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In The News Today

Posted: Nov 23 2010     By: Jim Sinclair      Post Edited: November 23, 2010 at 12:19 pm
Filed under: In The News

Thought For The Morning
Merkle of Germany has been quiet on this Irish bailout until today. That seemed strange.
Today she is jumping up and down again. That was good for a few hundred point on the downside of the euro.
Could this be a currency war and covering by the usual suspects?



What’s Behind The Gold and Silver ETFs? CIGA Eric
ETF products hold nine years of global, not US as suggested below, mine supply. How much 1285.08 tonnes current holdings represent physical gold? The legal wording of the GLD prospectus should present signficant clues for investors.
There are no assurances that the gold bar exist until added to the account of HSBC custodian or subcustodians. Then the prospectus clearly states that if the subcustodian(s) do not have the gold, Trustee cannot be assured that they will be able to recover any damages from them.
Under the Allocated Bullion Account Agreement, except for an obligation on the part of the Custodian to use commercially reasonable efforts to obtain delivery of the Trust’s gold bars from any subcustodians appointed by the Custodian, the Custodian is not liable for the acts or omissions of its subcustodians unless the selection of such subcustodians was made negligently or in bad faith.
Basically, shareholders cannot be assured that the Trustee will be able to recover damages from subcustodians or any losses relating to the safekeeping of gold by such subcustodian.
Then the legal speak takes it a step further by suggesting that neither Trustee or Custodian really knows the activities or holdings of the subcustodians.
Because neither the Trustee nor the Custodian oversees or monitors the activities of subcustodians who may temporarily hold the Trust’s gold bars until transported to the Custodian’s London vault, failure by the subcustodians to exercise due care in the safekeeping of the Trust’s gold bars could result in a loss to the Trust.
When the objective of the fund is to track the price of gold, does it really have to own any gold to do it? No.
Meanwhile, the theoretical gold supply held by the gold ETF(s) continue to soar as money seeking an easy way to track the price of gold finds an easy solution. This game of musical chair will play until holders of baskets (100,000 shares or more) demand payment in gold. The music could very well stop when this happens.
Exchange-traded products own 2,088 metric tons, equal to nine years of U.S. mine supply, data compiled by Bloomberg show.
Source: financialpost.com
Source: spdrgoldshares.com
More…



the awesome collection of charts at the National Inflation Association site have been updated.

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