Hamilton suggests that no investment is entirely safe and any corporation can be subject to fraud. He even makes a rather silly comment that gold itself can be minted such that it is not pure and therefore is subject to fraud. This is to make his point that we are fools if we do not trust GLD, or some such nonsense. I am sorry but that does not cut it. To agree that fraud is a real potential in almost any asset or investment does NOT excuse that GLD may in fact be a wolf in sheep's clothing, which is the point of the criticism against the ETF.

Hamilton marginalizes anyone who points out the issues with GLD, as if some conspiracy nutcase is the only one that may have objections to the structure of that ETF. I beg to differ. Read the goddamn perspectus for the fund, and note that in no place does it state that the fund cannot engage in secondary transactions, derivitives, swaps, etc, that could put a liability on the legal ownership of the metal. Therefore, smugly pointing out that the gold is audited by a third party firm does NOT guarantee that the gold held by the custodian is in fact completely pledged to the rightfull owners, the holders of the ETFs. Mr Hamilton, I did not write that perspectus, and I resent the implication that I may be a nutcase by pointing out the flaw in the contractual obligations of the custodians.

May I suggest if GLD did in fact want the criticism and mistrust of investors to go away, they simply rewrite the terms of their offering (as other ETFs have already shown leadership) to remove any possibility that the gold held in the fund is not pledged through paper contracts to other parties. Its that simple.

The Hamiltons of the world were also pooh-poohing any suggestion that Enron was running a corrupt scam too. And they were right... until it blew up. What an arrogant idiot.

cheers!

mike