Is Your Safe Haven a House of Cards?

[Mined over Matter]

This article (http://www.fool.com/investing/general/2010/04/05/is-your-safe-haven-a-house-of-cards.aspx) has been making the rounds, and was posted on GATA's site as well.

http://www.fool.com/investing/general/2010/04/05/is-your-safe-haven-a-house-of-cards.aspx

With 75% of respondents claiming they have been following this story for years, and that most of this is not news to them, it's clear this article is not reaching its intended audience. If only those in the know are reading it, then I'm preaching to the choir. The point was to help awaken a broader audience to the house of cards underlying their entire financial system.

More coming later in the week.

Mined

[Twisted Avatar]

ALWAYS TAKE DELIVERY!!


ALWAYS TAKE DELIVERY!!


ALWAYS TAKE DELIVERY!!



T

[Mined over Matter]

Here is the latest installment (http://www.fool.com/investing/general/2010/04/13/everybody-out-of-the-gold-pool.aspx) in my investigative series:

http://www.fool.com/investing/general/2010/04/13/everybody-out-of-the-gold-pool.aspx

Everybody Out of the Gold Pool!

Excerpts:

If you hold unallocated gold or silver bullion certificates issued by one of the major bullion banks, I urge you to consider that this segment of the market may collectively lack an adequate physical supply of metal to satisfy claims, in the event that any significant proportion of investors tender their paper certificates for physical bullion.

If the alleged leverage pervading the over-the-counter (OTC) markets and the futures exchanges is ground to a halt by increasing physical demand, the scarcity of supply will become more pronounced still. Just as the banks essentially wagered that mortgage values would never decline, it seems that a similarly dangerous wager may yet be on the table: a bet that gold and silver investors will never call the bluff of a massive paper-based shell game.

If you're swimming in an unallocated bullion pool, I recommend climbing out before lightning strikes the water. For investors seeking bullion exposure through vehicles that do explicitly state the nature of their holdings, in ways that alleviate these sorts of concerns, I continue to suggest Central Fund of Canada (AMEX: CEF) and the Sprott Physical Gold Trust ETV (NYSE: PHYS). If you have any concerns or questions relating to this developing story, please post them in the comments section below, or follow my Motley Fool CAPS blog for ongoing community discussion.

[Strawboss]

Chris - good to see you. I always appreciate your articles/posts.

[ttazzman]

the article speaks of manipulation and paper leverage as a risk.....it does not add the possibility that some of the held bullion could be tungsten....i moved out of GLD and SLV a couple of years ago because of the ratio of paper to physical and moved into CEF ........this year i moved out of CEF because of the possibility they could be holding Tungsten in their physical gold reserves........Does anyone have any information requarding CEFs gold holdings if they have been asseyed ?

[Saul Mine]

The tungsten story seems to have no legs. First it was cracked bars in London, then tungsten in China, then a failed audit in Cananda, then 1 COUNT 'EM! 1 TUNGSTEN BARS! in Germany. The one in Germany was exposed to be a bar brought in for the purpose of testing several years before the flick was posted on youtube, Canada was passed off as a simple clerical error, and we never heard any more about China or London. I draw a few conclusions from this pageant:
* The mints, warehouses, and bullion banks are not worried about what gold nuts think of their activities.
* Tungsten is awfully hard to work with. There are easier ways to steal stuff or to set up a hoax.
* Somebody is planting stories about tungsten to create uncertainty in the physical market, driving investors to prefer unaudited ETFs and unbacked pool accounts instead of demanding physical delivery.

[smilershouse]

Saul,

It is not my intention to deliberate discredit your post. However, what we are dealing with here in relation to Tungsten filled bars, is not just some unfortunate victim, that has been ripped of with a trivial amount of Gold on ebay.

By understanding the mentality and culture of vote-strapped pollies, - in relation to the GFC and their apathetic/despondent electorates, no one is going to openly admit to their general public, this grand theft.

Especially in the political arena. As this is not simply a case of bashing a street seller over the head with a BB bat, after learning that a bootlegged bot of moonshine, was nothing more than water.

There is a process with politics, and that process is often heard behind secure phone lines and closed doors.

What leader will immediately and openly confess to its populace, that 100 tonnes of gold are found to be counterfeit?
And more over,what leader will admit getting one over on the buyer?

It has either not occurred, and I stand to be corrected. Or, such a dodgy deal has occurred and the big wig recipients, are trying to rectify the matter.

Hence, the ramifications of a political and social fall out would be immense if it were otherwise.

SH

[Gold Rules]

Hey MoM good to see ya ....somewhere ( here on GIM or elsewhere) i saw an artical that the Central Fund of Canada did not have the "allocated" physical that they said they had..... they were playing the papper gold scam tooooooo.....

[Saul Mine]

smilershouse, I appreciate your points and agree. My point is that we don't actually know, so we are considering "What if this?" versus "What if that?" It looks bad either way.

[andial]

* Somebody is planting stories about tungsten to create uncertainty in the physical market, driving investors to prefer unaudited ETFs and unbacked pool accounts instead of demanding physical delivery.

Agree.....