“In a financial crisis central banks more easily can seize metal held by bullion banks”

Posted on May 13, 2013 by RonMamita — 2 Comments

This from GATA:

GoldMoney research director Alasdair Macleod writes today about how his inquiry to the United Kingdom’s Financial Services Authority produced an acknowledgment that the custodianship of the metal nominally held by the gold and silver exchange-traded funds GLD and SLV is not regulated by government.

As a result, Macleod concludes, there is enormous counterparty risk for GLD and SLV investors, in a financial crisis central banks more easily can seize metal held by bullion banks, and the two ETFs should not be considered havens against such a crisis. His commentary is headlined “The Role of GLD and SLV” and it’s posted at GoldMoney’s Internet site here:

http://www.goldmoney.com/gold-research/alasdair-macleod/the-role-of-gld-and-slv.html?gmrefcode=gata

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

NOTE: Alasdair Macleod goes on to state,

“In a systemic meltdown it may be naïve to expect central banks to fully respect property rights. So GLD and SLV are only suitable for investors prepared to accept a lower standard of custodial regulation, and who look to benefit from a rising gold or silver price until they decide to take their profits. They are definitely not for those seeking a safe haven or hedge from a financial crisis.”

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