02 May 2011

Dave in Denver - The Golden Truth?

A couple of weeks ago this blogger did a post about the University of Texas taking delivery. In it he made the following statement

"Delaware Depository also serves as one of the Comex depositories and you risk having your gold mingled with unallocated gold or "accidentally" borrowed"

To me he is saying Delaware Depository would defraud their clients by giving/lending a bullion bank the client's allocated gold without their knowledge. I left a comment saying as such and that I thought he had stepped over the line with this.

He replied, saying I "crossed over the line by accusing me of crossing over the line". I left another response disagreeing, but he did not allow it through. I emailed him to ask if he hadn't got the response or had, but wasn't going to publish it. No reply back from him.

My view of blogging is that you should be prepared to defend yourself (or admit you were wrong) if you are really after the truth. Dave obviously disagrees. Below is the response he would not publish - I'll let you make up your mind on whether Dave is really after the Golden Truth.

"Very few people/entities can be trusted in the world of precious metals" Agreed, but I gather you don't include Perth Mint in that :)

Your argument against DDSC is based on two red flags. First is non disclosure of insurance arrangements. Here "DDSC agrees to maintain "all risk" insurance coverage for Precious Metals stored for you." That is a bit vague as it doesn't say "fully" but they do say here that "All precious metal assets held at DDSC are maintained in customer-specific custody accounts, on a fully insured basis, and off of DDSC's balance sheet." If they aren't fully insuring but saying they are then that is not good and a real red flag - I'm assuming you know for a fact that they don't fully insure.

I would note that any depository of size is unable to be fully insured because insurance markets don't have the capacity/willingness to underwrite it. That would cut in at around $1b - $2b with the cost getting prohibitive beyond that, assuming it is even available. If DDSC's total holdings are above that you may have a point.

"DDC is a Comex depository - sorry, guilt by association and guilt by sleaze." I think you're second red flag of guilt by association is weak. As you say "With the sleaze and corruption embedded in our entire system, especially on Wall Street" you can't trust Wall Street. But then you yourself "trading on Wall Street. For nine of those years, I traded junk bonds for a large bank", so couldn't someone just raise a similar guilt by association red flag on you? You don't disclose that you didn't work for Goldman? Don't get me wrong, I'm not saying you are guilty by association, just suggesting you put the shoe on the other foot and see how it feels.

"If you want to read into or infer anything from what I wrote, that's your business" I don't think it is just me reading that in, I think most people would. Because I think most people would read that into it that is why I think it steps over the line.

When you say "you risk having your gold mingled with unallocated gold or 'accidentally' borrowed" you are saying there is a reasonable possibility (ie risk) that DDSC will engage in criminal fraudulent action to comingle a client's metal and/or lease it out. That is a pretty strong statement.

"you crossed over the line by accusing me of crossing over the line" So it is OK for you to accuse someone of being at risk of acting criminally but not OK for me to simply say I think you went too far by making that statement? I think our differing views about “crossing the line” is a difference between Australia and America in respects of custom and laws regarding defamation and free speech.


Anonymous said...

On you Bron. I am a gold bug but some of these sites I stopped reading some time ago because, frankly, they are mostly into scaremongering and mostly quite silly.



Pete said...

Good work Bron

Anonymous said...

After a few years following the metals saga that yours, Bron, is a welcome corner of clarity in the screaming melee that is commentary in this field.

Thank you for that.

Anonymous said...

Anonymous said...

The demand for gold and silver is real. For reasons unknown Bron doesn't like to accept that there is increasing demand for gold and silver all over the world. In fact, the demand for gold and silver for past three weeks is simply astonishing. There is a real shortage and refineries are working overtime. Bron knows all these facts and I hope he focuses on supply and demand issues instead of knit picking on blogger comments. And I hope Bron comments on what happens if someone sells one year production in one minute. Why would anyone wants to sell such large quantities in a such a short time other than suppressing price, aka price manipulation? Anyone with open mind can easily conclude who wants to indulge in such blatant price manipulation. These are real issues worthy of discussion.

Lazyfly said...

How can you claim that "there is a reasonable possibility (ie risk) that [Company X] will engage in criminal fraudulent action to comingle a client's [property y]" over the line 6 months after the MFG event?
Is that what you would say to the face of a MFG victim, that what happened to them was not "reasonably possible"?
FYI there's not such thing as "reasonable possibility". An event is either possible or impossible. If you meant "probability", well then that is only one of the components of "risk", the other is magnitude of potential loss which could be 100%. None of the components in this case is zero, which means that the risk it not zero. In other words there is a risk. In other words a statement claiming that risk exists is entirely true and therefore not over any line.

Anonymous said...


You got to give him credit for being tenacious.