mamboni
19th April 2010, 08:14 PM
Has The iShares Gold ETF (IAU) Been Covertly Depleted Of 90% Of Its Physical Holdings, With Banks Like JPM And Goldman Pocketing The Actual Gold?
Submitted by Tyler Durden on 04/09/2010
A few days ago we presented an interview of Harvey and Lenny Organ with King World News, in which the Organs recounted their personal visit to Canada's only bullion bank vault - ScotiaMocatta. According to them, the vault contained roughly 89,000 ounces of gold, in the form of "210 400 oz bars, 4,000 maples, 500 eagles, 10 kilo bars, 10 one kilogram pieces of gold nugget form." As GATA's Adrian Douglas confirmed, this was equivalent to about $100 million at today's gold price. Yet what we find perplexing is the disclosed gold holdings of the iShares Gold Trust, also known as IAU. According to the NYMEX Daily Report the Gold Stock data for the IAU is as follows:
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/paulson/IAU%20ScotiaMocatta.jpg
Key Excerpt:
So now we go back to the matter of the slight discrepancy between what IAU discloses is held in ScotiaMocatta and what, according to the Organs, is actually held there. In a high aggressive case, in which we assume that at least half the gold in the vault is the property of the iShares ETF, that would mean that 44.5k ounces are deliverable to IAU holders at any given moment. Yet according to the COMEX the IAU has 457,172.6 ounces deposited in the vault: a 10-to-1 dilution. Should one continue this line of thought and extrapolate a comparable dilution of IAU holdings in all the other vaults, it would appear that instead of holding just under 2.5 million TOz of gold, the ETF only has access to one-tenth of this amount, or just under 250k troy ounces. What this also means is that total net assets of the fund at nor $2.9 billion as disclosed, but more like $290 million, and that in the spirit of Fractional Reserve Robbery and Dilution, each and every holder of the IAU really has asset coverage of just 10%. Should there be a full physical delivery demand by every single holder, the result would be the unpleasant discovery that in this ETF alone all the holders have been forcefully "diluted." And where did the extra physical bars go? We do not know, but the phrase Authorized Participants (including JPM and Goldman) comes to mind. Are precious metal ETFs nothing more than a perfectly legal way for the big banks to transfer paper in exchange for actual physical gold holdings? Have the big banks already defrauded the IAU (and, quite possibly the GLD and SLV) ETF by 90%? Is this the greatest precious metal robbery ever conducted, all before the wide open eyes of the CFTC and other regulators, even as actual holders are blissfully unaware that by holding such ETFs they have nothing more than access to some pretty pieces of paper (which even are not their property, but, when push comes to shove, that of the DTCC).
When the dilution is complete, and when ScotiaMocatta is empty of all gold, perhaps then finally the great wealth transfer process will finally be done, as at that point fiat currency can finally be debased- after all the morts will have access to exactly zero physical when they demand it. It will all have long been pocketed by the Authorized Participants of the world.
Complete article at: http://www.zerohedge.com/article/has-ishares-gold-etf-iau-been-covertly-depleted-90-its-physical-holdings-banks-jpm-and-goldm
Submitted by Tyler Durden on 04/09/2010
A few days ago we presented an interview of Harvey and Lenny Organ with King World News, in which the Organs recounted their personal visit to Canada's only bullion bank vault - ScotiaMocatta. According to them, the vault contained roughly 89,000 ounces of gold, in the form of "210 400 oz bars, 4,000 maples, 500 eagles, 10 kilo bars, 10 one kilogram pieces of gold nugget form." As GATA's Adrian Douglas confirmed, this was equivalent to about $100 million at today's gold price. Yet what we find perplexing is the disclosed gold holdings of the iShares Gold Trust, also known as IAU. According to the NYMEX Daily Report the Gold Stock data for the IAU is as follows:
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/paulson/IAU%20ScotiaMocatta.jpg
Key Excerpt:
So now we go back to the matter of the slight discrepancy between what IAU discloses is held in ScotiaMocatta and what, according to the Organs, is actually held there. In a high aggressive case, in which we assume that at least half the gold in the vault is the property of the iShares ETF, that would mean that 44.5k ounces are deliverable to IAU holders at any given moment. Yet according to the COMEX the IAU has 457,172.6 ounces deposited in the vault: a 10-to-1 dilution. Should one continue this line of thought and extrapolate a comparable dilution of IAU holdings in all the other vaults, it would appear that instead of holding just under 2.5 million TOz of gold, the ETF only has access to one-tenth of this amount, or just under 250k troy ounces. What this also means is that total net assets of the fund at nor $2.9 billion as disclosed, but more like $290 million, and that in the spirit of Fractional Reserve Robbery and Dilution, each and every holder of the IAU really has asset coverage of just 10%. Should there be a full physical delivery demand by every single holder, the result would be the unpleasant discovery that in this ETF alone all the holders have been forcefully "diluted." And where did the extra physical bars go? We do not know, but the phrase Authorized Participants (including JPM and Goldman) comes to mind. Are precious metal ETFs nothing more than a perfectly legal way for the big banks to transfer paper in exchange for actual physical gold holdings? Have the big banks already defrauded the IAU (and, quite possibly the GLD and SLV) ETF by 90%? Is this the greatest precious metal robbery ever conducted, all before the wide open eyes of the CFTC and other regulators, even as actual holders are blissfully unaware that by holding such ETFs they have nothing more than access to some pretty pieces of paper (which even are not their property, but, when push comes to shove, that of the DTCC).
When the dilution is complete, and when ScotiaMocatta is empty of all gold, perhaps then finally the great wealth transfer process will finally be done, as at that point fiat currency can finally be debased- after all the morts will have access to exactly zero physical when they demand it. It will all have long been pocketed by the Authorized Participants of the world.
Complete article at: http://www.zerohedge.com/article/has-ishares-gold-etf-iau-been-covertly-depleted-90-its-physical-holdings-banks-jpm-and-goldm