offshore metal holdings

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  • Fri, Jan 04, 2019 - 08:29am

    #1
    randyfloyd

    randyfloyd

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    offshore metal holdings

Hi folks,

Does anyone have an offshore vault service that they trust?

I think this is a potentially great way to diversify one’s safe holdings in case of domestic turbulence, but who can you trust?  Especially in a potential global crash situation?

(If there is already a big thread on this, I would greatly appreciate a link.  I tried to search but was having trouble with the website functionality.)

Thanks much

– Randy

  • Fri, Jan 04, 2019 - 09:14pm

    #2

    bronsuchecki

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    Offshore storage considerations

Approaching this issue I would first suggest it is a question of what country, then what dealer/service. No point having metal with a good dealer if the country is going to go down the tubes. Being Australian and having worked at the Perth Mint I would naturally suggest Australia. I would note that it does look like we will be having an extended housing price crash and recession but I think we will get through it. We do have a confiscation law current suspended on the law books but I really don’t see confiscation here as a risk given we mine 300 tonnes of gold a year (see http://goldchat.blogspot.com/2008/11/australian-gold-confiscation.html for my full coverage of this issue).

Perth Mint is obviously an offshore option, but I would also suggest ABC Bullion on the east coast. For US persons concerned about FBAR and Form 8938 reporting, I would suggest looking at https://www.abcbullion.com.au/storage-&-delivery/global-vaulting-solution as I believe this would not fall under reporting requirements as the custodian does not have access to your metal (note: allocated metal IMO is reportable if the custodian can access it when you want to sell it back).

The other location I like is Singapore. The government there is very pro precious metals, having removed sales tax on PMs, encouraged the set up of a refinery and general support of the local industry. It has a solid economy and long range thinking government and is like the Switerland of asia where a lot of the rich hold their weath, so likely to be safe in any “turbulence” situation.

I also like Singapore because there is a good number of dealers there, which is important as when you go back to sell you don’t want to be hit with crap buyback rates, which can happen if everyone if doing the same and the location doesn’t have an ecosystem of dealers and thus volume of business to absorb it (why I don’t recommend New Zealand even though it is a popular destination for Americans to set up a bolt hole).

Bullion Star and Gold Silver Central are good but I do like the set up at Silver Bullion/Safe House (see this chat I had with them

where I covered location issues as well as confiscation risk).

One other thing to do is buy what the locals buys, not what you like. Again when going back to sell your metal you will be a better buyback rate on product that is in demand locally. US Eagles may be globally recognised and available in that location, but local brands/sizes may have a better bid/ask spread. Just as the dealer what is the most popular because you want liquidity when selling back – they will tell you as they’d rather sell you that.

  • Sat, Jan 05, 2019 - 02:56pm

    #3
    randyfloyd

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    good stuff, thank you.  I

good stuff, thank you.  I like Singapore as well so I’m glad you mentioned it.  I’ve never heard of Silver Bullion/Safe House, I will check it out!  

I considered perth mint, but something seems off to me.  Were they storing gold for free there?  That is a big red flag for me if that’s true.  

Also that’s great feedback on new zealand, I was considering it but I see your point

  • Sat, Jan 05, 2019 - 02:56pm

    #4
    randyfloyd

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    good stuff, thank you.  I

good stuff, thank you.  I like Singapore as well so I’m glad you mentioned it.  I’ve never heard of Silver Bullion/Safe House, I will check it out!  

I considered perth mint, but something seems off to me.  Were they storing gold for free there?  That is a big red flag for me if that’s true.  

Also that’s great feedback on new zealand, I was considering it but I see your point

  • Sun, Jan 06, 2019 - 04:10pm

    #5

    bronsuchecki

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    Free Perth Mint storage

Silver Bullion built their own vault https://www.silverbullion.com.sg/Storage and are very strong on internal testing of the metal, which is why I like them.

The Perth Mint free storage, ie unallocated, is widely misunderstood. This http://www.perthmintbullion.com/au/Blog/Blog/11-02-28/Understanding_Unal… was my best attempt (and not that great) at explaining why it isn’t a “red flag”.

Note that even with the word “allocated” games are played and it is used by many in a “flexible” way to cover different types of storage, see https://goldchat.blogspot.com/2009/04/gold-and-silver-how-do-i-own-thee…. for a more precise breakdown of different storage types.

  • Sun, Jan 06, 2019 - 04:47pm

    #6
    timot78

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    Disclosure needed !

Bron,

I thought that you worked for Perth Mint in the past, and indeed, in one of the Youtube reviews you mention that you have worked for Perth Mint since 1994, and you have also actively marketed their bars and storage ( https://www.youtube.com/watch?v=lCnCfpi9ho0 ).  

For the sake of clarity and fairness to the readers of Peak Prosperity  it would be good to make a full disclosure what has your relationship with Perth Mint been (or continues to this day).   The claim that there are no red flags with Unallocated PM-s is probably tinted by your past/current relationship with Perth Mint.  I vaguely remember that there were in the past (2008- 2010?) some issues  (like Perth Mint Certificates :  https://www.celticgold.eu/en/gold-university/perth-mint-certificates.html  ).  

Peter  

  • Sun, Jan 06, 2019 - 08:15pm

    #7

    bronsuchecki

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    Disclosure

Hi Peter,

I did say my answer “having worked at the Perth Mint” but you are right about disclosure although I assumed people would check my profile, which is actually out of date so I will update that. I left the Perth Mint in 2016, went to work for Monetary Metals for 2 years and am currently self employed as a consultant in precious metals.

I haven’t had any relationship or work with Perth Mint since I left them. My defense of the Perth Mint’s unallocated (and I should say it is not perfect or without risk) is based on the fact that as a senior executive of the Mint and having held the role of group metal accountant for some years, claims that the Mint’s unallocated is a fraud is saying that I am a fraud and liar, which I guess you can imagine I take exception to.

Having said that I’d rather not get into the topic in detail, as it is covered in my personal blog and on the Perht Mint’s blog many time but regarding that celtic gold link is a republication of http://www.marketskeptics.com/2009/02/warning-about-perth-mint-gold.html which is unfortunately no longer active, as I think I left a response in the comments to that article. I did make this comment about it on my personal blog https://goldchat.blogspot.com/2008/12/warning-on-existing-au-and-new-ag-… where I note that it is a “rehash of a flawed analysis done by James Turk (competitor of the Mint with his GoldMoney) on our annual report”. If you don’t find that answer satisfactory, I’m happy to answer questions.

  • Tue, Jan 08, 2019 - 09:18pm

    #8
    timot78

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    Caution raised by several people re: Perth Mint Certificates

Bron,

 

Thank you for the disclosure.  However, Perth Mint Certificates, with “free” storage raise many questions.

For those who consider Unallocated Gold Perth Certificates, please read first the highlighted text in J. Turk’s reply to CFO of Perth Mint.  I don’t see flaws in Turk’s reasoning:   https://www.igolder.com/glossary/perth-mint/gold-certificates-are-not-gold/

He clearly states that owner of Gold Perth Mint Certificates is in a sense an unsecured creditor of the Perth Mint which is owned by Western Australian Government.  And the conclusions should be researched by the potential investor.  Bron, according to the disclosure, is NOT an impartial party in this discussion.  The link above contains several more sub-links re: Perth Mint Certificates and these should be studied, in my opinion, before considering investment into this form of unallocated gold certificates. 

– Peter

  • Wed, Jan 09, 2019 - 06:04pm

    #9

    bronsuchecki

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    Turk vs Perth Mint

I remember that tit for tat between James Turk and Richard Hayes of Perth Mint. Two quick points:

there is $96.2 million of gold on hand against $234 million of liabilities

This is completely incorrect. James just didn’t delve deep enough into the notes to the accounts which would show the unallocated liabilities being fully backed. This has nothing to do with me being or not being impartial, it is simply a factually incorrect analysis of financial statements.

Is it going to exercise a “force majeure” clause to relieve itself of any obligations?

No, because force majeure clauses are only temporary, they do not allow you to take metal. Funny thing is that Goldmoney has force majeure clauses in its client agreement.

As I said, there are risks with unallocated in general and Perth Mint’s version, but my assumption is that Peak Prosperity people are more about direct physical storage and would be avoiding these types of programs as well as ETFs, so I won’t bore everyone with line by line discussion of the points made in those links.

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