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Old 17th April 2011, 09:25 AM   #81
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I'm not a gold bug or hard currency buff, but do have a stash of silver coins from the Carter 1 era. This might match your $5 number, I don't recall the purchase price. Most of mine was bought when the signals of the current boom were obvious, about 2 years ago.

Well...obvious to those who had their eyes open...
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Old 17th April 2011, 12:05 PM   #82
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Oh dear, are you importing your invented trading history here too? Tsk tsk . . .



http://www.internationalskeptics.com...90#post7093390
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Old 17th April 2011, 02:38 PM   #83
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It is easy to say that silver is an awesome investment with a few years of hindsight, but historically it has not been special:






Those spikes are really nice, but like any investment you would have to know when they are going to happen. Of course, if you can see 5 years into the future, there are all kinds of ways to make money. If we are going to assume that we know exactly when to buy something, why not compare the 1981-2011 price of silver to the 1981-2011 price of Microsoft stock?

Without psychic powers, a person could "invest" in silver at the wrong time, and either lose tons of money or go for several decades with a completely flat return.
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Old 17th April 2011, 06:43 PM   #84
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Originally Posted by Francesca R View Post
Oh dear, are you importing your invented trading history here too? Tsk tsk . . .



http://www.internationalskeptics.com...90#post7093390
I get the distinct feeling that you are mad about something, so why not just out with it?

A diversified portfolio would include some commodies, and in the metals basket there would likely be some silver. Silver has long been considered a reasonable part of such a basket. So there is no invented trading history, except in your imagination. And I'll forgive the implied assertion that I have lied, because I understand you are very upset at my question:

How yer T bills from 2 years ago doing compared to my gold from 2 years ago?


I was just answering the question about silver, and in asking the question that obviously ticked you off, I was only trying to bring historical results into the conversation. Some people care about, you know, darn it, that, darn it again, REALITY?

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Old 18th April 2011, 12:13 AM   #85
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Originally Posted by michaelsuede View Post
I might be able to feed myself for a few days with a single pre-1946 dime.

Yeah, good luck handing any dime to a supermarket cashier and attempting to walk out with several weeks of food. Bonus points if you make a video of yourself trying to convince her that your dime is anything more than ten cents.
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Old 18th April 2011, 12:18 AM   #86
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Originally Posted by Checkmite View Post
Yeah, good luck handing any dime to a supermarket cashier and attempting to walk out with several weeks of food. Bonus points if you make a video of yourself trying to convince her that your dime is anything more than ten cents.
He might even make some money. I would pay to watch that, as the "silly home video" type of stuff, like "dad get football in crotch".
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Old 18th April 2011, 12:33 AM   #87
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Originally Posted by mhaze View Post
[ . . . ]
Response
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Old 18th April 2011, 01:39 AM   #88
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Originally Posted by ConspicuousCarl View Post
It is easy to say that silver is an awesome investment with a few years of hindsight, but historically it has not been special:
But can't you see what a great hedge against inflation it has been?!?
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Old 18th April 2011, 06:25 AM   #89
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This caught my eye today, I think it's relevant (Francesca R can tell me if it's not), about derivative trading in commodities.

Quote:
The products have enticed investors into the soaring commodities markets, allowing them to enjoy huge returns from the rising cost of oil, gold and silver in recent years.

The Financial Stability Board, which was created in the aftermath of the financial crisis to monitor financial transactions, said the rapid growth of exchange traded funds (ETFs) into a $1,200bn (£735bn) business was unnervingly like the derivatives market in sub-prime mortgages before the credit crunch in 2007.

Mario Draghi, the chairman of the FSB, said ETFs had all the hallmarks of a bubble waiting to burst and needed close monitoring by international regulators.
...
The recent rise in the gold price has been underpinned by investors buying ETFs.
I guess that the same applies to silver to some extent, too.
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Old 18th April 2011, 06:55 AM   #90
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ETFs are pretty much derivatives in the sense that they allow investors to create net short positions. That means total long positions in any ETF (such as GLD and SLV which are the best known precious metal ones) can be larger than the underlying supply, and that if you have a long in one of these ETFs, you don't actually own any underlying gold or silver--but rather--you own the liability of someone else who is short, and who has essentially borrowed the commodity and sold it.

Total synthetic longs plus total synthetic shorts plus underlying holdings must match off to zero though. It is not the case that you can have more long positions than short positions at any time.

However that is the reality with every derivatives market where there are net shorts and is not peculiar to ETFs. It is a problem that some less sophisticated investors probably think that an ETF is a physical asset. It isn't, and it is rarely accepted as security/margin/collateral for any liability itself.

Scary story from last year. Response 1. Response 2.

No anti-fractional banking, anti-central-bank-monetary-policymaking, gold standard enthusiast--of course--could ever invest in GLD or SLV and keep a straight face, since they would be indulging in the "synthetic" creation of gold or silver, which is exactly what they are calling for to be criminalised in the case of money.

Moreover, beyond the extreme hypocrisy of that, they would be revealing quite aptly why a gold standard (or any commodity standard) would not change the behaviour of financial agents one iota, by itself.

(Assuming they thought about it )

Last edited by Francesca R; 18th April 2011 at 07:06 AM.
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Old 18th April 2011, 08:41 AM   #91
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Originally Posted by Francesca R View Post
ETFs are pretty much derivatives in the sense that they allow investors to create net short positions. That means total long positions in any ETF (such as GLD and SLV which are the best known precious metal ones) can be larger than the underlying supply, and that if you have a long in one of these ETFs, you don't actually own any underlying gold or silver--but rather--you own the liability of someone else who is short, and who has essentially borrowed the commodity and sold it. ....
I pretty much agree with this and my comment would be not that these ETFs have not done well in recently...they have done well... but now is a good time to move out of them.

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Old 18th April 2011, 05:55 PM   #92
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Originally Posted by Checkmite View Post
Yeah, good luck handing any dime to a supermarket cashier and attempting to walk out with several weeks of food. Bonus points if you make a video of yourself trying to convince her that your dime is anything more than ten cents.

Gee, is that what they did in Brazil or Argentina (or Germany or Zimbabwe or others for that matter)?

No, they had middlemen who traded such commodities with both hard and soft currencies as people needed them.
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Old 18th April 2011, 08:03 PM   #93
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There's nothing wrong with ETF's per se it's just that if you buy GLD you aren't buying the exact same thing as physical gold and that needs to be understand.

I own all kinds of ETF's and some CEF's as well. I don't see a problem, just make sure you know what you're actually investing in.
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Old 19th April 2011, 07:15 AM   #94
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43.38 yesterday

still over 43 today.

Last edited by michaelsuede; 19th April 2011 at 07:32 AM.
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Old 19th April 2011, 07:34 AM   #95
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Originally Posted by NewtonTrino View Post
There's nothing wrong with ETF's per se it's just that if you buy GLD you aren't buying the exact same thing as physical gold and that needs to be understand.

I own all kinds of ETF's and some CEF's as well. I don't see a problem, just make sure you know what you're actually investing in.
Ah....wrong.....

Look at the capitalization of GLD. Where did the money go?

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Old 19th April 2011, 09:40 AM   #96
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Originally Posted by mhaze View Post
Ah....wrong.....

Look at the capitalization of GLD. Where did the money go?

I trust the ETFs about as far as I can throw them.

Since my building throwing skills are poor, I can't throw them very far.
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Old 19th April 2011, 10:00 AM   #97
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GLD doesn't have a large amount of short positions. According to indexuniverse the short interest was -4.8% of the shares outstanding in Feb 2011. It could be larger, if more ETF investors wanted to short it, but it isn't because they haven't. (Compare Spider's S&P Retail Select ETF, Ticker XRT, for an example where the net asset value is a very small fraction of the total longs and shorts)

Nonetheless, it is the case that any ETF that allows shorting (which is not naked shorting since the stock has to be borrowed first and collateral has to be posted) can have long positions and short positions that are greater than the underlying assets in the trust. (The same is true for individual stocks and bonds.)

To repeat, nobody who is opposed to fractional reserve banking or central bank management of the money supply should trade ETFs, because their position would be internally inconsistent with their ideology.

They should also be petrified of serial runs on ETFs destroying their market value, as Andrew Bogan was in the article that produced a swathe of rebuttals last year (Another rebuttal here)
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Old 19th April 2011, 10:13 AM   #98
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Originally Posted by Francesca R View Post
GLD doesn't have a large amount of short positions. According to indexuniverse the short interest was -4.8% of the shares outstanding in Feb 2011. It could be larger, if more ETF investors wanted to short it, but it isn't because they haven't. (Compare Spider's S&P Retail Select ETF, Ticker XRT, for an example where the net asset value is a very small fraction of the total longs and shorts)

Nonetheless, it is the case that any ETF that allows shorting (which is not naked shorting since the stock has to be borrowed first and collateral has to be posted) can have long positions and short positions that are greater than the underlying assets in the trust. (The same is true for individual stocks and bonds.)

To repeat, nobody who is opposed to fractional reserve banking or central bank management of the money supply should trade ETFs, because their position would be internally inconsistent with their ideology.

They should also be petrified of serial runs on ETFs destroying their market value, as Andrew Bogan was in the article that produced a swathe of rebuttals last year (Another rebuttal here)
Good lord, you made a post I agree with.

Indeed, everyone who actually wants to hedge against the Fed's insanity should take physical delivery and keep the metal themselves on their own property.

Preferably in a hidden bunker out in the desert.

As we saw once before in our nation's history, when gold gets high enough, the federal government will send its armed goons out to steal it from the citizenry.
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Old 19th April 2011, 10:37 AM   #99
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You seem to be getting a decent wi-fi signal in that bunker
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Old 19th April 2011, 12:47 PM   #100
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Originally Posted by mhaze View Post
Ah....wrong.....

Look at the capitalization of GLD. Where did the money go?

Again, there is no issue there. You just have to understand that you are actually buying. Also there are plenty of index ETF's and other types of ETF's that aren't setup the same way that GLD is. ETF's in general are very useful.
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Old 19th April 2011, 12:49 PM   #101
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Originally Posted by NewtonTrino View Post
Again, there is no issue there. You just have to understand that you are actually buying. Also there are plenty of index ETF's and other types of ETF's that aren't setup the same way that GLD is. ETF's in general are very useful.
Yeah, useful at making suckers out of people.
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Old 19th April 2011, 12:51 PM   #102
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Why would one, having hit upon a foolproof investment scheme in metals, announce said scheme to the world? It seems... counterproductive.

Unless one were intending to drive the price of said commodities higher by convincing others to invest. In which case the announcement of such a foolproof scheme is simply marketing intending to inflate the value of your holdings by convincing other people to invest.
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Old 19th April 2011, 01:00 PM   #103
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Originally Posted by Aoidoi View Post
Why would one, having hit upon a foolproof investment scheme in metals, announce said scheme to the world? It seems... counterproductive.
Not necessarily. Maybe it's different this time: This time you can really get rich by copying what everyone else is doing. It almost worked 11 years ago, and we can safely assume things will go better now.
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Old 19th April 2011, 01:01 PM   #104
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Originally Posted by Aoidoi View Post
Why would one, having hit upon a foolproof investment scheme in metals, announce said scheme to the world? It seems... counterproductive.

Unless one were intending to drive the price of said commodities higher by convincing others to invest. In which case the announcement of such a foolproof scheme is simply marketing intending to inflate the value of your holdings by convincing other people to invest.
Perhaps its because I don't like to watch a society collapse like Zimbabwe?

Contrary to popular belief, there are still many people in society who value human life and freedom.

Nothing would make me happier than to lose my ass on my silver holdings. Because the only way that will happen is if the Fed and Congress start acting like adults.

Since it can be pretty much assumed that the Fed and Congress will never act like adults, we know historically that precious metals will become the only method of wealth storage.

Last edited by michaelsuede; 19th April 2011 at 01:03 PM.
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Old 19th April 2011, 01:02 PM   #105
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Originally Posted by michaelsuede View Post
Yeah, useful at making suckers out of people.
So just to be clear in your head *ALL* ETF's are for suckers?

If that's actually your opinion then we really have nothing further to discuss and I'll simply add you to my (empty) ignore list.
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Old 19th April 2011, 01:12 PM   #106
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Originally Posted by michaelsuede View Post
Perhaps its because I don't like to watch a society collapse like Zimbabwe?

Contrary to popular belief, there are still many people in society who value human life and freedom.

Nothing would make me happier than to lose my ass on my silver holdings. Because the only way that will happen is if the Fed and Congress start acting like adults.

Since it can be pretty much assumed that the Fed and Congress will never act like adults, we know historically that precious metals will become the only method of wealth storage.
Ah, it's a public service announcement. You are simply behaving altruistically while arguing with complete strangers on the internet about your investment strategy. How silly of me not to realize.
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Old 19th April 2011, 01:20 PM   #107
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Originally Posted by Aoidoi View Post
Ah, it's a public service announcement. You are simply behaving altruistically while arguing with complete strangers on the internet about your investment strategy. How silly of me not to realize.
Pretty much.

I'd rather have my money invested in something productive, like agriculture or industrial production.

Unfortunately, because government has so grossly distorted those markets, the only safe place left is precious metals.

During a hyper-inflationary scenario, commodities always outperform equities.

Further, during a currency failure, metals become the de facto currency.

Last edited by michaelsuede; 19th April 2011 at 01:22 PM.
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Old 19th April 2011, 01:26 PM   #108
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Originally Posted by michaelsuede View Post
Further, during a currency failure, metals become the de facto currency.
And we know this, because ... ?
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Old 19th April 2011, 01:40 PM   #109
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Originally Posted by timhau View Post
And we know this, because ... ?
http://www.youtube.com/watch?v=7ubJp6rmUYM
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Old 19th April 2011, 01:44 PM   #110
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silver broke 44 today.

Let's see.

10% gain in 10 days

Last edited by michaelsuede; 19th April 2011 at 01:46 PM.
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Old 19th April 2011, 04:26 PM   #111
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Originally Posted by NewtonTrino View Post
Again, there is no issue there. You just have to understand that you are actually buying. Also there are plenty of index ETF's and other types of ETF's that aren't setup the same way that GLD is. ETF's in general are very useful.
Nice, you start by not answering the question, then reframe the question, then misdirect, then generalize.

No...wait....
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Old 20th April 2011, 02:01 AM   #112
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Originally Posted by michaelsuede View Post
silver broke 44 today.

Let's see.

10% gain in 10 days
Over 300% in a year?
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Old 20th April 2011, 07:19 AM   #113
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Originally Posted by NewtonTrino View Post
So just to be clear in your head *ALL* ETF's are for suckers?
Originally Posted by michaelsuede View Post
Pretty much.
I should perhaps have held off outlining why it was internally inconsistent for goldbugs to trade ETFs because I'm not convinced anyone of that persuasion actually knew.

Originally Posted by michaelsuede View Post
I'd rather have my money invested in something productive, like agriculture or industrial production.
I am wondering exactly what would be safe for you to invest in given your strictures about synthetic asset creation. Certainly you shouldn't hold shares or bonds, in anything. Currency trades are a no-no. Real estate was corrupted by REITS even before derivatives came along. Infrastructure is a government program (Hell, no!).

I think you are limited to farmland (avoid buildings) and commodities for which you've taken delivery. Everything else is susceptible to synthetic longs and shorts and the creation of asset and liability value out of thin air.

But wait a minute: Just because you might hold actual gold or silver, its price is still surely corrupted (per your taxonomy) by the presence of derivatives investors: borrowing it to sell it, or lending amounts that they don't have, and creating obligations out of thin air (Ponzi scheme according to yourself, I believe). On what basis should silver or gold act as a store of value (to you) given this?

And if you just believe that it just is, then what's the reason not to apply the same logic to currency? Or ETFs? Or any instrument?

So . . . . what's the logic again?
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Old 20th April 2011, 07:54 AM   #114
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Originally Posted by Francesca R View Post
I should perhaps have held off outlining why it was internally inconsistent for goldbugs to trade ETFs because I'm not convinced anyone of that persuasion actually knew.

I am wondering exactly what would be safe for you to invest in given your strictures about synthetic asset creation. Certainly you shouldn't hold shares or bonds, in anything. Currency trades are a no-no. Real estate was corrupted by REITS even before derivatives came along. Infrastructure is a government program (Hell, no!).

I think you are limited to farmland (avoid buildings) and commodities for which you've taken delivery. Everything else is susceptible to synthetic longs and shorts and the creation of asset and liability value out of thin air.

But wait a minute: Just because you might hold actual gold or silver, its price is still surely corrupted (per your taxonomy) by the presence of derivatives investors: borrowing it to sell it, or lending amounts that they don't have, and creating obligations out of thin air (Ponzi scheme according to yourself, I believe). On what basis should silver or gold act as a store of value (to you) given this?

And if you just believe that it just is, then what's the reason not to apply the same logic to currency? Or ETFs? Or any instrument?

So . . . . what's the logic again?
There is nothing inherently wrong with private debt products or shares of ownership.

There is everything wrong with fraud.

If people are clearly informed about what the product represents then there is no fraud. But I am sure that 99% of people buying the metals ETFs have no idea what they are getting into.

The SLV ETF for example automatically puts any silver purchased by one investor back into an inventory pool where another investor can buy that same piece of silver.

Jeff Nielson explains the inventory fraud in a nice article here:
http://www.gold-eagle.com/editorials...son070110.html

More info in this recent video by The Weekly Telegram:
http://www.youtube.com/watch?v=_-dBQd16cvg

1. The SLV ETF may not be redeemable in an “emergency” (such as a currency crisis, market crash, terrorist attack).

2. NO ONE IS RESPONSIBLE for the quality/purity of the silver held by the trust.

3. If someone owns 75% of SLV, they can terminate the trust (if government or a hedge fund bought up the SLV they could terminate it).

4. If the SEC determines the trust is an investment company, they can terminate the trust.

5. If the CFTC determines the SLV is a commodity pool, they can terminate the trust.

6. If you want to get your physical silver out of the trust, they can require you to first pay taxes on your holdings before you can get your physical silver out of the trust. So this means if you made a tremendous profit, you have to cough up the tax dough on your own, without being able to sell the silver to get money to pay the taxes.

Last edited by michaelsuede; 20th April 2011 at 08:22 AM.
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Old 20th April 2011, 08:04 AM   #115
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silver just broke 45 today.

40 to 45 in 11 days.

Last edited by michaelsuede; 20th April 2011 at 08:32 AM.
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Old 20th April 2011, 08:36 AM   #116
lomiller
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Originally Posted by michaelsuede View Post
There is nothing inherently wrong with private debt products or shares of ownership.

There is everything wrong with fraud.

If people are clearly informed about what the product represents then there is no fraud. But I am sure that 99% of people buying the metals ETFs have no idea what they are getting into.
.
If you don’t understand the what you are buying you shouldn’t play. This is true even in a market that has strong regulation to protect buyers. I find it ironic that someone like yourself who advocates complete deregulation would complain that current regulation is insufficient.
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Old 20th April 2011, 08:43 AM   #117
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Originally Posted by lomiller View Post
If you don’t understand the what you are buying you shouldn’t play. This is true even in a market that has strong regulation to protect buyers. I find it ironic that someone like yourself who advocates complete deregulation would complain that current regulation is insufficient.
Deregulation would solve the problem of products like the SLV.

1. People assume the SEC and CFTC have done the vetting for them.

2. People assume the government will bail them out if there is a problem.

3. People assume the banks which manage the trust are covered by the FDIC and are regulated by the SEC which audits the trust.

Those assumptions are obviously wrong.

In a real free market, the SLV might still exist as a fraudulent entity, but it would only be filled with participants who understood the risks involved. The very existence of the SEC encourages participation is high risk products like the SLV by people who don't know any better.

I never said the SLV and similar products should be banned, I said they were junk high risk products. There is a difference between hating the fraud and wanting something banned by the State.

The State has no business regulating the markets at all.

Last edited by michaelsuede; 20th April 2011 at 08:45 AM.
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Old 20th April 2011, 09:38 AM   #118
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Speaking of SLV:

SLV Is Now "Hard To Borrow" At Goldman

Quote:
And now for the latest news in the silver meltup: SLV just moved to Hard To Borrow status at Goldman Sachs. This pertains to institutionals who are Goldman Prime Broker clients. Soon coming to every prime broker near you. Comex margin hike imminent now that it is impossible to short the largest silver ETF in the world.
Praise Mao, and may SLV reign supreme 4eva
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Old 20th April 2011, 10:14 AM   #119
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Originally Posted by michaelsuede View Post
silver just broke 45 today.
Originally Posted by michaelsuede View Post
I never said the SLV and similar products should be banned, I said they were junk high risk products. There is a difference between hating the fraud [ . . . ]
How do you reconcile "junk high risk products" containing "fraud" with "silver just broke 45 today."?

Since SLV is pegged to the physical price (check it), how can one (the price) be fine with you if the other (the ETF price) is not? And if the ETF price is fine too, what's exactly wrong with it?

Bear in mind that people long of it hardly want the physical metal; they want a price gain.
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Old 20th April 2011, 10:16 AM   #120
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Originally Posted by michaelsuede View Post
Deregulation would solve the problem of products like the SLV.

1. People assume the SEC and CFTC have done the vetting for them.

2. People assume the government will bail them out if there is a problem.

3. People assume the banks which manage the trust are covered by the FDIC and are regulated by the SEC which audits the trust.

Those assumptions are obviously wrong.
Why would anyone assume anything in their investing?

At the very least an investor should be paying for advice if they don’t fully understand the investment themselves, but as we have seen that doesn’t work when the company selling the advice can make a profit selling bad advice. At the end of the day if you invest your money you need to take some personal responsibility for it, why do you object to this?
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