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XMFSinchiruna (27.75)

Questions for GATA Chairman Bill Murphy?

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April 14, 2010 – Comments (22)

Hi Fools.

In light of this ongoing spate of developments in the public record corpus of evidence regarding price suppression and leverage in the gold (and silver) market, I have arranged an interview for this afternoon with GATA Chairman and co-founder Bill Murphy.

Now that you've read my two articles on the topic (linked below), and reviewed some of the supporting evidence referenced within this prior blog post, I wonder whether you might have any specific questions that you would like me to ask on your behalf. Bill is in a position to hold inside his head about as much knowledge of these issues as one person could hope to amass, so if you have unanswered questions about this topic swirling around your head, now would be the time to ask. :)

I won't promise to ask every you may collectively suggest, but I will pledge to pick as many of the most poignant ones and pose them to him.

Thanks in advance for your thoughtful questions. You have until 4pm EST. :) (Sorry I didn;t leave more time).

Sinch

Here is article #1

And here is article #2

 

22 Comments – Post Your Own

#1) On April 14, 2010 at 3:26 PM, XMFSinchiruna (27.75) wrote:

Come on guys ... 35 minutes remaining to get your questions in. :)

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#2) On April 14, 2010 at 3:35 PM, AvianFlu (39.88) wrote:

Sinch:

I would like him to speculate as to what the motivations are for manipulation of the metals markets. There is a reason for everything.

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#3) On April 14, 2010 at 3:39 PM, XMFSinchiruna (27.75) wrote:

That's a big can do... thanks for getting the ball rolling Avian.

Who's next?

 

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#4) On April 14, 2010 at 3:51 PM, XMFSinchiruna (27.75) wrote:

10 minutes left ... sorry again that my time is so short.

Questions?

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#5) On April 14, 2010 at 3:52 PM, Starfirenv (< 20) wrote:

Strongman-
 It would be interesting to hear his thoughts/concerns about another round of confiscation. Regards.

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#6) On April 14, 2010 at 3:53 PM, fndr489 (82.22) wrote:

With a view to the long-long term, if the manipulation stops and gold/silver prices are allowed to rise, what does Mr. Murphy think about the government possibly confiscating the physical bullion to balance the budget a la FDR?

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#7) On April 14, 2010 at 3:58 PM, XMFSinchiruna (27.75) wrote:

I love it ... the fact that two Fools asked it simultaneously means it must be asked. :)

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#8) On April 14, 2010 at 4:00 PM, XMFSinchiruna (27.75) wrote:

Although I'll be on the phone with him at 4, feel free to keep the questions coming until at least 4:30. I have my blog up live and can see your questions as they come in.

Thanks again for the questions already posed, and for those still forthcoming.

I'm off to call...

Sinch

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#9) On April 14, 2010 at 4:18 PM, outoffocus (22.80) wrote:

Dangit my question didnt make it. Oh well.

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#10) On April 14, 2010 at 4:23 PM, Starfirenv (< 20) wrote:

Thoughts on the $ long term, our Reserve currency status and the notion of AmeroDollars or other concerns he may have.

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#11) On April 14, 2010 at 4:25 PM, fndr489 (82.22) wrote:

Thank you Sinch!  I do apologize for forgetting to say that in my prior post.

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#12) On April 14, 2010 at 4:54 PM, XMFSinchiruna (27.75) wrote:

Wow ... just wow.

AvianFlu,

In a word ... interest rates. If you can reduce the appearance of inflation by suppressing the price of gold (which in a free market would be the only real reference point for inflation), then you can keep interest rates articificially low and thereby spur excess growth despite the obvious risks. I'm paraphrasing here, but that was the response.

Starfire and fndr489, you both asked about confiscation. He doesn't consider this likely. He suggested that America is a very different place today, and that our currency is in a very different state than it was then. He also mentioned China, Russia, and india in this context, and suggested they would laugh at such a measure given the state of the dollar. This would make the prices go "beserk".

Starfire, our discussion got a little sidetracked after I asked him your question about the dollar, so unfortunately we didn't get specifically into the Reserve currency status issue nor any mention of the Amero. He had a lot to say about the dollar, though, which you will see in this upcoming or forthcoming articles.

Thanks to all of you for taking part!

 

Sinch

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#13) On April 14, 2010 at 5:20 PM, ahobbs (24.79) wrote:

Since I missed the submission deadline, perhaps you can answer my question, Sinchi.  Is it possible for an investor in GLD or SLV to actually exchange shares for physical bullion?  Is the actual exchange possible, or is the lack of physical backing just academic?

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#14) On April 14, 2010 at 5:24 PM, ChrisGraley (29.77) wrote:

A big Charlie Brown Ugggh!

I wish I would have caught this in time.

 

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#15) On April 14, 2010 at 6:00 PM, megalong (< 20) wrote:

"gold (which in a free market would be the only real reference point for inflation)"

...

Come on, this is just silly.

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#16) On April 14, 2010 at 6:04 PM, XMFSinchiruna (27.75) wrote:

ahobbs

You have to be a VERY large investor in order to effect a physical transcation with GLD or SLV.

Each ETF defines as basket, which is the smallest unit of measurement they work in for physical transcations. If you own a basket's worth of GLD, then you can request bullion and arrange to have it delivered for a fee. I forget the specific basket sizes for these funds, butif someone wants to check the prospectuses and report back here, I'm sure many would be curious.

Someone the other day asked why a George Soros would invest in GLD if all of these concerns about encumbered hldings were well founded. I believe this is because buyers of scale know what they are first in line for whatever physical is able to be procured when the market finally subjects these vehicles to greater scrutiny.

ChrisGraley,

Not to worry ... I have a feeling your questions will have been answered within the content of our conversation ... which will be out in a forthcoming article.

In the meantime ... anyone here who has not recommended the last feature article, please take a moment to do so ... it is essential that demonstrable demand for these articles remains strong so that I can continue to focus on this important topic. Please help me to increase its circulation by posting it where you can and sharing it with family and friends.

Thanks in advance!!

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#17) On April 14, 2010 at 6:05 PM, XMFSinchiruna (27.75) wrote:

megalong

oh?

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#18) On April 14, 2010 at 6:20 PM, ahobbs (24.79) wrote:

Just looked at the prospectus of GLD and SLV and found:

A basket of GLD is 100,000 shares (or $11.3 million at today's close of approximately $113).  The website claims to have 1,141.04 tonnes of gold in trust at a NAV of $113.15 per share.

A basket of SLV is 50,000 shares (or $903,500 at today's close of $18.07).  The website claimes to have 9,025.78 tonnes in trust at a NAV of $18.03 per share.

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#19) On April 14, 2010 at 6:21 PM, ChrisGraley (29.77) wrote:

I look forward to it Sinch.

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#20) On April 14, 2010 at 6:37 PM, XMFSinchiruna (27.75) wrote:

ahobbs

Thanks so much for reporting back. Those are important points for us to reference here.

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#21) On April 14, 2010 at 7:39 PM, ahobbs (24.79) wrote:

So, I’m confused.  Are you saying that the bullion that GLD and SLV claim to have in trust is not actually there?  Or that the bullion that is there is encumbered by futures contracts, or something?

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#22) On April 14, 2010 at 7:52 PM, XMFSinchiruna (27.75) wrote:

ahobbs

I am not saying either way whether the metal is there or not in those specific cases. I have not been inside the vault, so I can not say anything on that matter with certainty.

What I can and do say is that I find it unseemly that the very same bullion banks that are implicated in maintaining huge, concentrated, manipulative short positions on the COMEX through a kind of gold carry trade that also has the effect of suppressing prices are also the very same banks entrusted to vouch for the quantity, state, and content of holdings presumed to be held in trust for the ETFs.

To run an effective shell game in paper gold and silver, you need a physical supply as the basis of your activities. I am suggesting the possibility that ETF holdings are encumbered through the origination of derivatives that permit holdings to serve multiple purposes at once. If they are leveraging gold 100:1 the way Jeffrey Christian divulged, then this could mean that a given bar in the vault has been sold, leased, or otherwise slapped with a ledger-entry claim against it many many times over. Then, in typical banker fashion, the magic of fractional reserve methods to maintain a semblance of full backing would be intended to prevent excessive demands for physical delivery to prompt a breaking of the scheme.

It's complicated, but that's about as succintly as I can express the potential framework for collusion between ETF holdings and additional market activity by custodians that may be based in part upon whatever supply of bullion is there.

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