Perth Mint Online Depository Program

[sixdollars]

Have any of you guys looked into this?

https://www.perthmint.com/storage/depos ... ogram.html

I am in the process of opening an account, seems like an easy way to get geographic diversification through them now.  I'm guessing no need to go through the old certificate program?

[AdamA]

Good discussion here.

http://gyroscopicinvesting.com/forum/gold/perth-mint/

There are a lot of good posts by the user named Bronsuchecki.  He works there, I think. 

[sixdollars]

Good discussion here.

http://gyroscopicinvesting.com/forum/gold/perth-mint/

There are a lot of good posts by the user named Bronsuchecki.  He works there, I think.

Isn't that discussion with regards to the certificate program which had a 10k minimum? I believe this new one doesn't have this requirement unless I'm missing something.

https://www.perthmint.com/storage

[MachineGhost]

This is the best news in a long time!!!

How can unallocated be 100% backed, yet there is no storage fee?

Unlike other depositories, which are merely warehouses, The Perth Mint is a manufacturer of precious metal products and one of the world's largest refiners. Accordingly, we have a substantial requirement for physical metal to support these operations.

To fund this working inventory, we traditionally borrowed metal from bullion banks, at cost. At the same time, investors were depositing metal with bullion banks and others and being charged storage fees.

We realised there was an opportunity to cut out the intermediary and take deposits directly from investors. The Perth Mint's unallocated is thus a win-win situation: we get to "borrow" precious metal to use in our business for free and you get 100% backed safe storage of your precious metal for free.

We don't charge storage fees on unallocated because the costs of vaulting and insuring our working inventories of gold and silver are part of our business and covered by the fabrication fees we charge for our bars and coins - we would incur these costs whether our metal was sourced from you or a bullion bank. We charge storage fees on allocated and pool allocated because we incur additional vaulting and insurance costs for storing this custodial precious metal.

Still, its a liability of Perth and not your asset.  It is a Ponzi scheme if you request "your" metal.  And if they have to source it outside of other Ponzi scheme participants due to excess demand in a crisis, you may not receive "your" metal at all while the price continues to skyrocket.

They have very steep transanction fees, allocated storage fees and fabrication fees.  Not much has changed.

[sixdollars]

This is the best news in a long time!!!

How can unallocated be 100% backed, yet there is no storage fee?

Unlike other depositories, which are merely warehouses, The Perth Mint is a manufacturer of precious metal products and one of the world's largest refiners. Accordingly, we have a substantial requirement for physical metal to support these operations.

To fund this working inventory, we traditionally borrowed metal from bullion banks, at cost. At the same time, investors were depositing metal with bullion banks and others and being charged storage fees.

We realised there was an opportunity to cut out the intermediary and take deposits directly from investors. The Perth Mint's unallocated is thus a win-win situation: we get to "borrow" precious metal to use in our business for free and you get 100% backed safe storage of your precious metal for free.

We don't charge storage fees on unallocated because the costs of vaulting and insuring our working inventories of gold and silver are part of our business and covered by the fabrication fees we charge for our bars and coins - we would incur these costs whether our metal was sourced from you or a bullion bank. We charge storage fees on allocated and pool allocated because we incur additional vaulting and insurance costs for storing this custodial precious metal.

Still, its a liability of Perth and not your asset.  It is a Ponzi scheme if you request "your" metal.  And if they have to source it outside of other Ponzi scheme participants due to excess demand in a crisis, you may not receive "your" metal at all while the price continues to skyrocket.

I think that's the risk of unallocated in general, not unique to the Perth Mint.

Also, don't you avoid a lot of this by preempting to allocated during uncertain times (i.e. before the crises hits)?

[MachineGhost]

I think that's the risk of unallocated in general, not unique to the Perth Mint

Yeah, but no one with a brain would use unallocated storage except as a temporary parking place.  Perth is charging too much non-storage fees to be cost effective compared to other [pool] allocated storage options.

Also, don't you avoid a lot of this by preempting to allocated during uncertain times (i.e. before the crises hits)?

You're going to pay the 5% fee just to do that???  It's bad enough you have to pay all of the Perth fees on top of the original bid-ask spread.

[sixdollars]

I think that's the risk of unallocated in general, not unique to the Perth Mint

Perth is charging too much non-storage fees to be cost effective compared to other [pool] allocated storage options.

Also, don't you avoid a lot of this by preempting to allocated during uncertain times (i.e. before the crises hits)?

You're going to pay the 5% fee just to do that???  It's bad enough you have to pay all of the Perth fees on top of the original bid-ask spread.

What other pool allocated storage options would you recommend then?

And no, I haven't actually committed to anything yet, I'm still exploring options

[Hal]

Well.....

I use the "Allocated" Perth Mint Depository Program, not the Certificate Scheme.

They will send you the bullion from storage when requested, and if you wish to drop in, (bit hard from the USA), you can physically inspect your holdings.

So honestly, I cannot complain about the "Allocated" holding program.

Also GoldMoney offers an Allocated program as well, but in this case you would have to go to Switzerland to verify your holding.

Does anyone else have comments about other depositories?

Hal

http://www.perthmint.com.au/documents/R ... e_2014.pdf

[Libertarian666]

Global Gold (globalgold.ch) has several types of allocated storage (no unallocated types) at prices starting at about 0.5%/year for $250K (slightly higher for lower amounts).

[sophie]

globalgold looks really good, except for the minimum of 50,000 CHF.  Thanks for the info on Perth Mint!

It looks like Fidelity has lowered its storage fees to a total of 0.5%/year.  It doesn't say whether it's allocated storage though, will probably require a phone call to get more info.  I believe they store their bullion in Nova Scotia, but this may not count as geographic diversification.  The big advantage is that you can buy bullion in retirement accounts held at Fidelity for only a slightly higher expense ratio than ETFs, which is pretty awesome.

[Libertarian666]

globalgold looks really good, except for the minimum of 50,000 CHF.

I wouldn't think that would be a big problem for most of the people on this forum.

[sophie]

globalgold looks really good, except for the minimum of 50,000 CHF.

I wouldn't think that would be a big problem for most of the people on this forum.

I guess you have a big taxable stash!  Congrats are in order.  Or maybe you don't contribute much to tax advantaged accounts?  Tax deferral/Roth is a big enough deal in my high tax heaven here that tax advantaged account contributions take precedence over all else.

[AdamA]

Good discussion here.

http://gyroscopicinvesting.com/forum/gold/perth-mint/

There are a lot of good posts by the user named Bronsuchecki.  He works there, I think.

Isn't that discussion with regards to the certificate program which had a 10k minimum? I believe this new one doesn't have this requirement unless I'm missing something.

https://www.perthmint.com/storage

Ah...yes, you're right.  I didn't understand initially.

I would like to hear what Bronchecki has to say about it, if he still posts here. 

[AdamA]

Yeah, but no one with a brain would use unallocated storage except as a temporary parking place. 

I'm not sure I agree.  I think either you trust the mint or you don't. 

If they're not honest enough to honor the unallocated storage, then why would anyone expect them to honor the allocated storage?

[Cortopassi]

Gold is the ultimate safety net of everything going to crap.  At least that's what a lot of people believe, me included.  Maybe it is unwarranted and things hopefully will never get that bad.

However, for those who have their (for example) stock portion in VTI, bonds in TLT, cash in a money market, gold in GLD or similar, a global event could make all of that inaccessible for an undetermined length of time.

I'd suggest at least some portion of cash and gold reasonably readily available.  Whether that means a safe deposit box at a local bank, under your mattress or in your own 1000lb TL-30 rated safe, I don't know, but somewhere closer than Australia would make me feel more comfortable!

[MachineGhost]

What I wonder is what exactly is the diffrence between the Online Program and the Depository Program???  The fees for both are all the same, as is the Certificate Program.  Just another relatively bad deal.  Maybe Perth is just too much the armpit of Australia to have economies of scale to lower costs?

[MachineGhost]

Yeah, but no one with a brain would use unallocated storage except as a temporary parking place. 

I'm not sure I agree.  I think either you trust the mint or you don't. 

If they're not honest enough to honor the unallocated storage, then why would anyone expect them to honor the allocated storage?

That's not the point.  It's about title and ownership.  You don't own anything in unallocated storage and have no legal claim on it.  It's a liability on the books of Perth Mint and there is no guarantee there is enough gold readily available at any one time to supply withdrawal demand.  In other words, there's no FR or FDIC to deal with a "bank run".  Unallocated gold is like going back to the past and suffering the same "wildcat banking" indignities all over again.

A real asset is only "real" if its literally real.

[Libertarian666]

globalgold looks really good, except for the minimum of 50,000 CHF.

I wouldn't think that would be a big problem for most of the people on this forum.

I guess you have a big taxable stash!  Congrats are in order.  Or maybe you don't contribute much to tax advantaged accounts?  Tax deferral/Roth is a big enough deal in my high tax heaven here that tax advantaged account contributions take precedence over all else.

I'm in retirement (mostly) so I don't contribute to tax advantaged accounts.

And actually I cashed out a bunch of retirement accounts a few years ago before tax rates went up, so now I don't have much left in tax advantaged accounts.

Of course Roths don't help with current taxation either, just future taxation. If they don't change the rules, that is...

[Hal]

This might help

https://www.perthmint.com/storage/

also a friend uses this service in Singapore ( Jim Sinclair info:  http://www.jsmineset.com/2013/11/23/jim ... nge-sgpmx/ )

http://www.sgpmx.com/services/secured_storage/

From what I understand, its stored in a duty free vault at the airport

[JohnnyFactor]

Bron Suchecki has stated that unallocated is fully backed by physical at all times. They will not sell you an ounce if they don't physically have it. Perth Mint is a manufacturer not a lender, so they do not fractionalize or lease their gold. It's all spelled out here:
https://www.perthmint.com/storage/help/ ... torage-fee

The 5% fee to convert to allocated is the fabrication cost of making bars and coins. It's pretty close to a typical bullion dealers markup and I consider it a wash, compared to other choices.

[yankees60]

Gold is the ultimate safety net of everything going to crap.  At least that's what a lot of people believe, me included.  Maybe it is unwarranted and things hopefully will never get that bad.

However, for those who have their (for example) stock portion in VTI, bonds in TLT, cash in a money market, gold in GLD or similar, a global event could make all of that inaccessible for an undetermined length of time.

I'd suggest at least some portion of cash and gold reasonably readily available.  Whether that means a safe deposit box at a local bank, under your mattress or in your own 1000lb TL-30 rated safe, I don't know, but somewhere closer than Australia would make me feel more comfortable!

We are currently in the midst of a "global event" (it this an "event" or "a period of time" (of indeterminate length at this point)?).

So far has any of the four been made inaccessible for any length of time?

Vinny

[pmward]

Gold is the ultimate safety net of everything going to crap.  At least that's what a lot of people believe, me included.  Maybe it is unwarranted and things hopefully will never get that bad.

However, for those who have their (for example) stock portion in VTI, bonds in TLT, cash in a money market, gold in GLD or similar, a global event could make all of that inaccessible for an undetermined length of time.

I'd suggest at least some portion of cash and gold reasonably readily available.  Whether that means a safe deposit box at a local bank, under your mattress or in your own 1000lb TL-30 rated safe, I don't know, but somewhere closer than Australia would make me feel more comfortable!

We are currently in the midst of a "global event" (it this an "event" or "a period of time" (of indeterminate length at this point)?).

So far has any of the four been made inaccessible for any length of time?

Vinny

Well individual treasury bonds went no bid at times two weeks ago. If you needed to sell an individual treasury bond there was not always someone there willing to buy for any price. It was the individual bond itself that had that illiquidity effect, not the ETF. In the bond ETF's like TLT instead of not being able to access the cash, this instead manifested in the ETF's trading lower than NAV. Unlike the individual bonds, you could still sell the ETFs (as the ETF's are more liquid than the underlying bonds) but you had to pay for that liquidity during the crunch. So there were differing tradeoffs both to individual bond holders and ETF holders, and both played out slightly differently. Mutual funds likely also went below NAV, but they do not update their NAV figures daily like ETF's do, they only update at end of quarter. And since end of quarter is today, and the Fed restored liquidity to the market, we cannot know for sure how much this effected mutual funds. The takeaway, there is no safe way to hold anything. There are always tradeoffs. Having diversity in the ways you hold bonds and gold is probably good (some physical, some ETF, some mutual funds, etc) to counterbalance the risks.

[dualstow]

Hey, he said "a global event could..."
not
all global events will...

[yankees60]

Hey, he said "a global event could..."
not
all global events will...

Yes. That is exactly why I worded my question as so: "So far has any of the four been made inaccessible for any length of time?" I was asking by whatever definition he choses to use if he believed any of them have yet qualified to meet his definition.

Vinny

[AdamA]

I think it's all still accessible, but I did get this confusing email from the Perth Mint a few days ago.

There’s no doubt COVID-19 is having a huge impact on us all. At The Perth Mint, our focus is on the health and wellbeing of our staff as well as the continued service to our customers throughout Australia and beyond.

In the past few weeks, my team and I have introduced rolling shifts across dual sites to ensure safe distancing between our employees as well as adopting remote working options and increased hygiene practices in accordance with current government guidelines.

Right now, we are experiencing unprecedented demand. Our precious metal volumes remain high, though there may be some delays and temporary shortages of specific items we manufacture. Our teams are doing the very best they can, so your patience is greatly appreciated.

The Perth Mint has been proudly operating since 1899 and we take our responsibility as one of Australia’s largest exporters seriously. We fully intend to continue our service to all customers throughout this period. Together, we know we will all get through this.

As a State Government trading enterprise, all our operations are guaranteed by the Government of Western Australia. This is your assurance of trust in us and our unflagging commitment to you.

Our Refinery

The Perth Mint is not dependent on funding from any external providers, ensuring there is no risk of default or non-payment for our mining customers.
We continue to refine more than 90 percent of Australia’s gold production, our refinery remains open and this volume is not decreasing.
Trusted as a partner to the Australian mining industry for over 120 years, we have the knowledge, experience and technology to continue operating in this challenging time.
Our Depository

The Perth Mint offers the world’s only government guaranteed suite of tailored storage and investment programs.
With the largest network of central bank-grade vaults in the southern hemisphere The Perth Mint is one of the safest places in the world to buy and store precious metals.
We’re currently receiving higher than usual call volumes so please be patient with our teams should you experience delays. Should you need to contact our office, please ensure you have your account number, account name and password ready
Our Minted Products and Bullion

As the inaugural producer of the official Australian bullion coin program, we are experiencing an all-time high-level demand for our products.
Our production teams are working tirelessly to meet customer demand. Please be patient if a particular item that you are after is delayed.
Our Shop and Exhibition

For your health and safety, our showrooms, guided tours and exhibition are currently closed. Gifts, jewellery and minted products are still available online.
Bullion and gold jewellery buy-back services are operating from our East Perth location, Monday to Friday from 9am – 5pm. Social distancing requirements will be required.
From all of us here at The Perth Mint, we want to extend strength and good health to everyone around the world during this challenging time. We thank you for your continued support.

Richard Hayes, Chief Executive Officer, The Perth Mint