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Gold/Mining/Energy : Gold & Gold Stock Analysis -- Ignore unavailable to you. Want to Upgrade?

To: The Vet who wrote (12168)	2/24/2008 10:41:52 AM
From: tyc:>	Read Replies (1) \| Respond to of 29622

>>the shorts simply create more stock than there is gold to back it. I agree, but this is not peculiar to shorts of GLD. It is true for ALL shorts,( I am not talking about only naked shorts). Even when a share is "borrowed" to allow a short sale, after the share has been shorted there are now two people who own that share. The same applies when gold is shorted. There was talk on another thread about ABX's forward sales. When a CB leased gold to enable it to be "sold forward", it retained ownership of the gold that was sold to someone else.... again two owners of the same gold.... And the second owner might also "lend" it to enable it to be sold once again, making three owners etc. Why then do you say that the situation with GLD is unusually hazardous ?(IMHO it is hazardous to the shorter.. who has backed a loser, i.e. fiat).

To: The Vet who wrote (12168)	2/24/2008 11:06:09 AM
From: tyc:>	Respond to of 29622

Postscript: Logically, the "duplicated" shares created by the shorts are backed, not by gold, but by the cash that is required to be held in the margin account.... cash equal to the current market value of the gold or gld. I suppose if one is a gold-bug, that is "unacceptable". But even if you take delivery of the physical, my bet is you will never gain more than gold's market value !