GLD

Bill,
In the last two months GLD has apparently added 249 tonnes of gold. That means they took 68% of all global mine output! Somehow I don’t think this is possible. India typically imports about 25% of world gold mine output in a year so between just India and the GLD we are supposed to believe that almost all mine output is being taken up and yet gold can not make it through $1000/oz! What is wrong with this picture? What’s more the COMEX warehouse levels are completely static at 8.5 Mozs. They are a complete joke. Some days they report that somewhere between 0-500 ozs moved in or out of the warehouse (was this by Taxi cab?) but meanwhile back at the ranch two large identifiable buyers are taking delivery of nearly all the world’s gold mining output! From where? It should be noted that GLD has only been around for 4 years so their demand is relatively new. How can an entity go from zero to 68% of world mine supply and the gold price only appreciate on average 17% per annum? You don’t have to be a rocket scientist to know something is seriously wrong!

There are only two possible explanations: 1) GLD doesn’t have the gold they say they have without being encumbered in some way

2) The Central Banks are emptying their vaults surreptitiously at alarmingly high rates.

I tend to favor explanation number (1). What an efficient way to siphon off demand! In this way gold mine output can be "virtually" increased by 68%.

While we are on the subject in 2009 SLV has been accumulating silver at the rate of 35% of all global silver mine output! Yet silver is trading below the cost of production.

Many sing the praises of ETF’s as God’s gift to precious metals as it has allowed so much more institutional buying…I ponder what that much buying on the COMEX would have done to the PM prices. Madoff and Stansford funds seemed like great investor vehicles with stellar returns until the truth was revealed.

Wall Street is being revealed to be so utterly corrupt; are we to believe that the ETF’s are the only vehicles they invented that are totally corruption free? You only have to look at AIG that reported they lost 61B$ in a single quarter and they need 30B$ more from the government after having received 150B$ already. And yet Wall St. still calls this sham an insurance company!!! Hello! An insurance company is meant to have reserves out of which it can pay customer’s claims….how can such a capital black-hole be called an insurance company? If AIG can be called an insurance company then can you sleep at night knowing that Wall St calls GLD a gold backed ETF?

But Dennis Gartman says he has seen the gold in GLD so I guess that eliminates the need for an audit!

If anyone at GLD would like to e-mail me on how they purchase 68% of world mine supply without the price going nuts I would really like to hear it.
Cheers
Adrian