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It’s Friday already, my last day
of filling in for David. He is officially a “snowbird,” but
raring to get back at it following a week of unprecedented political and
market turmoil (which will only INCREASE in the coming weeks). I’m
already salivating at writing my RANT, as tomorrow is Guy Fawkes’ day,
when Europeans remember one of history’s most notorious, and
celebrated, acts of treason.
Today, I want to discuss two disparate
subjects – the investor FEAR instilled by the Gold Cartel over the past
decade, and the fraudulent GLD Exchange Traded Fund, possibly the most
nefarious of all Cartel suppression tools.
The inspiration for the former topic
emanates from an email I received this morning from a colleague in the gold
wars, a portfolio manager heavily invested in both bullion and PM mining
stocks. In this email, titled “Major PM Smash Imminent?” he
refers to this disclosure regarding MF Global’s 150,000 frozen
commodity accounts:
According to the trustee handling the
liquidation of MF Global Inc., no other broker dealers have agreed to accept
the transfer of the 150,000 MF Global accounts that were frozen on Oct 31, of
which 50,000 were regulated commodities accounts. The trustee states
that if no one agrees to transfer the accounts to their brokerage, all
commodities accounts WILL BE LIQUIDATED BY END OF TRADING ON FRIDAY 11/4!
Such FEAR among PM investors is exactly
what the Gold Cartel preys on, as TRUST ME I understand the nervous feeling
that, AT ANY SECOND, another major smash will occur. However, a decade of
experience has conditioned me to such attacks, and helped me adjust my
portfolio to immunize it against such actions, not to mention allow me to
SLEEP more peacefully.
The Gold Cartel will do ANYTHING to
manipulate PERCEPTION, seeking to attack PAPER gold under essentially any
pretense. It’s the exact opposite of how the PPT operates, goosing the
Dow when new developments emerge to provoke media and Wall Street
“analysis” that “positive news” was received well by
the “all-knowing market.” To quote my friend and hero, Bill
Murphy, “Price action makes commentary.” In other words, if PAPER
gold collapses the day MF Global is scheduled to liquidate accounts, the
media will dutifully report that as the reason.
The primary reason PM investors are so
FEARFUL of the Cartel is because the majority of their portfolios consist of
PAPER gold and silver investments, particularly ETFs (such as GLD and SLV)
and PM mining shares. Mining stocks are heavily suppressed, and such
suppression will only heighten as the END GAME nears, either via “rule
changes” (such as increased capital gains taxes) or, simply, increased
naked shorting algorithms. And don’t forget that gold and silver mining
offtake agreements relate specifically to PAPER prices, despite what REAL,
PHYSICAL metal is trading at. Moreover, per what I am about to discuss,
“tracking” ETFs such as GLD and SLV are DESTINED to continually
erode versus the underlying commodities.
It took me ten years to realize
PHYSICAL gold and silver ownership not only GUARANTEES victory against the
Cartel, and ultimately INFLATION, but IMMUNIZES the impact of PAPER gold and
silver smashes, NEUTRALIZING the nefarious forces determined to prevent you
from PROTECTING YOURSELF.
Regarding GLD, I learned a VERY
alarming piece of information today. As regular readers are aware, I
published a RANT last Monday depicting the COLLAPSE of the tracking ETF USO
relative to its underlying commodity, West Texas Intermediate Crude oil, or
WTIC. USO is now trading at a 60%+ discount to WTIC, justifying the title of
that RANT, THE BEST WAY TO LOSE MONEY IN THE WORLD.
Regarding GLD, read this alarming
article by Jeff Nielson, which I also published yesterday in the Miles
Franklin daily blog.
‘D-Day’ Near For GLD
As I’ve discussed ad nauseumfor years,
GLD has a litany of investment risks that make Enron and Madoff Securities,
look like pikers. I have NO DOUBT GLD and SLV were created as Cartel slush
funds, aiming solely to draw investor funds away from PHYSICAL gold and
silver and into these opaque, unaudited, and for all intents and purposes,
unregulated PAPER ETFs. I’d go into greater detail, but I’ve done
so in minute detail on numerous occasions already (please contact me if
you’d like the related RANTS).
Currently, both GLD and SLV trade at
roughly 3% discounts to the underlying prices of PHYSICAL gold and silver,
having both gradually declined at the same rate since their respective
launches in November 2004 and April 2006. However, I now fear the rate of
erosion will accelerate, based on the following adverse change, buried deep
in the GLD prospectus:
On the 11th day, of the 11th month, of
the 11th year (November 11, 2011) the self-imposed cap on the rate of
dilution for this fund expires. From this point onward, the fund will be
diluted by any/all “expenses” incurred while administering the
fund.
The PRIMARY risk to GLD and SLV is they
don’t own the gold and silver they claim. In fact, I am 100% sure this
shortcoming will be exposed in time, destroying all investors in these
fraudulent funds. However, as we all know well, the Cartel has its tentacles
deep into the nation’s government and regulatory infrastructure, and
consequently could prolong the GLD and SLV frauds well into 2012, and
potentially 2013.
Irrespective, I believe this tiny
footnote will go largely unnoticed by the investment community, allowing the
custodians to aggressively rape and pillage the funds indefinitely.
Consequently, I wouldn’t be surprised to see GLD and SLV trade at 10% discounts
to the underlying metals a year from now, and eventually the 60% discount USO
has deteriorated to.
This is why you must own PHYSICAL gold
and silver, the ONLY way to guarantee PROTECTION against the coming rampant,
and likely hyperinflation.
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