some quick comments
- the gold has been recoverd en returned to the owner
- You can buy the physical at the same price as the ETF, why place some third party (bankers) between you and YOUR gold? Hasn’t the current crisis learnt that paper is unsafe, a gold ETF is not gold, it’s paper gold. HSBC can tell us what they want. This kind of journalism bashes physical gold owners.

Ed Note: The ETF process is a legal framework that ensures actual allocated gold (at least with the DGS) – you are the one talking nonsense. Physical gold is a security problem.

Mr Cooper,

Since Aristotle, there is something like the principle of non-contradiction (PNC) which says that it is impossible to be and not to be at the same time and in the same respect.

This principle is only applicable to human thought, not, as many authors argue, to reality. (Fernand Van Steenberghen, (F-X De Guibert, éd.), “Philosophie fondamentale”, Longueuil, Québec, Editions du Préambule, 1989, p. 296 note)

On the hand, you are saying that the Dubai Gold SECURITIES exchange traded fund is the perfect local solution. On the other hand, you are saying that PHYSICAL gold can be stored at the Perth Mint Depository System.

The applicability of the PNC to thought only explains why you can still get away with this apparent contradiction.

Indeed, the contradiction (securities vs. physical gold) is only apparent. You are stressing that the gold which would be stored at the Perth Mint Depository System is UNALLOCATED.

Now, do you want your readers to invest in physical gold or in paper?

You conclude that the place to keep gold is in a vault and you urge your readers not to carry it around in their luggage.

Carry around what?

At the Dubai Gold Securities exchange, it is only paper. At the Perth Mint Depository System it is unallocated. In neither case do your readers own a physical ounce of gold.

How could your readers carry that no-gold around in their luggage?

Ivo Cerckel

Ed Note: Philosophy apart, yes in both the PMDS and DGS scheme you do own physical gold – what do you think you are holding? Plastic Bags? The issue here is security, and having gold in your at home is not secure – do you disagree? Perhaps you have Fort Knox in your basement – but that would be an even bigger security risk, would it not?

What prevents the DGS from leasing the gold bar allocated to your ETF?

Ed Note: DGS no longer legally owns the gold so of course it can not lease it out. I sat with their lawyer and went through the entire sale process and believe me this would be illegal. Why would officials with nothing to gain do this knowing it to be illegal? You have to come up with a pretty convincing conspiracy theory to make this charge.

Mr Cooper says:
The issue here is security, and having gold in your at home is not secure – do you disagree?

and said before:
Perth Mint Depository System in Australia from a AAA-rated, 100 per cent government owned institution

I, Ivo, disagree that guv’mint can provide security.
Guv’mint rests on taxation and the difference between taxation and theft is that the thief does not come back (return?) periodically nor does she pretend to be stealing in the public interest.

Ed Note: There is no taxation on foreign holdings in the Perth Mint

At the Dubai Gold SECURITIES exchange, one can only own securities.
At the Perth Mint Depository System, the metal is unallocated.
In both cases, you have only your paper. No metal whatsoever.
Is paper secure?
Yes, the banksters will tell you that having a claim to something means possessing the real thing.
It’s policies such as those Mr Cooper is advocating which have led to Fort Knox being empty now.

“I sat with their lawyer and went through the entire sale process and believe me this would be illegal. Why would officials with nothing to gain do this knowing it to be illegal? You have to come up with a pretty convincing conspiracy theory to make this charge.”

Bravo and good for you. I guess all potential investors need to sit with this lawyer and be satisfied that the policy, independent audits and supporting local laws provide adequate protection for the investment in securities such as this.

I agree that expat managers are highly unlikely to knowingly breach local contract law.

Trust is not something that comes easily or naturally here in UAE/ME. My gut response is typically “prove it”. I have seen and continue to see stuff here that makes me shake my head in disbelief.

I would trust DGS if the actually would be stored in Dubai, but it’s not. For me, it’s the exact same thing as GLD since the gold is stored in London.
Let me quote this excerpt from the GLD prospectus on page 11:

Gold bars allocated to the Trust in connection with the creation of a Basket may not meet the London Good Delivery Standards and, if a Basket is issued against such gold, the Trust may suffer a loss. Neither the Trustee nor the Custodian independently confirms the fineness of the gold bars allocated to the Trust in connection with the creation of a Basket. The gold bars allocated to the Trust by the Custodian may be different from the reported fineness or weight required by the LBMA’s standards for gold bars delivered in settlement of a gold trade, or the London Good Delivery Standards, the standards required by the Trust. If the Trustee nevertheless issues a Basket against such gold, and if the Custodian fails to satisfy its obligation to credit the Trust the amount of any deficiency, the Trust may suffer a loss.

I rest my case.

Ed Note: I do think this is splitting hairs – the trust is indemnifying itself against a very marginal situation. How much of the world’s 7th largest gold hoard is likely to be substandard? They would hardly make a habit of it! So you give up the convenience of a hugely liquid ETF product because a very tiny proportion might not be top standard? Come on, think about this.

Yes, keeping gold at home is somewhat of a security risk, and walking around carrying gold, certainly is. But I prefer this over having my gold kept by bankers or by the government anytime. History has proven that neither of those are trustworthy.
And yes, ETF’s are backed by sound contracts that are perfectly legal, but so were CDO’s and CDS’s and the lot; that never stopped their holders being ripped off.
Lastly: “There is no taxation on foreign holdings in the Perth Mint”… yet.

Ed Note: I suppose a wealth tax is possible but then you would just take out your money. And gold ETFs are gold backed not by obscure financial instruments.

Yes, holding physical gold in your possesion is a security risk. But I prefere to hold phisical over paper any time becouse the physical gold risks I can manage myself but I can not influence the paper gold risks (which are substantial, I think).

Ed Note: How big are these risks for the average investor? The gold ETFs are huge and highly liquid. Personally I would not want gold in my house.

“Ed Note: How big are these risks for the average investor? The gold ETFs are huge and highly liquid. Personally I would not want gold in my house.”

Peter, lets say that an ETF is 100% backed by gold, and the gold is in a gold safe with a bank in England.
The goldbars are audited at a regular basis by a reputible audit company, both the ETF-management and the bank are 100% trustworthy.
Now, what if the British goverment seizes the gold?
You end up owning nothing! Perhaps you think this is far fetched, but something like this actually happened a little more than a year ago in the UK!

See: http://news.bbc.co.uk/2/hi/uk_news/7442644.stm
http://www.timesonline.co.uk/tol/news/uk/crime/article5966764.ece

Ed Note: Oh come on, have a look at what you are saying and the examples you give. You really are talking complete and utter nonsense.

“Ed Note: Oh come on, have a look at what you are saying and the examples you give. You really are talking complete and utter nonsense.”

Peter, when things happen as in the case of my example of this police raid, they always come with a
feel good story to justify their actions, like “This is a major blow to serious crime and if you are innocent you get your stuff back as soon as possible.”
But at this day, 90 % of the innocent people still do not have their belongings back.
And if they get it, some stuff is missing.
I guess,not trusting governments and banks is a state of mind that grows on you.
First, you realize that all politicians are liars. Then you experience unjustice done by government agents in your personal life.
Then you realize that others near you and everywhere in the world have similar experiences as you have.
Then you know it: You can’t trust them.
Peter, The example of the police raid I gave was the trigger for me to switch from paper to physical.

I understand that you beleave the feel-good story. It is designed that way. But look at the people that are the victims.
You’ll see a different story.

Ed Note: No you are a victim of paranoia here! There is no connection between a gold ETF and a safe deposit box. Indeed, the link to make is with physical gold – physical gold in a safe deposit box is less safe than an ETF. It is the physical stuff that people can easily steal, or that the government agencies might get access to – your ETF will be fine, or at least let us agree that relatively speaking it is far safer than storing gold yourself.

Ed Note: “No you are a victim of paranoia here! There is no connection between a
gold ETF and a safe deposit box. Indeed, the link to make is with physical gold
– physical gold in a safe deposit box is less safe than an ETF. It is the physical
stuff that people can easily steal, or that the government agencies might get access to
– your ETF will be fine, or at least let us agree that relatively speaking it is
far safer than storing gold yourself.”

Peter, the link between a gold ETF and the safe deposit raid example is _confiscation_.
If they can confiscate safe deposit boxes, they can confiscate safe contents from a bank.
I don’t care if it would be legal or not. They can and will change laws as they see fit.

- Storing gold yourself can be safe, but you must be creative to find the proper way to do it.
Storing it in the safe in your bedroom closet is a bad idea. Burglars look there first.
I’m afraid I can’t tell you how I do it.

what is the problem with some kilobars at airport when we have tenfold in the goldsouks

how about that nice lady , she had a huge diamond necklace (that was worth also tenfold more) than the guy with his goldbars

only “weight” could become a problem with gold, that is why that lady has the diamonds, more money in less volume and weight

gold is logic

small coupures = no travel problem & security problem

big coupures = make a lot of attention but would you run away with my 10 times 12 kg comex bars, you will run very fast with that

they have numbers, so i guess you are smarter and would melt them your own

if you come by with a 12kg bar to melt to other proportions they will ask some credentials and look up the number

YES we do have a list (as a refiner) with numbers that are missing or stolen! so please come by and just wait a minute while we call authorities