Paper gold market defaults loom ?

[vinoveri]

Re: Paper gold market defaults loom ?

Lets see you can use PAPER TO STILL GET REAL GOLD AND SILVER? What was your question again?

Land is good too. Had my mom sell her house and by gold in '05, JUST told here to go buy a house again (like friday). She is on a fix income and has unlimeted exposure to inflation in rental costs so I told her she needed to fix that. NOW is the time.

If you have food and guns and bullets (as I do) then you know paper is crap, why are you even asking the question. You know what you should be doing, GET TO IT MAN!

bullion direct is out of Plat, and Paladium. Only have limitied 1 oz Au and Ag left in stock, don't be a fool and be left holding paper anything as the supply of PM is disappearing right before your eyes. Don't take my word for it, go check for yourself.

www.bulliondirect.com

jtabeb, be interested to know your experience with bulliondirect. buying remote is sort of risky it would seem to me, but would like to have some physical and can't find any local dealers.

[sn1p3r]

Re: Paper gold market defaults loom ?

I also have my retirement account largely in GLD (and GDX which is in terrible shape lately) and am concerned about paper defaults.

One thing I've been wondering is if there is such a shortage of physical out there that the Mint has to suspend making gold coins, where are the managers of GLD finding enough physical gold to buy to put in their vault and back up the money flooding into their ETF?

I'm sure somewhere in the fine print there is a clause that gives them some inordinate amount of time to catch up in certain circumstances...

[grapejelly]

Re: Paper gold market defaults loom ?

it is so obvious that to think otherwise is to have blinders on.

GLD is paper.

Perth is paper.

CEF is paper.

Paper is fine but paper is not GOLD.

C'mon...quit fooling yourself. The reality is that paper is paper. There is a degree of convenience, and perhaps speculative advantage. But having paper is NOT THE SAME IN ANY WAY with owning buillion and having it buried someplace where only you know where it is.

[jtabeb]

Re: Paper gold market defaults loom ?

jtabeb, be interested to know your experience with bulliondirect. buying remote is sort of risky it would seem to me, but would like to have some physical and can't find any local dealers.

I have had nothing but good expereinces with them for the last 5 years. I placed more than 30 orders with them and have not had any problems, even as recently as two weeks ago. What I like about them is that they only put in their catalog what the have available for immediate sale or will clearly state that a certain type of product is (delayed). I never order or buy delayed items. They have an excellent service departement. I will say that if it is on there site and it doesn't say delayed, if you order it, you will get it( as long as you pay of course).

[jtabeb]

Re: Paper gold market defaults loom ?

it is so obvious that to think otherwise is to have blinders on.

GLD is paper.

Perth is paper.

CEF is paper.

Paper is fine but paper is not GOLD.

C'mon...quit fooling yourself. The reality is that paper is paper. There is a degree of convenience, and perhaps speculative advantage. But having paper is NOT THE SAME IN ANY WAY with owning buillion and having it buried someplace where only you know where it is.

Speak the truth and it shall set you free!

[vinoveri]

Re: Paper gold market defaults loom ?

I have had nothing but good expereinces with them for the last 5 years. I placed more than 30 orders with them and have not had any problems, even as recently as two weeks ago. What I like about them is that they only put in their catalog what the have available for immediate sale or will clearly state that a certain type of product is (delayed). I never order or buy delayed items. They have an excellent service departement. I will say that if it is on there site and it doesn't say delayed, if you order it, you will get it( as long as you pay of course).

thanks.
what have you found to be the quickest way to get delivery, e.g., how do you pay to get the quickest turnaround? do you buy from the catalog and/or the nucleo-exchange, and if so, can you compare/contrast the advantages of each?
Also, have you used their self directed IRA for PM? Seems like it could be a good idea for those of us with money locked up in IRAs.

[Southernguy]

Re: Paper gold market defaults loom ?

Andrew Grove said: only the paranoids survive...
Well fellows, having some physical PM´s, let´s say to pay couple of years expenses, in case everything falls apart, that´s not a bad idea.
But if I were to pay the taxes you have to, just to hold and sell gold, I wouldn´t buy more than that...
That said, I´m leaving for the exchange to get a couple kilos.

[LargoWinch]

Re: Paper gold market defaults loom ?

Ever wonder why Kitco is based in Montreal, Canada?

Because PMs pool accounts are NOT allowed in the US; the way it should be.

Only in Canada...land of the free or whatever. I forgot. pfff.

PS: Again, Jim Rogers thinks that vendors are sitting on a lot of bullion but do not want to sell it. I find that hard to believe. Lets see what happens next shall we?

[phirang]

Re: Paper gold market defaults loom ?

sold my GLD today and got into GTU...

there's NO WAY i'm messing with GLD in this market!

[ASH]

Re: Paper gold market defaults loom ?

Can you guys explain what you mean by paper gold defaults to a newby?

Well, basically, we're just talking about the degree of abstraction involved in different methods of holding gold. Many of the more convenient ways to "own" gold don't involve taking physical possession of the metal. The word "paper" refers to you holding a document that represents your supposed ownership of gold, rather than the physical article -- like a stock certificate. In this context, "default" means that when push comes to shove, you may discover that the gold that was supposedly backing the paper representation does not in fact exist, and that your paper certificate is worth fuck all.

[vinoveri]

Re: Paper gold market defaults loom ?

sold my GLD today and got into GTU...

there's NO WAY i'm messing with GLD in this market!

Another thing to consider with GTU and CEF; the premium paid over NAV is not insignificant.

Central GoldTrust
05:08 PM		07-Oct-08
				US$		CDN$
Net asset value per Unit				$32.87		$36.35
Trading Symbols on AMEX and TSX				GTU		GTU.UN
Closing market prices		07-Oct-08		$37.40	AMEX	$41.65	TSX
Premium / - Discount				13.8%		14.6%

CENTRAL FUND OF CANADA LIMITED
Calgary, Alberta, Canada
05:20 PM		07-Oct-08
			US$		CDN$
Net asset value per Class A share			$9.59		$10.60
Closing market price		07-Oct-08	$10.84	AMEX	$11.90	TSX
Premium/-Discount			13.1%		12.3%

[phirang]

Re: Paper gold market defaults loom ?

Another thing to consider with GTU and CEF; the premium paid over NAV is not insignificant.

Central GoldTrust
05:08 PM		07-Oct-08
				US$		CDN$
Net asset value per Unit				$32.87		$36.35
Trading Symbols on AMEX and TSX				GTU		GTU.UN
Closing market prices		07-Oct-08		$37.40	AMEX	$41.65	TSX
Premium / - Discount				13.8%		14.6%

CENTRAL FUND OF CANADA LIMITED
Calgary, Alberta, Canada
05:20 PM		07-Oct-08
			US$		CDN$
Net asset value per Class A share			$9.59		$10.60
Closing market price		07-Oct-08	$10.84	AMEX	$11.90	TSX
Premium/-Discount			13.1%		12.3%

considering that GLD could go to 0, i'm ok with that.

[ASH]

Re: Paper gold market defaults loom ?

I'm holding a position of GLD within my IRA as this is the only practical way that I know to invest in gold through this account. I'm well aware of the warnings against holding paper, but have rationalized that so long as I leave the party early and don't get trampled by everyone rushing to the exit I'll be OK (sure I'm the only one thinking this). Anyway, I not so comfortable with this decision, but just feel it is better alternative than leaving these funds sitting in gov't bonds. Can someone lay out a credible scenario has how GLD defaults might go down and leading edge warning signs to watch?

If you are able to invest in GLD, then likely you are able to invest in GTU. Neither GLD nor GTU will be of any use in the event of a complete systemic crash or confiscatory government policies, but of the two, GTU is probably a more sound paper vehicle.

With a hat tip to iTulip's $#*, who brought this to my attention, you should read the short description of gold ETF risks on Wikipedia. This points out that if the sponsor of GLD went into liquidation, your shares in GLD only entitle you to be treated like a general creditor, rather than an owner of the specific assets of GLD. I am personally unfamiliar with the financial companies which sponsor GLD and similar ETFs, but my impression is that a single company sponsors multiple ETFs and other financial business. If the sponsor has its fingers in many pies, then there is the potential that trouble in another business area could result in the liquidation of your ETF's assets.

One reason to prefer GTU (and its sister CEF) over GLD is that they are single-purpose bullion holding companies based in Canada rather than funds sponsored by Wall Street investment companies. The fact that they are single-purpose means that you don't run the risk of problems spreading from other areas of business. Being off Wall Street isn't really a quantifiable advantage, but to me, it improves their scent.

GTU and CEF are passive asset-holding companies. They are closed-end (meaning your share of the bullion does not get diluted), and they are backed by physical bullion in segregated storage which is insured and frequently audited. Most important to me, their bullion is unencumbered -- which means they have neither borrowed any portion of it, nor loaned any of it, nor used it to secure any other financial arrangement.

Again, investing in any paper gold exposes you to risks of systemic failure or government confiscation. The same could be said of any paper asset, including stocks and bonds. I personally hold both paper and physical PM. The paper is held because I can realize tax-free capital gains inside a retirement account, and I don't think a Mad Max future is likely. The physical is held because I think a Mad Max future is technically possible. Still, if you expect Wall Street firms to continue to get in trouble -- but you don't expect the system to fail completely -- then one form of paper gold may be superior to another.

[ASH]

Re: Paper gold market defaults loom ?

thanks.
what have you found to be the quickest way to get delivery, e.g., how do you pay to get the quickest turnaround? do you buy from the catalog and/or the nucleo-exchange, and if so, can you compare/contrast the advantages of each?
Also, have you used their self directed IRA for PM? Seems like it could be a good idea for those of us with money locked up in IRAs.

Like jtabeb, I too have had a very good experience with bulliondirect. I have bought catalog. The fastest payment method I know of is a wire transfer from your bank. When buying, I've never noticed a superior price on nucleo, compared to catalog, but I don't have any extensive experience with nucleo.

[jtabeb]

Re: Paper gold market defaults loom ?

thanks.
what have you found to be the quickest way to get delivery, e.g., how do you pay to get the quickest turnaround? do you buy from the catalog and/or the nucleo-exchange, and if so, can you compare/contrast the advantages of each?
Also, have you used their self directed IRA for PM? Seems like it could be a good idea for those of us with money locked up in IRAs.

I always send in a check so, don't have much input.

I have never used Nucleo, only the catalog.

I liquidated my IRA to put into physical. I don't recc anyone hold your PM's but you or the hole in your back yard. (yes I took the 10% penalty, it was worth it both interms of return and in security).

My thoughts are "if it's not Physical, IT'S CRAP" and "If I don't hold it, I Don't own it".