The KB Financial Group -GOLDby Ramabadran seshadri Iyengar internet marketer
Market Niche Their unique marketing strategy and niche is to produce and distribute 999.9 pure kine-bar quality gold and silver products in smaller weights. This creates a new and more affordable way Recommended Features
- 1. CAB Bonus $130 up to $900 US Dollars for each referral who opens and funds their account.
- 2. Residual Income of up to 5.5% on monthly purchases.
- 3. Up to 5.5% on one time purchaser.
- 4. KB Global Funds (Worldwide Pool)
- 5. GMI POOL (Worldwide Pool)
Review on The KB Financial Group -GOLDGold: Why Owning Physical Metal is Better than Paper Metal
This section could be subtitled: Why is Holding Physical Gold better than holding Paper Gold? If we were looking at a Precious Metals Ownership Pyramid, the physical metal that you own and store for yourself would be the base. On top of that would be e-gold and carefully selected ETF shares. On top of that would be diversified metals mutual funds and large producing miners. Only at the very top would be the most speculative of holdings. Those would include futures, options, and smaller non-producing explorers (miners). It is always going to be safer to hold physical metal than paper metal. The reason to hold paper metal is for the leverage to a rise in the price of the underlying metal.
bullion is the only financial asset class you can own that is not simultaneously someone elses liability. When you own an ounce of gold, you own an ounce of gold. Its not just a piece of paper that conveys a right to it from parties that may or may not even exist if and when you want to turn their liability into an actual, unencumbered asset in your pocket. Doug Casey, Casey Research
Beware: Paper gold and physical gold are two different animals. Paper is a promise to pay not the real thing. This includes stored bullion not in your possession. A receipt is not the same as the actual metal. Shares of equities can go to zero bullion cannot. Bullion not in your possession can be confiscated much more easily than your hidden metal. Physical bullion is highly recognizable and desirable. People know what it is in any form and it can be exchanged in all countries at all times. You can always get at it when you have it in hand. There are no third parties involved. You will not get at your metal if there are bank runs or the entity holding your metal becomes insolvent. Also, sales are normally not reported when you sell your metal but normally are when another entity sells for you.
Heres a table of the main differences between physical and paper holdings.
Negatively correlated to financial assets May be correlated to financial assets
Lower risk Higher risk
No leverage High leverage
No/low third party risk Third party risk
Less subject to rule or law changes Subject to rule or law changes
Taxes when sold Taxes when sold
Can hold some forms in IRA Can hold some forms in IRA
Easy Access More Convenience
Possible Confiscation Possible confiscation
Highly Recognizable Fools Gold? Do you really know what you own?
Good anywhere Must sell to profit
Highly Liquid Not always liquid
Can never decline to zero value Can decline to zero
There are approximately 140 ounces of paper gold for every one ounce of physical gold. Trace Mayer 6/15/2009
In 2007, the last reported year, the LBMA, or the London gold market, exchanged over $20 Trillion in gold. Mining of new gold is only a small fraction of what is traded annually.
There are more paper claims on physical gold than there is physical gold. Physical Gold is likely leveraged 100:1 or more. This means that there is not enough gold to be delivered to everyone who has been promised paper gold. There may be 100 claims on each ounce of gold in existence. This leverage was confirmed by Jefferey Christian of the CPM Group at a Commodities Futures Trade Commission (CFTC) Hearing on March 26, 2010.
This is known as Fractional Reserve Gold. There is only a fraction of gold available for delivery. This is also how banks operate. All depositors money is not kept on hand. Only a fraction is because, unless there is a bank run, not all depositors demand their money at the same time. Only a fraction do.
How do the players get away with this fractional gold scheme? Via unallocated accounts, ETF such as SLV and GLD that are not audited, and Commodity (Comex) contracts that are settled in cash and never delivered upon.
At 100:1 leverage, the system breaks down when more than 1% of claimants demand their gold. This happens when more than 1% of the holders of paper metal figure out the game and take personal delivery of their paper gold and turn it into real gold.
There is not enough gold in the world to provide the gold to those who think they own gold. We will see a modern day gold rush or run on gold at some point. Nobody knows when but it is coming sure as can be. Paper or metal?
This material may only be copied or reproduced with permission of the author.
About the author:
Jerry Western is author of the newly available work,
Got Gold? Get Gold.
A Book on How to Protect your Wealth with the 21st Century Gold Rush and
a Laymans Guide to Riding the Golden Bull and the Silver Stallion.
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Created on Nov 14th 2010 23:10. Viewed 1,797 times.