A lot of questions were raised when it was reported that Deutsche Borse failed to deliver physical gold in exchange for its Xetra-Gold Notes. But the only real answer to those questions is simple: the only way you ever own physical gold is if you buy actual physical gold and take possession.
The allegations that Xetra-Gold or Deutsche Bank or Deutsche Borse committed fraud or failed to deliver gold are strictly false. One thorough reading of the Xetra-Gold prospectus dispels those allegations. The prospectus is little more than a blanket legal disclaimer. The language is clear. It says right in the prospectus that the an investment in the Notes “ does not constitute a purchase or other acquisition of Gold.” There is not case for fraud because none of the participants in Deutsche Borse, and Deutsche Borse itself, did not commit any breach of contract per the terms of the prospectus.
The term “economic” in the prospectus is defined (pg 12) to mean that the "bear the market risk associated therewith. If the gold price decreases, provided that all other conditions remain unchanged, such a decrease may result in a partial or complete depreciation of the invested capital. If the gold price increases, provided that all other conditions remain unchanged, such an increase may result in an increase in the invested capital.”
In this latest episode of the Shadow of Truth, we discuss why buying paper forms of gold like GLD or Xetra-Gold is nothing more than an investment in a paper claim to the rate of return on gold during the period in which you own the security. If you don’t hold your gold in your own possession, you don’t own it:
Rory Hall, Editor-in-Chief of The Daily Coin, has written over 700 articles and produced more than 200 videos about the precious metals market, economic and monetary policies as well as geopolitical events since 1987. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver and Silver Doctors, SGTReport, just to name a few. Rory has contributed daily to SGTReport since 2012. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Gerald Celente and Peter Schiff, to name but a few. Visit The Daily Coin website and The Daily Coin YouTube channels to enjoy original and some of the best economic, precious metals, geopolitical and preparedness news from around the world.
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