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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: aknahow who wrote (56909)	2/24/2008 2:12:44 PM
From: The Vet	Read Replies (1) \| Respond to of 78412

George your comment "Well if the , are participants because they want to make money, they will sell gold and buy shares that shorting causes to sell at a sufficient discount to the gold behind each share. is valid, but you ignore the numbers involved. Short selling creates more trading shares than are actually issued. If the authorized participants did exactly as they are required, and that is to buy shares and sell the gold redeemed they do make a profit but the number of issued shares and the quantity of gold backing those shares also goes down by exactly the equivalent amount. Eventually you reach the point where there are still shares available to buy in the stock market but no gold in the ETF's vault to redeem. Now what happens?