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Ted Butler: China trades oil (badly)
4:15p ET Tuesday, December 7, 2004
Dear Friend of GATA and Gold:
TheBullionDesk.com today posted an unsigned
editorial defending the World Gold Council's
exchange-traded bullion fund against criticism
and questions from GATA and its consultant,
James Turk, editor of the Freemarket Gold &
Money Report and founder of GoldMoney.
The Bullion Desk's commentary, headlined
"Allegations About Gold ETF by James Turk
Unfounded," is as sweeping as it is brief and
unsupported.
"Suggestions by James Turk that the World Gold
Council's recently launched ETF appears to be
double-counting bars are flawed," the Bullion
Desk says. "The number and chop form only part
of the identification of a particular gold bar
and need to be read in conjunction with the
mark denoting the year. It's like saying
'there is only one December 7' when of course
there are many."
At this hour you can find the editorial on the
Bullion Desk's home page here:
http://www.thebulliondesk.com/
But you won't find the authority for the
editorial's assertion about the gold bars the
fund says it owns. Is the Bullion Desk making
this statement on its own authority, or at
the behest of the fund's sponsor, the gold
council? It's not clear.
And surely if there are gold bars with
duplicate or similar registration numbers,
the fund might know better than to list them
as duplicates without explanation and
assurance to investors that they are not.
Maybe there is a good explanation for the
fund's listing seemingly duplicate bars. But
from the start the need for explanations from
the fund has has been the point of Turk's and
GATA's criticism. This criticism goes far
beyond the gold bar registration numbers.
The issue illuminated by the duplicate
registration numbers is the issue of the
security of the bullion fund's assets generally.
If the fund has incompletely reported the
registration of its gold bars, it would be good
to get clarification from the fund directly
rather than to assume that the Bullion Desk
speaks for the fund. (Of course as a matter of
journalism, it would be good for the Bullion
Desk to establish this as a matter of ordinary
reporting before opining about it.) Then the
fund and the Bullion Desk could address the
other questions Turk and GATA have raised,
questions the Bullion Desk and its editorial
have failed even to acknowledge, much less
provide answers to:
* Why have all the custodians and potential
custodians of the fund's gold not been
identified?
* Why is the fund refusing to let its gold
holdings be fully and publicly audited?
* Is any of the fund's gold being leased,
made available for leasing, or encumbered in
any way?
* Exactly what is the fund's relationship
with the Bank of England, a major lessor of
gold?
Turk and GATA endorse the concept of an
exchange-traded bullion fund. But since the
suppression of the gold price and the
manipulation of the gold market have been
made possible by the mystery that has been
carefully woven around gold possession and
leasing, Turk and GATA would like to be
sure that any bullion fund really has,
secure in vaults, without encumbrances, the
gold it claims to have.
Of course we have found that central banks
deliberately confuse unencumbered gold in
the vault with leased gold long dissolved
in the market and unrecoverable by any
practical means. We would like assurance
that the bullion fund's accounting and
security standards are better than those
of a central bank.
When the exchange-traded fund reports gold
bars with duplicate serial numbers (even
if there really are separate bars
somewhere), when the fund happily declares
that it may not even know the identity of
the custodians of its gold, when the fund
has a relationship with the biggest and
perhaps most nefarious gold-leasing and
gold-selling financial institution in the
world, and when the fund does not forswear
leasing its gold and thereby assisting the
suppression of the gold price, investors
generally and gold's partisans particularly
should be skeptical.
As for the Bullion Desk, it has done no more
than sneer at questions it has not even yet
dared to report.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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Eagle Ranch discussion site:
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Ted Butler silver commentary archive:
http://www.investmentrarities.com/
----------------------------------------------------
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----------------------------------------------------
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