Gold/Silver OTC trading illegal for US residents after July 15, 2011?

Originally posted by ommadawn
Sounds like an attempt to get rid of Tradinmg on Margin in the OTC market. The kind of stuff that caused the 1929 stock market crash.

I forget the name now, but there wqas a very basic new law brought in to stop trading on margin above a certain ratio. Can anyone point me to the name? Can't find it after a brief web search.

Looks like the OTC market may have slipped under that law, and this is a correction for that.

Trading on margin is basically gambling using borrowed money. Not good.

Darn, someone help me out here.

What's the SEC rule introduced after 1929 that reduced Trading on Margin from say 10:1 to 2:1? It's a very basic rule, but I cannot seem to find it.

Just listened to Chapman audio. He's correct that Frakendodd doesn't prohibit the private purchase of precious metals, but when asked to define the Gold/Silver OTC market as it relates to these regulations [5:20 mark] he incorrectly describes the OTC forwards market. The new regs apply to Forex activity in the OTC "spot" market...trading synthetic currency pairs XAU/USD & XAG/USD...not OTC forwards or futures contracts. The "spot" market is just that, a market where transactions are agreed to on the "spot" with a 2 day settlement period.



What Chapman described:

Forward Contract

A forward contract—or forward—is an OTC derivative. In its simplest form, it is a trade that is agreed to at one point in time but will take place at some later time. For example, two parties might agree today to exchange 500,000 barrels of crude oil for USD 42.08 a barrel three months from today. - Link

Spot Price Of Gold

The spot price of gold is a price quoted for the immediate settlement of a transaction and quoted in US dollars per troy ounce. It is determined by market forces in the 24-hour global over-the-counter (OTC) market for gold. - Link

*I recognize the above "spot" definition as an excerpt from the GLD prospectus.

[atsimg]http://files.abovetopsecret.com/images/member/9651179cbd1c.jpg[/atsimg]

All this market language makes me crazy because I dont understand it.....

Question: Will this affect my ability to buy gold or silver online from say.....APMEX or Monex or whatever website that sends you the metals?

What about going to a gun show and buying silver bullion from the guy with the goods?? Will that be affected ????

reply to post by Starwise


No. Physical trading, buying, and selling will not be affected. Also gold and silver ETFs will not be affected provided the companies that sell them keep within a certain reserve requirement.

The only thing this is affecting is highly leveraged derivatives.

Originally posted by OBE1
Just listened to Chapman audio. He's correct that Frakendodd doesn't prohibit the private purchase of precious metals, but when asked to define the Gold/Silver OTC market as it relates to these regulations [5:20 mark] he incorrectly describes the OTC forwards market. The new regs apply to Forex activity in the OTC "spot" market...trading synthetic currency pairs XAU/USD & XAG/USD...not OTC forwards or futures contracts. The "spot" market is just that, a market where transactions are agreed to on the "spot" with a 2 day settlement period.

What Chapman described:

Forward Contract

A forward contract—or forward—is an OTC derivative. In its simplest form, it is a trade that is agreed to at one point in time but will take place at some later time. For example, two parties might agree today to exchange 500,000 barrels of crude oil for USD 42.08 a barrel three months from today. - Link

Spot Price Of Gold

The spot price of gold is a price quoted for the immediate settlement of a transaction and quoted in US dollars per troy ounce. It is determined by market forces in the 24-hour global over-the-counter (OTC) market for gold. - Link

*I recognize the above "spot" definition as an excerpt from the GLD prospectus.

Thanks for posting this: It made more sense...

reply to post by projectvxn


Thank you...I have been searching the web trying to increase my language skills LOL!! Ive been looking to buy silver for quite sometime, but wasnt sure whether to go with smaller denominations or go for the bullion..

If the SHTF, which would be more useful? LOL Decisions decisions.....

reply to post by Starwise


You can get fractional bullion that would likely be more useful in day to day transaction than 1oz or larger denominations.

1/10th of an ounce and what not. Get a bunch of that if you're really into silver. But also buy the one ounce, the ten ounce, and the kilo bricks of silver for higher priced purchases. That's IF you wish to use silver as currency.

reply to post by projectvxn


I wish I could afford gold, but NOT, I figure if need be for barter or trade I could also use food, ammo, silver and veggies seeds, plus I stock up on mini bars of soap and mini shampoos and toothpaste...LOL hey somebody might wanna trade something for it! I also have extensive medical/EMT first aid supplies....

I was looking at the mercury dimes and the 1/4 and 1/2 oz rounds, they seem to cost a little more than the 1oz bars......

Originally posted by CarlitosAmsel
WASHINGTON, D.C. — President Barack Obama today banned private ownership of more than a quarter ounce of gold, saying the move was necessary to revive the economy.

"Wealthy Americans are bailing out on the economy by taking their money out of circulation and hoarding gold," Obama said as he signed an executive order reminiscent of Depression-era President Franklin D. Roosevelt's ban on the possession of gold. skinnyreporter.com...

So everybody told Americans, even Alex Jones did, tu buy GOLD GOLD GOLD. Now Obama comes and steals it from you, which means, you have lost a tremendous chunck of your wealth and gave it, to whom? In end effect probably to ISRAEL!

edit on 19-6-2011 by CarlitosAmsel because: (no reason given)

Who the heck is Justin Thyme? Sounds like a joke, and skinnyreporter?? The article isnt even dated. I find it highly suspect. I cant find any other sources or videos!!!

Originally posted by syrinx high priest
I googled it, and ity seems like one single blog post caused all the commotion

I can't find a single credible corroboration that it will be illegal for US residents to buy/sell/trade gold

can anyone lese ?

I noticed that too! Hmmm Justin Thyme...get it...what a joke!

Originally posted by projectvxn
No. Physical trading, buying, and selling will not be affected.

Nail on the head! The OTC spot market is a physical market. Prices are set via large physical transactions involving miner/producers, refiners, bullion banks, central banks, major metals dealers, and other well capitalized entities like mega-hedge funds. By contrast, spot XAU and XAG are undeliverable paper transactions . They trade on Forex platforms that attempt to mimic, or parallel, actual spot prices. Regulatory authorities can ban all trade in these instruments tomorrow, and it wouldn't have any effect on the real-life spot price of Gold & Silver.

Originally posted by projectvxn
Also gold and silver ETFs will not be affected provided the companies that sell them keep within a certain reserve requirement.

Shares in the ETFs aren't traded OTC. ETFs only list on regulated exchanges, so they have total immunity from the new Frankendodd regulations...just like shares in the S&P, the DOW, or APPL. ETFs trade just like any other security.

A metals ETF is a Trust. The shares are backed by physical bullion. One share of GLD represents one tenth ounce of Gold. One share of SLV approximates one ounce of Silver. The metal is held in vaults by the assigned custodian on behalf of the Trust. There isn't a reserve requirement. The only way shares can be created is by depositing the equivalent amount of metal with the Trust.

Investors buy and sell these securities from each other in the open market through whatever broker they have an account with - Etrade, Scottrade, IB, etc. If I place a buy order with Etrade for 1000 shares of SLV @ $35 per, and the order is executed, I simply bought them from another investor that wanted to sell 1000 shares of SLV @ $35...through their broker.

Not trying to be critical here. The precious metals sector can be legitimately confusing, what with overlapping pricing mechanisms, OTC vs exchange trade, ETF commodity pools vs open end funds vs closed end funds....and on and on. Just hoping to shed a ray of light.

And I really do enjoy reading ZeroHedge, it's kinda fun, but I also enjoy reading the National Enquirer and The Skunk Works Forum from time to time

GL

Thanks for the clarification on GLD. The prospect of paper metals suddenly becoming worthless is a sobering thought.

This just means the price will sky rocket and those who have gold and silver could either trade it in for hundreds of times what they paid or keep it provided they know how to use a shovel.

buy lead, preferably in 308 by the 1500 count and at least 10,000, then you can have all the gold and silver you want

reply to post by OBE1


From what I understand Dodd/Frank creates reserve requirements of physical for regulated markets as well.

lol @ Frankendodd

Originally posted by anumohi
buy lead, preferably in 308 by the 1500 count and at least 10,000, then you can have all the gold and silver you want

All my lead is in 9mm, .40, and 5.56mm denominations.

reply to post by filosophia


so who has gold ? rich people aka the elites ,write?, gues what they will do now? exactly sell their gold to us dumb ignorant u know whats cuz we think hey i better have some gold when shtf wright?
guess what will happen next it will become worthless again,since u cant eat gold
than its evry man for himself and trust me they are prepaired
this is just squizing our last resources before # TRUELY will hit the fan,
although its ungoing with the gulf o m and fukushima,but america will be next imo offcourse

This is a 3 year old bill that only refers to "over the counter (OTC)" trades, which is what professional stock and commodities brokers do on Wall Street. This has nothing to do with the rest of us owning, buying or trading gold or silver. Otherwise, we'd have heard a lot more about this during the past 3 years.

Originally posted by HRF1965
This is a 3 year old bill that only refers to "over the counter (OTC)" trades, which is what professional stock and commodities brokers do on Wall Street. This has nothing to do with the rest of us owning, buying or trading gold or silver. Otherwise, we'd have heard a lot more about this during the past 3 years.

Doesn't matter how many times you say it - the thread finds it's way back into the wilderness.
Honestly if we had taken notice of the cdo's, cds's, futures trading and speculation years ago we wouldn't be where we are today.