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    • Wed, Sep 28, 2011 - 03:11am

      #16

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      SailAway wrote:  Jim, I

    [quote=SailAway]

     

    Jim,

    I think I understand now what’s going on with the discount price on CEF. On their WEB site, Central Fund of Canada uses the London Gold and Silver fixing to calculate the NAV. The fix is done at 3PM London Time (10AM ET) but they use the closing market price (4PM ET) to calculate the premium/discount. 

    So on Friday they showed -1.3% discount and today they show a premium of +8.6%. But if you use gold & silver October Comex price at 4PM then you find that the premium on Friday was ~+3.2% and today ~+4% which makes more sense.

    So there is no negative to NAV trading for CEF, it’s just that they don’t use consistent data to do the math…

     

    [/quote]

    SailAway —

    Seems to me CEF is being consistent with its data…just using London consistently rather than Comex.  If they always calc NAV on the London fixing, then buyers/sellers will always be paying a premium or getting discount relative to that exchange. It may not be timely from a US point of view, but it is consistent.  Here’s a link to some Nuveen research on CEF’s premium/discount history.

    http://www.cefconnect.com/(X(1)S(jgzu1045wlcvka55zrli2f45))/Details/Summary.aspx?ticker=CEF&AspxAutoDetectCookieSupport=1

    Perhaps their attachement to London has something to do with CEF’s history dating back to the early 1960s.  Would that have been the dominant PM exchange at that time?

    If fixing prices is an issue now, imagine what it will be like once China’s new gold exchange gets established.

    BTW, I really like your moniker.  I’m a sailor myself, and always look forward to time away from land.

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    • Thu, Sep 22, 2011 - 07:30pm

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      Great post

    Thanks for a great post, Travlin.

    I like CEF for all the reasons you mentioned plus these: very long track record with stable management, provides a mix of gold and silver bullion holdings, offers the chance to buy at a discount to spot if you monitor the NAV (this occurs especially around announcements of issuance of additional shares even though the issuance will not dilute ownership value), reasonable liquidity through good trading volume.

    I also like GTU and SBT.U.  Both are part of the same management team as CEF.  Unfortunately, trading volume in both is light at this stage of their development, and that can have a significant impact on both liquidity and premium.  I read recently that GTU plans to issue another $1billion in shares to buy more gold.  If the history of CEF share issuance is any indicator for GTU, then we moight expect to see a premium drop when this occurs. 

    Wishing you well,

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    • Fri, Sep 16, 2011 - 10:03pm

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      Interesting point about the Swiss Franc

    Thanks, Jim.

    The fact that the SNB pegged their franc to the Euro is definitely worth noting.  Seems the message is that they expect gold to continue going up (relative to the Euro, anyway), and they don’t want their exports to get slammed by increased valuation in the franc.  So if the SNB thinks gold is going higher, why shouldn’t we?   Good point.

    I am not a trader.  Started buying PMs in 2009 and haven’t sold yet.  Physical, CEF, and GTU personally, plus a chunk of our biz assets are in BullionVault.com.  Continuing to buy incrementally for our personal accounts, but will stop at 60% of liquid assets as I am very close to retirement.  Sold out of stocks earlier this summer (actually sold out the first time in August 2007).  Will start buying large-mote dividend stocks and some commodities once the hammer drops.  Still, PMs will be our core/dominant holding for a long time to come.

    All the best,

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    • Wed, Sep 14, 2011 - 09:54pm

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      Don’t know about Stoneleigh, but…

    [quote=Jim Hannah]

    She and Illargi have said multiple times that Gold is topping.. that this is it.. the collapse is now.  BS.  She does not correctly view Gold… it is a currency.  It is the only currency that does not have counterparty risk.    

    Realize this:  The (paper) price setting mechanisms for Silver and Gold are manipulated.  Silver more than Gold at the moment… based on the fact that the majority of all Comex futures contracts held to maturity are being settled in Dollars... not Silver metal…

    from Harvey Organ today; 

    http://harveyorgan.blogspot.com/2011/09/another-massive-raid-as-europe-burns-to.html

    The total silver comex OI continues to trade in a narrow band of 113,000 contracts.  Today the OI rose by 170 contracts to 113,383.  These are all in strong hands and I doubt if any silver leaves will fall.  They can huff and they can puff but no silver leaves  will fall from the silver tree.  The front delivery month of September saw its OI fall from 615 to 530 for a loss of 85 contracts.  We had only 1 delivery on Friday so we lost 84 contracts to cash settlements.  It seems that all settlements are done by cash and not  actual metal.

    I am constantly amazed at the success of TPTB in  creating fear around the PM’s… and pushing well meaning folks to be "paperbugs" instead of Goldbugs.  

    Go back to Kingworldnews.com and read every blog entry… and listen to every interview… and get your head on straight because these are the times that try men’s souls.    

    [/quote]

    Thanks for your thoughts, Jim.  I know you are passionate about your belief in PMs, and I respect that.

    I don’t follow Stoneleigh, so I can’t comment on her perspective.  I can tell you that I have a connection with one of the regulars on KWN who, like you, is a passionate believer in PMs.  Privately, though, this person admits that a brief period of contraction/deflation is quite possible.  If one were already all-in with PMs, then a brief period of contraction (six months?) wouldn’t matter unless there was a liquidity crunch like 2008 and they had to raise some cash for living expenses.  For those who are not yet fully vested in their PM positions, though, a contraction would provide better buying opportunities, so a little patience might be in order.

    I realize that silver futures are based upon 200% of actual metal available for delivery.  My presumption is that players in that market understand they are trading derivatives.  So with regard to the number of silver contracts actually being delivered, forgive me if what I am about to ask is ignorant.  First, isn’t it possible that at least some of those contracts wanted cash so that they could roll it into other investments?  Is there a way to determine how many wanted cash vs. silver?  Second, if all or even a large number of contract holders insisted upon actual delivery and were denied, would that not be enough to trigger a run?  Even if it wasn’t a large enough number, could we not presume that word of failed deliveries would cause other holders to get cold feet and start demanding delivery?  If that hasn’t happened, then can we presume that sellers are not demanding actually delivery?  And if they are not, then can we safely presume that those who are selling simply want to do something else with their money?

    Thanks for helping all of us develop a better understanding of the silver market.

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    • Fri, Aug 19, 2011 - 04:28pm

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      First, get the book

    [quote=terry.winston]

    Hi everyone,

      Just joined via a new friend found in the NZ 9-11 Truth group (he’s the only active member in Auckland).  I’m struggling to find a way to introduce this very important topic to friends and neighbors but the awareness level down here is so low that even my wife rolls her eyes when I bring it up. I’m thinking that a short presentation (half hour max) with credible witnesses and a calm delivery might open the door a bit — any recomendations?

     

                          — Deck

     

    [/quote]

    Hello Terri —

    I suggest you start with buying the book if you haven’t already done so.  Maybe a few extra copies would be in order, too.  After reading the book, you could invite several people to your home, connect your computer to your TV, show them the short version of the Crash Course, then have a discussion afterwards.  No booze.  Minds need to be clear

    Wishing you well,

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    • Wed, Aug 17, 2011 - 12:42pm

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      Agree with ao

    There’s something about Sprott that doesn’t feel right to me, either.  And like ao, my survival instinct has served me well over many years.

    SGOL has low fees and the bullion is in Switzerland…nice advantages.  You may also want to consider CEF (gold and silver) and its gold-only sister trust GTU.  Both are managed by people with a long track record.  Premiums fluctuate and are higher than SGOL fees, but both are about as solid as you can get for paper bullion.

    Wishing you well.

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    • Mon, Aug 15, 2011 - 05:51pm

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      Well said

    Well said, Nick.  You may not be an expert, but we only need look at the "experts" to see why CM tells us to think for ourselves.

    • Tue, Aug 09, 2011 - 07:50pm

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      We’re holding some cash

    Howdy, Texas girl —

    We have cash for necessities and PMs as a hedge against economic uncertainty.  We will keep the cash for use even after QEIII is announced because our local grocer won’t likely be ready to accept silver rounds or gold coins.  We will only divest the PMs under these circumstances: 1) it becomes necessary for survival, 2) we can convert them to primary wealth under favorable terms, or 3) the PM market finally reaches a bubble state.

    Adios!

    • Tue, Jul 26, 2011 - 07:00pm

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      I don’t understand…

    I don’t understand why China would want to suddenly disintermidiate the dollar, thereby causing a potentially dramatic drop in the value of their reserves and an increase in inflationary pressure. 

    China, the US, the EU and Japan developing a twenty year plan to gradually replace the dollar with something more like SDRs makes more sense to me.  So perhaps the arrangement with Iran has more to do with political posturing than global finance.   Or…because we are doing such a bang-up job of managing our national finances, they could simply be getting things lined-up to mitigate the impact of a dollar collapse.

    Interesting times we live in.

    • Fri, Jun 10, 2011 - 02:59pm

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      Thanks

    Thanks, Travlin. I’ve read many of your posts and they are always helpful.

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