RedOakPresoBox

http://theinternationalforecaster.co...sk_of_Drowning

This is a pretty interesting article from Bob Chapman discussing China, silver and gold manipulation and ETF's running on paper only rather than physical assets. Anyway, I read the guy regularly and listen to him on radio programs. He has seen it all. Smart guy.

Cloudsweeper99

"In fact, the gold and silver being promised as backing for the holders of ETF shares may be the same gold and silver that is used to back COMEX futures contracts. The ETF's may well be leasing their gold and silver to the COMEX, which may then be handing it out to settle COMEX physical demands for delivery."

I copied the above out of the article with my emphasis. Note that the allegations are stated as possibilities, not probabilities or as facts. If you read the GLD perspectus [yes, I read it], there is absolutely nothing in it to even hint at the presence of derivatives in the GLD portfolio. Bob Chapman doesn't provide a shred of evidence that his assertions are true. It is very easy to make unsubstantiated claims like this and sound profound. If this turns out to be true, it will be a major news story. If Bob Chapman has any evidence to back his statements, he should turn it over to the SEC. Otherwise, this is just another doom and gloom newsletter.

Edit: Additionally, nobody has ever lost even the smallest quantity of a physical asset stored in a Comex warehouse in its history. Naturally, the assets fluctuate in value, but they have always been secure. The assertion that the gold and silver stored there might not be there is another unsubstantiated claim.

RedOakPresoBox

Don't shoot the messenger. Part of this goes hand in hand with what Ted Butler has been saying. I found it poignant. Anyway, of course take it with a grain of salt. Just saying that it might be good to have physical assets now.

Cloudsweeper99

I don't think it's poignant. I think it's wrong. I don't recall Ted Butler saying that GLD held derivatives instead of physical gold, or that the Comex warehouses didn't hold the metal they claim to have. Can you post a link?

RedOakPresoBox

So, you read Ted Butler? He talks about paper silver contracts with no backing that is how he thinks all these short contracts can be held thus falsely holding back silver prices. Are you saying that you don't think that can happen with gold too?

http://news.silverseek.com/TedButler/1252075929.php

"But this much is clear – the long anticipated default of the massive OTC silver derivatives position by China appears to be at hand. It’s hard to imagine a more profound event. All at once, the backing and excuse for the concentrated short position on the COMEX is exposed for the fraud it has always been. No longer can the CFTC pretend that the COMEX silver short position is backed by anything legitimate. Not when China, itself, is saying it may default. So many game changes have emerged in silver over the past few months that it is hard to appreciate them all. These recent announcements by China concerning its future intentions on select OTC commodity derivatives could be the most important of all."

This is one article. I don't know how many I have read by him.

There is a good archive of his stuff on the Investment Rarities site if you are interested.

coinman0456

I probably won't live to see this scenario come to fruition, but Copper will be the Gold of the future, not diamonds,not gold, not silver. Technology demands it.

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RedOakPresoBox

You might be surprised. Give it 20 years and copper could be the same price as silver.

Cloudsweeper99

The article by Ted Butler is completely unrelated to the assertions by Bob Chapman that GLD doesn't hold physical gold or that there is no gold and silver in the Comex warehouses. Ted is talking about the concentration in the futures market and how many of the folks shorting silver contracts don't own the silver necessary to meet delivery and may default if they can't borrow the silver from China. But rest assured, every ounce of silver for which there is a Comex warehouse receipt is backed by physical silver plus insurance at the Comex warehouse. It just isn't owned by the folks with the naked short positions. But I can see how this might confuse people.

RedOakPresoBox

"No longer can the CFTC pretend that the COMEX silver short position is backed by anything legitimate."

I take this to mean that they are paper contracts not "backed by anything legitimate"

I take shorts to mean paper contracts not physical silver.

You seem to think that paper contacts mean that they are backed by silver and or gold.

Ted and Bob are suggesting that if all paper contracts were called in that there would not be enough silver or gold to cover those contracts.

Bob is applying it to ETF's possibly. Isn't a warning to own physical metals prudent?

So, what am I missing here?

coinman0456

it's all on a boat to china.

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Cloudsweeper99

I think what you are missing is the distinction between the futures contracts that trade on the Comex exchange and the physical gold and silver in the warehouse for which warehouse receipts have been issued to the owners. The Comex warehouse receipts are most definitely pieces of paper backed in full by gold and silver. Of this there is no doubt. The futures contracts are just promises. Anybody can sell a futures contract without holding physical silver in the warehouse. Large traders who can disrupt the market must demonstrate to the regulators that they have access to silver held inside or outside of the warehouse. That's where China comes in. The rumor is that some large banks were shorting silver and relying on off-exchange contracts with China to supply the physical silver if needed. Now that this is in doubt, some futures contracts may default -- or so it is said. That's what Butler is saying. Chapman is asserting that there is no gold or silver in the Comex warehouses and that GLD doesn't own physical gold and only holds futures and derivatives contrary to what is stated in the prospectus -- but he offers no proof.

Personally, I think Butler might turn out to be correct and the contracts will default -- or more likely be settled in cash. But Chapman has a high probability of being wrong. The two men are most definitely talking about two different things. Comex warehouse receipts for gold and silver are completely safe; safer than a safe deposit box or anyplace in your home no matter how well secured. It is irresponsible for Chapman to encourage people to remove it. GLD has problems, but faking their gold holdings probably isn't one of them.

RedOakPresoBox

Well what is to stop them acting like the fractional reserve banking system to make a buck on commodities?

Cloudsweeper99

The commodities market is heavily regulated and the contents of the warehouses are subject to audit and insured. Maybe you can work for Chapman because now you are making up what-if scenarios with no basis in reality to try to manufacture a problem where none exists.

CrustyCoins

Sounds like an article written with some hidden intent to draw more readers and or attention to the author.

I agree though, before making serious allegations like this there should be some foundation of proof layed out.

Blueindian65

This is a very interesting discoution, but I just want to chime in that the Chapman article made my eyes bleed. Illuminaite, Shadow Governmnet, This Dbag probobly thinks that 911 was a conspiericy, that we never made it to the moon, and that the 14th amendment was never ratified, and I do not even want to get him started on the eveil eveil federal reserve. How could any one take a clown like this serious.

I am going to admit that I just used Adhominim and Straw Man arguments (see mom and dad my philosophy degree is worth something ) but still what a clown.

In America and The world for that matter if you enter into a contract then you have to pay it. It makes perfect sense that a contract would be paid in eather the x commodite you where shorting or cash. Wow it must suck to have shorted silver I would file bancruptcy as well. LoL


Also I would like to note that This champan fellow seems to hate America and uses anti-semtic rhetoric when he talks about the cia and massad. ( I also have a communications degree)


This is sorta related. But Aig via the american government paid billions of dollars to foregin banks to live up to there contractual obligations. While it may seem to the bronze class of peole that this is bad because it takes amercian tax dollars and ships them overseas. Gold class thinkers can realize the strong precedent it sends that American Companies live up to our contractual obligations. If Contract Law goes out the window what is left. It is common knowledge that those that seek justice must act justly. I am glad that america does not have dirty hands.

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I read somewhere that 77 per cent of all the mentally ill live in poverty. Actually, I'm more intrigued by the 23 per cent who are apparently doing quite well for themselves.
Jerry Garcia ... We Miss You Jerry