Sprott Physical Gold Trust Announces Follow-On Offering

The stock was down .31 after hours on this announcement. So much for the healthy premium.

Even though the funds will be used to purchase additional gold bullion and add a little cushion to the cash on hand, there is generally some game playing done by the underwriters who like to hedge (some might say 'front run') their over allotments.

PRESS RELEASE: Sprott Physical Gold Trust Announces Follow-on Offering of Trust Units
Thu Sep 06 16:04:24 2012 EDT

TORONTO, ONTARIO--(Marketwire - Sept. 6, 2012) - Sprott Physical Gold Trust (the "Trust") (NYSE:PHYS)(TSX:PHY.U), a trust created to invest and hold substantially all of its assets in physical gold bullion and managed by Sprott Asset Management LP, announced today that it has launched a follow-on offering (the "Offering") of transferable, redeemable units of the Trust ("Units").

The Trust will use the net proceeds of the Offering to acquire physical gold bullion in accordance with the Trust's objective and subject to the Trust's investment and operating restrictions described in the prospectus related to the Offering. Under the trust agreement governing the Trust, the net proceeds of the Offering per unit must be not less than 100% of the most recently calculated net asset value per Unit of the Trust prior to, or upon determination of, pricing of the Offering.

The Units are listed on NYSE Arca and the Toronto Stock Exchange under the symbols "PHYS" and "PHY.U", respectively. The Offering will be made simultaneously in the United States and Canada by underwriters led by Morgan Stanley and RBC Capital Markets in the United States and RBC Capital Markets and Morgan Stanley in Canada...

Gold Daily and Silver Weekly Charts - Metals Capped While the Stock Market Flies on Hot Money

Draghi lit the markets' fire with hot money pledges in Europe, but the metals were firmly capped.

This is standard operating procedure, especially on the day before a Non-Farm Payrolls report.

Intra-day commentary on single currency monetary theory and political organization here. It amazes me how few people seem to understand this. A single currency, which therefore dictates a single monetary policy, cannot span a political geography that does not have a tightly unified fiscal arrangement including transfer payments and revenue adjustments to accommodate regional conditions. Period.

This is why the push for a single world currency, while maintaining the promise of national independence, is a malignant myth of the would-be money masters.

Bill Gross says he prefers gold to bonds. Directionally correct, but his choice of investment instrument (GLD) is probably more risky than he realizes.

SP 500 and NDX Futures Daily Charts - Mario Draghi Dit "Trois, Deux, Un, FEU"

The ADP employment report came in well this morning, all things considered.

But it was all about Mario Draghi and the ECB, and their pledge to buy short term sovereign bonds in a purportedly unlimited manner. Since the purchases will be done in the secondary market, and will be sterilized, there is thinking that the German court will find no objections when they meet on September 12.

No matter in what brand of paper you might wrap this fish, it still smells of monetization. And it is primarily designed to benefit the big banks, and not the ordinary European. So it will most likely fail without meaningful systemic reform.

This is just Bernanke, Italian style.

Non-Farm Payrolls tomorrow.