ALERT, ALERT Raid on Gold/Silver!!!!!!!

[metalman]

Re: Silver Coinage, Peak Oil, Cash Payments...

He told me he could not recall anyone ever paying for fuel with cash. Plastic nation...:p

rent extraction approaching 100% of all economic activity?

how many will spend their stimulus check?

[Mega]

Re: ALERT, ALERT Raid on Gold/Silver!!!!!!!

Luke
Anything else on the Peith Mint?

We hear that its much "A do about nothing".......However it is goverment owned..........both a curse & blessing i guess.
BTW Did you have a nice 4 th?
Mike

[Guest]

Re: ALERT, ALERT Raid on Gold/Silver!!!!!!!

Hi Miker -

Well, since you asked for some info, here's a "pile O dirt" for you and everyone else here to peer at. Just for the record, I am not any huge fan of Jason Hommel although I do share his enthusiasm for silver - but the point is A) he's done a creditable job of pulling together some "significant" questions about the Perth Mint's foot dragging on delivering bullion to clients who request delivery, and B) the big point that bullion investors need to understand is that they are buying bullion as their "bedrock" security asset - yet they are laboring under some serious misapprehensions by carrying this out by means of "certificates" or "promissory notes" from "storage facilities".

In my view people who choose to take their Perth Mint facilitator / broker's assurances that there are zero issues are entirely responsible for their own potential and eventual "disappointments". You overlook that fact that you are accepting your guarantees from a chain of business entities whom are all on the receiving end of your paid commissions and fees. They profit from you - it is not therefore your due diligence if you are accepting as final any "verbal guarantees" from people who are getting paid to keep your trust in these accounts.

With regard to brokers generally, my experience has been that if you express an interest in gold or silver, they will invariably seek to introduce you to STOCKS, failing which they will earnestly seek to introduce you to CERTIFICATES OF STORAGE, which can produce fees for them as well. What they will invariably rgard with disgust, is your decision to simply BUY the metals you wish to acquire and take consignment for them. At that point, they are then out of your business and cannot derive any further fees from you. I suggest Miker that you are still somewhat "in thrall" to a certain famous brokers many speaking engagements and punditry, such that you regard their "disinterested advice" as a bedrock assurance which you can take to the bank.

What bears mulling over, is what it means to you, when you allocate certain of your funds to "bedrock assets". If that's what you think you are doing, then make sure the VEHICLE for doing that is something which passes your most skeptical scrutiny. With regard to the following, I don't endorse anything - it's just a collection of articles and client letters I've received regarding that entity, but I think it describes in a nutshell all of the fond illusions of the many people here who probably find lots of things to like about paper metal accounts - after all, they are regarded as so "convenient" and so "liquid". I think these are crappy ways to own the "bedrock assets" you have sought for safety.

This may be considered a "chore to read through" by some, but anyone who has a significant portion of their net worth tied up in precious metals may do well to mull this entire issue over carefully, and figure out for themselves what really constitutes "safety". There is nothing "tinfoil hat" about this at all - it's an entirely reasonable assumption in a world so awash with fiat paper assets that any uptick of interest from here going forward in the physical metals constitutes a breaking strain on their ready availability - availability for actual delivery.

The below articles and client letters are all about SILVER, not gold, because persistent questions on delivery times are all clustered around silver, and gold's delivery seems much less of an issue. However, taken all together, these notes amply illustrate the "slipperiness" of ALL custodial arrangments, and it appears a lot of people in this community who hold things like GLD and SLV, and these various "mint products in custodial arrangment" are surprisingly complacent about the issues they choose to simply overlook. To each his own desserts, when these metals really start to gap up in their exponential rises, as seems a probable behavior at some point in their intermediate future. Piling a serious chunk of one's net worth into pooled custodial accounts" is regarded as the middle option, but what people overlook is that A) that commits a large part of your funds, and B) that allocation's wisdom hinges entirely on their deliverability. I'd rather own metal futures contracts and get the leverage using a small portion of my assets, or own the physical stuff in my possession with a large chunk of my assets.

These "convenient and highly liquid custodial pool accounts" emit a certain stench, in my opinion. Also Miker, if you forward this directly to a certain brokers attention for further denials or rebuttals, that will put me squarely in his baleful headlights, which I would regard as a bit of a headache, insofar as I am still (nominally anyway) his client. Therefore please just continue to quietly do your own research if this item is of concern to you. You already have his opinion, and you have mine here, (in some detail). Just make your own decisions. If it were me, I would accept a little temporary inconvenience now to tweak my positions for higher assurance and potentially considerably less headaches in the future. To each his own. Your capital gains in the metals are not yet large enough for a sell and re-allocation elsewhere to be hugely damaging to you. Later, that consideration may box you in considerably more. Good luck meanwhile ever attempting to have the Perth Mint actually deliver any bullion to you, as you'd be utterly scalped in various transaction costs once you have serious capital gains involved.

_______________

PERTH MINT CRISIS WATCH - Silver Stock Report

by Jason Hommel

The testimony of the people below go to show that you cannot trust silver certificates, nor can you trust allocated silver storage, nor can you trust government guarantees. (Trusting government guarantees for bullion is the most absurd thing I can think of, since governments are the ones who are printing money which competes with the demand for silver as money!)

=============

Date: Thu, 28 Feb 2008 18:52:05
Subject: Re: Silver Stock Report

S Tabikh wrote:

Jason,

Ive just ordered $20k worth of Silver 100oz bullion from the Perth Mint and have to wait upto 6 months for delivery for such a small order. Goes to show the lack of Silver avaliable.

Regards,
Shafic

=============

Date: Thu, 28 Feb 2008 15:07:40

Peter wrote:

Hi Jason,

Thanks for sending me your latest email, I'm always interested in hearing your opinion of the current state of the Silver market.

I was rather alarmed, however, to read the story of the gentleman you mentioned who had 10,000 ozs of allocated Silver stored on his behalf by a "AAA rated,... guaranteed " mint which "services the Asian market" ...I assume you are unable to publicly identify the mint concerned for legal and other reasons, but I would greatly appreciate it if you could inform me privately of same. IE: Is it the Perth Mint?

The reason I ask, as you can probably guess, is that my own situation is almost identical to the one mentioned in your article (which listed difficulty getting allocated silver which took 6 months) and you have now further aroused my suspicions about the alleged security of allocated storage of precious metals. In addition, I have also met with an un co-operative attitude when making enquiries about taking delivery of my Silver, so again there are further parallels with your story.

I hope you can take a moment from your busy schedule to share this information with me as obviously, its vitally important to my future financial security -just a simple 'yes' or 'no' in answer to my query above would suffice, no need to elaborate.

Thanks again for your time and I wish you every success in spreading the Story of Silver to the world.

Regards,

Peter

=============

3/19/2008 9:20 PM

Jason,

Just placed another order with Perth Mint, they are out of stock on everything, however there waiting period is no longer 6 months (Im guessing they received alot of complaints) its now 6-8 weeks.

Just got off the phone with them, they have no bullion in stock, its all on backorder, the official excuse is that it takes along time to make the bars and everyone wants them, could be viiewed as a good thing knowing demand is high, but I personaly dont like waiting 6-8 weeks for delivery.

I contacted several other dealers in Sydney, only 1 out of 5 has stock...... Everyone has back orders with PM which is the distributor.

Regards,
S

=============

In the March 26th Midas report, from lemetropolecafe.com (a site I subscribe to, and highly recommend):

G'day Bill

The shortage of silver is becoming acute in Australia. I phoned my supplier (THE major in my state) this morning, to confirm the developing situation re supply and he has confirmed that he cant get silver until May. He has always had ample stocks on hand, with my son or myself able to walk in and transact on a cash and carry basis.

NOT ANY MORE!!! He can't get a price from his supplier whom I assume is the Perth Mint or the Australian Bullion Co, as these are the bars that I have received from him. He only does Open Book orders where he will take your order but will not be able to price the metal until he is assured of a delivery price from his suppliers. Mid April is when he expects to be able to price an order. He said he has knowledge of a Perth Mint customer who has his money tied up in their Unallocated Pool Account, using Silver Certificates. Taking the advice of various "hold it in your hot little hands" advocates (such as yourself, Ted Butler and Jason Hommel etc,) he tried to redeem his certificates and have his holdings transferred into an Allocated Account.

The Perth Mint has advised him that they WILL NOT buy his certificates from him and WILL NOT allocate physical silver to him. They will however ALLOW him to swap them for gold. They will only do this by slugging him on the spreads. They slug him on their buy back price for silver and then whack him for their mark up on gold. He apparently is a man on the edge as my dealer feels that he is close to topping himself over the issue. Must be on Margin. I wonder if the Perth Mint is so broke that they can't pay him. Apparently they are backed by the full faith and credit of the Western Australian Govt. Yeah Right!

Stow it or blow it is the right call from you et al, and I thank you dearly for the advice, as I was once a Perth Mint PAPER silver certificate holder.

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5:24 AM, March 26th

Hi Jason,

just wanted to let you know about recent dealing with Perth Mint.
As I have been following your emails now for some time I recently decided to buy silver at Perth Mint in the form of the PMCP (Perth Mint Certificate Program).

Talking with a person in their Treasury Department I opted for Unallocated silver with the view of changing that to Allocated or pick up at a later stage.
After your email "If you don't hold it, you don't own it" I sent an email saying when I wished to pick it up, giving about 4 weeks notice that I was told I needed to give.

Still have had no reply after a phone call and another email.
Wondering if you have had any similar emails from anyone else regarding Perth Mint?

God bless,

Graeme.

=============
=============

PERTH MINT CRISIS WATCH - (a few more stories) Silver Stock Report

by Jason Hommel, May 23th, 2008

http://www.silverstockreport.com/2008/perth4.html

So, it appears to me that the government of Western Australia will do nothing about the Perth Mint Crisis, at least, not yet based on what I've sent them.

And it appears that none of the major press have any desire to cover the Perth Mint Crisis, at least, not yet based on what I've sent them.

It is probably too difficult for most customers to even think about suing the Perth Mint over a mere delivery delay of 1-2 months.

And I, personally, have not invested in the Perth Mint certificat program, and therefore, I have no reason to sue them for delivery delays or default.

So, what else can we do? I can avoid investing in their progams myself, and watch. Here then are a few more customer reports about the Perth Mint. If you have a story about the Perth Mint that you would like to share, send it to me by replying to this email, or email j at silverstockreport.com.

I would also like to tell the Perth Mint that I'd love to say some positive things about the Perth Mint, and freely advertise their service if they can manage to give prompt delivery of silver to their customers.

As proof, I've been freely advertising the availability of silver at www.fidelitrade.com for weeks now, and I've heard no complaints from any of my readers about www.fidelitrade.com, and yet, I also advocate that you do not let www.fidelitrade.com hold any metal for you, and that you take delivery.

I'd also like to note that Ted Butler warned very clearly about the dangers of the Kitco and Perth Mint certificate programs in January, 2007. See:
http://news.silverseek.com/TedButler/1170190859.php


=============

Dear Jason,


I too am a dissatisfied Perth Mint customer. I purchased several thousand ounces in January 2008 and converted them to silver bullion a couple of months later. The process was however protracted and took about four weeks from the time I requested it. The bullion was obviously being shipped from the eastern states and I could feel the sense of relief in the voice of the agent of the Perth Mint when he was finally able to deliver my metal.

When I questioned him about whether he really had silver bullion he said they stored it in Perth and London and when I asked him why he didn’t charge storage fees he said it was because they themselves could use the silver. and then he broke off the conversation with the ‘well if you can’t trust the West Australian government’ speech.


I suggest that your pursuit of the Perth Mint at the moment is spot on. Their strength is that they are owned by the West Australian government but this is also their weakness as they can be forced to reveal their true financial situation.


If they are indeed selling promissory notes of future silver and not real bullion then they are acting fraudulently under the Fair Trading Act of Australia.

If you really do have a subscriber base of 80,000 then I suggest that if 20,000 of them donated $25 to a legal fund to challenge the Perth Mint under Australian Law then this would give a starting budget of $500,000. Further I suggest the moment the case is advertised for court action then the worldwide interest will begin and the silver price should begin to move rapidly upwards. A $25 investment then should be a bargain!


=============

You should see the corporate ownership structure around the Perth Mint.

http://www.perthmint.com.au/about_us_the_perth_mint_group_structure.aspx

If it was anymore complicated it would beimpossible.

So listen Jason you don’t live in Australia I do. People don’t have foresight so your comments to government bodies will fall on deaf ears, the gullible public here would believe that State Government guarantee was good as gold. Let me tell you, a previous Premiere of State Govt of WA was brought up on corruption charges and convicted, as far as I know. At one time the current Prime Minister of Australia lunched with this Premier as they were both in the Labor Party at that time. After the conviction the current Prime Minister sort of washed his hands of him.

There was a corporate group know as the Bond Corporation that had it roots in WA and the largest shareholder there was done for raiding corporate coffers. amongst other allegations. A few decades ago WA was still know as the Wild West.

I find it ironic that pure metals are trying to be sold out of WA with a WA State Guarantee. I would say that without the current mining boom, the state’s financials underpinning such a guarantee could well be questioned. You know talk is cheap and I would wonder if the State Government would do good on this guarantee.

=============

Dear Mr.Hommel,

1000 thanks for your action regarding Perth Mint! Before Easter I ordered to change my unallocated deposit in a allocated one involving gold and 3000 ozt of silver. It took more than one month, a dozen emails and about a dozen phonecalls to finally get it done. Slowly I increased the pressure until finally reminding them of theirlegal obligation to supply metal as they state on their website. Publicity is the best way to get improvements.

Some people hold their life savings with Perth Mint and I certainly had many sleepless nights until these 1000 oz. bars (serial numbered) were put into my allocated account.

Many thanks again for your actions which will surely lead to an internal enquiry at the mint. Australia is a very fairand caring nation and people there do not like it when their country is put into the wrong light. Perhaps a change ofmanagement at the mint will lead to the necessary improvements.Please keep up the good work and kind regards.

=============

According to my bullion dealer in Brisbane he is aware of the problem with Perth Mint since 2006.

He reduced his business absolutely drastically with them.

If I insist to get Perth Silver I have to wait at a long long time.

How long is long was my question?

He said, "XXXXX, too long for you." Luckily I bought 1350 kg in 2006 from 2 sources in Australia.

By the way, West Australia is governed by a very very questionable labor government. (I try to be polite).

Kind Regards

=============

Hommel then writes:

By the way, getting back to the issue of the Perth Mint's responsibility to their certificate holders, and delivery delays which do suggest shortages, and possibly fraud, which is the real issue, the Perth Mint's lawyers let the truth slip out!

http://www.perthmint.biz/downloads/Investment/PMG%20Tax%20Issues.pdf

See Page 3, two paragraphs from the bottom of the page, where it says:

"Gold Corporation continues to be the owner of the gold bullion backing the PMG [ie, certificate]. However, even though Gold Corporation holds gold bullion in order to back the PMGs, it is not required to do so and does not hold gold bullion for the benefit of the Holder."

Thus, if you own a silver or gold Perth Mint certificate, it is no evidence that you own any gold or silver, they own the gold or silver, not you. And furthermore, they can do anything they want with their own gold (not your gold) including spend it on whatever they want, since they are not required to hold it for the benefit of the holder of the silver or gold certificates!

It's exactly as the Mogambu Guru said, as I quoted 12 days ago:
http://www.silverstockreport.com/2008/bullionbanks.html

The Mogambu Guru Writes:

"Unallocated gold is the most widely traded form of gold in the world. While this gold remains unallocated to you, the regulator considers it part of a bank's liquid reserve."

He figures that 99% of gold deposits are in unallocated form, and therefore all the deposited gold is, in effect, in a big commingled pile in the basement of the bank.

Another way of looking at this stunning fact is, "This makes unallocated gold an attractive way for the bank to maintain its regulated liquidity, because you have paid for your gold, and the bank is free to use your money, while it is also able to add your unallocated gold holding to its own reserve."

http://www.dailyreckoning.co.uk/gold...-to-trust.html

=============

PERTH MINT CRISIS WATCH - Silver Stock Report

by Jason Hommel, June 5, 2008

I'm happy to report a rumor that I heard a few days ago that the Perth Mint had a few hundred 100 oz. bars now for investors who want to take delivery. Fantastic. Get them while you can. I hear the bars are available for about $1.80 over spot. Let's do the math on that, shall we?

200 bars x 100 oz. x ($17.30 + $1.80) = $382,000

Remember, Perth Mint has a total of an $880 million in bullion liability to certificate holders.

So, they may have had $382,000/$880,000,000 (three hundred eighty two thousand, out of eight hundred and eighty million) or $1 worth of 100 oz. bars for every $2303 on deposit available for delivery. If true, that's much less than a 1% backing, actually 0.04% backing! Wow! No shortage there! Get the bars while, or if, you can.

=============

Jason Hommel - on discussions and polemics with Peter Schiff of Euro Pacific Capital -

Peter Schiff slandered me in his radio program yesterday. Don't worry Peter, I won't sue, as I don't expect justice from the system anymore, which is why I buy silver.

June 4th, start listening at 31:00 and Peter discusses me and Perth Mint at 31:40. http://www.europac.net/radioshow_archives.asp -- http://www.europac.net/media/PeterSchiff_06-04-2008.mp3

You can hear it half way through.

Peter has a dual bias. Peter sells the Perth Mint certificates. And he is woefully uninformed.

Peter starts out saying that the Perth Mint certificate program is good in case of government confiscation by the U.S. government. But he seems to ignore the possiblity of current or past confiscation by the Australian government! Irony of ironies!

Peter thinks I've gotten a "couple emails" about delivery delays from customers of the Perth Mint. No Peter, it's about 30-50 complaints. Are they all lying? What a conspiracy!? And I'm not the customer service rep for the Perth Mint, so why are so many people complaining to me? See past reports, with complaints, here:

Perth Mint Crisis Watch May 23, 2008

Perth Mint Crisis: Solutions and Ramifications May 23, 2008

To the largest newspapers in Australia May 22, 2008

To the government of Western Australia May 21, 2008

Poor Prospects for Kitco/Perth/Matthey May 19, 2008

Kitco / Perth Mint / AGR Matthey / Bullion Bank Connections May 17, 2008

Will Kitco Sue me?! May 16, 2008

Silver Shortage Drives Men Nuts March 31, 2008

Perth Mint and Kitco Scheme Exposed March 26, 2008

I find it rather humorous how Peter really stammers and stumbles when he tries to explain that the Perth Mint has all their silver in the form of 1000 ounce bars, and, and, and, and, and, if people want 1 ounce rounds or "little bars" then the mint has to fabricate them, and it takes time depending on how busy they are.

But the whole reason for even offering the certificate program, is ostensibly, to be able to provide silver for operations so that they will have those final silver products available for their customers. It's ridiculous for them to ever run out, since the entire reason for the certificate program in the first place is to provide the silver to make sure that they have the silver for operations so that they never run out! Therefore, if they run out, it's evidence of a serious problem!

And hey, if "running out" is no indication of any problem, then what, pray tell me, would be an indication of a problem?

Peter says I've made "bogus accusations", but I've not made any accusations, many Perth Mint customers have.

While Peter is incensed at the possibility that the Perth Mint might not have a full backing for their precious metals, Peter asks, "Why would the government do that?" I've answered that already.

Excerpt from: http://www.silverstockreport.com/2008/perth3.html

I don't think the Perth Mint is engaged in any conspiracy to defraud people. More likely, they're simply "doing their jobs." I believe that the trouble was low silver prices. For years, silver remained at $5/oz., and minting costs, I assume, were about $2.00 per ounce, at the bare minimum in the private sector. Like most government agencies, the Perth Mint was probably not too concerned about costs.

During silver's bear market, a lot of silver was coming to market by investors as "recycled siver", who were dumping their silver, thus depressing prices of all silver products, below market prices, which, as all student of free markets know, creates a challenging environment for all producers, who usually find it hard to compete under such circumstances.

What would you do if you worked at the mint? You might not even know if minting costs were as high as $3-5.00/oz on top of the silver price, because things might be done the typical inefficient way of all governments, and your job may well have depended on continuing to mint coinage, whether at a profit, or loss.

The Perth Mint appears to me to have been funded for years, by precious metals loans from banks, which is similar to how all government operations on the planet are funded, by loans. Are there any governments not in debt? The difference is that these are precious metals loans. The other difference is that these precious metals loans were transfered to the public via the selling of the Perth Mint certificate program.

The Perth Mint says in their annual report that these are "non interest bearing loans" and technically, that is correct. However, with precious metals prices rising at about 25% per year, these loans are quite expensive, and will grow much more expensive as precious metals prices continue to rise.

So, I have left several questions on Peter's answering machine. I asked him:

Do you know how many complaints I've gotten about the Perth Mint? It's about 30-50, not "a couple".

Why would so many complain to me, given that I'm not a perth Mint customer service rep?

Do you know the size of the Perth Mint's liabilities of their certificate program? (It's $880 million Australian dollars (which are worth about the same as a U.S. dollar.) Do you know the estimated annual silver demand in ounces and dollars? (It's about 60 million ounces, or about $1 billion at $16.66/oz. THE PERTH MINT'S LIABILITY IS WORTH ABOUT AN ENTIRE YEAR'S WORTH OF SILVER INVESTMENT DEMAND!

Do you know the Perth Mint's production capacity of making 100 oz. silver bars? I don't. But the Perth Mint ought to know their own production capacity, and so should their certificate resellers, such as Peter Schiff.

Peter, let me warn you. If you don't figure this out, some of your customers might start calling you Peter Shifty or Peter Shiftless, or worse. It's your reputation on the line here, not mine. Because I'm not selling any paper silver, and I'm not making any accusations. Just reporting.

By the way, the Perth Mint's lawyers covered themselves, and let the real truth slip out:

http://www.perthmint.biz/downloads/Investment/PMG%20Tax%20Issues.pdf

See Page 3, two paragraphs from the bottom of the page, where it says:

*** "Gold Corporation continues to be the owner of the gold bullion backing the PMG [ie, certificate]. However, even though Gold Corporation holds gold bullion in order to back the PMGs, it is not required to do so and does not hold gold bullion for the benefit of the Holder." ***

Peter, have you ever heard that if you are sitting at a poker table, and if you cannot figure out who the mark is, then you are the mark? Figure it out.

Peter also wonders what my "agenda" is. Peter, I'm extremely transparent. I'm trying to help people acquire physical silver.

Peter, we know your agenda, to line your own pockets as you are a Perth Mint certificate reseller. Tell us, what are your commissions on that program? And if they can affford to pay you a cut and commission as they surely must be doing, how can they afford to buy silver in the open market for their customers?

=============

If the Perth Mint cannot handle the situation today, how will they handle the increased volumes as silver prices rise as they certainly will?

Here's a rather shocking complaint posted at goldismoney.info. The author is saying that the Mint is badmouthing their customers, and inventing extra charges at whim to take delivery of physical bullion now, saying that people will be assigned a 6 month storage fee if they try to get delivery of physical silver bullion bars.

http://goldismoney.info/forums/showthread.php?p=1131037#post1131037

Here's another Perth Mint hell-story:

I was dealing over the last 2 years with the Perth Mint buyingand selling over $200,000 worth of gold and silver via the Dublin agents- each transaction was one **ck up after another, long delays, Dublin / Perth not executing at the right buy / sell fixes I wanted,certificates getting lost because they were not sent to me by registeredmail (to save money...) ... it all became too much and I'm now all inphysical and can sleep soundly at night...

When things go ballistic Perth will not be able to cope, they can barelycope now, not answering phones etc etc etcIt is a disaster waiting to happen. And BTW I do believe parts of thePerth operation/govt of western Oz is insured by Lloyds (I may bewrong), but if several major banks implode, which is still apossibility, the derivatives crisis in waiting could easily take Lloydsdown too.

All best!

Andy

==========

And here is a bash at Jon Nadler of KITCO, for what Hommel considers his "bias" against silver. :rolleyes: (however, despite J. Hommel's over the top crusade against corrupt and compromised "custodians" of pooled metal, I tend to agree with all his points).

"" The Jon Nadler stupidity index just went up another level yesterday to reach new highs.

Just yesterday, Jon Nadler quoted someone who said: "Gold should outperform silver in this environment as the latter is more dependent upon investment demand."

http://www.kitco.com/ind/Nadler/may282008B.html

But as anyone who has half a brain who has studied the silver and gold markets should know, that's a blatent lie.

The gold market is far more dependent upon investor demand than silver, not the other way around.

About 95% of the gold market is purchased for investment demand.

In contrast, only about 7% of the silver market is purchased for investment demand.

So, if investment demand for precious metals is going down, it means that silver should outperform gold, as it has been, and will continue to do!

Surely, a man such as Jon Nadler is aware of those fundamentals, so why would he say such a thing that would only damage his own credibility? Because he's desperately trying to talk silver down!

Interestingly at kitco, Silver Eagles and Maples at kitco are still listed as "out of stock"! https://online.kitco.com/bullion/completelist.html "

==========

Perth Mint Crisis - Silver Stock Report

by Jason Hommel, May 23rd, 2008

The vast majority of my readers understand the Perth Mint crisis. They know that when the Perth Mint is supposed to have an operating pool of $880 million Australian dollars of precious metal, and yet, the Mint has delivery delays for precious metal; they can see the obvious conflict there.

A rep from the Perth Mint admitted, today, that they have a delay in deliveries.

From: Liselle Carroll
To: XXXX
Sent: Friday, May 23, 2008 3:38 PM
Subject: RE: Purchase of silver bars

Hi XXXX

Our metal is state government backed, there isn’t a shortage and the delay is only in production.

Kind Regards
Liselle Carroll
The Perth Mint
310 Hay St
East Perth
WA 6004

While obviously lying about a shortage, because a "production delay" is a shortage, the Perth Mint is admitting the essence of what I've reported that my readers have said with that one phrase, "the delay is only in production".
I continue to wonder why, and ask why there should be production delays if the size of their operating pool is $880 million Australin dollars worth of precious metal.

When you go to buy bread from the bakery, do they tell you there will be a "production delay?" After all, it does take time to harvest wheat and bake bread. But, no, they don't say that.

When you go to buy new tires for your car, do they tell you there will be a "production delay" of 6-8 weeks? No.

When you go to the bank to cash your paycheck, do they tell you there will be a "production delay?" of 6-8 weeks? No.

How can the Perth Mint have a production delay if they have an operating pool, to be used for operations, that is $880 million Australian dollars?

And so, after getting a few complaints about the Perth Mint's long delivery times, I had to mention it, privately in an email to one of my readers. And then I got more complaints, and still I avoided mention, until people were willing to let me use their names. Then, I went public with the complaints, and I got a lot more complaints.

Perth Mint and Kitco Scheme Exposed March 26, 2008

That was nearly two months ago, and the Perth Mint is still having problems with delivery delays. Therefore, I think this is a systemic problem at the Perth Mint.

Of course, I have never said what is on the tip of everyone's tongue, given the evidence. I'm just making the contrast between the size of the pool of bullion to be used for operations, and the fact that there are delivery delays, both of which are indisputable facts.

The Perth Mint might well be fully 100% honorable about how they use the pool, refusing to use the pool to fill new orders. And the Perth Mint could have easily simply told their customers, "We simply do not use our precious metals pool to fill customer orders." But if that's the case, it would beg the question, "What exactly would you use the pool of precious metals for, if not for filling customer orders?"

And furthermore, why are there reports of delays of up to 7 weeks just to transfer silver from unallocated to allocated, when allocated silver costs more due to storage costs?!

==========

Silver Stock Report

by Jason Hommel, May 17th, 2008

Kitco's online store sells Perth Mint Certificates. https://online.kitco.com/

The Perth Mint owns 40% of AGR Matthey.

http://www.perthmint.com.au/about_us_the_perth_mint_group_structure.aspx

If The Perth Mint is storing your metal, they admit that they may have loaned your metal out.

"The $880 million of precious metals deposited by Perth Mint Depository clients (note 17) was used in operations by Gold Corporation as inventory ($381 million - Note 8b) with the balance in the refining operations of AGR Matthey (Note 8a).

http://www.perthmint.com.au//documen...ort%202007.pdf

p. 81, bottom:

"AGR Matthey has well established relationships with the major bullion banks and regularly supplies to them on a contractual basis ."
http://www.agrmatthey.com.au/wps/wcm/connect/AGRInternet/agr/refinery/value_added_bullion_product/

"An innovative treasury is as important as refining efficiency,"
http://www.agrmatthey.com.au/wps/wcm/connect/AGRInternet/agr/about_us/about_agrmatthey/

"Treasury undertakes a leasing program to either lend or borrow precious metal within the terms of a lease agreement between AGR Matthey and approved counter parties."

http://www.agrmatthey.com.au/wps/wcm...sury/services/

The Mogambu Guru Writes:

"Unallocated gold is the most widely traded form of gold in the world. While this gold remains unallocated to you, the regulator considers it part of a bank's liquid reserve."

He figures that 99% of gold deposits are in unallocated form, and therefore all the deposited gold is, in effect, in a big commingled pile in the basement of the bank.

Another way of looking at this stunning fact is, "This makes unallocated gold an attractive way for the bank to maintain its regulated liquidity, because you have paid for your gold, and the bank is free to use your money, while it is also able to add your unallocated gold holding to its own reserve."

http://www.dailyreckoning.co.uk/gold...-to-trust.html

Ted Butler writes:

"I found it appalling that Morgan Stanley would claim to store silver that didn't exist and even have the chutzpah to charge for the storage."

"In fact, in the court documents summarizing the proposed settlement, one of Morgan Stanley's defenses was that they were not doing anything unusual by charging storage on metal that didn't exist, as this is a widespread industry practice."

http://www.investmentrarities.com/10-23-07.html

===========

Here is a Perth Mint update -- by an actual, 'long term' customer this past month.

Jason,


Since 2005, I was/am a Perth MInt Certificate holder of around 24,000 unallocated ounces of silver, and some gold. I always intended to take delivery at some future point, because I believe that due to possible physical shortages of silver, actual holders of physical, deliverable metal will be able to get higher prices than holders of 'paper silver'.

About six weeks ago, partly due to Ted Butler and Jason Hommel's alarming articles, I asked about taking delivery. Everyone associated with the PMCs was assuring me the program was extremely safe, government backed. ASI urged me to sell the PMCs instead of taking delivery, because fabricating and shipping (to a European location) would be very expensive and time-consuming.

(Yes, it is expensive -- but not even 1/3 the cost of paying long term capital gains on bullion at 28%, which nobody tells you is due when precious metals are sold!)

However, what convinced me to take delivery was discovering that the Perth Mint had just discontinued making 100 oz. bars of silver, claiming there was little demand, except from a few Americans.

And... to take delivery from unallocated metals requires that the 'pooled' metal be separated out and fabricated into your choice of coins or bars. These fees used to be quite reasonable. They have just increased.

Currently, the silver choices are 1 oz. coins (which now cost around $5.00 to fabricate, up from $3.00) 10 oz. bars, 1 kilo bars, and then no intermediate sizes until the 1000 oz bars (which require about $17,000 to buy at current POS). The fabrication fees to turn those unallocated oz. to deliverable 1000 oz bars has quietly TRIPLED since mid-January 08 -- from $85 each to $270 each (27 cents per ounce. )

Gold fabrication fees have increased as well.

These new high fabrication fees ( and the eliminating of a silver 100 oz. bar choice) have the accidental -- or not -- effect of making it more inconvenient and expensive to take delivery of PMC silver, especially smaller amounts of silver between 100 - 1000 oz.

Another curve ball -- since Federal Express won't ship items in the USA over 80 lbs., 1000 oz bar deliveries in the USA have to be made by armored carriers, which cost a lot more-- and they won't go to private homes! So if you intend to take delivery in the US you will pay heavily, either by higher proportional new fabrication fees for coins or 1 kilo bars, or paying for armored trucks and a bank deposit box to deliver 1000 oz bars.

The Perth Mint now only uses an expensive private carrier for shipping, because they say that Fed Ex has lost some shipments. Or you have to make your own arrangements -- we saved about $2,000 by contacting an international bonded PM shipper, but it took several international phone calls and faxes to different time zones.


===========


Most physical silver costs about 5-7% over spot, that's standard. Why? Risk. Silver prices can move that much in a day, and if dealers sell you their silver, they take on both price risk and default risk if they go to replace it, after selling it to you. They buy silver at about 0-1% under spot from the public, who may sell at random times. If they order from another dealer, they will have to pay that 5-7% over spot fee, and charge you about 1% over what the other dealer will charge.


Again, because of risk. If you don't like those terms, then open your own bullion shop, pay rent, find your own suppliers, risk getting robbed, and deal with crazy people who will loiter in your shop and waste your time and prevent you from trading stocks, etc.

I know you can't always locate a shop near you with good terms, and who has any physical bullion, because the stuff is RARE!

Questions to ask an internet dealer that may live far away from you:

1. What kind of silver do you have in stock?
2. How much of that kind of silver do you have available right now?
3. How much of that do you have in your shop?
4. How long will it take to ship?
5. Will you drop ship my order from another dealer, and if so, what is that dealer's name?

Those questions will help you discover if your dealer is honest. I will order from dealers who have to order from other dealers, but I'll have my dealer ask the other dealer those same questions.

Any order should take 1 week to ship, or less. All orders should be shipped within a day or two after your wire or bank check arrives, and most shipping takes 3 days anywhere in the U.S., so anything longer than a week is something to worry about.

[moonshot]

Re: ALERT, ALERT Raid on Gold/Silver!!!!!!!

Thanks for passing on this info Lukester. I know quite a few iTulipers use BullionVault for gold storage. Has anyone taken gold delivery from them?

[Guest]

Re: ALERT, ALERT Raid on Gold/Silver!!!!!!!

Thanks for passing on this info Lukester. I know quite a few iTulipers use BullionVault for gold storage. Has anyone taken gold delivery from them?

Moonshot - Bullionvault and Goldmoney are different from the Perth Mint Bullionvault for one, undergoes a painstaking WEEKLY FULL AUDIT from what I understand, which is pretty extraordinary. James Turk's GOLDMONEY as well as Bullionvault, both have a contractual form which is solely and explicitly custodial. They are a distinct step up from the Perth Mint's pooled accounts area, but nothing is ever black and white, because they also don't have the Perth Mint's government guarantee. It's possible that a fully segregated holding at Perth would be OK, but that's just a matter of anyon's individual preference.

For gold, the Perth Mint is probably fine. For silver, no remote storage is really an AAA solution these days, and the Perth Mint sounds frankly crappy for that metal. The ratio of paper to physical trading in silver is a good deal worse than the ratio in gold. Any "runaway" trends in the metals will likely start with silver, because it's such a tiny market.

Here's how kindly I look at "custodial arrangements" in the world we may have upcoming - I'd feel comfortable having maybe 30% MAX of all my precious metals in any custodial account. I'd expand that percentage considerably if this custodian was a very highly reputed small private bank, that had nothing to do with mass commercial bullion storage - where my ownings were in an explicitly segregated account where I had a letter in writing from a Vice President categorically assuring a series of numbered bars were in my name and would remain within that single location without being moved or impinged upon as assets at any time without my express notification and pending my consent.

The far easier thing to do is to hold it in your personal consigment. With regard to storage, where there is a lively interest in finding out HOW, there is always a WAY. With regard to confiscation, here's the hidden benefit of silver over gold - it is a tiny, microscopic market. In the US, the amount of confiscatable silver would not even be gnatsized in net USD terms, compared to the assets a government would need to garnish. Gold is the overwhelming target for that. Silver's confiscation would provide precisely zip in proceeds to a government, because it's market size is so infinitesimal compared to national debt. Ergo, silver in one's own possession actually scores quite high in terms of security.

Some people don't like it as a precious metal in the 2000's. We'll see who turns out right. Everyone has to make their own choices.

[moonshot]

Re: ALERT, ALERT Raid on Gold/Silver!!!!!!!

Moonshot - Bullionvault and Goldmoney are different from the Perth Mint Bullionvault for one, undergoes a painstaking WEEKLY FULL AUDIT from what I understand, which is pretty extraordinary. James Turk's GOLDMONEY as well as Bullionvault, both have a contractual form which is solely and explicitly custodial.

I am aware of the custodial nature of Goldmoney and BullionVault, but the proof is in the pudding - i.e., has anyone taken physical possession of their gold from BullionVault? I know BV says you can, but that's different from actually doing it, as the Perth mint customers discovered.

You raise an interesting point about silver claims/physical as compared to gold claims/physical. I agree on the much lower confiscation risk of holding physical silver vs. gold.

[Mega]

Re: ALERT, ALERT Raid on Gold/Silver!!!!!!!

Nothing new then?

As you say the Gold is fine, silver i got £10K worth via a cert on its way............at the end of the day Luke i don't want either!

Just get the Aussie Goverment to print money and give it to me!

Mike

[c1ue]

Re: ALERT, ALERT Raid on Gold/Silver!!!!!!!

I don't know if you are all following the ongoing UBS story, but one of the interesting possible outcomes is the US using UBS' cross border wealth management (and Luxembourg's recent BND money laundering sting) to pry into previously safe havens for money and wealth.

If Switzerland has to give up the ghost, can gold in Bullionvault and whatnot really be considered safe?