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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives

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From: Copeland	4/11/2010 6:05:12 PM
	1 Recommendation Read Replies (1) of 221701

More gold stuff. Look at paragraph six -- makes you want to skip buying GLD and use CEF/GTU instead. The Gleason Report 07 April 2010 An audio broadcast this morning on King World News has some gold owners rattled. The program features Adrian Douglas from GATA (Gold Anti-Trust Action Committee) and investors Harvey and Lenny Organ. ( kingworldnews.com ) Lenny Organ states he held certificates of bullion ownership with a major bank. The metal was said to be in the bullion vault at Canada's Bank of Nova Scotia. Mr. Organ personally inspected the bullion vault. A small fraction of the pooled/certificate bullion was present by his count. The required bullion wasn't there. He was being assessed storage charges on metal that didn't exist. The banker could not explain it. This was said to be evidence of massive fraud in the paper gold market. I'm not competent to say what is fraud versus standard business practices but this story is unsettling. In the interview, the Central Fund of Canada was mentioned as having knowledge of a banker experiencing problems getting silver delivery. This morning I called Central Gold Trust in Canada for clarification. I received a return call from Mr. Stefan Spicer, CEO of the three bullion firms: Central Gold Trust of Canada, Central Fund of Canada, and Central Silver Trust. These three funds hold Gold, Silver and a mix of Gold/Silver in storage in Canada. Mr. Spicer stated that the funds hold their metals in caged, segregated and allocated storage under the funds' names at CIBC Bank in Canada. They do not lend or encumber their gold in any way. He said all the gold is there. His funds have no problems getting delivery of metal . I asked Mr. Spicer what he thought of the stories on the internet alleging 100:1 paper (non-existent) gold. He stated that if an investor wishes to own gold they should read the prospectus and be sure they are buying ALLOCATED gold and not pooled gold. The bankers selling gold/silver certificates of pooled ownership lend and leverage gold to maximize their profits. It's in their prospectus (if you can understand the prospectus). He didn't discuss allegations of fraud in the gold market. Know what you're buying was the takeaway. The prospectus of his funds are specific: gold-trust.com Restrictions The Declaration of Trust requires that at least 90% of the assets of Central GoldTrust (“GoldTrust”) be held in physical gold bullion at all times. This cannot be changed without the approval of the Unitholders. GoldTrust’s physical gold holdings may not be loaned, pledged, subjected to options or otherwise encumbered in any way. Safeguards Gold bullion is stored on an allocated and segregated basis in the underground treasury vaults of the Canadian Imperial Bank of Commerce (the “Bank”), one of the largest banks in Canada. The Bank may not release any of GoldTrust’s physical bullion holdings without receipt of an authorizing resolution of the Board of Trustees of GoldTrust. Bullion holdings and Bank vault security are inspected annually and spot inspected periodically by Trustees and/or Officers of GoldTrust. On each occasion, inspections are required to be performed in the presence of both GoldTrust’s external auditors and Bank personnel. I also spoke with Mr. Mike Parente at Central Gold Trust. He said that for twenty years he has been personally present at the bullion audit inspections and states the gold and silver is all there. I then asked Mr. Spicer about the rumors of Tungsten Gold. A financial person named Roy Kirby alleged that major banks were holding many thousands of delivery bars that were actually gold plated tungsten. Mr. Spicer said he spoke with Kirby and told him that if he's going to tell that story he should provide bar numbers and the refiner name so it can be verified. Otherwise, it's just hearsay. I stated essentially the same thing a couple months ago. The Central funds do not buy metals on the futures market. All their bullion is provided by refiners within Canada and is shipped directly to them in the form of Good Delivery Bars. If Johnson Matthey shipped a tungsten bar they'd be out of business immediately. I've recommended that investors own physical gold in their personal possession and store it in their own safe deposit box. The next best option is owning gold and silver with the Central Funds or another firm like Sprott (phys) holding allocated gold/silver. The Central Funds and Sprott are closed-end funds and not ETFs. GATA believes the paper gold market is the world's greatest Ponzi scheme and is going to eventually crash. All it takes is for enough investors to demand physical metal. When the bullion dealers cannot supply the leveraged volumes of metal they will fail. Investors will rush to the physical gold market to buy bars. Gold/Silver will spike causing a destructive short squeeze on the banks said to be manipulating the bullion markets. People not owning allocated or physical gold will be paid off in currencies which could be rapidly depreciating relative to metals. Tom Gleason The Gleason Report (www.gleasonreport.com)

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