Saturday, December 01, 2012

Bron Suchecki - ETF PRICE SUPPRESSION MECHANICS

We have found the writings and opinions of the Perth Mint’s Bron Suchecki worthy of our time.  The article below is no exception.  The article speaks for itself.  Bron begins:


“Last week the TF Metals Report blog posted an explanation by Andrew Maguire on how bullion banks use the GLD and SLV Exchange Traded Funds (ETFs) to suppress the prices of gold and silver.


There are some mistakes in the article that need to be addressed lest they become more virally accepted “truths” in the precious metal blogosphere. Andrew also uses some terminology/jargon that readers may not be familiar with. I’ll cover both of these in the first section titled “Getting the facts straight”.

With the facts established I’ll then seek to hopefully explain some of Andrew’s “mechanics” a bit more clearly. I think it is a combination of jargon, poor wording and the fact that Andrew talks about different transaction mechanics that results in this sort of comment from Ed Steer: “I haven't a clue as to what he's talking about” and Ed’s a smart guy who can follow an argument. This will be in the second section titled “Transaction mechanics”.

Finally, I’ll discuss how significant the ETFs and the transaction mechanisms around them are to the market. ..."


To continue reading Suchecki’s “rebuttal” of Andrew Maguire’s offering, follow the link to the Perth Mint article below.


Link:  http://www.perthmintbullion.com/Libraries/Website_Downloads/ETF_Price_Suppression.sflb.ashx

Source: Bron Suchecki, Perth Mint

20121201BronSuchecki

Photo: Perth Mint 

Comment:  Our own, long held contention is that gold and silver ETFs would be a terribly inefficient vehicle to attempt to alter the supply/demand/liquidity equilibrium, when there are much better, less transparent ways available.  (Such as the OTC and COMEX markets.  Mostly the former.)


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