Posted: 01/05/2010 09:45:34
Let's examine some recent eyebrow raising writings of Jim Willie CB, editor of the "Hat Trick Letter".
For those of you who don't know, Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a PhD in statistics and his career has stretched over 24 years. Jim Willie's newsletter writings, although strongly worded, are well read within the gold community.
Before you jump in, here are some quick definitions for a few of the specialized terms he uses:
GLD is an ETF or an electronic traded fund that many people believe allows them to buy and sell physical gold in a trust for their stock trading account (that being said, many experts have and are becoming even more suspect of GLD as you will read).
COMEX is a division of the NYMEX (New York Mercantile Exchange -> the world’s largest commodity futures exchange located in New York City).
GOLD AS CRUX FOR BATTLE - 12/3/2009
In an open manner, no longer hidden from view, the COMEX is settling gold long futures contracts with Street Tracks GLD shares. Investors in GLD shares should be horrified at shareholder contamination. Clearly, the COMEX does not have much of any gold bullion, yet it operates formally as an exchange to sell gold, and to create a market for gold price discovery. Some call this new redemption developed appropriately a silent COMEX default, and correctly so. It is the early chapter of a COMEX default, presaged last May.
The two-sided fraud deserves mention once more. In time, the Street Tracks GLD (run by State Street, with JPMorgan as custodian) will be exposed as totally corrupt. They are using GLD shares openly now to cover COMEX short futures contracts. They are likely providing GLD bullion to London to satisfy futures contract delivery demands. Evidence painted a picture after London gold delivery stresses occurred at the same time as vast deletions from the GLD bar list, which suddenly reappeared days later. That is burning the candle at both ends of the GLD itself. Eventually my expectation is for GLD shares to sell at a 40% discount to gold price as the lack of gold inventory is revealed. Then later, after lawsuits, the GLD might easily sell at 80% discount. Finally the climax could be prosecution for fraud and all investors will be given 20 cents per dollar versus gold. Who knows? Maybe it will be 30% and 60% and 40 cents per dollar. The trouble for hapless unsuspecting investors is they did not read the prospectus, which permits such misuse of GLD shares. |
As the paper price "music" fades away -> Will you have a chair full of physical bullion or will you be left standing - holding paper contracts?
Our answer -> Get Physical Gold and Silver.
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Would you like to hear Michael Maloney's thoughts on ETF's?
Click Here! |
You can also visit Jim Willie's free website at www.GoldenJackass.com
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