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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: TheBusDriver who wrote (51688)	4/18/2000 8:30:00 PM
From: d:oug	Read Replies (1) \| Respond to of 116764

Wayne, Thanks for article. Alex posted it in its completion only to muddy the water, so I countered with the following and hope Ron does not yellow pee into the muddy water at the same time i'am adding clear spring water. Also, forget reducing the supply of gold & silver through creations of new uses, all that needs to be done is have all holding paper gold & silver take delivery. Then it will be GATA Time, Big Time. Lots of recent GATA type news at the cafe that .... Doug [Start.] ... the bankruptcy of Handy & Harman, perhaps the largest silver refiner in the world, holds important non-obvious ramifications. ... leasing of precious metals is inherently flawed because you can't dispose of the collateral of a collateralized loan and continue to pretend that the collateral still exists as backing. ... lesson from Handy & Harman is that when you take a simple warehousing process, and convert it to a banking operation, only bad things can happen. ... the system of fractional reserve banking [is ok] for currency and credit [not ok] for a physical commodity, such as silver [or gold] In a regular banking operation, deposits by customers are lent and re-lent to others customers. Only a fraction of the deposited funds is kept in reserve to pay expected withdrawals. Unexpected withdrawals can be managed with help from the banking regulators. It is a system that has contributed mightily to world development. ... what works for paper and electronic currency can't work for a physical commodity ... Handy and Harman has stiffed anyone holding physical silver with them. This silver can never be returned. This is the result of the fraud of metal leasing. ... you can't take actual silver metal in as a deposit, and relend or sell the metal to a third party without getting into trouble eventually. While silver is fungible (fungible - freely exchanged for another of like nature or kind) it cannot be created out of thin air, like paper or electronic currency. Because of this, it is only a matter of time before a demand for repayment of metal has to end in default. There is no lender of last resort for depositors and lenders of physical silver. Not only is there no FDIC for silver depositors, the usual ultimate guarantor, the US Government, was itself victimized by H&H - the US Mint... Your silver must be segregated by bar and be bonded and insured. ... is to own warehouse receipts from a licensed exchange, like the COMEX or Chicago Board of Trade. If you own paper silver in any other form, you are taking an unnecessary risk. It would be prudent to switch, immediately, from questionable forms of paper silver into these registered warehouse receipts. Own it in your physical possession when possible, but if you own a lot, make sure your certificate is valid. Warehousing is warehousing, banking is something completely different. It is impossible to fractionally reserve silver. Handy & Harman should have stuck to warehousing. Trying to be a bank is what brought them to bankruptcy. Do you know where your silver is? You better make sure you know. Ted Butler April 18, 2000 info@butlerresearch.com