Virtual Audit

Discussion of the Gold portion of the Permanent Portfolio

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dopplerdave
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Virtual Audit

Post by dopplerdave » Wed Sep 29, 2021 7:59 pm

About 2 years ago, someone on this forum recommended SWP Cayman for offshore precious metals storage. I opened an account with a very small holding and made plans to visit them in May 2020. Well, the island closed due to the Wuhan. It is open now, but anyone visiting must spend a week in quarantine, so that is not very practical. After January 6, I decided to convert half my PP into gold coins and did what I could via the internet and telephone to check them out. I have been very pleased. It is insured and independently audited, but still, it would be nice to actually see my fortune in their secure vault.

Well, they just started a new service called a Virtual Audit. Cost is $150 per hour but it was well worth it to me for the peace of mind. It’s a Zoom call where they bring out your container, open it and do what ever you want. In my case, I have 5 different types of 1 oz gold coins, so we counted all of them, looked at selected ones close up, and even checked one using their Electronic Verifier.

I don’t mean this to sound like a commercial for SWP Cayman, but this is a pretty cool service.
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I Shrugged
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Re: Virtual Audit

Post by I Shrugged » Wed Sep 29, 2021 9:16 pm

Thanks for the review.
coasting
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Re: Virtual Audit

Post by coasting » Tue Oct 12, 2021 9:54 am

Hi dopplerdave,

I too thank you for sharing. May I ask some other questions regarding your experience with SWP?

I note the Virtual Audit service is available only for the Cayman Islands vault - I presume because SWP is the operator there while different companies operate the other vaults. SWP is considered the custodian, yes? Do you have any concern that, for assets stored in the Cayman Islands vault, the custodian and vault operator are the same company?

Buy prices are readily available on the website, but it says to call or email for buy-back rates. Do you have any experience with selling gold to SWP? I am curious to know the round trip costs to buy/sell from/to SWP.

The website indicates that SWP does not have any government reporting requirements. Since you are storing gold offshore with SWP, do you find it necessary to file FBAR and/or FATCA and, if so, do you find this particularly burdensome?

Thanks!
dopplerdave
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Re: Virtual Audit

Post by dopplerdave » Tue Oct 12, 2021 3:00 pm

Hi Coasting,

If you click on one of the coins shown on their site, you get both the purchase and buy back price. For example right now the gold 1 oz eagle is listed as $1856.80 and buy back is $1769.30 so the spread is 4.9%. (That's actually pretty low compared to what it was a few months ago). Other coins are lower. For example the Marlin is 4.1%. On a few occasions in the past I have noticed they said to call for the buy back price of one or two coins, but today all the ones I checked seem to be listed.

SWP owns and operates their vault in Cayman. They also buy and sell, but for larger orders there is a delay of a few weeks as they get the coins from another source. For example, I ordered Marlins about 6 months ago,and they took nearly a month to arrive from the mint in Scottsdale AZ. But it doesn't really matter as the price is fixed at the time of purchase, and it includes whatever transportation costs are involved in getting them there.

They have some sort of storage arrangement at other vaults which I really don't understand. But their main operation is in Cayman. The Virtual Audit is a new service they just started.

One of the questions I asked them during the audit was whether they verified using their electronic tester all the coins I sent to them for storage. They said yes, so they would treat them just like ones I bought through them when it comes time to sell. But I have not yet sold any coins to/through them so I cannot say anything about how that process actually works.

I am not an attorney, but in my opinion, storing coins in their vault is no different than putting them in a safety deposit box or a hole in my back yard as far as reporting is concerned. But from personal experience, I can say that the IRS really has no rules. It is just legalized extortion, and the best way to avoid it is to stay off their radar.
coasting
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Re: Virtual Audit

Post by coasting » Tue Oct 12, 2021 5:12 pm

D'oh! How did I miss that? I see the buy back price now, clearly listed - thank you.
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