Invester alert: silver certificates from Canadian banks not fully backed by physical bullion

[skyson]

Since I am interested in buying some gold/silver, and planning to purchase PM certificates from Scotiabank, so I was looking around on the internet to do some due dilligence. Then, I stumble upon this shocking article, stating Canadian banks do not back their silver certificates with full amount of physical bullion, and even worse, refuses to redeem the certificates with physical!!

Holders of paper gold/silver: FORGET IT!!!

Since ScotiaBank is the by far the largest dealer in precious metals in Canada I decided to look into these allegations.
The first thing I did was to call ScotiaBank and ask them about their Silver Certificates.
This was my conversation reproduced as closely as my memory allows.
MS:What is the current price for Silver Certificates?
Agent: $13.30 Bid $14.00 USD ASK. (Silver was trading at $13.65 at the time)
MS: What is the minimum amount?
Agent: 500 ounces.
MS: So when I purchase this..do you go out and buy the exact amount and store it?
Agent: Our Silver Certificate is backed by Silver Bullion in our Vaults.

This gave me pause for thought. Exactly how much bullion was being stored in ScotiaBank's vaults?
MS: So you mean you do not purchase it?
Agent: It can be exchanged for Physical Silver (nice dodge there).
I decided to move on, since his answers were going in a circle.
MS:What are the annual storage charges?
Agent: 60 cents per 50 OZ per year.

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

As I see on your balance sheet that Precious metals as assets declined dramatically (from $4 Billion to $2.4 billion) while certificates liabilities declined from about $6 Billion to $5.6 Billion.

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

http://ispeakofpeak.blogspot.com/200...al-silver.html

TD bank(Toronto Dominion)

The holder of this certificate accepts the risk of non-delivery for any reason beyond the control of the bank

http://canadiansilverbug.blogspot.co...ailure-to.html

[rabot10]

Re: Invester alert: silver certificates from Canadian banks not fully backed by physical bullion

BV or GoldMoney easy to set up.

[Spartacus]

Re: Invester alert: silver certificates from Canadian banks not fully backed by physical bullion

When I bought certificates from TD (sold them couple of months later)
1. they would not let me see the certificates, or photocopies (!!!!!!!!!!! I'm so surprised I still bought them, considering how much abuse this could lead to)
2. they would not tell me if (forget HOW, they wouldn't tell me IF) the certificates could be exchanged for physical
3. they charged storage fees (based on how many ounces you "bought") for the certificates

http://itulip.com/forums/showthread....ilver#post6557

http://itulip.com/forums/showthread....lver#post51776

There are also articles floating around about one of the big US bank/brokerages doing the same thing (selling "silver" but not "really, "real" Silver", yerhonor), but being forced to admit it in court.

Since I am interested in buying some gold/silver, and planning to purchase PM certificates from Scotiabank, so I was looking around on the internet to do some due dilligence. Then, I stumble upon this shocking article, stating Canadian banks do not back their silver certificates with full amount of physical bullion, and even worse, refuses to redeem the certificates with physical!!

Holders of paper gold/silver: FORGET IT!!!


http://ispeakofpeak.blogspot.com/200...al-silver.html

TD bank(Toronto Dominion)

http://canadiansilverbug.blogspot.co...ailure-to.html

[Spartacus]

Re: Invester alert: silver certificates from Canadian banks not fully backed by physical bullion

Scotiabank MAY have the Silver.

When I exchanged my Scotiabank certificates for bars it took 6 months for delivery. They had none in Toronto and had to get some in from the Mocatta vault in NY.
(edit: clarification - I've forgotten the exact timelines, but I bought the certificates and told them I wanted bars. They said they would call me when bars became available, at which point they would do the exchange. I called every couple of weeks, but didn't push too hard. From purchase of certificates to delivery of bars was around six months, but I can't swear to that number - leave a large margin for error. I was apparently the first person to take delivery at that desk in many years.)

If they're promising the certificates are backed by Silver bars in Toronto ... well, maybe.

It's not a "maybe" for the others, IMHO. TD, CIBC, RBC, I think they'll all sell you "Silver" (all quoted me prices ca 2001) but they have zero metallic Silver - it's all paper or worth-less-than-paper electrons, IMHO

Since I am interested in buying some gold/silver, and planning to purchase PM certificates from Scotiabank, so I was looking around on the internet to do some due dilligence. Then, I stumble upon this shocking article, stating Canadian banks do not back their silver certificates with full amount of physical bullion, and even worse, refuses to redeem the certificates with physical!!

Holders of paper gold/silver: FORGET IT!!!


http://ispeakofpeak.blogspot.com/200...al-silver.html

TD bank(Toronto Dominion)

http://canadiansilverbug.blogspot.co...ailure-to.html

[nitroglycol]

Re: Invester alert: silver certificates from Canadian banks not fully backed by physical bullion

Scotia does sell physical silver as well, but they don't make it easy or pleasant. I bought off of them once last year; my experience is described here.

[skyson]

Re: Invester alert: silver certificates from Canadian banks not fully backed by physical bullion

Scotiabank MAY have the Silver.

The question is not whether they have the metal. The real question is whether they have enough.

Last week, I went into a Scotiabank branch(I have saving account there) inquiring about their silver certificates(I wanted to save bar charge and forwarding fee, which in total amount to 6% above spot). I specifically asked if they did regular audits to see if the amount of certificates they sold matched the amount of physical bullion they stored, and if audits were done, were they available to the public.

After a few exchanges, the branch manager told me:"We do internal audits. But our bank has very strict policy. To do business with us, you need to have faith in our bank".

What the heck. If one of the five bullion banks in the world, and the "conservative and prudent" banks of Canada are doing these sort of things, who can we trust?

The big question about these papers is: can you get to your bullions when you need them!

[cjppjc]

Re: Invester alert: silver certificates from Canadian banks not fully backed by physical bullion

When I bought certificates from TD (sold them couple of months later)
1. they would not let me see the certificates, or photocopies (!!!!!!!!!!! I'm so surprised I still bought them, considering how much abuse this could lead to)
2. they would not tell me if (forget HOW, they wouldn't tell me IF) the certificates could be exchanged for physical
3. they charged storage fees (based on how many ounces you "bought") for the certificates

http://itulip.com/forums/showthread....ilver#post6557

http://itulip.com/forums/showthread....lver#post51776

There are also articles floating around about one of the big US bank/brokerages doing the same thing (selling "silver" but not "really, "real" Silver", yerhonor), but being forced to admit it in court.

The best is they charged for storage and insurance. Insurance, insurance against what?

http://www.reuters.com/article/banki...25115120070612

The lawsuit, filed in August 2005, alleged that Morgan Stanley had told clients it was selling them precious metals that they would own in full and that the company would store.
But Morgan Stanley was actually making either no investment specifically on behalf of those clients or making an entirely different investment of lesser value and security, according to the complaint