I take your point about the ETF’s being convenient to nip in an out of for some of these big players. Also if George, Warren and Gerald loose a few million dollars here and there I guess it won’t break them; however, in regard to people like myself and maybe many reading these threads it may be a different matter.
If you are going to use a margin loan to leverage up you gold investments then I guess the ETF’s such as the ASX GOLD are useful. When GOLD first listed I did along with a margin loan use it and wrote to the mangers for clarification on taking possession of your gold if you wished to do so, apparently you could take the gold in large bars in London. I recall passing this information to a Mr Bill Buckler up in Noosa and he replied with a very poignant question: “Did I know personally of anyone successfully doing exactly that?” I had actually done very well with GOLD as the margin loan allowed me to hold twice as much stock as I otherwise would have been able to.
I guess the point I wish to make is that if people here don’t need to take risks then why do it by trusting others with your gold investments. Physical gold in one’s own possession and there are plenty of safe storage methods around would be to me at least, the most favourable option. A recent foray into Intrepid Gold (IAU) and its current sovereign risk fiasco has done little to restore my faith in my fellow man either!
You linked an article the other day about the CME accepting physical gold against options trading positions, I debated without answer with Timber on this, and do you happen to see the two custodians chosen by the CME to hold the physical gold. Talk about the fox guarding the hen house!
Like Skol and no doubt many others I am aware of some real horror stories about the effects of the last few years I know of a few acquaintances that have lost everything including their family homes and business.
You also picked up that very telling quote from that ABC Australian shonky mortgage loans story:
“If you can’t trust your bank manager who can you trust?”
People can tell me I am wrong to hold gold until they are Virgin Blue in the face but for now I will continue to buy and hold physical gold outside of the traditional banking system.
Sometime in the future I will sell the gold and move into other investments and the time to do this will be clearly signalled to me and also all of you.
The trigger will be: When the money printing out of fresh air stops and all the letters of the alphabet have been used up on names for the various system repair plans. Central banks and governments let the very people that should have taken the punishment in the first place, actually take their punishment and maybe even jail or hang a few of the worst ones. We read about real productive jobs being created and unemployment figures falling. Real earnings start rising along with living standards, food stamps and soup kitchens are relegated to history and we see interest rates back around a fair level 10% or so!
Until then the trick is to be prepared stay healthy and enjoy every day as best we can. You don’t need a fortune to enjoy yourself either. I had a very pleasant Saturday afternoon yesterday for 20 Euros I had a bowl of calamari, 2-3 cold beers and watched the girls play volley ball on a beach with what I must say was a very liberal view on the dress code!
