Doubts about gold and silver ETF's

The takeaway message is this: when in doubt, always choose taking physical possession of gold and silver over paper certificates. Because in a financial crisis (which is a primary reason for buying gold and silver), those certificates are not 100% backed by physical inventory and may end up being claims to nothing. In other words, if you have to stand in line to claim ownership of physical bullion, you may end up being too late and a dollar short.

Also note that the custodians for the GLD and SLV ETF's are HSBC and JPMorgan, respectively, who are also allegedly the two biggest naked short sellers in the gold and silver futures markets. If 100 owners lay claim to each ounce of gold and silver, 99 stakeholders are going to be very disappointed when it's time to take delivery.

http://www.gata.org/node/8649