Friends, here is why the GLD fund aka ETF is the worst investment if you like GOLD.
1. GLD Is Paper Gold
GLD is actually the SPDR Gold Trust Electronic Traded Fund. It is a promissory note for GOLD. It is backed by physical gold but the real ratio is controversial. See
2. GLD Is Supported By The Fed Which Wants the US Dollar High and Gold Low
In a previous post, I discussed how the US Dollar and GOLD move in opposite directions.
In that post, I explained that the Federal Reserve wants to keep the dollar high so to do that, it depresses GOLD prices by encouraging the sales of paper GOLD. See
3. GLD is a CDO aka Tranche
Remember the Great Recession of 2008? It was brought on by CDOs and tranches based on bundled mortgages. GLD is a tranche aka a bundle of paper gold.
Statistics prove that 13% of CDOs before the Great Recession were sold to multiple buyers. It is like selling an acre of land in Florida multiple times.
4. Paper Gold is rumored to be oversold by 200 times
You need to read this.
5. GLD Has Lagged Gold Mining Stocks Year To Date
NEM, a gold mining stock, is up 34% from 01/01/2016 to 2/5/2016.
Meanwhile GLD is up only 10% from 01/01/2016 to 2/5/2016.
That is probably because investment companies are avoiding GLD. So NEM is a GOOD investment right now not GLD.
Here are Solutions when a Recession Comes
Here is Some More Information
Lessons From How The Great Recession Happened and What A CDO Is
PS I own NEM and care about you but I cannot be held responsible for your decisions.
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