just in in-tray
player 1: actual gold = "diversification within diversification"
MineWeb's Dorothy Kosich last week described a report by UBS Investment Research that discovers a new trend among gold investors: actual gold.
Kosich writes: "In their analysis, UBS noted, 'A new trend in 2010 is the movement toward fully allocated physical gold. In H2 and 2011, we expect this type of gold exposure will deepen as new and existing investors diversify a portion of their gold reserves to purely allocated form. Quite simply, such customers are limiting their weight of paper gold exposure. In essence, this is diversification within diversification.'
player 2: maybe the BIS gold swaps have woken a few people up to the dangers of unallocated accounts. When a technically insolvent euro-area bank uses gold belonging to its customers so it can get cheap financing it can not get in the interbank lending market because the other banks aren't trusting it anymore, said customers have every reason to be duly alarmed. it sort of defeats the entire purpose of gold ownerhsip.
Besides, we know since the Morgan Stanley silver scam that they are not beyond charging people the storage costs for gold and silver that isn't even there. I'm as near to certain as one can be that this practice is continuing - this follows from the fact that the fines extracted for such infractions when they are discovered (which happens rarely enough) are usually well below the profits the scams tend to generate. as an example, MS or Merrill (i don't recall which one now) was once fined less than $500K for posting 'spoof' bids and offers on hundreds of Nasdaq stocks for over 3 years, with the clear intent to manipulate prices. The fine struck me more as a licensing fee than a fine.
player 1: Agreed [player 2] - Like many, I own physical and trade paper-with the hope that ZKG is a better vehicle than GLD-
I think when the whole allocated/unallocated gold enchilada comes apart, cash settlements will have to be made-by the banks or by the central pixel money makers.
The latest BIS deal, MS silver scam (and who knows how many others) and the ever growing question of paper gold along with the fact that UBS suddenly begins to make a distinction-(after years of pushing GLD)-are noteworthy imho.
will sell some chf during wee hours-possibly some paper gold as well...much talk about easing has me a bit uneasy-as it is untenable and the whole enchilada may slide til the public demands intervention?
player 3: A few weeks ago, moved all my silver etf's from slv to zurich (forget ticker think it is zkb, but sister to zkg for gold)
Have some misc gld positions that I will move as well.
Interesting one is trying to buy gold thru hsbc private bank or premier. They push you to their unallocated (basically hsbc paper gold). To get allocated is pain in ass
Also they want minimum of 250k usd trades for gold/silver etc
Ie basically they don't want you buying physical , and expecially not allocated.
player 1: fwiw-that is the trading vehicle I use for silver as well. I think Sprott has a "deliverable" silver fund too now-but have not looked into it yet.
player 2: at the CFTC hearing into position limits it was highlighted in public for the first time just how pervasive and extensive fractionally reserved gold banking actually is. Jeffrey Christian - perhaps inadvertently - admitted in his interview that the reserves on hand that are backing unallocated gold accounts may be as little as 1% of the originally deposited gold. if this is true, and i find it credible considering the source and considering the great temptation customer deposits represent for bankers , then an eventual blow-up is probably unavoidable.
my opinion on the next QE program is this: it is inevitable, but the FOMC needs some justification for it. so it will probably only happen AFTER the stock market slides some more. central banks are always reactive, and Benny and the Jets are not different. like the BoJ always did, they will come up with new monetization schemes every time the stock market slides.
as to gold/gold stocks - the biggest positive factor at the moment is the pronounced bearish sentiment. two charts attached that are confirming this. a big outflow from the Rydex pm fund, and traders are buying lots of puts on gold futures. this could become a tailwind for gold once the price action turns from 'corrective looking' to 'bullish looking'. so we need to keep this in mind, the public and most traders are currently not greatly enamored of gold, although the positioning in COMEX gold futures of course still shows a very big net long bias on the part of speculators (and i didn't like the fact that commercials liquidated 15K contracts in gross longs last week).
still, the sentiment backdrop is beginning to look more constructive for the bulls. at some point the correction will be over and gold stocks should rally big - my current guess is that 'THE' low will occur in the fall, and that until then they will range-trade in a fairly wide range. A close above HUI 470 woud indicate a larger bullish move is already underway, and a close below 420 would indicate a larger corrective move is underway. A close above HUI 520 would be needed to create a technical upside target of 680-700. we will eventually see a move to this level imo, the main question is really when and from where does it start.
player tj: the biggest bullish factor is that both [player 1] and jay were eager to and going to sell paper gold, and only prevented from doing so by inconvenience of getting to the website in time :0)
player 2: LOL - i'm trying to use myself as a contrary indicator too at times. whenever something happens that makes me especially convinced of a move or especially worried about upcoming developments, it often pays to fade myself. :)
player 1: I am slowly learning to buy USD- iow-"fade myself" (good title for a tune)-it is not easy :o) but I felt I needed to capture some gains in the currencies and fear we could see a repeat of past gold upward rise-Euro 1000 plus,
with US equity crunch?
player 2: easily possible, because gold will be the first asset to react to any change in perceptions about more QE - which falling equities would provide.
old has quietly recaptured the 1200 level - not much fanfare, and just as a lot of traders got really bearish on it. this is a development that deserves some attention - note also, failure of t-bonds to sell off much lately, in spite of equiies recovery. something isn't quite right about all this.
note my most recent write-up/update on the BIS gold swaps - clearly the banks are misappropriating unallocated customer gold to finance themselves. That should scare a number of people into allocated accounts.
acting-man.com
On Aug. 10, we'll get 'symbolic QE' - my hunch is this wil be bearish for the stock market (as it is a combo of 'we admit everything is going down the drain again, but we're not going to do much about it before stocks tank')
acting-man.com
Also, recently wrote a critique of Richard Koo, who wants governments to spend themselves into oblivion (of course that is exactly what they are going to do, with or without his advice):
acting-man.com
player 1: saw that-nice-fwiw-sold CHF and CAD early hours-now mostly USD and some CHF and CAD (net sales from CAD % CHF 60%)
still holding paper au/ag in CHF-climbing wall of worry, specifically about QE rants and about possible pre-FED, etc. hammer down-
the big CHF weakening we are seeing as of the past few hours has me worried that some swan-mini or not lurks in the Euro zone or else where as the last time the Euro dropped
the Swiss beggared like mad....
player 2: the euro-.zone crisis isn't over at all imo - it is merely waiting for te next catalyst.
player tj: i have a bit of unallocated paper gold kept at the very-guilty and paper gold as well as paper platinum maintained at not-by-contract-but-they-tell-me-they-are-holding-one-for-one smallish subsidiary/sister of bank of china
i have sinned, just had my mom buy unallocated and probably imaginary gold
hsbc not only plays against their marks in unallocated and imaginary gold, it also loans out whatever physical gold they do hold as business loans hsbc.com.tr
for my next life, reincarnated, i must consider coming back as hsbc
i have heretofore justified my dalliance with paper metal by invoking "convenience", meaning "lazy"
i atone for my sin by holding physical au and pt in actual boxes accessible
the time to change mode of operation is the same time we need to go to 100% allocation to 100% allocated metal, and that time should be between now and 15 years from now, i figure.
i love macro dirty talk, sexy planet alignment shout, and paper this and physical that naughtiness
ok, enough, back to work
attached please find report from a survey re the american dream
i wonder what a similar survey of this e-mail list would reveal
Subject: FW: metlife survey the american dream 2010 |
