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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Gold Advantage To Skeptics

Commodities / Gold and Silver 2012 Jun 15, 2012 - 07:12 AM GMT

By: DeepCaster_LLC

Commodities

Best Financial Markets Analysis Article“The amusing denouement to last September’s CNBC fiasco falsely claiming on camera a particular gold bar in the depository GLD uses belonged to that entity is (below). Apparently it belonged to ETF Securities, All power to the Internet!”

JBGJ, 6/12/2012

The following detailed description of the CNBC fiasco provides yet another justification for Investors adopting a Healthy Skepticism of MSM “News”.


“*UPDATE: We have now confirmed that the ‘GLD’ bar marked ZJ6752 is listed in the bar list for the EFTSecurities fund, as stated by Ned Naylor-Leyland. Screen shot of the EFTS bar list including bar ZJ6752 is included below.

We now have indisputable evidence that the gold bar held up by Bob Pisani as a ‘GLD’ gold bar is actually owned by ETF Securities!!

“The Doc spoke with Cheviot Asset Management’s Ned Naylor-Leyland Sunday regarding the Euro-zone crisis and the €100 billion Spanish banking system bailout announced this weekend, extreme supply constraints in the physical bullion markets, the new allocated silver exchange launching in China this summer, and gold rehypothecation concerns.

“Ned provided some explosive details regarding the infamous GLD gold bar presented by CNBC’s Bob Pisani which was quickly discovered NOT to be on the GLD’s bar list.

“Ned reveals the ACTUAL OWNER of the gold bar shown on CNBC, who HAD NOT GIVEN PERMISSION to CNBC or to Bob Pisani to handle their bullion, and was shocked to see Pisani claim their bar as part of the holdings of the GLD!

“In Ned Naylor-Leyland’s words, ‘this tells you EVERYTHING YOU NEED TO KNOW ABOUT ETF’S!!’

“First, for those who are not familiar with the CNBC story:

“As our readers are well aware, it was quickly discovered that the gold bar held up by Pisani in the interview stamped ZJ6752 was not included in SPDR’s gold bar list.

“The story almost immediately went viral, but CNBC went silent on the issue over the actual ownership of the gold bar held by Pisani.

“This is what Ned Naylor-Leyland had to say today, regarding the recent concerns that the GLD’s gold holdings are actually swaps from the LBMA, and whether investors will one day soon wake up to discover that the bullion they thought they owned is really rehypothecated paper:

“I’ve been saying that to clients, to potential clients, and to my colleagues in London and in the investment world since 2003-4! Effectively, you MUST BE CAREFUL WHICH VEHICLE YOU USE!!

“There’s no question that at some point this is going to be a HUGE problem!

“You’ll remember that amazing video interview with Bob Pisani that CNBC ran where they went into GLD’s vaults in London- I’m sure you saw that Doc. You know they took his mobile off him and he ended up in the vaults and he held up this bar and he said ‘this is the kind of thing that GLD holds custody for you!’ And then immediately everyone jumped all over it and said ‘wait a minute, that bar isn’t on the bar list!’”

“Ned Naylor-Leyland Reveals Actual Owner of Bob Pisani’s GLD Gold Bar!!”
The Doc, silverdoctors.com, 6/12/12

 

 

An important related point is that increasing numbers of Investors are justifiably concerned that certain ETF’s may not hold all the Non-Hypothecated Precious Metals they claim they do.

Indeed, there is also evidence that certain Bullion Banks have for years been selling Naked P.M. contracts in the Future Markets (i.e. selling Metal they do not have) in order to suppress prices. We invite Investors to review the archives of the Gold Antitrust Action Committee (gata.org) where they will find considerable evidence of Gold and Silver Price Suppression.

But awareness of these Issues gives Skeptics the Advantage and allows them to Act accordingly: Regarding Gold, for example, one can avoid the risk of owning “Paper Gold” by Buying Physical Metal and Take Personal Possession of it (NO Bank Vaults).

Regarding Gold and Silver, the “Secret” (i.e., not reported by the MSM) of which most savvy Investors are now increasingly aware is that supplies of Physical Gold and Silver are very thin.

“The secret that the manipulators must keep quiet is that the physical market for gold is very thin on the sell side. Whatever is offered, be it 500 tons or more in manipulation from paper, has been and will continue to be taken.

“Stay The Course As Gold Continues Its Progressive March”

Jim Sinclair, jsmineset.com, 6/11/2012

 

Indeed, the evidence indicates the ongoing Price suppression is implemented by a Cartel of Central Bankers (See Note 2).

Official Misinformation, Disinformation and Spin regarding the Precious Metals is a characteristic of Official Pronouncements from certain Governments, as well.

“…there will be no Spanish banking rescue…”

Prime Minister Mariano Rajoy of Spain, 5/28/2012

And about the same time as that Spanish’s Prime Minister’s statement, Spain’s Central Bank Governor insisted there was no need to inject further capital in Spanish Banks. But now, just a few days later, not only has there been an (inadequate) bank rescue, but alsowe have this from Reuters referring to the ongoing Bank Run on Spanish and Greek Banks:

“European finance officials have discussed limiting the size of withdrawals from ATM machines, imposing border checks and introducing euro-zone capital controls as a worst-case scenario, should Athens decide to leave the euro.”

“EU discusses 'limiting ATM withdrawals'”, Reuters, 6/12/2012

Didn’t the European Banking Authority run stress tests which ostensibly would have prevented the aforementioned outcome? And realistically, is not the gravity of the Eurozone situation reflected in Spain and Italy’s 10 year note yields which continue to rise toward the Toxic 7% level?

Indeed, unsustainably High Debt levels post a Threat to a variety of Fiat Currency-denominated Assets, including especially those in our Retirement Accounts (since those are meant to be enduring Assets).

“Which brings us back to the concerns of our dear readers – like this one: “that the U.S. government will find ‘legal’ ways to confiscate our 401(k)s, SEP IRAs, IRAs and private pension plans (other than by the use of… inflation).”

“We can tell you two things. On the surface, they seem contradictory:

  1. It will likely happen by stealth.
  2. You will likely get ample warning.

“By “stealth,” we mean that Uncle Sam won’t be so blatant as to liquidate your account and transfer the proceeds to the Treasury. And by “ample warning,” we mean that your account won’t be the first one to get the stealth treatment. Others will come before you, and you will have time to seek shelter.

“The notion of 401(k) confiscation first got traction during the wrost of the 2008 financial panic. “In October of that year,” says The 5 Min. Forecast’s Dave Gonigam, “the House Education and Labor Committee held a hearing on the idea of eliminating 401(k)s’ tax advantages. ‘High income’ earners, it was suggested, would no longer be allowed to make tax-deferred contributions.”

“This is the brainchild of the hearing’s star witness – an economics professor at The New School in New York named Teresa Ghilarducci. She further suggested that all workers should be forced to contribute 5% of their gross income to a “guaranteed retirement account,” or “GRA.”

GRA would be invested entirely in government boinds and return an inflation-adjusted 3% a year. Half of the “contribution” would come from you, half from your employer.

“In other words, it’d be like Social Security – which would still exist – but with GRAs, the pretense of a “trust fund” would be thrown out the window. Your “contributions” would go straight into the Treasury to be instantly frittered away on fighter jets, food stamps and hot tub parties for employees of the General Services Administration.

“The rest is history: Time passed, the market recovered and Ms. Ghilarducci’s plan was put on the shelf.

“But the “confiscation” camel has come back since. Its noise isn’t under the tent yet… although its sweaty nostrils are perhaps visible beneath the tent’s seam.

“In early 2010, the Treasury and Labor departments proposed – in the words of a Bloomberg story at the time – “ways to promote the conversion of 401(k) savings and individual retirement accounts into annuities or other steady payment streams.”

“As in 2008, the Internet was set abuzz – suspicious minds rightfully wondering if the funds would be “converted” into Treasuries, perhaps by force.

Not so, it turns out: By early 2012, the proposal was reality. The new regulations merely alter the tax rules for insurance companies – making it easier for them to offer annuity-like products to holders of 401(k)s.”

“’Extraction’ by Stealth: The Risk to Your Retirement Account”

Addison Wiggin, The Apogee Advisory: Issue 16, June 2012

And one should also be skeptical of the pronouncements of MSM Favorites such as Warren Buffet. Admittedly, Buffet has been an excellent stock picker and business owner, and a wise critic of overleverage via Derivatives (Ticking Time Bombs, or some such, he called them).

But he was, and is, wrong about Gold.

Gold is up 500%, more or less, in the past decade, a performance which far exceeds that of Berkshire Hathaway stock over the same period. (Awareness of the facts provides, for example, the opportunities referred to in Note 3 below.)

Indeed, there is no substitute for the facts regarding Precious Metals, or, in general, no substitute for having Real Numbers (as opposed to Bogus Statistics) when investing. Real Inflation in the U.S., for example, is 9.9% (which is why Deepcaster’s High Yield Portfolio is aimed at a Total Return well in excess of that) per shadowstats.com. Real U.S. Unemployment is 22.7% and Real U.S. GDP is a Negative -2.17%. (See Note 1).

Finally above all, it is Important to Critique “Hype”.

A few days before the Facebook IPO, we overheard a Broker Touting the Stock by saying, correctly, that Facebook had 900 Million Regular Users.

A friend’s Skeptical Rejoinder was, “Of the 7 billion people in the world several billion regularly use Toilets. By your ‘logic’ I should run out and buy Toilet Manufacturers’ Stocks.”

A healthy skepticism has enormous benefit for investors.

Best regards,

www.deepcaster.com
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© 2012 Copyright DeepCaster LLC - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

DEEPCASTER LLC Archive

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