So... You want to sell your gold stocks and buy the gold and silver etf's?
have heard from many investors inquiring if they should sell their gold
stocks and just buy the gold and silver ETFs. The first thing they should
understand is that doing so would prolong the time they must wait for
gold and silver to reach their true market levels which are much higher.
The gold and silver ETFs were created by such financial giants as JP
Morgan and Barclay’s Bank that also serve as custodians and sub-custodians.
These are the very firms that have been involved in the process of short
selling gold and silver in huge quantities. That they would be involved
in creating the ETFs had to be considered as most unlikely unless they
had nefarious purposes. What I mean by that is that when the gold and
silver ETFs first came out the investment demand for gold and silver
was just in the initial phases of taking off. The bullion banks and
financial powers that have been involved in suppressing the prices of
gold and silver needed an outlet to satisfy this additional demand for
gold and silver when there was clearly no actual gold and silver to
fulfill this additional demand.
Most do not like to recognize that the business model of the US is fast approaching what could be called Fascism, particularly since that word is immediately associated with World War II Italy and all the ugliness of the Axis powers. However, when one looks at the definition of what fascism is, it becomes clear that many of our Government’s decisions benefit the large corporations more than the people the government is supposed to be serving. In return, these corporations return all their support in both monetary contributions and affirmations of policy through such means as the media which is largely controlled by the same money powers. Look no further for evidence in some of the examples that have arisen with the outbreak of the unconstitutionally un-declared war on Iraq. Instead of the military providing services by use of its own personnel for things such as laundry and meals, big corporation’s line up for their part of the money pile. A perfect example is Halliburton which handles laundry for the soldiers at an outrageous fee of $99 per bundle, and this in a country where such a service would be a tiny fraction of such a fee.
The following example a second grader should be able to follow. Yesterday GLD traded at a price of $87.05 while gold futures were $882.00 and spot gold was at $881.00. I called my best sources and the best quote I could get for purchasing one ounce of physical gold was $897.00. So here is the question: If you were buying ownership of gold at an effective price of $870.50 for an ounce of gold by buying the gold ETF at $87.05, how does the gold ETF turn around and purchase real physical gold for you when the spot price is $11.00 higher, the futures price is $12.00 higher and the physical price is $27.00 higher? That is a neat trick. I wonder how they do it. YOU SHOULD START WONDERING TOO! Do you really believe the GLD ETF can survive loosing $27.00 for every ounce of gold that they buy for you? Now you know why the custodian and sub-custodian’s agreements for these ETFs are so complicated and un-auditable. It would make sense that the GLD would have to trade at least $4-$5 higher than the price of gold if they were actually buying it, insuring it, guarding it, and delivering it. They say there is a sucker born every minute. This should help to prove that point.
January 22, 2008