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  1. #1
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    Default Are You Holding Gold? Silver? In Allocated Accounts?

    Not going to be sleeping well:

    http://www.zerohedge.com/contributed...-gold-accounts

    Are Banks Raiding "Allocated" Gold Accounts?Submitted by George Washington on 07/06/2012

    n 2007, Morgan Stanley paid out $4.4 million to settle a class-action lawsuit by its clients after Morgan Stanley charged them to buy and "store" precious metals for them, but neither bought or stored the metals. (Similarly, a 2011 class-action lawsuit filed in federal court in New York accused UBS Financial Services of misleading silver investors and harging them storage fees for metal that was never actually purchased, segregated, and stored for them.)


    Avery Goodman points out that Morgan Stanley has once again just launched a similar scam, offering "allocated" metals, but gaming the definition so that the holdings are not really allocated.


    On May 21st, Matterhorn Asset Management's Egon von Greyerz alleged that Swiss banks are trading physical gold bullion which is being held in special "allocated" accounts for its customers:
    We are stressing to investors to take their gold out of the banking system, not only because there are runs on banks that will continue, but the risk of being in the banking system is major. So you should take the additional step of not just owning physical gold, but also owning it outside of the banking system.

    We (just) had an example of a client moving a substantial amount (of gold) from a Swiss bank to our vaults, and we found out the bank didn’t have the gold. This was supposed to be allocated gold, but the bank didn’t have it. We didn’t understand why there was a delay (in our vaults receiving the gold), but eventually we found out why there was a delay (the bank didn’t have the gold). It’s absolutely amazing, but not surprising.

    This confirms what I’ve always thought. Not only should you not have gold in banks or even unallocated gold, but even allocated gold. It seems that some banks don’t even possess that. So the risk of having gold in the banking system is major.”
    On May 23rd, John Embry - Chief Investment Strategist of Sprott Asset Management, with $10 billion under management - added:
    When the customer finally got his gold, it was 2011 minted bars. This made no sense because he had been holding the allocated gold for years. That’s just another example that even the allocated gold in the banking system has probably been loaned out. Many of these customers will wake up one day and realize they entrusted their gold to the wrong people.”
    Jim Willie claims that :
    Swiss face hundreds of $million lawsuits, for refusal to deliver Allocated gold.
    Similar reports have come from Canada and other countries.


    Indeed, Jim Willie alleges today:
    Allocated Gold accounts across the Western world have been confiscated, sold, and replaced with shabby paper gold certificates illegally.... The account raid practice has been widespread in Europe, London, and United States.
    Given the numerous reports of supposedly "allocated" gold not being there, it should not be entirely surprising that wealthy investors are taking matters into their own hands ... literally.
    Kirby Analytics notes:
    We are hearing anecdotal accounts that beneficial owners of “allocated” gold bullion in London and other European centers have showing up at bullion banks and demanding their physical metal be a] viewed and assayed, and then b] withdrawn from the vaults of banks.
    And as we pointed out in 2010:
    Omnis’ Jim Rickards, GATA’s Adrian Douglas and others have demonstrated that the big bullion dealers and ETFs don’t have nearly as much as physical bullion as they claim.

    Should a substantial portion of investors in these vehicles demand physical delivery at the same time, it could cause a panic in the gold market which would cause a huge run up in gold prices.
    Does this mean you shouldn't own gold?


    No ... It just means that you should only buy physical gold, and store it somewhere you can actually get your hands on it.


    "The government is a child that has found their parents credit card, and spends knowing that they never have to reconcile the bill with their own money"-Shannon Churchill


  2. #2
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    We just have gold shares, tenth of an ounce shares, GLD.

  3. #3
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    I got a guy in Nigeria who keeps all the gold I buy from him at no charge. Quite a deal.

    A nutcase will do nutty things.

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    I'm short silver right now. It's a small position and I could turn on a dime and go long, but silver looks technically precarious. It keeps wanting to test the $26 range. If it breaks through, there is nothing to support it all the way to the $17-$19 area. Latest COT report had too many spec shorts though, so maybe it will hold.

    FTR, ZeroHedge is a dicey source. It has some interesting things but there's too much tin-foil hat stuff there. But I do jaunt over to ZH every time I'm long precious metals! lol
    Last edited by Toro; 07-07-2012 at 12:06 PM.

  5. #5
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    I'd be more worried about gold cratering if Romney gets elected and gets government out of the way of investment and job creation... If.
    "when socialism fails, blame capitalism and demand more socialism." - A friend
    "You know the difference between libs and right-wingers? Libs STFU when evidence refutes their false beliefs." - Another friend
    “Don't waste your time with explanations: people only hear what they want to hear.” - Paulo Coelho


  6. #6
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    A nutcase will do nutty things.

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