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Beware of the Gold and Precious Metals Markets

By Jim Gillespie | April 12, 2010

If you or someone you know is either invested in gold or precious metals, or you’re considering investing in gold or precious metals, then you need to read this article.

Sometimes I come across something that I need to tell you about, even though it may not be directly related to commercial real estate. You may remember the article that I published in June of 2008, citing the Royal Bank of Scotland, which was founded in 1727, telling us of the coming collapse in the U.S. financial markets within three months, and then everything began collapsing exactly as they had predicted just three months later on in September. Well there’s something going on in the gold and precious metals markets right now that some people are labeling as the greatest scam in history, and I’m telling you about it just in case you or someone you know is in a position to potentially get burned by it.

In summary, here’s what’s happening:

People are buying gold and metals, and paper representing an interest in gold and metals, and are trusting that others have these metals stored somewhere for them. But here’s the problem…market experts now estimate that for every 100 ounces of gold that people think they’re currently holding a claim to, only one ounce of physical gold actually exists. So if everyone who thinks they own gold were to ask for their gold right now, 99 out of every 100 ounces of the gold wouldn’t be delivered. And these customers will simply be recognized as being "unsecured creditors" instead.

We all remember the billions of dollars that were lost by investors in mortgages and mortgage-backed securities when that market completely collapsed, and those investors thought they had purchased investments that were rock solid. A lot of people made off with a ton of other people’s money when that all happened, while the people invested in those securities were left completely holding the bag.

Well we’re faced with another situation similar to that one right now, and I’m telling you about it in case you or someone you know may be affected by it—BEFORE it all begins to unravel, and while there’s still time for you to protect your investment.

Here’s a link to a 37-minute radio interview about all of this, featuring Andrew Maguire, a veteran London metals trader, along with Adrian Douglas of GATA (the Gold Anti-Trust Action Committee). When you arrive on the following Web page, click on the image just below where it says "MP3 Not for Redistribution", to begin listening to the interview. (And as they’ve requested, please don’t download the MP3 file onto your own hard drive for redistribution.) 

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