Silver Investor: Do You REALLY Own Your Gold and Silver Stocks?

Published: Thu, 03/15/12

Do You REALLY Own Your Gold and Silver Stocks?

Hello ,

A few months ago, investors who were asked this question would have looked back with a puzzled look on their face and said, “But I do of course!” Well, don’t be so sure. You see, when you purchase shares through a brokerage house, your broker holds the stocks under what’s called “street name registration”. It’s a quicker and less expensive procedure, but the problem is, you’re not actually registered as the owner of your own shares!

Under this setup, the broker can lend these shares to a short seller, which can drive down the share price of your position. But that’s just the beginning. Through a tongue-twisting process known as “rehypothecation” he can borrow money against your shares and use the funds to speculate in the derivatives market. For investors, ignorance was bliss, until…MF Global.

MF Global – The First Domino?

Last fall, futures and stocks clearing-house MF Global, formerly known as Man Financial, made a highly-leveraged bet against Greek debt. Their bet went the wrong way, taking down the company. In trying to cover the loss with their customers’ funds, several hundred million dollars (estimates run as high as $1.7Billion) more disappeared.

To say that people were surprised would be an understatement. Investors large and small saw their funds go up in smoke, to who knows where. The well-known trends analyst, Gerald Celente himself was apparently a victim. Shortly afterwards he told reporters:

“They took my money out of my account…six figures and they have it…they closed out two of my positions and I can’t get any answers and I can’t get my money!”

Don’t be surprised to find that your brokerage house “invests” your money the same way. And don’t expect the MF Global debacle to be the last. If at some point in the future, your brokerage should go bankrupt, your unregistered shares could be used as assets to pay off their creditors! Given that the whole Western financial system rests upon a foundation of shifting debt, expect more of these firms…along with perhaps millions of their customers (you?) to share something similar to MF Global’s fate.

Since the repeal of the Glass-Steagall Act in 1990, investment banks have been able to own and operate brokerage houses, and make leveraged derivatives’ market bets of 30 - 40:1 or more…while their unsuspecting customers share the risk.

“But I am protected by the SIPC!”

Think your funds are protected by the Securities Investor Protection Corporation (SIPC), which “

provides insurance coverage up to $500,000 of the customer's net equity balance, including up to $250,000 in cash”? Read a bit more on their website and you’ll see the following:

“The statute that created SIPC provides that customers of a failed brokerage firm receive all non-negotiable securities that are already registered in their names or in the process of being registered. All other so-called "street name" securities are distributed on a pro rata basis.“

(our bold)

So in the event your brokerage house goes down, if the shares are issued in their “street name” rather than yours…good luck! Maybe as a Canadian investor, you’re better off, eh? Sorry. It’s pretty much the same story for our neighbors to the North.

Learn here about the two simple methods which can keep your stock account fund safe from broker-dealers who might decide to either sell your shares short, or “rehypothecate” them for their own financial gain. These methods are so safe that they can help keep the funds in your investment account out of reach – inaccessible – to your broker, whether due to brokerage house bankruptcy or improper trading.

The 2008 Global Near-Collapse and the MF Global Failure are Your Warning Shots…

After the 2000 doctom meltdown, many of your friends and family (maybe you?) saw their 401ks turn into 201ks– with prices still flat for over a decade. Next up was the real estate crash of 2006 - ? Now the Federal Government debt bubble is going down for the count. Three huge bubbles - gone, gone and going.

Meanwhile, gold has been rising for 11 years straight. You’ve been smart enough to invest ahead of the herd for what in a just a few years time, may become “The Biggest Bubble in Investment History” - Gold and Silver Mining stocks. Don’t risk having the “financial rug” pulled out from under you, if your brokerage house goes down the tubes…along with your account funds!

Trading stocks is stressful and risky enough as it is. Why put up with more worry about whether or not the stocks you (think) you own are themselves safe?

Take time to order, carefully read, and consider acting upon this timely and valuable report. If you haven’t yet read about and gone through the process outlined in BulletProof Shares, who do you think really owns your stocks? Maybe not you!

Remember, this report is available to all paid members of The Morgan Report. We are providing this announcement upon request, as David Morgan had spoken about this recently in an interview, and many callers asked how they could buy the report.

To learn more and purchase please go here...

http://tdv.bulletproofshares.com/dm/

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Information contained herein has been obtained from sources believed to be reliable, but there is no guarantee as to completeness or accuracy. Because individual investment objectives vary, this Summary should not be construed as advice to meet the particular needs of the reader. Any opinions expressed herein are statements of our judgment as of this date and are subject to change without notice. Any action taken as a result of reading this independent market research is solely the responsibility of the reader. Stone Investment Group is not and does not profess to be a professional investment advisor, and strongly encourages all readers to consult with their own personal financial advisors, attorneys, and accountants before making any investment decision. Stone Investment Group and/or independent consultants or members of their families may have a position in the securities mentioned. Mr. Morgan does consult on a paid basis both with private investors and various companies. Investing and speculation are inherently risky and should not be undertaken without professional advice. By your act of reading this independent market research letter, you fully and explicitly agree that Stone Investment Group will not be held liable or responsible for any decisions you make regarding any information discussed herein.

Become A Member