The Spot Price of Precious Metals Is Becoming Irrelevant
In light of the recent violent down-and-up action in the precious metals, we invited the executives behind the Hard Assets Alliance (HAA) on to discuss the impacts they're seeing recent developments have on the balance of buying and selling for gold and silver.
The HAA is a large precious metals bullion dealer that gives the retail investor access to an institutional-grade platform for purchasing, storage, and delivery. The platform itself is operated by Global Bullion International (GBI), which counts a number of the country's largest banks and funds among its clients. So today's guests have an exceptionally good finger on the "pulse" of bullion transactions in today's market.
(Full disclosure: The HAA is endorsed by PeakProsperity.com. Details on why and the business relationship between our firms can be found here)
In this podcast discussion, Chris asks Ed D'Agostino (General Manager, HAA) and Savneet Singh (President & Co-Founder, GBI) what's remarkable about the recent action in the precious metals.
For starters, demand is off the charts:
Savneet: It’s tremendous. On Friday and Monday we had the two largest days of selling. We at GBI had some of the biggest days of all time. We had four to five times as many buy orders and sell orders, both in number of trades and in volume. Far more significant buying than selling, and it’s continued throughout the week. Buying has been just tremendous on the gold side. It’s been robust across markets – both in the United States and also in our overseas locations. It’s been consistent across the board.
It’s also representative across all of our dealers. When we surveyed our dealers to get their feelings on what’s happening, it’s been off the charts. Our refiners had two times as many orders as they usually do. Our bullion dealers had, on average, three to five times as many orders as they normally do. Our bullion banks had the same type of positive inflows verses outflows.
Ed: That’s the same with the Hard Assets Alliance. We’ve seen record inflows of cash deposits over the last two weeks, and purchases have far outnumbered – basically nine-to-one at the Hard Assets Alliance for purchases verses sales of positions.
Second, the demand we're seeing is from existing customers who are returning to buy in bigger volume as they see the precious metals as being "on sale" right now. This is creating supply strains across the system. If we get to a stage where another 1% or 2% of the population decides to become first-time bullion buyers, supply could become exhausted quickly:
Ed: I think there’s going to be some serious supply constraints. I agree, we're nowhere near mainstream yet. Once more conventional retail investors wake up to the fact that they need some sort of protection in their portfolio against debasement of currency and inflation the demand is going to surge.
Savneet: At this moment, particularly on gold, I just don’t see there being a shortage. Even ETF and closed-end funds are looking for a better way to buy. We’ve never had a problem being able to coordinate extremely large purchases for them. We’ve already hit the capacity on the silver coin side where there’s just not enough out there to satisfy demand. Because that demand is centralized around coins, people will have to wait for what mints want to do – whether it’s the Royal Mint, the U.S. Mint. You are kind of tied to the supply of one producer. Silver bars are a little bit better, but silver is just a much smaller market than gold is. I think you're absolutely being exposed to shortages there.
On the gold side, I think if gold ever became truly mainstream, as Ed was talking about – gold's total market value is $5-6 trillion dollars. If 1-2% of the population wanted to buy some at current prices, there’s just not enough of it. So, two things happen: Either you have a gigantic price re-rating, or you don’t have supply.
Third, the surge in physical buying combined with tightening supply is resulting in the premium paid over spot price for physical bullion to march upwards quickly. For all of recent memory, the price of precious metals has been determined in the paper marketplace (e.g., COMEX; LBMA). That may now be changing. Should the availability of physical bullion start setting the price action, the spot price quoted in the paper market for gold or silver will become an anachronistic irrelevance:
Savneet: Internationally you traditionally see huge buying after a price selloff. But since the recent huge selloff, you've had more buying than people ever imagined internationally. What was unique about this selloff is that the buying surge occurred in the United States as well.
In the U.S., when we’ve had huge price run-ups, we have lots of buying. It’s not often that within the same day of a huge price decline, we have significant buying. So it was different than other very large days in our company’s history in that you've just had such counterintuitive buying.
Ed: And such a big disconnect between the spot price and the actual price that you're going to pay for physical, particularly on the silver side. You could make the argument that spot price is becoming irrelevant relative to the physical market because silver is well north of the 20% premium over spot right now.
Click the play button below to listen to Chris' interview with Ed D’Agostino and Savneet Singh (31m:12s):
Chris Martenson: Welcome to this Peak Prosperity podcast. I am your host, Chris Martenson. Today we welcome Ed D'Agostino and Savneet Singh to the program. As you may be aware, Peak Prosperity endorses the Hard Assets Alliance (HAA) as our preferred platform for purchasing gold and silver. Given all the recent volatility and the price of the precious metals as well as rising premiums and tightening supply for physical bullion, we thought it would be timely to talk with the folks operating HAA and to get their take on this situation. Ed is the general manager of the Hard Assets Alliance, and Savneet is president and co-founder of Gold Bullion International (GBI) – the institutional trading platform that powers the Hard Assets Alliance. Gentlemen, thank you so much for joining me today.
Ed D’Agostino: Great to be here Chris.
Savneet Singh: Thanks for having us.
Chris Martenson: Great. So Ed, before we dive into the recent market action, which I know everybody wants to hear about, perhaps you can give us a quick summary of the mission behind the Hard Assets Alliance and why it was created just about a year ago.
Ed D’Agostino: Sure; I’d be happy to. Basically, the principals around the Hard Assets Alliance are also in the financial newsletter-publishing business and specialize in precious metal miners in gold and silver. We’ve always been interested in the space and invested in the space. We wanted to get into the precious metal market directly, but for years we hadn’t really found the right vehicle. We’d gone pretty far down the road in developing our own private depository outside of the U.S. We ultimately decided that just wasn’t the right fit for us. We were struggling a little bit with the right model to go to market for our readers. That’s when we met Savneet.
Savneet had a need as well. He was interested in expanding the reach of his company beyond institutions and large funds to the individual investor, but he didn’t really have the reach or the infrastructure to do that. So it really was a great fit for us. We love their platform, the ability to store overseas or domestically. And we love the trading platform that they have set up because it offers great price transparency and competitiveness.
We took it one step further. Instead of just doing this platform on our own, we invited essentially all of our friends to join us. We invited any and all information providers, websites, newsletter publishers to come and join us and get behind one best-of-breed platform. That really was the genesis of the Hard Assets Alliance. That’s where we are today.
Chris Martenson: So there was meeting a need that wasn’t really filled out there. Peak Prosperity.com users can find out a lot of the actual benefits that exist in the HAA platform, which we think are quite numerous and really quite good. And a lot of what stitches all of that together is the magic of the trading platform. So, Savneet, what is the Gold Bullion International platform, and what advantages does it really bring to the market?
Savneet Singh: Sure, thanks Chris. I guess I’ll step back and talk a little bit of the genesis of the platform. Around 2009, myself and a couple of partners were trying to acquire gold. When we went out to try to execute it, we found it extremely cumbersome and difficult. You were either forced to call up a Swiss bank – and if you didn’t have $20 million it wasn’t available to you – or you had to go to an online website or a store where you might not be completely comfortable with the quality of the gold, the service, the ability to sell it back. It just wasn’t really a robust service. We found it very odd that when we’re buying stocks and bonds, the ability to trade online had become so robust, but it hadn’t really happened in precious metals.
What we did was we, over a long period of time, convinced the large precious metal dealers around the world to tie into a technology platform where they would be able to bid on orders from our client and we would be able to then take client orders, bid out to this market of dealers, get our clients the best price, and then provide a really robust back end for storage, insurance, and audit.
Essentially what we think we’ve done is create the first truly ubiquitous platform or exchange for people to buy and trade the physical asset. We don’t do any futures, any derivatives. It’s all pure, physical precious metals. It’s been fantastic. We’ve been able to really collapse pricing for our clients. We’ve been able to store metals in seven or eight locations all around the world. The Hard Assets Alliance is a key part of our growth strategy.
Chris Martenson: Great; so this platform is really matching buyers and sellers, but you're tapping into a very deep, very liquid market. There’s a wide variety of metal sources that exist out there. What are those sources that you're tapping into right now, just generally speaking?
Savneet Singh: That’s a good question. Everything we do is what’s called on an “agency basis.” So, we take an order, we bid it out to our market of dealers, and whatever dealer bids the best price gets the transaction. So we’re not even matching buyers and sellers and taking a spread ourselves. We’re literally finding the dealer who has the best price at that moment in time.
If you came in and said I want to buy $10,000 of silver, that order would hit our system, we would execute with the dealer who has the best price, and then we’d literally take those coins to the location where you've asked us to store it and feed all that data back into whatever system you ordered from. So, if it was the Hard Assets Alliance, in your Hard Assets Alliance account you’ll have the record date, the trade date, the settlement date, and the positions all on your statement – all available to be sold also online. So it’s complete. The retail investor has access to institutional pricing and institutional service.
Chris Martenson: So, how many dealers are in that network right now?
Savneet Singh: We have about 15 dealers. These vary from large refiners to what we call bullion dealers – people who specialize in trading bullion but aren’t banks or stores – and then we have the actual bullion banks who participate in our network as well.
Chris Martenson: So, a pretty wide market structure there?
Savneet Singh: Yes. If one day, for example, the banks go out of business, we have dealers we can go to. If the dealers go out of business, we have the refiners, and so on and so forth. The goal is to have extreme diversity and supply so that we always have availability in all the locations that we’re selling in now.
Chris Martenson: Excellent. Let’s get right to what happened recently. In the wake of this very historic price decline that we saw in gold and silver that happened on Friday and Monday of the week prior to the recording of this podcast, what are you seeing now in your marketplace experience in terms of the balance of buying and selling? I’m interested in what’s happening to premiums, delivery times, and inventories. Let’s start with gold.
Savneet Singh: Okay. To keep it short, it’s tremendous. On Friday and Monday we had the two largest days of selling. We at GBI had some of the biggest days of all time. We had four to five times as many buy-orders and sell-orders, both in number of trades and in volume traded. So, far more significant buying than selling, and it’s continued throughout the week. Buying has been just tremendous on the gold side. It’s been robust across markets – both in the United States and also in our overseas locations. It’s been consistent across the board. It’s actually representative across all of our dealers.
When we surveyed our dealers to get their feelings on what’s happening, it’s been off the charts. Our refiners had two times as many orders as they usually do. Our bullion dealers had three to five times as many orders on average as they normally do. Our bullion banks had the same type of positive inflows verses outflows.
Ed D’Agostino: That’s the same with the Hard Assets Alliance. We’ve seen record inflows of cash deposits over the last two weeks, and purchases have far outnumbered – basically nine-to-one at the Hard Assets Alliance for purchases verses sales of positions.
Chris Martenson: Ed, what about silver verses gold? Any differences there, or are you seeing strong demand in both?
Ed D’Agostino: Right now we offer silver in the U.S. About a month ago we started offering silver in Melbourne. Last week we started offering it in Singapore. If I look just at the U.S., I would say it’s still about 50/50. Hard Assets Alliance customers tend to like silver just as much as gold. That has been pretty consistent over time, including the last two weeks.
Chris Martenson: You're recording very strong demand, and it’s pretty evenly spread between gold and silver, at least among the Hard Assets client base at this point.
Ed D’Agostino: That’s correct.
Chris Martenson: All right. Savneet, in silver, does that hold true from what you're seeing across the larger platform experience?
Savneet Singh: Absolutely. I do think the clients of Hard Assets Alliance have definitely taken advantage of silver’s depressed price more than our other clients, but it has been across all our platforms. Silver is clearly fascinating to us right now, because for most dealers who are trying to get access to silver coins, they’re waiting five to eight weeks for delivery because the production is so delayed, and delayed because of large demand. Silver is where you're seeing production delay, settlement delays, and access being tighter and tighter.
Chris Martenson: Are you experiencing that same tightness within your network as well? Are any silver products in your inventory in short supply right now?
Savneet Singh: I would say because we have such a wide network of dealers, we’re able to generally get supply. But you know, if this continues in the coins, we might have to slow down. But broadly, I would think if you called any dealer right now, they would have a very hard time getting you the very popular silver coins. The demand was so much bigger than anyone had expected. The supply exists, but it takes time to get it back into the system.
Chris Martenson: Having been in the gold and silver markets for about 13 years now, I’ve never seen a price decline have this counter-intuitive response on the part of the buying public. In times past, I’ve noticed that sales sometimes spike during down periods as weak hands get shaken out. I don't know how to interpret this besides there aren’t that many weak hands in the business at this point or people recognized a buying opportunity when they see it. But, for whatever reason, this price decline resulted across the board in a pretty large explosion in buying interest, and it was across many different cultures. So, this isn’t just a U.S. perspective. I don't have firsthand knowledge, but I read the newspapers and see what’s happening with buying in China, buying across Asia, in India, in Europe, and even today the Royal Mint out of the UK is reporting that they’ve seen an explosion in demand there, too. It looks pretty worldwide at this point. Would you concur, or are there any wrinkles in that story?
Ed D’Agostino: Just adding that on our side we have newsletter editors in Singapore and Thailand and they’re all saying the same thing. Whenever they walk by physical dealers, the line is literally out the door and around the corner.
Savneet Singh: Internationally, you traditionally see huge buying after a price selloff. And then, since you have such a huge selloff, I think you had more buying than people ever imagined internationally. What was unique about this selloff is that it was in the United States as well. Ed can comment on the Hard Assets Alliance, but I think we saw it there as well – which traditionally happens abroad. I think it’s the education – the newsletter partners of HAA have done a great job of educating their customers and their clients about taking advantage of dips like this.
What’s even more unique is that historically, in our business, when we’ve had a price decline, we’ve had sales. When we’ve had huge price runs, we have lots of buying. It’s not often that within the same day of a huge price decline we have significant buying. So it was different than other very large days in our company’s history; in that intra-day, you just had such counterintuitive buying.
Ed D’Agostino: And such a big disconnect between the spot price and the actual price that you're going to pay for physical, particularly on the silver side. You could make the argument that spot price is becoming irrelevant relative to the physical market because silver is well north of the 20% premium over spot right now.
Chris Martenson: Twenty percent, wow. That just erupted. I remember I was shocked when it went to 7% then 8% then 10% in the days, Friday and then Monday and into Tuesday. Now, it seems to have spiked even higher. I found a couple of online dealers where the average now for silver eagles is $8 or $8.50 over spot. So, that’s pretty high. It just speaks to real tightness in the market.
I’m wondering, do you expect this demand to continue? I know this is a bit of a speculation game here, but let me ask this question more directly: How long can this demand continue before there might be a danger of physical supply simply being overwhelmed – that there’s just no chance to meet the demand? How big is the pipeline relative to what demand is right now? How big does demand have to be before that pipeline essentially breaks?
Savneet Singh: Obviously it’s very hard to predict. I don't think anyone has ever predicted a price selloff like we saw. So it’s hard to predict the future. What I would say is that the fundamentals of owning gold haven’t changed one bit. I think the price has changed, but the fundamentals haven't changed. If you have that value-investing mentality built in you, I think you will continue so see some solid buying. Secondly, people don’t often talk about this but I think it is important; the education on gold has increased dramatically in the last two years – the amount of articles, the amount of research – demand has led to education. Education is the best way to create long-term demand.
When we had this price decline, I was surprised that our institutional clients were buying just like our retail clients were. Historically, our institutional clients will dump during a selloff and buy during an uptrend. I think the more people who are aware about gold and have access to it, the more it puts a stepping stone into a nice long-term demand trend. In the short term, it’s very, very hard to predict, because clearly there are other forces at work beside the physical markets.
Ed D’Agostino: I think the other thing that you'll see in the short term, Chris, is – for example, the U.S. Mint is pulling back on manufacturing tenth of an ounce Eagle coins. You're not going to be able to get those for quite a while, I would say. Once they run out, they’re going to be gone for a while.
Chris Martenson: The U.S. Mint confuses me. They’ve done this before where they say demand is so high we’ve decided to stop. Is this because they’re just going to concentrate on minting other things? I would have thought that the production runs where you produce one-tenth ounce would have been slightly different presses and dyes from the ones where you're producing the one-ounce coins. Maybe I have that wrong. But is there something odd in that they’re doing that, or are they just overwhelmed and concentrating on larger coins at this point?
Ed D’Agostino: I think it is the latter. I think they are overwhelmed with the demand, so they are just focusing on the one-ounce coins.
Chris Martenson: Here’s what I was trying to get at with the prior question. I can still walk into a party with 100 people and find maybe one other person who has invested in gold or silver, and maybe I’d have to go to 200 people to find somebody who actually did it in the physical form – not through GLD or SLF or any other ETF at this point. So physical ownership is still a relatively small percentage. I’m going to guess that when the price got knocked down that the people who stepped up to the plate to buy more were probably that same crowd – maybe the crowd expanded a tiny bit. My perception is that even with that sort of surge of demand, as tiny as it was relative to the overall percentage, that we found the dealer inventories for popular retail products just got swamped and eliminated.
The question is: Is the system ready for really large public participation that might be measured in whole percentages, like when I can walk into a party and find five people out of a hundred? How do you think the system will fare?
Ed D’Agostino: From my perspective, I think there’s going to be some serious supply constraint. I agree, we're nowhere near mainstream yet. We frequently tell people that everyone should have some sort of allocation to precious metal, whether it’s 5%, 10%, or whatever is comfortable for you in your personal situation. But I agree, I get the same reaction when people ask me what I do for a living. When I say I’m in the precious-metal business, most of them don’t even know what that means.
Once more conventional retail investors wake up to the fact that they need some sort of protection in their portfolio against debasement of currency and inflation, the demand is going to surge. Even if everyone decides well, I’d like to have 3% or 4% or 5%, there is strength in numbers.
Chris Martenson: Absolutely. Savneet, from our end, before we started the recording of this podcast, you and I were talking about how the precious metal market is very large. It’s very liquid. The precious metals move around rather freely. Do you see a point where it could get physically tight, or do you think that’s really still pretty far from where we are at this moment?
Savneet Singh: First answer: Yes. Second answer: At this moment, particularly on gold, I just don’t see there being a shortage. Even ETFs and closed-end funds are looking for a better way to buy. We’ve never had a problem being able to coordinate extremely large purchases for them. We’ve already hit the capacity on the silver coin side, where there’s just not enough out there to satisfy demand. Because that demand is centralized around coins, people will have to wait for what mints want to do – whether it’s the world mint, the U.S. mint, the Canadian mint. You are kind of tied to the supply of one producer. The silver bar is a little bit better, but silver is just a much smaller market than gold is. I think you're absolutely exposed to shortages there.
On the gold side, there’s two things in play. I think if gold ever became truly mainstream, as Ed was saying, absolutely there’s not – clearly, gold total market value is five or six trillion dollars. If one or two percent of that world asset was there, clearly there’s just not enough of it. So, two things happen: Either you have a gigantic price re-rating, or you don’t have supply. So, I figure you get into that standpoint if and when you get to the point that demand is that large.
Chris Martenson: Excellent. Speaking of demand, let’s talk about something that has really been on my mind, and I’ve been writing about it – the flow of gold from West to East. There have been a lot of stories about that. We’ve seen India’s demand somewhere between 800-900 tons for the past three years running, which is really quite high. You have China being the number two producer in the world, exporting zero but importing I think 885 tons in 2012. You add those two numbers together and you discover that India and China alone, out of all new mine production, coming in at 2700 tons. They’re yanking down anywhere from 40-60%, depending on how you like to count. That’s quite a lot, all things considered. I’m wondering, do you have any insights into that flow from West to East? Does that show up anywhere in your platform data?
Savneet Singh: We’re clearly seeing more demand and premium changes abroad for smaller products. I think the demand is robust. I think a lot of the data that has come out Casey Research and others is showing just how dramatic the demand in China is for physical gold and silver. There was a video last week, actually, showing that the gold exchange, they’re importing gold from London and Zurich now. It’s clear there is a trend now.
I would argue that in India, the demand has been consistent for many, many, many years. They’ll look at supply that’s used to serving that market. In China, you have the fact that China is the world’s biggest gold producer and also its biggest importer. I think that area has the biggest potential to change the gold market. From our data, we do see a demand. As Ed mentioned earlier, we even see demand from U.S. clients to purchase gold and have it stored abroad.
Chris Martenson: Interesting. Are there any favorite destinations right now for having gold stored abroad?
Ed D’Agostino: Singapore is actually the number one destination for all of our purchases right now at the Alliance. As far as client assets in storage, Salt Lake City is the number one destination and number two is Singapore, which is pretty remarkable because Singapore has only been online for about three months. It’s already overtaken all the other non-U.S. locations, so very quick growth there. I would say 80% of Hard Assets Alliance customers, of their purchases for non-U.S. storage, 80% is going to Singapore at this point.
Chris Martenson: Well, that’s interesting. Let me follow-up on that first, Savneet. Ed, that’s very interesting because I would have just intuitively thought maybe Switzerland – that bashing of freedom and safe haven, and a place where people might feel they can have some of their assets safely stored out of country in a really secure location. But somehow Singapore has risen above that. How is that, do you think?
Ed D’Agostino: You know, this is just my personal opinion, but I think that when you look at the will of the U.S. government and its ability to impose its will on foreign nations, I think the perception is that maybe Zurich is not quite as strong as it used to be. Singapore, on the other hand, has a very independent reputation. It’s a strong political entity that’s very pro-business, very easy to do business in, and they protect individual rights. I think Singapore, in many ways, is the new Switzerland.
Chris Martenson: That’s fascinating. How things change. Savneet, what did you have to say around that?
Savneet Singh: I was going to say the same thing. Ed hit the nail on the head. People are looking for a new area to protect their wealth, and Singapore has shown for a long time now a high respect of private property. When you're buying gold, I think that matters quite a bit. I had mentioned Salt Lake City being popular. I think that’s popular because Utah as a state has always had great respect of private property, going back to its original founding history. So I think we as humans look for an area that seems to respect private property. Obviously, Switzerland, and particular Zurich and Geneva, have changed a little bit in the last few years in their ability to disclose. I think people have decided to look more abroad.
Chris Martenson: I certainly would agree with the idea that to the extent to which the United States Treasury can reach out and touch companies over in Switzerland, which they certainly have done in the past years. But more importantly, what happened after Cyprus – the general imposition of the idea across the entire EU is that assets are now imparable [sic] even if they are not related to or in any way responsible for said losses that might be existing within that system. I mean, they’ve just really started to encroach in a very worrisome way, at least in principal – in Cyprus’ case – and more broadly, conceptually, in words that have been spoken since then. So I can certainly understand why Europe is no longer a favored destination. That makes a lot of sense.
I was wondering, is there anything in your experience, besides the rising of Singapore to the number two destination, that’s showing that – are you seeing flows of gold out of Europe? Is that showing up yet?
Savneet Singh: We’re not seeing that yet. What we are seeing is European clients choose not to store in Europe. Maybe that is the answer. The other thing we’ve seen is the demand to store in different locations. Through the Hard Assets Alliance we have a location in Melbourne, Australia. That was a result of client interest and client demand. We are seeing things out there. But the ability to track flows leaving Europe is a little bit harder to find.
Chris Martenson: All right, so let’s turn our attention to perhaps somebody who is listening to this who has not yet bought precious metals but has been thinking about it. For all those who’ve yet to buy, what would your advice be at this moment?
Ed D’Agostino: Again, from my perspective, my advice would be, if you've been looking at precious metals, hopefully the events of the last two weeks have eliminated the fact that unless you are buying it purely to trade and you want the ultimate in liquidity and you're truly just short-term speculating, you really need to own physical metal. I would suggest that you store it somewhere other than your house, which is I think a mistake that a lot of people make. They pile it up in their house, and there are several risks. There’s the obvious; there’s the threat of theft, and 90% of the time that theft involves someone that you know. Also, the fact that precious metal can melt. So if you have a fire and you have a chunk of your assets in your basement or in a sleeve of a lamp, they might be gone. My advice, in short, would be own physical and store it somewhere safe.
Chris Martenson: All right.
Savneet Singh: I’ll look at it as more from the investment side. If you talk to great investors around the world, or people who never turned out to be great investors, I think they’ll always say they’d wish they bought when there was lots of fear in the street. They wish they’d bought when markets were down. I work with a partner, and he and I always talk about, you know, I should have put my entire portfolio into equities at the bottom of 2008 or 2009. Or, I should have had my portfolio in homebuilders a year ago. Historically, when there are times of great drops, you always look back and wish you had actually acted on that dip.
I think now we’re getting to a point where that might be happening in precious metals. So if you've been on the sidelines, if you're fully convinced, then you should absolutely get into the market. If you're not convinced, maybe you go in with a portion of what you had originally planned. But getting in the market is very important in keeping you tied somewhere and getting active in what’s going on. I think it’s very important to partake in it.
Towards Ed’s point, the platform of Hard Assets Alliance, if you are buying, is that here’s nothing that’s safer, more secure, and more transparent. It’s very important, whether you use Hard Assets Alliance or anybody else, to work with a high-quality vendor, because this is your wealth. This is your money at risk. You just don’t want to take a risk with it. It’s really important to do your diligence and find a vendor who can provide you all the services that you really need.
Chris Martenson: Indeed. As we learned with MF Global and other things like that, you really have to understand the fine print really well in some cases. Understand that the custodial arrangements vary, and some of them are really good and some of them aren’t. I will point out that Adam and I did a lot of due diligence on HAA and the whole system, and came to the conclusion that it satisfied all the things we needed to see. I’ll really take off and say that this is as confident as we can be with independent third party audits and a system of custodial trust networks that looked really good and solid, as solid as they can be.
Really, the key message that I’m getting out of what happened in this past week and a half is that –Here’s my point-of-view: We’re still in the early stages of this bull market of precious metals. There will be a time when it will make a lot of sense to transition out of these substances into other things. But we are really far from that moment. I know that because so many people are not yet invested in gold and silver. So, we haven’t really hit the public participation phase of this market. But when we do, this past week taught me that your access to metals is going to be as important as anything else out there.
What I really like about the Hard Assets Alliance and the trading platform you've stitched together is that there are 15 dealers and some of them are very large. That’s about as liquid of a market as I can imagine being able to tap into. I just think that’s a real plus. We’ll get into the real frenzy moment of this market. It’ll be interesting. We won’t note it necessarily in lines that are queuing up around the block in Hong Kong; we’ll see that pretty much everywhere, and a similar sort of virtual lines will be queuing up all across the Internet.
So, having access to the ability to trade both in and out of, but particularly to obtain, metals in this next stage is just going to be critical. So, what I like about your platform is that it’s got about as much depth as I could imagine personally having access to, as a guy sitting at a computer screen with a mouse in my right hand.
Ed D’Agostino: Chris, I couldn’t have said it better myself. That’s exactly why we got behind this platform and partnered with GBI, because of those exact reasons – access to liquidity, being able to own physical metal and yet still have ETF like liquidity, and being able to do it online in a transparent manner.
Savneet Singh: When you look at a physical platform, you need to look at three things. One is it’s institutional nature. You don’t just want to go anywhere. You want somewhere where your money is safe. That means everything from the buying to the vaulting to the audit to the insurance. Then, I think you want to make sure you're getting a great price, and Hard Assets Alliance does a fantastic job of making sure your price is bid out to an active network in the best-price way. Then third is the liquidity and sell side. You don’t just want to buy gold and store it somewhere. You want to be able to sell it when you need to sell it or if you want to sell it. Or, if you need to find a way to transfer your metals, then you need to do that as well. Those are the three elements that if I was an investor I’d look at. The Hard Assets Alliance was absolutely built for those needs.
Chris Martenson: Absolutely. I’d really like to thank you both so much for your time today and what you're doing. It’s just been a fantastic conversation. I’d like to invite listeners who want to find out more about Hard Assets Alliance to go to Peak Prosperity.com, scroll down to the bottom of the main page to the Resources section, then click on the link that says where to buy gold and silver. That will get you to a page where the HAA benefits are described in detail. Or you can go to the website, HardAssetsAlliance.com – note that assets is plural in that. You can find out more there.
We heard it here. The fundamentals for gold and silver haven’t changed. Education is up. Institutional buying has been strong, as has individual buying. It’s just been a record week and a half here. We’re going to watch that carefully and learn more as we go along. So, Ed and Savneet, thank you so much for your time.
Ed D’Agostino: Thanks Chris, great talking to you.
Savneet Singh: Thank you.