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Paper-Gold Fraud Now Out In The Open by Jeff Nielson

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In Paper-Gold Fraud Now Out In The Open, Jeff Nielson makes the point, that I made in an earlier post, that the market price of gold is manipulated, offering the supply crunch of physical gold as the proof.  Here are some interesting tidbits:

The virtues of (actual) “free markets” are well-known to anyone familiar with basic market dynamics: they self-correct. If supply exceeds demand, the price falls to a sufficient level to discourage more supply and encourage more demand – until those simultaneous dynamics achieve equilibrium: supply and demand matching, with prices stable.

Conversely, where demand exceeds supply; prices must rise sufficiently so that more supply is encouraged and more demand is discouraged, until once again equilibrium is achieved. Thus a permanent supply-deficit is ipso facto proof of price-suppression.

The problem with the price-suppression of any kind of physical “good” is always the same, one inevitably runs out of inventory as the repressed supply and excessive demand caused by artificially low prices means that buyers will always outnumber sellers.

Now this should help explain why investor grade bars and coins are not available at bullion stores–the price is manipulated too low.  Buyers are readily available but sellers are scarce, and so physical metal is not available.

Disclosure:  I own Sprott Physical Gold Trust and Sprott Physical Silver Trust

Pump and Dump is protected by First Amendment

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The practice of pump and dump is scheme whereby a person takes a long position and then uses media outlets (internet, TV, print) to pump up the stock, hoping that the public would buy the stock. The pumper then dumps the stock at a profit.  Short-selling and then offering negative opinions is an equivalent scheme.  Perhaps there should be a term for this like:  “Short and Dump on”; or “Dump on and Cover Short”.

The Financial Post reports that U.S. court gives short-sellers freedom of speech shield in Silvercorp ruling:

Vancouver-based Silvercorp, which operates in China, was one of the most high-profile companies targeted by short-sellers last year. Anonymous websites Alfredlittle.com and Chinastockwatch.com posted reports within days of each other, both suggesting the reported production and resource figures from the company’s Ying mine were too good to be true.

Silvercorp fought back. It figured out who was behind the anonymous sites and named them as defendants in a defamation and stock-manipulation suit. The company is disappointed it was dismissed, and has already filed an appeal.

I suppose this means that SEC should return Jonathan Lebed his money, since what he did as a fourteen year old was far more innocent.

Whitecap Resources to pay dividend in 6-12 months

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Whitecap Resources’ CEO Grant Fagerheim speaks to Enercom Consultants.  He says that Whitecap is planning to reward shareholders with regular dividend starting within 6-12 months.  As a former shareholder of Midway Energy (which Whitecap took over earlier this year in a shares and cash deal), this will be a realization of my hopes: that my shares in Midway would turn into a dividend payer.  I’m crossing my fingers.

Out of the fry pan: on playing musical trading accounts (UPDATED)

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Update: I am happy and relieved to say that the rest of my US positions have been moved now to TD Waterhouse. It is now only a matter of getting them to transfer any remaining dividends will be paid on the 15th of June. Also, I’ve learned the reason for Penson Worldwide’s financial woes: a bad bet on a horse race track.

(NB: I’ve started to see my final positions show from Questrade show up in my TD Waterhouse US funds account after I published this post–so good news. I’ve got my fingers crossed for now.)

In the Spring of 2011, when I was in the process of getting out of the United States tax system, my lawyer advised that I move my accounts out of TD Waterhouse into a company that had no holdings in the United States, as he thought the US could hold TD’s US assets as leverage against me. So I took his advice, and moved my bank accounts to a credit union and my investment accounts to Questrade, a Canadian only company. Thus, if things got nasty with FATCA, I would create distance between me and the United States. I wonder how many US laws I broke doing this.

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