am leaving shortly to move to Australia but I have substantially more money, education, and job skills than the vast majority of Americans my age.  I would move to somewhere in Europe since they enjoy a much better life style, more liberty, and less police state totalitarianism than the Anglosphere, but I think the language barrier is too steep for me to maintain anything remotely resembling my current income and standard of living.

Fri, 04/20/2012 - 09:55 | 2360913 SAT 800
SAT 800's picture

Son't make the mistake I did and come back; That's the greatest country in the world you're moving too; you're very fortunate.

Thu, 04/19/2012 - 22:44 | 2360206 proLiberty
proLiberty's picture

With all due respect, as far as I know, according to US IRS rulings, when a fund holds more than 10% of its assets in physical, gains and losses are taxed as "collectables"  and subject to a 28 tax rate.   

Fri, 04/20/2012 - 02:38 | 2360416 akak
akak's picture


gains and losses are taxed as "collectables"  and subject to a 28% tax rate.  

Correction: at a MAXIMUM rate of 28%.  It is not that high for everyone, namely, for those who are NOT in the highest tax brackets.  The 28% capital gains tax rate on precious metal (nominal) gains only applies to those whose income puts them into a tax bracket which exceeds 28%; all others are taxed at their normal, prevailing income tax rate.

This idea that ALL gains on precious metals are taxed at 28% seems to be almost ubiquitous on the net, and is constantly thrown around, but it is erroneous none the less.

Fri, 04/20/2012 - 03:21 | 2360454 Amagnonx
Amagnonx's picture

Try not paying any taxes and you'll find out that in fact the tax rate is 100% - its just that decided you would be more useful if they had enough money to buy food and things for themselves.;


The tax rate is not put up any higher, because it would result in lower total tax revenue - in other words they are taking you for the absolute limit - this is a general rule, and doesn't apply specifically to your quoted 28% - however, it is a simple truth that people should try to get their heads around.


They tax you at a arte whereby they get the maximum amount of tax - it is effectively 100% tax, while allowing you to keep enough so they don't have to go to the trouble of taking care of you.

Thu, 04/19/2012 - 22:46 | 2360211 Cabreado
Cabreado's picture

Two good guys, in a sea of scum.

May the good guys win.

Thu, 04/19/2012 - 22:53 | 2360223 Atomizer
Atomizer's picture



The ETF fraud ring is no different than the CDO scam.

i.e. Grandpa Warren owes a large amount of IRS back taxes. What does he do? He creates a medical condition to leverage bets on his prostate infection. See how easy it is to generate liquidity?

Thu, 04/19/2012 - 22:57 | 2360234 slewie the pi-rat
slewie the pi-rat's picture

anyone coming to his/her senses is doomed

Fri, 04/20/2012 - 00:03 | 2360308 Yen Cross
Yen Cross's picture

 Markets are never rational Slewie! Markets are always overshot Slewie!

 Can you see the door closing? I can!



Fri, 04/20/2012 - 01:21 | 2360378 ebworthen
ebworthen's picture

Whiskey and cigars and Women are all the senses I want to come to.

And my XBOX 360.

And steak.

Baked potatoe.

Collard greens.

And my Thermos.

Fri, 04/20/2012 - 14:40 | 2361962 fuu
fuu's picture

and this lamp.

Thu, 04/19/2012 - 22:59 | 2360238 lsbumblebee
lsbumblebee's picture

Nice interview with Sprott and Rick Rule on Midas Letter Money:

Thu, 04/19/2012 - 23:12 | 2360258 q99x2
q99x2's picture

Maybe they can put their gold together some day and exchange it for a microphone.

Thu, 04/19/2012 - 23:22 | 2360268 Yen Cross
Yen Cross's picture

  They are both good trades!  Are you trading ETF's or CFD's ? If I were overseas, the CFD and margin/leverage ratios can work out well.

  Hedging is much less expensive in a direct trade/market. You don't have to worry as much about correlations in other hedged derivatives.  Ex; you can trade against yourself in the same market with less exposure vs. having to find another correlation that works  in the same way, in another market.


Sprott On Biderman On Paper Vs Physical Gold ,
Thu, 04/19/2012 - 23:28 | 2360276 Darth Silver
Darth Silver's picture

sprott bitchez baby!

Thu, 04/19/2012 - 23:57 | 2360299 hairball48
hairball48's picture

I'm 64 and I bailed from my 401K in 2007 not because I had a crystal ball, but other reasons.  A 100% of my modest savings are  in safely stored(and I can lay hands on it in short order) physical gold and silver. Value today is up roughly 80% from when I bought it.

I keep enough cash around for day to day living expenses. If something happens and I need cash, I have a credit card with near zero balance, a generous limit, and an 800+ credit score.

Fuck all that paper gold shit. Fuck that gold stored in someone's "vault". When the shit hits the fan, if you don't have your gold and silver in  your hot lil hands, you simply don't have it...and may never be able to get it.

Thu, 04/19/2012 - 23:58 | 2360303 Yen Cross
Yen Cross's picture

 If pigs can grow hair, then you can to! Until I can lay my hands on it I'll use FIAT to hedge it Mr. MoneyBags!

Fri, 04/20/2012 - 00:17 | 2360330 piceridu
piceridu's picture

Jesus Christ! Is Sprott in a cave?

Fri, 04/20/2012 - 00:22 | 2360333 Yen Cross
Yen Cross's picture

 He's in a cave with a " Peace Maker" , and a bottle of " Goldschlager"!

Fri, 04/20/2012 - 00:38 | 2360349 The Beam
The Beam's picture

People have to realize the fraud is going to continue in Europe and eventually into Asia. Asia is where the end game may be. HSBC and JPM are heavily leveraged in Asia (specifically Tokyo and Hong Kong areas).

Just like Bank of America needed a bailout backstop for the Euro derivatives (which was greater than the USA derivatives), I suspect Asia to do that to JPM.

By my calculations we still have some time left. I suspect 2015 time frame.

I hope for the best, plan for the worse....and I expect the worse!

Fri, 04/20/2012 - 00:58 | 2360361 Soda Popinski
Soda Popinski's picture

PSLV, while a decent investment in the long run, is still struggling to catch a bid.  I was hoping Sprott was going to help break the curse of Blythe by now, but as a shareholder, I can tell you it is frustrating to watch.  His shares should be trading at par or slightly above the spot price of Ag.  No clue whats going on behind the scenes or why he can't get the price higher.  Probably because there is very little volume anywhere in stock trading.

Fri, 04/20/2012 - 10:21 | 2361037 Quinvarius
Quinvarius's picture

If this link works, it will show you the silver available for delivery at the COMEX.

The beast knows its' time is short.

Fri, 04/20/2012 - 00:59 | 2360363 Yen Cross
Yen Cross's picture

 Another generation of " Cracker Jack " box buyers!   WELCOME!

Fri, 04/20/2012 - 01:05 | 2360367 Yen Cross
Yen Cross's picture

   Tyler the money is great!  ( BUT), Please bring back some sort of ( NON TMZ) based logins! Basic Algebra based?

Fri, 04/20/2012 - 01:19 | 2360374 Yen Cross
Yen Cross's picture

 Who even thought of Sprott with Biderman?  It's like Obama touring a GOLD mine at  MSNBC!

Fri, 04/20/2012 - 01:17 | 2360375 Yen Cross
Yen Cross's picture

 FUCK all you worthless LIBERALS by the way!

Fri, 04/20/2012 - 01:25 | 2360381 ebworthen
ebworthen's picture

My friend.

Your Chi seems clouded.

Your Zen singed or bruised.

Gold is good.

Cash is good.

Equities are brownies in someone else's oven.

Politics is the distraction.

Reality is the destination.

Fri, 04/20/2012 - 01:52 | 2360404 Yen Cross
Yen Cross's picture

 That was a nice comment. Thank you.


Fri, 04/20/2012 - 01:26 | 2360384 HoboTrader
HoboTrader's picture

Careful of the premiums on net asset value on the physical trusts...I remember seeing 20% at one point was insanity. Now that market sentiment has been beaten with a stick the premiums are low...I believe they even went into discount last year during the heavy COMEX raids.

CEF.A is 3.3% today (loaded 50 gold/50 silver)


Sprott near 4.93% on silver, 1.65% on gold

Fri, 04/20/2012 - 01:37 | 2360390 Dorky
Dorky's picture

The best way to own gold is to own the physical, not any of the EFTs.

Fri, 04/20/2012 - 02:02 | 2360406 JupiterAndBeyond
JupiterAndBeyond's picture

gold & silver bitches!!!

Fri, 04/20/2012 - 02:00 | 2360408 JW n FL
JW n FL's picture



Biderman ='s Zionist.

Fri, 04/20/2012 - 04:59 | 2360511 sensibleperson
sensibleperson's picture

Physical gold and silver, plenty of long term survival food, etc, and means to defend home turf. 

Fri, 04/20/2012 - 08:04 | 2360617 Quinvarius
Quinvarius's picture

Speaking of Pisani's "indepth GLD story", the second he realized he was lied to, he should have gone back.  The dude is no journalist.  He is a clown.  He could have made his career and had book deals for millions if knew how to do a fucking investigative report.

Fri, 04/20/2012 - 09:05 | 2360759 Getting Old Sucks
Getting Old Sucks's picture

I think GLD is a scam.  I've read that in order to take delivery, you have to be a bank or own 50,000 shares.  If that happened in mass, would GLD retain a par value or would it just trade like an equity when J6P panics and sells?  I'm glad that in the early 2000's, I got into coin collecting.  Never paid more than 300 an ounce.  I'm sticking with my holdings and scared to buy more cause I don't trust the GOV to allow little people to suddenly become rich while everyone else gets shit for their fiat when they debase it.  Banks with gold can leverage it but I can't.  I'd have to sell and if GOV puts a 90% tax on it or something like that?  Yeah, I guess I could barter with them but GOV obviously will make that a crime.  Once cash is extinct and all transaction are electronic and recorded, bartering for say a double eagle for a new car will be hard to do.  Perhaps my grandkids will be able to prosper from it if by then, our freedom returns.

Fri, 04/20/2012 - 09:59 | 2360929 SAT 800
SAT 800's picture

Also getting Old; US ninety percent Silver Coins; available from several sources on the internet. They'll be far below the radar and completely spendable.

Fri, 04/20/2012 - 10:14 | 2361001 acetinker
acetinker's picture

+1 for you!  Getting old DOES suck in many ways, but it's also kinda cool.  The lesson I've learned is that there truly is no such thing as a free lunch or a free puppy.  I have token amounts of PM's, but I have also learned that the best investment I can make is in myself.  Selfish, ain't I?  To me, the ONLY thing GOV can't take away from you resides between your ears, and even that is uncertain.  If GOV decides to, it can take that too.  Only thing is, I won't much care at that point, will I?  For now, I put my meager earnings back into my own little enterprise; Making custom parts for customers who need/want them.  Is this a good strategy?  I dunno.  It keeps me occupied and provides a mostly positive cash flow, a large portion of which I invest in Bud Light and Wild Turkey 101.


This is not advice- I would never presume (being libertarian) to know what you should do.  I just enjoyed your comment and wanted to say so.

Fri, 04/20/2012 - 14:51 | 2361995 akak
akak's picture

Getting old DOES suck in many ways

Just like the classic Polish saying: "starosc nie radosc" (old age is not worth it).

Fri, 04/20/2012 - 19:38 | 2362736 WmMcK
WmMcK's picture

Too soon old and too late smart -- but maybe that's German.

Fri, 04/20/2012 - 15:53 | 2362177 BanjoDoug
BanjoDoug's picture

Vote up!

Vote down!


Looking at Precious Metal Ownership in a Different Way –

Too often we reference the value of <anything> in U.S. Dollars.    But since everything we buy or sell is measured in some fiat currency this is quite natural,  yet it is a stumbling block to owning physical precious metals.    Thus, I would like to suggest an alternate way of viewing precious metals, which is pretty simple and goes like this: “I own <insert a number here> ounces of silver (or gold, or ???)”,   OR “I own <insert a number here> one-ounce gold eagles or silver eagles”.      This distinction divorces the link between fiat currency and precious metals that hold real value.    Fiat currency only holds “faith” value on a temporary basis.   I might ask, how strong is that faith today for the long haul?   BTW,  I would not suggest you tell anyone (but yourself, or spouse) you own any precious metals.....

I hear folks all the time say, “Oh, gold is down, I better not buy, I might lose money” (as measured in fiat paper),   or they say, “Oh gold is too high now, I can’t buy now, I missed out.”   Each of these expressions measures precious metals against a fiat currency that has no real value at all.  

 If you want to trade in precious metals on a daily or hourly basis, then the ETFs are wonderful,  but don’t assume that any paper metals are backed by anything but paper, and maybe a casual promise (maybe).    

If you are going to acquire physical metals for the long haul, don’t ever compare your asset against a fiat paper currency.  The exception to this is when you need to know how much of that fiat currency in your wallet you’ll have to part to buy your favorite gold or silver coin or other physical  commodity.   And BTW, if you order from some outfit like and you use a credit card (& pay a premium) and then pay for shipping too (& the insurance) consider it a privilege to be able to exchange those pretend dollars for something that has intrinsic, genuine value.   In the long run you'll be ahead, probably WAY-AHEAD.....

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