Is Your Safe Haven a House of Cards?

If automatically dismissing allegations about the suppression of gold and silver prices as tinfoil-hat madness helps you to sleep better at night, then I wish you sweet dreams.

If you prefer to consider the evidence on the merits; and draw your own conclusions, then you will want to read on.

A recent extraordinary hearing held by the Commodity Futures Trading Commission (CFTC) to discuss the need for position limits in metals futures morphed unexpectedly into what I will argue was the grandest expose of potential fraud in modern financial history.

A little background
There is not an investor among us who has not been deeply disappointed by revelations of shady dealings in the financial sector over recent years. The list of prior assumptions about the economic landscape that people have been forced to begrudgingly shed stretches out like a list of Bernie Madoff's unsuspecting victims. We've witnessed the forensic discovery of Lehman's pre-collapse book-cooking, and now Goldman Sachs (NYSE: GS  ) has admitted (and defended) its role in disguising some of Greece's sovereign debt woes.

Given a financial industry so awash in systemic impropriety, perhaps the notion of a scheme to manipulate and suppress the prices of gold and silver isn't so loony after all.

I have been tracking this topic for several years, and we would need to sit down over a gigantic cup of coffee to pore over all the verifiable evidence amassed by researchers like GATA (Gold Antitrust Action Committee), John Embry of Sprott Asset Management, silver analyst Ted Butler, and many others.

Fools may recall GATA from a full-page ad that appeared in the Wall Street Journal in 2008 calling for an independent audit of the United States' gold reserves. GATA also "seeks to disclose and publicize the huge speculative short positions in gold taken by financial institutions and bullion banks" and has spent more than a decade compiling evidence of gold price suppression.

One year ago, GATA board member Adrian Douglas issued a seminal report entitled Pirates of the COMEX, in which he deduced by comparing two sets of government-supplied data that JPMorgan Chase (NYSE: JPM  ) and HSBC (NYSE: HBC  ) were the principle holders of derivatives in precious metals. When only two entities control 85%-100% of a futures market segment, as Douglas alleged, they can effectively control the price of the underlying commodity. Fools eager to dig further into the reams of evidence pointing to price suppression in gold and silver are encouraged to visit my CAPS blog post here for a collection of relevant links.

They finally have a whistleblower
Whereas this research has come from the outside looking in, during the CFTC hearings the world was finally offered a glimpse from inside the alleged manipulation process. Andrew Maguire, a professional metals trader in London, has claimed colleagues from JPMorgan Chase bragged of their ability to knock down the price of silver at will.

On February 3, 2010, in an email message posted here on GATA's website, he reportedly informed the CFTC's enforcement division of a manipulation event that would occur two days later when U.S. non-farm payroll data was released. He apparently then followed up with detailed insight into the process while it was occurring.

Ultimately dissatisfied with the CFTC's response to his communications, Mr. Maguire alerted GATA of his allegations ... which were then made public by GATA Chairman Bill Murphy during the recent hearings.

But wait ... the story gets bigger still.

Is your "physical" gold or silver leveraged at 100:1?
A critical exchange occurred after GATA's Adrian Douglas chimed into a conversation with his assertion that the leveraged market for physical metal is essentially a game of "paper backing paper." The underlying argument here is that the volume of gold traded daily at the London OTC metals exchange (LBMA) is so large (at about 20 million ounces of gold per day), that in fact the over-the-counter market for "physical" metal can not possibly be backed on a 1:1 basis by actual physical supply. As Mr. Douglas asserts: "it's fractional-reserve accounting, and you can't trade that much gold -- it doesn't exist in the world."

Jeffrey Christian, founder of commodity consultancy firm CPM Group and "one of the world's foremost authorities on the markets for precious metals," brazenly confirmed Douglas' characterization of the metals market:

The previous fellow was talking about hedges of paper on paper and that is exactly right. Precious metals are financial assets like currencies, T-bills, and T-bonds; they trade in the multiples of a hundred times the underlying physical and so people buying them are voting and giving an economic view of the world or a view of the economic world.

In case you're thinking that Mr. Christian surely must have miscommunicated his intended point, he clarified most pointedly:

People say, and you heard it today, there is not that much physical metal out there, and there isn't. But in the "physical market," as the market uses that term, there is much more metal than that. There is a hundred times what there is.

I repeat: "There is a hundred times what there is." Did he learn from Bill Clinton what the definition of is is? I sure hope that kind of leverage never comes toppling down the way lesser leverage did in the mortgage securitization industry. Not to fear, assures Mr. Christian while commenting earlier on the short segment of the market, "there are any number of mechanisms allowing for cash settlements." It appears that he actually perceives no structural problem inherent in a metals market that would seek to deliver cash in lieu of physical bullion to investors who may be inclined to call this paper bluff. In some circles, one could call that for what it would be: default.

Fools may recall a couple of instances in 2008 when physical supplies of bullion were very tight even as spot prices were mired in weakness. I believe that kind of anomaly results from an enormous disconnect between a leveraged market for paper gold and a much smaller market for actual, hold-it-in-your-hands physical bullion.

Taking it all in
If you have never considered the topics of price suppression or leverage in silver and gold before, this is a lot of material to process all at once. I believe that these revelations place this entire leveraged house of cards at risk. Conceivably, all it would take would be a few deep-pocketed investors overseas to call the market's bluff by demanding physical delivery of bullion, and the world's major futures exchanges could break down before our very eyes. Adrian Douglas points out that the LBMA exchange in London alone trades some $5.4 trillion per year in "gold" on a net basis. If the leverage of paper instruments to bullion stands anywhere near 100:1, then the implications are sufficient to make the Enron debacle look like child's play. Without mincing words, if the supposed quantities of gold and silver bullion simply are not there, then we may witness the greatest incidence of fraud in financial history.

Investors with exposure to the popular gold and silver "bullion" proxies have some very critical assessments to make. Fools are encouraged to note that HSBC is the custodian for the holdings of the wildly popular SPDR Gold Trust (NYSE: GLD  ) . On the silver side, we have JPMorgan Chase serving as custodian for the holdings of the iShares Silver Trust (NYSE: SLV  ) . Both trusts indicate that underlying metal holdings are held on an allocated basis for the trusts, although the silver vehicle permits some 1,100 ounces of unallocated silver per trading day. This allocated nature of the holdings is enough to reassure many investors, but I still have my concerns.

For my part, I have consistently stated my preference for Central Fund of Canada (AMEX: CEF  ) , which has been around since 1961, and offers the magic words that discerning precious metal investors pine for. The fund holds "allocated, segregated and unencumbered gold and silver bullion and does not speculate in gold and silver prices". Another compelling alternative, the Sprott Physical Gold Trust ETV (NYSE: PHYS  ) , was launched recently by the very firm that has been a vocal advocate for terminating the manipulation of the gold price for many years running.

Please stay tuned for additional analysis of this tremendously important topic, which holds further implications far beyond what I have discussed above. Please also share your reactions by voting in our Motley Poll, and by posting your comments below.

Gold is a hot topic on the blogs at Motley Fool CAPS. Join the free service today and see just how many Fools are taking the long view when it comes to investing in gold. The "Gold" tag at CAPS lists 51 potential investments, and you'll find Christopher's comments on most of them.

Fool contributor Christopher Barker carries a silver coin which reads: "Honest value never fails." He can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He tweets. He owns shares of Central Fund of Canada. The Motley Fool's disclosure policy is 0.999 pure.


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  • Report this Comment On April 05, 2010, at 5:12 PM, FuerteFunds wrote:

    Consider that our USA holds an unaudited approximate 8,000 metric tonnes of gold and owes (national debt) of 13 trillion dollars. There is a huge multiple there also.

  • Report this Comment On April 05, 2010, at 5:56 PM, davejh23 wrote:

    True, we don't even have enough gold to pay off 2% of the national debt, but nobody thinks that their investments in US Treasuries are backed by gold.

  • Report this Comment On April 05, 2010, at 8:17 PM, tony1717 wrote:

    Looking at the six hundred year chart of silver in the 1600's silver was valued at today 1200 per ounce. It came down to the two or three dollar level when the government and banks got involved, and wanted it cheap for currency. Anyone who thinks eighteen dollars for an ounce of silver is legit is crazy. People are just so used to it being cheap they don't question it. Silver has hundreds of uses and gold doesn't really have any.

  • Report this Comment On April 05, 2010, at 11:49 PM, ChilamBalam wrote:

    Coupla things...

    The www.gata.org archive is a detailed chronicle of gold price suppression.

    Think of gold and silver as "stored value." When compared to currency created from debt, the gold and silver market manipulation comes into perspective. (Note the widening gap between gold prices and currency values, especially USD.)

    If there is no problem, gold inventories and exchanges would be public, yes?

    That's why bills for FED "transparency" by Rep. Grayson, Rep Paul and others are gaining attention and support.

  • Report this Comment On April 06, 2010, at 2:05 PM, rfaramir wrote:

    I totally agree that this is a big problem, and I recommend that anyone who can should order and take physical deliver of as much gold and silver as they think they need (to survive the collapse of the USD, perhaps). This should force the shorts to cover, wouldn't it? And expose as fraudulent those who have naked shorts above and beyond the physical metal available to borrow?

    On the other hand, some of these numbers don't seem to directly correspond to quantity of metal. If one ounce of silver is traded several times in a day (or hundreds of times in a year), that doesn't mean that there is one real ounce and several "fake" ounces on the market. You cannot take volume of trading as a proxy for quantity. I guess you would call this "velocity of money" (since gold and silver ARE money) in a way.

    But overall I agree with you. After all, fractional reserve account is fraud. You cannot morally have one unit (ounce) of reserve and several paper units issued for that same physical unit. As soon as one of those paper units is exchanged for physical, all the other (99, say) paper units are found to be worthless via this fraud.

    Claim yours before the other 99 disappear in the scandal!

  • Report this Comment On April 06, 2010, at 3:04 PM, Doris411 wrote:

    All currency today is fiat currency. (If anyone knows a currency that is still on a genuine gold-standard, please correct me, but the US hasn't been for decades.) How much $100 dollars is worth in peanut butter or crude oil is based on what "everybody" agrees it's worth (setting aside for the moment commodity manipulation in peanut or oil futures).

    While the information in this article is undoubtedly valuable to those who thought gold and silver were a "safe haven", I think most Fools already knew better.

  • Report this Comment On April 06, 2010, at 3:49 PM, silverminer wrote:

    rfaramir,

    To clarify on the volume issue, that is net volume that Douglas referenced ... i.e. the quantity of supposed metal that actually changes hands on a given day ... not raw trade volume. You will find ample clarification of this point here:

    http://www.gata.org/node/8247

    For that matter, any readers expecting to find holes in GATA's research, which has been painstakingly compiled over an 11-year period, may find themselves astonished at the group's collective expertise on the topic and the consistent strength of the verifiable evidence they present.

  • Report this Comment On April 06, 2010, at 6:12 PM, XMFSinchiruna wrote:

    Doris411,

    Gold is a currency -- indeed the ultimate currency according to Alan Greenspan -- and by definition it is not fiat. Actual gold remains the only true safe haven currency in the world.

    Now, if you think this watershed revelation that the actual degree of leverage in the bullion markets is several times worse than even the group commonly labelled as "radical gold bugs" themselves believed to be the case is a realization that only holds ramifications for those invested in gold and silver, then I hasten to correct you. When leverage of this nature ultimately unwinds, its impact will be felt in every corner of the globe.

    It taxes the mind to fathom the full range of impacts from such a disastrous delevering event. What do you think would happen tomorrow if the COMEX or another major world commodity exchange were to default when their enormous multi-trillion-dollar paper bluff is finally called?

    What do you suppose the value of an ounce of real gold will be when millions of people who thought they owned gold discover that they hold nothing more than silly pieces of paper with no possible means of satisfying their physical backing in bullion?

    What do think a commodity-based derivative contract will be worth when this metals market delevers? Do you think there might be a connection between that single ramification and China's announcement last year that Chinese SEOs would be permitted to walk away from failed derivatives?

    Do you suppose that all foreign nations will play along with this unsavory game of manufacturing the illusion of strength in deeply impaired fiat currencies just to preserve the status quo ... even when they understand that perpetuating that status quo does nothing to change the ultimate outcome?

    It amazes me ... it even vexes me ... the extent to which many readers fail to comprehend the significance of these allegations and revelations about the nature of the precious metals market.

    Look back over the past few years. The mortgage-backed securities market stood at about $7.3 trillion prior to the collapse, and look at the lasting damage caused by that one portion of the financial crisis. The Fed's interest rate remains zero-bound, and only by rolling out the largest fiscal interventions in financial history and mortgaging the solvency of future generations were we able to forestall the worst of this crisis.

    Now, if this metals market is leveraged 100:1 versus the 30:1 that we commonly saw in the mortgage markets, and the Fed is already out of bullets at zero-bound, and the debt levels of key western economies are already stretched beyond the confines of the imagination, how on Earth is our financial system supposed to absorb a delevering of a market where $5.4 trillion changes hands annually (ON A NET BASIS) just on the London exchange alone???

    The unsettling and painfully obvious answer to that question is: our financial system as we know it can not possibly withstand such a blow. And yet wishing for the fraud to never be unearthed is not an option, as the end result will ultimately be the same.

    The $600 trillion-plus market in global derivatives will continue its multi-year delevering event no matter how many times we try to convince ourselves that sustainable recovery at this stage is a realistic scenario.

    It's time to turn off the financial tv, because sometimes what they don't tell you is more important than what they do. It's time to cast wishful thinking aside and consider the real plight of our fractional reserve economy based upon a detached and rational review of the available evidence.

    Stay tuned, Fools. Additional analysis of this enormously important story is forthcoming. And remain alert, because it's just a mater of time before some deep-pocketed investors calling the bluff on this house of cards becomes the catalyst for the far-more-destructive chapter of this still-nascent financial crisis.

  • Report this Comment On April 07, 2010, at 6:49 AM, fockewulf wrote:

    This article is now on the GATA website. Congrats Chris!

  • Report this Comment On April 07, 2010, at 10:39 AM, questormeg wrote:

    TMFSinchiruna:

    So, what do you think the outcome will be regarding the value of gold? Do you think as the paper market is de-levered, demand will go up for the actual physical, (like the strengthening of the dollar since it was needed to clear transactions in the de-levering of the credit markets), or down because people will shun the risk of metals altogether and overall demand will collapse? Also, it seems obvious once an ETF is exposed as fraud, it would collapse in dollar price. But since something like GLD is supposed to be based on the price of gold, how can it maintain any relationship to price? Does it just fail and disappear?

    To me, if the global financial system takes such a mortal hit as you predict, gold will be the last currency standing and demand will go up. By the same token, I doubt a government on earth will resist confiscation in that environment.

  • Report this Comment On April 07, 2010, at 4:34 PM, fockewulf wrote:
  • Report this Comment On April 07, 2010, at 4:36 PM, fockewulf wrote:
  • Report this Comment On April 07, 2010, at 4:57 PM, XMFSinchiruna wrote:

    fockewulf,

    The cat has just leapt another mile out of the bag.

  • Report this Comment On April 07, 2010, at 7:09 PM, fuzzywzhe wrote:

    Gold and silver have had value and been recognized as such for the last 5000 years.

    The oldest and longest lasting purely fiat monetary system is 40 years old. It's our current fiat monetary system.

    It's hard to recognize you live in an insane time when for most of your life you have lived in that time. We've only been off from a gold standard for a mere 40 years.

  • Report this Comment On April 08, 2010, at 9:46 AM, smokyfied wrote:

    What scares me about this article is how little the author understands futures markets. The amount of open interest in a commodity is not the same thing as leverage, which is purchasing an asset with borrowed money. The same ounce of gold (or barrel of oil) could be sold 10 times and each of the buyers could have posted 100% of the collateral required for the transaction. In this example the open interest in gold would be 10 ounces and the leverage would be 1 to 1, not 10 to one. If all 10 buyers elected to "go to delivery" and take physical possession of the gold there would not be a problem because there must also be 10 sellers who have promised to physically deliver an ounce of gold. There MUST be both a buyer and a seller for every transaction. When the contracts were settled the same ounce would be passed from Seller #1 to Buyer #1, then from Seller #2 to Buyer #2, and so on. Clearly at least one of the participants in this market must be both a Buyer and a Seller. This might be hard to understand but that's how it works. Lets say that there are only 2 houses on your street but there were four real estate deals done last year. How is this possible? Well, you may still own your house and the other house was bought and sold 4 times.

  • Report this Comment On April 08, 2010, at 12:36 PM, XMFSinchiruna wrote:

    smoky ... I understand these markets just fine, thank you. There isn't enough physical supply in the world to satisfy the collateral requirements. The collateral itself is a paper promise to deliver ... welcome to the ultimate shell game.

  • Report this Comment On April 09, 2010, at 1:23 PM, stevesjp wrote:

    I'm with smoky. I don't see how a large trading volume implies large leverage and an inability to deliver the traded asset. Are they any sources further discussing this particular point? All I've read here are assertions and appeals to authority.

  • Report this Comment On April 09, 2010, at 5:41 PM, gozer33 wrote:

    Why would everyone demand delivery of gold? Gold itself is not very useful for making purchases... You will need to trade it for some kind of currency to get any use from it.

    And it does go up and down in value much like a fiat currency. So... I'm not sure what people are talking about in the comments.

  • Report this Comment On April 09, 2010, at 5:46 PM, TJmon wrote:

    Ditto on the gata.org site. Best place to keep up with the so-called "conspiracy" theories.

    Central Fund of Canada? Hmmmm......I wonder.

    http://www.zerohedge.com/article/latest-gold-fraud-bombshell...

  • Report this Comment On April 09, 2010, at 8:52 PM, penchy1 wrote:

    This is truly incredible and I am very concerned. I remember the Harry Browne and James Dines days of the 70's and 80's and did profit from their writings. How can we safeguard ourselves today? Buy gold and silver? Mining stocks?

  • Report this Comment On April 10, 2010, at 12:17 PM, XMFSinchiruna wrote:

    TJMon,

    Disregard Zerohedge's discussion of CEF... unless he's already fixed his mistake. That just happened to be the CEO of CEF who relayed an additional account of ScotiaMocatta's failure to deliver in 2008 to an acquaintance of his to Harvey Organ. That didn't involve CEF in any way, and I have fully vetted the security of CEF's holdings both through my own research and through the expert opinion even of those deeply involved in researching this issue.

    CEF is in my strongest opinion the safest vehicle for equity-based bullion exposure.

  • Report this Comment On April 10, 2010, at 12:18 PM, XMFSinchiruna wrote:

    penchymd,

    yes, and yes. :) Especially well-selected junior miners and explorers which are likely to deliver sound leverage to price gains in gold and silver.

  • Report this Comment On April 10, 2010, at 12:21 PM, XMFSinchiruna wrote:

    gozer33,

    gold doesn't go up and down in value much? Have you seen a chart of gold during the last decade? :)

    One would be inclined to take physical delivery if one were concerned about what may truly be backing supposed bullion investment vehicles in order to force an end to price suppression and dangerous levels of leverage in the world's most important currency.

  • Report this Comment On April 10, 2010, at 12:32 PM, XMFSinchiruna wrote:

    stevesjp,

    Mountains of supporting evidence have been compiled by GATA, Ted Butler, John Embry, Reg Howe, Jim Sinclair, and many, many others over the course of the last decade. If you have a desire to delve deeper into the topic to see the evidence for yourself, I recommend clicking on the link to my blog post in the above article for a good starting point.

    Again, on the issue of volume, those figures refer to NET volume, and it's entirely correct that the scale of that volume precludes the possibility that these markets are backed 1:1 by physical metal as they are commonly thought to be.

    The cases revealed this week of investors who have demanded physical delivery from bullion banks for gold and silver certificates relating to unallocated bullion storage agreements that are absolutely supposed to be 100% available for delivery on demand, only to be told that the bank doesn't have the supply and will require 6-8 weeks to procure it ... there is strong corroborating evidence there as well.

    See my blog post here, and listen to the first interview link. It will be well worth your time.

    http://caps.fool.com/Blogs/ViewPost.aspx?bpid=369035&t=0...

  • Report this Comment On April 12, 2010, at 6:56 AM, extremist wrote:

    It's quite perplexing and appalling that no general accounting or auditing mechanism is in place to protect legitimate metals traders on the CRIMEX. It would be quite interesting to see what happens when a large fraction of them demand immediate delivery of their metals. Anyone who watches and understands CRIMEX trading action over even a few days must at the very least scratch his head -- and the pattern becomes quite apparent over longer timeframes, with no conspiracy theories needed for explanation.

  • Report this Comment On April 12, 2010, at 7:16 PM, TheDumbMoney wrote:

    1) I understand what this article is saying;

    2) I think the author is almost unprofessionally 'wild-eyed' about all of this, especially for a writer on what is at least a relatively mainstream financial website;

    3) My initial reaction to seeing this leverage information, if it's true, is that it means the value of gold and silver are wildly OVER-valued, just as leveraging in the mortgage industry led to over-valuation of the underlying asset. It is completely inconsistent with a thesis that gold prices are being artificially kept down. And if true, anyone who owns gold, whether in GLD, or CEF, or under his/her bed, will be highly displeased when and if such a thing delevers.

  • Report this Comment On April 13, 2010, at 8:42 AM, XMFSinchiruna wrote:

    dumberthanafool,

    1. [See #3 below]

    2. That's not exactly what I meant in paragraph #2 in the article: "If you prefer to consider the evidence on the merits ..."

    I even italicized the latter part to be sure readers would avoid the alluring temptation to escape the facts of this case by attacking the messenger.

    3. I think you might want to revisit the principles of supply and demand. Housing prices did not decline as a direct result of the deleveraging event in mortgage securitization derivative instruments... it was the other way around. A massive oversupply of houses triggered a reversal of the housing market's longstanding upward price trajectory, which in turn triggered the ongoing derivative deleveraging crisis.

    Here is the important distinction: At no time were participants in the housing market deceived into thinking that the physical supply of actual houses in the U.S. was orders of magnitude greater than it actually was.

    In the case of gold and silver, the only supply which has been manufactured out of thin air is a paper supply that has no basis in reality. To understand that physical gold and silver are impervious to such monstrous inventions of the bankers is to understand the nature of gold and silver as the only remaining forms of honest, debt-free money in a world of heavily impaired fiat currencies.

    We will have a parting two completely different classes of investment vehicles that are presently conflated through fraud. Investors who may not understand the distinctions between physical metal and leveraged metal derivatives today will certainly understand them soon enough, and all that investment capital that thinks it's parked in gold and silver will be deployed in search of real physical.

    And so, it's plain to see that even assuming a fixed level of demand for precious metals, a delevering of the paper market will send massive demand chasing a minute physical supply ... sending prices sharply higher.

    Fool on!

  • Report this Comment On April 13, 2010, at 10:18 PM, FuerteFunds wrote:

    It is the same ball of wax as puts,calls, shorts, straddles et cetera. Rarely does an in the money derivative settle in stock or physical commodity. What are you going to do with 100 thousand barrels of oil, wheat bushels, hog bellies et cetera? You just settle out for cash before the expiration. Physical delivery costs, storage, refrigeration et cetera. Do you think that the International Monetary Fund put 200 metric tonnes of gold on a boat to India, Sri Lanka and I forget the other country. No they just move the labels around in the vault. I don't know if China is a member of the IMF, if not I presume they are taking physical delivery of gold bullion bars. Please correct me if I am wrong.

  • Report this Comment On April 17, 2010, at 8:16 PM, CocomoJohn wrote:

    Speaking of "Safe Havens", along with physical gold, we recommend that one has an offshore bank account (Canada is easiest from the U.S.), hold certain assets offshore AND have a "Safe Haven" in offshore real estate, namely very affordable ocean-view lota in 'Cocomo Village', Vava'u, Tonga in the South Pacific.

    Join us in establishing a small community of "smart' individuals who recognize that it's better to have an offshore piece of real estate and not need it, rather than need it (perhaps one day soon, with the direction the U.S. & other western countries with ever-increasing deficits, taxes and dysfunctional gov't. spending & waste) and not have it !

    Visit http://www.TongaIslandProperties.com and join us on 99-year leased prime oceanfront lots for only US$3,850. each (not a typo) and a fully protected lagoon for your boat - live like a King in the Kingdom of Tonga for $1,500/mo. and build a fine home for $25 - 30,000. and be SAFE in the Southern Hemisphere away from increasing terrorism, taxes, traffic, congestion and more & more gov't control of individuals !

  • Report this Comment On October 26, 2010, at 2:41 PM, mtf00l wrote:

    Wow, there is a lot to digest here.

    Derivatives, where did they originate? Physical delivery of a commodity, typically unlikely. I suspect like dollars, the bank can certainly loan more dollars than they have on deposit. I'm sure banks can sell the derivatives on the same ounce of gold to as many buyers as choose to buy. Government has confiscated gold in the past and I saw a post earlier that I agree with. I don't believe there is a government on the planet that pressed wouldn't confiscate privately help gold. "Off Shoring" and "Safe Havens", good luck. The US IRS has a long reach and if you happen into a country that doesn't recognize the IRS there are always "terrorism" laws that can be used to freeze and confiscate your assets.

    If the system does collapse I suspect all the derivatives will come home to the US for final settlement. Just my opinion and nothing more.

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