The Bloomberg article is ultimately about the University of Texas having One Billion in physical gold in a vault.
In the article though it is stated if only 5% of the people who own GLD actually asked for the physical there would be no gold left. It is plainly stated GLD is simply a paper product and you will probably get paid 10 cents on the dollar if it busted open. Silver is not mentioned in the article but from everything I have read SLV doesn't have anything at all left in it, it is all a paper transfer without physical to back it up.
It is so refreshing to read truth in a MSM article!
Portion from article:
Open interest in gold futures and options traded on the Comex typically exceeds supplies held in its warehouses. If the holders of just 5 percent of those contracts opted to take delivery of the metal, there wouldn’t be enough to cover the demand, Bass said.
Printing Money
“If you own a paper contract where they can only deliver you 10 cents on the dollar or less, you should probably convert it to physical,” said Bass, who isn’t related to Fort Worth’s billionaire Bass family. He said holding cash wasn’t a better choice because the rate of inflation exceeds money-market rates by 2.5 percent to 3 percent, eroding the value of cash.“Central banks are printing more money than they ever have, so what’s the value of money in terms of purchases of goods and services,” Bass said April 15 in a telephone interview. “I look at gold as just another currency that they can’t print any more of.”
Thank you Sherrie-- as you well know silver is similar but perhaps only 1 or 2 per cent would do it-- and it looks as if it is happening before our eyes.
ReplyDeleteDavid Morgan
Founder Silver-Investor.com
The article was talking about COMEX gold futures contracts, not about the GLD ETF. According their website, GLD currently holds 39,582,988.58 oz of gold. Is there reason to believe that a significant portion of this is not physical gold?
ReplyDeleteYou are right it is. But also reading if you have a paper contract convert it to physical could be read as GLD.
ReplyDelete“If you own a paper contract where they can only deliver you 10 cents on the dollar or less, you should probably convert it to physical,”
The part above can easily be read as GLD since those are paper contracts and that is the way I interpreted it. That may be wrong, but considering Jeff Christian a "metals expert" at the CFTC manipulations hearing they had last February, told the CFTC that GLD and SLV is leveraged 100 to 1 of paper to physical.
He outright admitted physical gold and silver does not match the paper of GLD and SLV.
Read his testimony or here it is on youtube.
http://www.youtube.com/watch?v=BfCn8NlLHko
So the above article can be read two ways - which I did. It may be a mistake to read it both ways - but it is still how I did read it. Due to the simple reason GLD and SLV are Paper contracts and people who have those do not actually own physical as they believe they do.