GOLD

[Steve Netwriter]

I don't know whether you guys are interested in the charts I tend to do each day.

I find it helps me to think.

If you think it would be better for me to post them on my own thread so you can all ignore them, just say so

 

I did this one yesterday:

 

 

And now todays:

 

 

Anyone think this might just be right ?

 

 

 

And there is something I find interesting when comparing gold in US$, GBP and Yen:

 

 

 

Notice the downward trend of gold in Yen recently, which reflects the recent rise of the Yen:

 

 

 

It's amazing to see the US$JPY go all the way up to 100.5. Anyone want to bet it's just about to fall over the top and come right back down again ?

[drbubb]

VERY NICE charts, Steve!

Thnx for posting them

 

= =

 

Gold to see the uptick in RGLD yesterday on such a bad day for many gold shares

[Steve Netwriter]

It's not the end of the world. But it's the biggest economic crisis since 1929.

 

As for the paper boy, maybe he is simply clever.

 

That's because he gets to read the papers first

[Steve Netwriter]

Totally agree, we're getting closer to the top. Unless we see a total collapse of the $ and the paper currency system this could be just another cycle. Colleague at work told me yesterday that Platinum and gold were up "a hell of a lot." I think we might be entering tbe blow-off stage. I reckon that the final, irrational burst is still ahead of us, though. When the office mates that bought houses in the last year or two (because house prices only ever go up, obviously) tell each other how much money they've just made on their gold, then I'll sell...

 

Actually, I'm not bitter. Why would I, given gold's performance? But I just wanted to point out that herd sentiment is an important indicator of tops (like we saw quite recently in the housing market). *If* this is not the end of the world, then we *might* be near a top. I'm not making any calls, merely pointing out analogies...

 

I agree it's always a worry that we are getting to "the top".

But I agree with the others. The rise so far has been going on mainly during a house price boom. What we have only just started to see is the REAL rise of gold. We haven't got the resultant rise in inflation yet.

Every article I read suggests this will continue for years. Maybe even 2 decades.

 

But, I am always looking for something that shows me I have it all wrong.

[Steve Netwriter]

I am not a lawyer, but this document stinks like a rotting turd.

 

Those investing in ETFs specifically GLD should go over every word with a fine tooth comb.

 

http://regulations.justia.com/view/105224/

 

SUMMARY: The Commodity Futures Trading Commission (Commission) is

proposing to exempt certain transactions in physically delivered

futures contracts based on streetTRACKS[reg] Gold Trust Shares (ST gold

futures contracts) \1\ from those provisions of the Commodity Exchange

Act (CEA or Act),\2\ and the Commission's regulations thereunder, that

are inconsistent with the trading and clearing of ST gold futures

contracts as security futures. The proposed exemption would be

conditioned on the compliance of transactions in ST gold futures

contracts with the requirements established for security futures. The

authority for the issuance of this exemption is found in Section 4©

of the Act.\3\

 

Pluto, you must have missed my posts on that a while back.

 

I'll go find Jim's response to it.........Ah, there it is:

 

Dear CIGAs,

 

In conversation with CIGA Jack S, we decided the most probable meaning of the following legal speak is to determine who the regulator is for Gold ETFs. Is a gold ETF a commodity or a security? You cannot be both.

 

The regulations in some cases are contradictory, making accounting difficult.

 

My feeling is that you want it as a security in order to give the shareholder more protection. You might need it.

[drbubb]

I agree it's always a worry that we are getting to "the top".

But I agree with the others. The rise so far has been going on mainly during a house price boom. What we have only just started to see is the REAL rise of gold. We haven't got the resultant rise in inflation yet.

Every article I read suggests this will continue for years. Maybe even 2 decades.

 

We wont get a top, without a decent parabolic move, and that would mean a break well out of this channel

(from the PRO traders thread)

 

...and a strong run in the Juniors too. IMHO

[Goldilocks]

My first ever chart.

 

I think this chart explains why the Dow,Dollar and world markets are up during the ongoing crisis in the Financial system.

I am waiting for the gold rocket to take off in the next few days as people realise that it is all bullsh1t with the surge in stocks & currency markets.

 

 

Copyright Goldilocks.

[whoops_apocalypse]

Not sure whether Doraemon is bitter, but he reminds me of RK, CTT, or RB.

 

Remember RB's calls on gold?

 

Kharma Chameleon?

[Steve Netwriter]

My first ever chart.

 

I think this chart explains why the Dow,Dollar and world markets are up during the ongoing crisis in the Financial system.

I am waiting for the gold rocket to take off in the next few days as people realise that it is all bullsh1t with the surge in stocks & currency markets.

 

 

Copyright Goldilocks.

 

Brilliant :lol:

 

Are you sure that's copyright ? I'd like to post it somewhere else

[Steve Netwriter]

An interesting read from James Turk of Gold Money.

I'm going to quote quite a bit as it's IMPORTANT.

And I doubt James would mind

 

 

Counterparty Risk Is Escalating

http://www.goldmoney.com/en/commentary.php

 

But what about GoldMoney, I am often asked. Doesn't it have counterparty risk? The answer is no, but our customers do have performance risk. Namely, they accept our promise that we will complete our tasks as expected.

 

To explain the difference between counterparty and performance risk, there are two ways to own physical metal - either store it yourself, or work with someone to store it for you. GoldMoney is the latter. We perform a custodial function, and customers need to rely upon our ability to perform as promised

 

When you store metal with GoldMoney there is no counterparty risk because no debt (i.e., no liability on GoldMoney's balance sheet) is created. In other words, we do not "owe metal" to you. Rather, we simply store metal "you own".

 

All too often people say they "own gold" and then start talking about their "Gold Certificates" with XYZ Bank. The reality is that they do not own gold. They only own the bank's promise to pay gold to them. That is the nature of a "certificate".

 

From both a legal and an accounting point of view, a "Gold Certificate" is akin to a "Certificate of Deposit". When you deposit dollars in a bank, you give up the ownership of those dollars to the bank, which becomes their new owner and can therefore lend those dollars to other customers. To evidence its debt to you, the bank issues a "Certificate of Deposit". Similarly, a "Gold Certificate" evidences the bank's debt to pay gold to you. To be clear on this important point, with a "Gold Certificate" you own the bank's debt, which is denominated in gold (in contrast to a Certificate of Deposit denominated in dollars, euros, pounds or some other currency).

 

That change of ownership of the dollars from the customer to the bank or gold from the customer to the bank does not happen with the gold and silver in GoldMoney. Our customers always own the gold and silver we store for them, which also contrasts with the gold and silver Exchange Traded Funds.

 

If you own one of these ETFs, it is not accurate to say that you own gold or silver. In reality, you own an equity that tracks the gold price or the silver price; the ETF owner does not actually own any physical gold or silver that may be owned by the ETF.

 

I say "may be owned" purposefully. These ETFs still do not audit the gold and silver supposedly stored in the vaults to prove that it actually exists. In contrast, one of the key components of GoldMoney's governance procedures is the periodic audits of metal owned by its customers. Furthermore, these audits are available to GoldMoney's customers upon request.

 

This omission by these ETFs seems inexplicable given the small cost of obtaining an audit relative to the millions of dollars in annual fees being paid by the ETFs to its managers and other service providers. Without this independent third-party confirmation to prove that the gold and silver really exists, ETF shareholders must therefore assume that the ETF has counterparty risk. So while these ETFs may be viewed to be an inflation hedge, they do not offer the other advantage that one receives by owning physical gold or silver - these ETFs are not a hedge for financial catastrophe like the one now brewing.

 

So to confirm this important point, GoldMoney's customers are not reliant upon the creditworthiness of GoldMoney; they are not a counterparty of GoldMoney. Their only reliance on GoldMoney is that we perform as expected, accurately keeping the record of how many goldgrams and silver ounces each user owns and just as importantly, making sure that the gold and silver in the vault always exactly equals the gold and silver owned by our customers. Keeping accurate records is one of the cornerstones of our governance procedures, which are designed to provide assurances of integrity that performance risk is well controlled.

 

So in summary, there is a big difference between counterparty risk and performance risk. And in today's uncertain financial environment, it is essential to avoid counterparty risk wherever possible. We can expect more Bear Stearns 'events', and only time will tell whether or not they will end in 'soft landings'.

 

Maybe that at least partly answers the many questions we get on here about ETFs

[drbubb]

My first ever chart.

Copyright Goldilocks.

 

LOL.

So that's what a "Dead Cat bounce" looks like !

[drbubb]

An interesting read from James Turk of Gold Money.

I'm going to quote quite a bit as it's IMPORTANT.

And I doubt James would mind

 

Counterparty Risk Is Escalating

http://www.goldmoney.com/en/commentary.php

 

Maybe that at least partly answers the many questions we get on here about ETFs

 

Here Jim Turk is speaking like the CHase credit man, he was once trained to be !

[Steve Netwriter]

Ah, you've got me at it now

 

 

 

PS I see we found the same dead cat with Google )

[godless]

My first ever chart.

 

I think this chart explains why the Dow,Dollar and world markets are up during the ongoing crisis in the Financial system.

I am waiting for the gold rocket to take off in the next few days as people realise that it is all bullsh1t with the surge in stocks & currency markets.

 

 

Copyright Goldilocks.

 

 

Love it!

 

[Goldilocks]

Ah, you've got me at it now

 

 

 

PS I see we found the same dead cat with Google )

 

Ssshhhhh! yes got the pussycat from google, but i came up with the red line, i think maybe yours could be in breach of copyright too.

[wren]

Maybe that at least partly answers the many questions we get on here about ETFs

Thanks for posting that. As I understand it the situation is the same with BullionVault. BV say in their own documentation that they could go bankrupt but the customers - the owners - still legally own the gold which they own.

 

Referring to an earlier post, it should be apparent that if BV's bank, which keeps the cash accounts, went bankrupt the cash might be lost, depending. But the gold belongs to the individual owners.

 

This is the whole point of allocated gold.

 

Today I came across a company called The Anglo Far East Bullion Company which provides bullion banking. Is anybody familiar with them? Here's their website:

http://www.anglofareast.com/

 

While we're at it, just how many companies are there which provide services equivalent to GoldMoney and BullionVault? I'd be interested to see a comprehensive list.

[Steve Netwriter]

Hi wren

Yes, I agree. That's why I feel slightly nervous until the paper money have been converted to real money.

Only then do I know it's safe and insured :lol:

 

I don't know that company.

 

Places that do a similar service, that I know of are:

 

http://www.newzealandmint.com - they will store it for you.

 

http://www.perthmint.com.au/ - they will also store allocated as one of their options. You can buy from the UK via a UK broker.

 

Both of the above will deliver on request. Not sure of the delivery cost to the UK though !

 

Hmm, that's it

[Goldilocks]

Maybe that at least partly answers the many questions we get on here about ETFs

 

Hi, Steve or anyone what do you's reckon on the Perth Mint certificates unallocated for a friend, I,ve tried to convince him for about a year to get into gold/silver, he has a 200k in sterling ,but wants to keep it for building a house,he already owns the land but is going to take another year or so with planning, i tried telling him about etfs the article above should put him off, he won't buy physical has he wants to liquidate quickly & is a bit frighten at the moment of inflation eatng his hard earned cash.

 

I would think even though the pool accounts with the Perth Mint would be a better bet than the etfs, even so they are only a promise,plus the Aussie gobberment own the Mint,and have a working gold/silver mine,so if things go tits up, he should at least get something,even if they have to dig for more metals in my opinion,this is what i would maybe do in his position.??

[Steve Netwriter]

I'm stuck on the "if it ain't allocated it ain't real gold" view.

 

You can see James Turk doesn't think much of any paper version of gold.

He obviously has a vested interest in saying that, but what he says makes sense to me anyway.

 

If you agree, and therefore want allocated, that only leaves two basic options:

1. Buy some and store it yourself

2. Buy some and get someone trustworthy to store it for you.

 

For (1) you can use safe deposit boxes, banks, etc etc.

 

For (2), as you can see above, there aren't many options. BV, GM, the Perth Mint allocated storage option......

 

http://www.perthmint.com.au/ig_allocated.aspx

 

If unallocated is on the balance sheet, doesn't that mean I am exposed if the Mint becomes insolvent?

 

Correct.

 

Personally, as many others have said on here, a mixture of (1) and (2) seems to be a nice option.

And the more you spread it around, the less risk you have with any one options.

 

 

he won't buy physical has he wants to liquidate quickly

 

None of the above options will take more than say a week total to liquidate !

Less with GM & BV. Just a few days while the money transfers.

[Goldilocks]

 

http://www.anglofareast.com/

 

 

Wasn't their a real life film about a guy who was America's biggest coke suppler in the 80's that stored his ill gotten gains in one of the banks in panama and there was a coup, and the new leaders decided they would like to keep his millions banked there, messy i would think.

[Goldilocks]

I'm stuck on the "if it ain't allocated it ain't real gold" view.

 

You can see James Turk doesn't think much of any paper version of gold.

He obviously has a vested interest in saying that, but what he says makes sense to me anyway.

 

If you agree, and therefore want allocated, that only leaves two basic options:

1. Buy some and store it yourself

2. Buy some and get someone trustworthy to store it for you.

 

For (1) you can use safe deposit boxes, banks, etc etc.

 

For (2), as you can see above, there aren't many options. BV, GM, the Perth Mint allocated storage option......

 

http://www.perthmint.com.au/ig_allocated.aspx

 

 

Personally, as many others have said on here, a mixture of (1) and (2) seems to be a nice option.

And the more you spread it around, the less risk you have with any one options.

 

 

 

 

None of the above options will take more than say a week total to liquidate !

Less with GM & BV. Just a few days while the money transfers.

 

Yeah tried telling him to go for allocated, but he doesn't want to pay the fees on storage etc, he really wants to get into gold/silver but he is indecisive and knows the etfs/ pool accounts are messy stuff ,he also is coming up with the can't eat gold

crap that he has read on a certain site,and that it "gold/commodities" is in a bubble, but i am trying to convince him that the train will leave the station without him if he doesn't hurry up.

[Steve Netwriter]

I've literally just come across this:

 

Central Fund Of Canada

http://www.centralfund.com/

 

I haven't looked at ETFs etc, so don't know whether that is known by everyone.

 

Anyway:

 

Central Fund of Canada Limited is “The Sound Monetary Fund”.

 

Central Fund's purpose is to hold gold and silver bullion on a secure basis for the convenience of investors in the shares of Central Fund.

 

(At least 90% of Central's assets are Gold and Silver at all times.)

 

Central is listed on the American Stock Exchange - Symbol CEF and

the Toronto Stock Exchange - Symbols: Cdn. $ CEF.A and U.S. $ CEF.U

 

 

Yeh, I get the "you can't eat gold" and "but it's not liquid like money".

I reply:

 

"If your bank went bust today, how would you buy food ?

Don't you think the shopkeeper would ask for something in return for the loaf of bread ?

Maybe your watch or your suit.

But if you want a full trolley load of food, don't you think he'll be happy with a gold coin ?

It's happened before, and that's what worked."

 

IMO the commission and storage charges are irrelevant.

I started looking at them looking for the best deals.

But when your gold have gone up way past the charges, you start to realise they don't matter.

What matters is safety.

 

Would you go for the cheapest insurance company if you knew they wouldn't pay out if you made a claim ?!

No of course not.

 

 

And doesn't this conversation just prove that we are a long way from mass public buying ?

Your friend is just one of many who will be thinking the same way.

It will take time for them to learn and adjust their views.

And that gradual process will IMO result in a gradual increase in the purchasing of gold by the general public.

 

And boy that makes cartel intervention difficult

[wren]

Yeah tried telling him to go for allocated, but he doesn't want to pay the fees on storage etc,

At BV the storage and insurance is only 0.12% per annum. Not much! Each time you buy or sell the commision is 0.8%. It isn't expensive if you plan to buy and hold for a while.

[Steve Netwriter]

Sorry, just got to say....

 

If he had a brand new Rolls Royce, wouldn't he be happy to pay £1 to keep it stored safely ?

 

How much would it cost to insure his house ?

 

The storage cost for gold must be a real bargain compared with those !

That's why it's used as money. It's small, doesn't burn, and so is much easier to store than just about anything. Except digital money of course

[Billy]

Interesting thread. Silver is OUT. (Well, if we can believe these stories.)

 

http://goldismoney.info/forums/showthread....405#post1018405

 

 

I can vouch for that - I recently ordered 20 100oz bars from a dealer in Oregon - he's always delivered OK, if a tad slow at times - this time I've been waiting getting on for 8 weeks now ... 50 x 1oz eagles turned up after bout 5 weeks - defo seems to be trouble getting physical silver...