Is China going to make good on its recent threat to repudiate derivatives? Well, if you were going to make good on that threat, you would want to be sure that the counterparty was not holding on to your stash of bullion. Getting your thousand-year-old ducks in a row would probably include moving your gold out of London to Hong Kong.
Interesting. I’ve been having a running disagreement with some commenters at “zerohedge” over the structure of the SPDR GLD ETF. Some insist you’re just getting paper when you buy it, even though when you visit the GLD website, they actually show the gold bars in their vault, and provide a list of every bar, its source, its purity, etc.
When someone suggested that it didn’t matter if it was backed by physical gold, because if the US government confiscated gold as it did in the 30’s, your GLD shares would be worthless, I responded that’s probably why GLD’s bars are held in London, not NY. (Ironically, they are held in London by HSBC, which of course is the modern name of the Hong Kong and Shanghai Bank.)
Seems a prudent move on China’s part.
Kevin B
There have been several articles written on the GLD and SLV etf’s. The worst thing about them is that as stocks they can be shorted. When the shares are shorted there are two people who think they have a claim on the gold. In a commodity etf this is nothing less than counterfeiting.
In the event of a confiscation a cash settlement would be made.
I personally do not trust the gld or slv etf’s. They are after all managed by the same people who brought us the banking crisis.
http://www.zerohedge.com/sites/default/files/SilverETFs_1_PDF.pdf
Along the same lines … IE can we trust our governments with power over economy.
Not only is the question insane, look at the results.
Wait until they haul OUR gold out!
Uh, it’s $63 million in gold. Chump change.
“it’s also a signal that China no longer trusts Europe to manage its gold for it”
I wouldn’t trust the Eurowienies to manage a one man line-up for a two-hole outhouse!
As Canadians we do not need to worry about where we store our gold. We only have a total of about 100 million US. That’s about 3.5 tons. It would all fit in an armoured car.
There have been several articles written on the GLD and SLV etf’s. The worst thing about them is that as stocks they can be shorted. When the shares are shorted there are two people who think they have a claim on the gold.
Yes, and there are two counterparties – the GLD ETF, and the person who shorted the stock. Assuming the latter meets the margin requirements, both GLD holders should be satisfied. Remember, you can’t turn in your GLD shares for physical metal; you can only redeem them.
Some have suggested that “naked shorting” has been going on which I agree could lead to problems, but this is illegal. Not that that’s stopped them before, of course.
The news didn’t make major headlines, because it doesn’t deserve major headlines.
It’s a minor story which may be one small piece of a puzzle regarding the future of China’s relationship to US debt and the dollar’s fate.
Or may be an indication that Hong Kong has seen an opening for profits in the gold storage market, sensible given that Asia is traditionally an eager market for good old AU.
There is an old saying, “If you don’t HOLD the GOLD, you don’t OWN the GOLD”
In a world of ‘bait and switch’ investments, there is a lot of merit to having the metal within your reach.
Hey, Brendan. You really ought to hit my tip jar to pay for that advertising ….
have any of you held gold bullion in your hands?
crikey that stuff is heavy for its size.
thousand bucks per troy ounce as they say.
wtf Troy has to do with it no one is saying. unless it’s tied in to what the world economy is headed for the same fate.
incidentally, to anyone contemplating on the ‘hold the gold’ view this is of interest; at least relevance:
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/10/AR2007051001517.html
note the date. 1999. ten years ago and the moment the topic of gold holdings comes up my grey matter search engine comes up with this citation. man I’m good at remembering stuff. if only I could remember where I put my socks. LOL !!!
So…the good news is that you forgot where you buried your gold you can just use a geiger counter?