Keywords: GoldMoney, Monex, BullionVault, "Perth Mint", physical, auditors, "bullion storage facilities".

Graceland Updates 4am-7am

June 12, 2009

Stewart Thomson

15. Speaking of Jim Sinclair, yesterday he warned that the missing gold at the Canadian Mint is not an isolated incident, and that auditors have quietly descended on MANY bullion storage facilities.

16. I was at a new bank earlier this week. I asked if the bank offered insurance on safe deposit box items. The manager of the bank told me, “Are you kidding, do you know how safe that vault is? Before a thief got to the vault from the front door the police would be here!” He explained how once the door was locked by accident, and it took a professional team over 48 hrs of non-stop drilling to get thru.

17. Meantime, I stood there looking at the door, which was OPEN, and thought, “yeah, but YOU can go in there anytime and access anything.”

18. Jim is advising people to take delivery of ALL metals and store them in a bank deposit box with insurance if possible. This statement, to me, is like the GLD-n/GTU-n thing. For years the gold writers said gld was a “fraud”. Meantime, I kept booking profits, trading happily. The “fraud” paid we well. Then one day Jim said he was highly concerned about GLD. He mentions “The Gambler” song, by Kenny Rogers. “Gotta know when to fold em”. I didn’t see GLD collapsing tomorrow AM, but gld had become big enough, public enough, and enough large players in the gold community were becoming so negative that I deemed the risks to exceed the rewards for trading GLD-n.

19. So I switched to GTU. Which is also traded on Toronto, another plus. I made the switch in stages. Not a plop.

20. I think there’s enough negativity now about non-bank depositories to warrant doing some homework on your own. Contact your depository, and say, “hey this isn’t very funny what I’m hearing, what can you tell me to make me feel comfortable?” Don’t let them blow you off. Jim Sinclair is the world’s largest gold trader. When he says something like this, you BETTER take it VERY SERIOUSLY. Because if gold does an astroblast, and it turns out you own NOTHING or much less than you paid for, YOU are the one that is FRIED.

21. I don’t want to terrify you, but my own view his statement warrants at least a phone call/written letter to your depository and some may consider a partial (say 5% to 10%) delivery of your gold as a first ACTION. This is how I moved from GLD to GTU: As I booked profits on trades, I rebought via GTU.

22. Don’t call your depository screaming, “I know you got no gold, you flippin’ scammer!!!” You don’t know anything at this point.

23. How many times have I said: SECURE YOUR GOLD? Yes, that code blue thing comes to mind.

24. The big 4 that come to mind are: Goldmoney, Bullionvault, Perth Mint, and Monex. Of those, I’m most comfortable with: PerthMint. While it’s the most bashed in the gold community, the Australian govt has vastly more resources than the other 3 operations combined (a million times over at least) to cover any fraud.

25. I’m not concerned AT ALL with the theft of gold at the Canadian Mint. If you have gold stored there, it is insured. So what if $5 million, or even $200 million, in gold is ripped off. Odds are 99.99% that the Gman will cover it, if the insurance company fails to.

26. In the case of Goldmoney and bullionvault, I think the insurance in place is likely adequate protection. Monex has some issues with the IRS. My guess is the trading programs run by monex are ok, provided you don’t keep large funds there. Deal with monex, yes. Take delivery of any large purchases, yes.

27. Keep in mind the safe deposit box fine print. You may not be ALLOWED to keep “legal tender” in the box. Are gold coins with a $50 face value from the Canadian Mint legal tender? Absolutely. The bank may be all smiles when you put your coins IN the box. When there’s a robbery, the banker may take off her mask. Revealing an ogre.

28. This is another reason why I’m mentioned 22carat jewellery. That’s 90% gold. Jewellery is EASILY insured and CAN be kept in most safe deposit boxes.

29. Neighbourhood watch. One of you mentioned that if armed thieves become more prevalent, neighbourhoods may resort to vigilante justice. Gun sales are definitely up. If the economy takes another nose dive, it may be a good time to pass out flyers in your neighbourhood to prepare to possible increases in crime due to the recession. Do NOT send out flyers that the Fed is a scam set up by bankers and govts are all evil, etc. You’ll be branded as a freak. And worse, no ACTION will occur. Simply mention that given the recession, increased petty crime is obviously a concern, it’s not a big issue, but a FEW small preventions now are worth a pound of cure later. Get your foot in the door. Running thru the neighbourhood screaming “We’re all gonna die!, Run!” isn’t the smart play.

30. But a PREPARED NEIGHBOURHOOD is a huge deterrent to thieves. They’ll pick a softer target. Again, no need to act now, but another downturn of significance, and it’s probably time to take some action. You want an audience that is receptive. Not hostile.