POLL: Gold ETFs....Is it all there?
gecko109
Posts: 8,231 ✭
Some claim it is, some feel its not. Do the ETFs use leveraging by selling 5x, 10x, 50x of the actual gold on deposit? If you read about ETFs, the claim is that they must have on hand all gold they sell. Yet I have yet to find any specifics on who controls the auditing process. Futhermore, just because a gold ETF has bullion on hand doesnt mean they own it outright. Whenever big money is at stake, books get cooked. It would be all too easy to have multiple ownerships on the same 1oz of gold on deposit with some creative accounting. I do not buy into the idea that the ETFs sell at a rate of 1 to 1. Two main reasons support my beliefs. First is that there is too much money to be made by using leveraging (like our fractional banking system), and secondly, with an ETF, you never have the option to take physical delivery of the gold you supposedly "own".
Read the 5th gray box from the top....this allows the ETF to oversell without fear of a "run" and thus allowing them to oversell at will in my opinion.
At least these guys tell you straight out that you can NEVER have the gold YOU PAID FOR!!!
Read the 5th gray box from the top....this allows the ETF to oversell without fear of a "run" and thus allowing them to oversell at will in my opinion.
At least these guys tell you straight out that you can NEVER have the gold YOU PAID FOR!!!
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Comments
I'd be very surprised if the ETFs ever provided transparency in their metals holdings. Very surprised.
I knew it would happen.
<< <i>Slow day at the Fire Station?
I get days off from my job just like everyone else!
But, very useful as an investment tool. Easy in, easy out, for those who like to gamble in that manner.
<< <i>Leveraged paper, corruption, smoke, mirrors. Just my uninformed opinion.
But, very useful as an investment tool. Easy in, easy out, for those who like to gamble in that manner. >>
And in my opinion, that type of "specualting" activity should be banned by the SEC. It does nothing more than create an imaginary (and often inflated) sense of value for any commodity or asset. A few guys in NY could put their sigs on some paper this morning, and tomorrow gasoline is now 30 cents more per gallon. Not because of some REAL shortage in ACTUAL production of oil, but rather because those few SPECULATORS have artificially manipulated the marketplace. Its simply unreal that the SEC and government dont see this very simple scam. Ah, but they do! And they allow it to continue because A) they get a cut on every sold contract, and
I knew it would happen.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
.
"BUT THE PENSION FUND WAS JUST SITTING THERE!"
.
I don't believe that the ETF gold is there.
MOO
TD
"...Do the ETFs use leveraging by selling 5x, 10x, 50x of the actual gold on deposit?..."
//////////////////////////
Prolly not.
Using the word "leveraging" in the hypothetical totally misstates
the theory.
Traders use "leverage" to control larger positions than they can
afford to pay for with cash. TOTALLY legal.
An SEC-regulated ETF engaged in selling more shares in metals than
audited records declare are vaulted, would not be using "leverage;"
they would be conducting a fraudulent scheme. NOT legal, and
certainly not ANY element of "leverage."
In the markets - and to the regulators - words and the concepts
they define have specific and non-fungible meanings. The SEC
and the CFTC routinely disregard oral testimony and written
complaints submitted by folks who misuse the word "leverage"
when they try to explain their conspiracy theories of misconduct
to those regulators.
The regulated ETFs either have the metals or they don't. Their
audited records have long convinced the regulators that the
metals are present in the full quantities required. ANYBODY is
free to present evidence/information that would prove the
contrary. So far, NOBODY has; maybe they can't or maybe
they are too busy/lazy to bring their claims forward.
..................
96%+ of future/forwards action involves bets placed on price
moves. There is NO contemplation that "delivery" of the metals
will EVER be made. Settlements are to be made in CASH.
So far, 100% of the "legit" ETFs have operated on the same settlement
model. Thus, except for the fact that the ETF operators are mandated to
meet inventory requirements set by the regulators, it would be irrelevant
if the metals existed or not; as long as the ETF operators had CASH to
redeem the outstanding shares.
There may be some folks who think they "own gold" by buying ANY piece
of paper. I have not personally met any. Folks with that belief really need
to learn to read before they invest. (Not saying they should be cheated;
just that they should use some common sense.)
....
Upwards of 95% of ALL futures contracts are closed and settled in cash prior
to delivery. EVERY class of derivatives tied to the price of a commodity represents
dozens/hundreds of times the actual quantity of the underlying commodity that
is in hand or warehoused.
THAT is how "derivatives" work. Traders make "price bets;" they don't want
10K barrells of oil or 1,000 ounces of gold. They just want to bet on price
moves and settle their profits/losses in cash.
..........................
Using ETFs is a viable way to profit on metal-price moves. Similar profits
are just not possible - absent calamity - using physical metals.
ETFs are a terrible way to "own" metals. But, a great way to profit on them.
................
ANYBODY who thinks the ETF vaults are relatively empty should bring a complaint
to the SEC. An accurate whistlelower will get rich and famous.
"Upwards of 95% of ALL futures contracts are closed and settled in cash prior
to delivery. EVERY class of derivatives tied to the price of a commodity represents
dozens/hundreds of times the actual quantity of the underlying commodity that
is in hand or warehoused.
THAT is how "derivatives" work. Traders make "price bets;" they don't want
10K barrells of oil or 1,000 ounces of gold. They just want to bet on price
moves and settle their profits/losses in cash."
This seems like simply a game of semantics that we are playing. If I, as an individual, place an order for more shares of an object than I have cash on hand to pay for that order, you call it "leverage".
But if an entity sells more shares of an object than which it physically owns, its now called a "derivative"?
Other than the fact that someone is buying, and another is selling, I see zero fundamental difference between the 2 activities. Its all "leveraging" in my eyes. In both instances, the parties involved are doing business by using instruments that dont actually exist (my money, or his goods).
Are many ETF's backed buy one vault? Are vaults leased by ETF's for "business-sales" purposes?
You might as well bet on a coin flip as a derivative IMHO. You are really betting on nothing.
That's not true my from read of the GLD prospectus. Those big-wigs holding >100,000 GLD shares (or some similarly huge #) can opt for delivery though I don't know exactly how that would work. Smaller investors certainly have no claim on bullion in this ETF. I don't think GLD investors with large stakes such as John Paulson and China would settle for anything less.
ANYBODY who thinks the ETF vaults are relatively empty should bring a complaint to the SEC. An accurate whistlelower will get rich and famous. ..........and possibly DEAD.
While I believe most or a majority (>50%) of the GLD gold is actually there, I also believe that they are far from 100%. The requirements to be allowed to physically audit the custodians and sub-custodians makes it all but impossible except for custodians/subcustodians to see what's actually there. The audit requirements are nowhere near as stringent as Central Fund of Canada for example. While GLD and SLV have injected money into the PM's game, it has also put a lot of physical ounces under the "guiding hand" of JPM and HSBC. I don't think it's by accident that 2 of the biggest Comex gold and silver shorts just happen to be JPM and HSBC.
roadrunner
<< <i>Have any reports or summaries of reports of ETF audits ever been made public? >>
////////////////////////////////////////////////
Filed May 7, 2010
10-Q
Filed Feb 26, 2010
10-K
...........................................................
So far, the SEC says "AOK."
Folks who can prove a different theory will be listened to
and their proofs considered by the SEC.
............................................
I have played GLD/SLV since day one.
I don't care what is in the vault - tho I "believe" the
vaults are well stocked. I only care that I get paid
in cash when I guess right.
BUT, while required metal-to-share ratios never
really trouble me, I have often thought of another
risk:
COUNTERFEIT BARS
The Trust's liability for such a happening is pretty nebulous.
Some liability is spelled out, but my read is that the shareholders
would essentially be suing themselves if they brought an action
for any loss due to counterfeiting that did NOT involve fraud by
the principals.
Also, any liability - unless fraud by the principals is proven - accrues
from the date the counterfeits are delivered to the Trust. That means
a counterfeit delivered at $6.00 and discovered at $25.00, would be
deemed no more than a $6.00 liability.
...............
The vaulted inventory comes from "reliable" vendors that want to
stay in biznez. That may or may not maintain "honesty." I dunno.
To think the counterfeit count is ZERO might be overly optimistic.
To think it is super-high is prolly alarmist; no real way to know.
Just as some restrike coins - with inferior content - may be in
some TPG slabs, it is "possible" that some ETFs are sitting on
some bad bars. As long as I am not holding such an ETF when
a discovery is announced, it is sort of irrelevant.
Jump in, jump out, don't hold much overnight and you should
be just fine.
///////////////////////////////
There are more than 100 "principal participants" in the SLV/GLD Trusts.
There are LOTS of reasons that those principals might be SHORT of any
commodity and few such reasons involve fraud.
...........
Delivery thru the ETFs is possible for the PPs, but, as far as I know, only
a few such deliveries have been reported. All have been in the 50,000+ OZ
range and have involved the principals' desire to conveniently deliver to
third-parties.
"...But if an entity sells more shares of an object than which it physically owns, its now called a "derivative"?..."
////////////////////
When folks were lobbying for the ETFs' approvals, the main
argument used against the concept was:
"Folks will be confused about what they are buying."
To remove any "confusion," the SEC found that a 100%
metals-to-shares ratio was the answer. (This also allowed
for the shares to be SHORTed; their most attractive feature
for holders of physical metals.)
SEC-regulated ETFs are really just "less murky" derivatives
than those traded in other markets.
..............
Folks who want additional "position limits" placed on the
COMEX traders will likely get them, but they will not get
the longterm benefits they hope for.
Some price bumps will come, but they will reverse FAST
when the opportunity for traders to gamble on ups/downs
is diminished.
Traders don't want to OWN metals. They want to gamble
and win/lose cash.
MOST of the COMEX boys are NOT really "buying/selling"
anything other than bets on price movements.
A buy announces, "I bet the price is going up."
A sell announces, "I bet the price is going down."
The metals-to-bets ratio is virtually meaningless to the action.
The "ownership" - or, within reason, even the existence - of the
metals means less than NOTHING to the bettors.
100-to-1 ratios - or higher - are irrelevant to the soundness of
the exchange, provided the losing party has the cash to pay the
counterparty to the bet.
Bets are settled in CASH, not in metals.
............................
Some folks fantasize that "someday everybody will demand
physical delivery and my lottery tickets will score."
First: Such bettors don't have the CASH to take delivery of
their "score." They will get cash, not metals. (Most ALL of
the contracts make that clear.)
Second: The largest SHORTS - prolly including the FRB - are
quite unlikely to allow the exchange to be disrupted by traders
on the LONG side of the bets. Choppy prices are acceptable to
such SHORTS , but they will use any means necessary to counter
fantasy prices that might disrupt "orderly commerce."
...........
The idea that the govt would allow a bunch of peasants - who
bought metals they saw advertised on TV - to come out on top
for very long is the real "fantasy" in the whole mix.
Physical holders will have an opportunity to get pretty well, when
the news tells of the "final crisis," but that crisis will likely be "resolved"
sooner rather than later.
And, of course, physical holders will have a good chance to save their
lives, if there is even a short-term "breakdown of order."
Meanwhile, all I wanna do is be able to place regulated bets on the
price-behavior of things that interest me.
..........
anything other than bets on price movements.
A buy announces, "I bet the price is going up."
A sell announces, "I bet the price is going down."
An ETF seems like an inefficient way to bet on price movements when you could just dispense with the metal altogether and write buy/sell orders on the price movements only.
I knew it would happen.
You mean like the "proof" that was presented to the SEC and listened to over the past 10 years concerning Bernie Madoff? SEC said "aok" to Madoff during all that time. Ted Butler has been sending the SEC/CFTC documentation for just about as long. Eventually he will be vindicated. Do you that the hand-cuffed SEC wants to take on JPM, GS, HSBC, and the Treasury all at once? The Madoff investors played satisfactorily with Bernie from day one with no problems. But it was on the last day when things blew up in their faces. Bernie's audits were all approved by the regulators as well. It didn't mean a thing.
............................................
The vaulted inventory comes from "reliable" vendors that want to
stay in biznez. That may or may not maintain "honesty." I dunno.
This is the crux of the argument. There is nothing in the 10Q/K that give me a warm fuzzy that a 100% physical inventory was conducted....just paper accounting and promises. You can double the pages in that report and add more signatories to it, it still doesn't tell me anything. There is precise language in the T&C of GLD or SLV (or both) that are very restrictive on who can view/audit the inventory. I believe in GLD the custodian is specifically not allowed to view the gold held by its own selected sub-custodians. And there is also a clause that requires 10 days advance notice in writing before an appointment to view the inventory can be made. And I'm sure that's the way the Custodian wants it. What you can't see, can't hurt you.....tougher to link the custodians to fraud if they never bothered to see the metal. Morgan-Stanley was caught red-handed a couple of years ago for claiming to hold millions in PM's for their clients....they didn't have any....and still billed customers for storage charges too! SEC gave them a slap on the wrist and sent them home without their supper. Whatever JPM, MS, and others get fined for their shenanigans in the metal's markets, it's a drop in the bucket compared to what they earned on trading profits in metals as well currencies/bonds/stocks affected by the metals' movements.
Speaking of trading. Goldman Sachs "commercial banking" just went 63 straight days w/o a trading loss at their desks. During the first quarter they made over $100 MILL on more than half the trading days with net profits of over $7 BILL (>70% of the company's quarterly profits). It's nice to be a connected trader while doing God's work...and never be wrong in a "free" market.
There are more than 100 "principal participants" in the SLV/GLD Trusts.
Yes, but only 2 designated custodians: JPM (SLV) and HSBC (GLD) are responsible for ALL the metal in their trusts...yet they have limited rights when it comes to their sub-custodians. They are the 2 key players....and also the ones with huge Comex short positions. I don't care what positions the 100 principals have as they are isolated investors, but am only concerned with the total metal existing in the hands of the custodian and sub-custodians. There are relatively few sub-custodians.
Once a 100% GLD/SLV inventory is done with somebody I can trust (ie other than a bank or an accounting firm paid by the custodian/trustee/sub-custodians) then I'll believe these ETF's are 100% beyond reproach. Until then, I'm from Missouri, so show me.
roadrunner
Who was paying for all that porn?
Texthttp://www.cnbc.com/id/15840232?video=1476740097&play=1
so much porn to view......and so little time.
After all, the internet volume is probably growing exponentially.
roadrunner
Here are just a few of the Authorized Participants.
There are many more.
Some are LONG metal futures, some are SHORT metal futures.
Barclays Capital Inc
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
EWT, LLC
Goldman Sachs & Co.
Goldman Sachs Execution & Clearing L.P.
Intrade LLC
JP Morgan Securities Inc.
Knight Clearing Services LLC
Merrill Lynch Professional Clearing Corp.
Newedge Group USA
PruGlobal Securities, LLC
Scotia Capital (USA) Inc.
UBS Securities LLC
Virtu Financial BD LLC
BlackRock
........................................................
Such folks or their authorized reps can take a look in the
vaults anytime they want to set up the excursion.
The SEC could also take a look, if they were convinced
there was ANY reason to do so.
<< <i>Here are just a few of the Authorized Participants.
There are many more.
Some are LONG metal futures, some are SHORT metal futures.
Barclays Capital Inc
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
EWT, LLC
Goldman Sachs & Co.
Goldman Sachs Execution & Clearing L.P.
Intrade LLC
JP Morgan Securities Inc.
Knight Clearing Services LLC
Merrill Lynch Professional Clearing Corp.
Newedge Group USA
PruGlobal Securities, LLC
Scotia Capital (USA) Inc.
UBS Securities LLC
Virtu Financial BD LLC
BlackRock
........................................................
Such folks or their authorized reps can take a look in the
vaults anytime they want to set up the excursion.
The SEC could also take a look, if they were convinced
there was ANY reason to do so. >>
That group sounds like the Mexican Mafia regulating the drug flow!
In other words ~ USELESS!!! JMO