Changed situation for geographic diversification

Discussion of the Gold portion of the Permanent Portfolio

Moderator: Global Moderator

Post Reply
murphy_p_t
Executive Member
Executive Member
Posts: 1231
Joined: Fri Jul 02, 2010 3:44 pm

Changed situation for geographic diversification

Post by murphy_p_t » Wed Apr 07, 2021 2:05 pm

https://www.sprottmoney.com/blog/Undesi ... il-06-2021

Back when Craig R wrote his book, he was recommending Perth mint for international metal storage. Based on this article above, that recommendation may need to be revisited.

I am seeking recommendations, comments, suggestions, etc.
User avatar
I Shrugged
Executive Member
Executive Member
Posts: 1351
Joined: Tue Dec 18, 2012 6:35 pm

Re: Changed situation for geographic diversification

Post by I Shrugged » Wed Apr 07, 2021 3:49 pm

I don't think anything has really changed in regards to Perth Mint. If you buy unallocated metal, you're really just buying a paper claim on metal. At least Perth Mint seems to be a stronger counter party than a lot of others. And, you can buy and store allocated metals at Perth. Last time I looked at it, the storage costs were 0.75%.

These kinds of articles are always written by people selling physical metals. And in this case, they are also selling storage.
User avatar
mathjak107
Executive Member
Executive Member
Posts: 3802
Joined: Fri Jun 19, 2015 2:54 am
Location: bayside queens ny
Contact:

Re: Changed situation for geographic diversification

Post by mathjak107 » Wed Apr 07, 2021 3:50 pm

Even 2008 was no problem for paper gold like Gld
User avatar
I Shrugged
Executive Member
Executive Member
Posts: 1351
Joined: Tue Dec 18, 2012 6:35 pm

Re: Changed situation for geographic diversification

Post by I Shrugged » Wed Apr 07, 2021 3:58 pm

Another odd one is Bullion Vault. Through them, you buy allocated metal, and the storage costs are very low. The catch is that you are a fractional owner in a bar of gold. So practically speaking, it doesn't feel much different to than unallocated at Perth Mint. OTOH if you hold complete gold bars, BV seems like a great deal on storage.
User avatar
I Shrugged
Executive Member
Executive Member
Posts: 1351
Joined: Tue Dec 18, 2012 6:35 pm

Re: Changed situation for geographic diversification

Post by I Shrugged » Wed Apr 07, 2021 4:26 pm

mathjak107 wrote:
Wed Apr 07, 2021 3:50 pm
Even 2008 was no problem for paper gold like Gld
I've held GLD since 2008. I don't like all of the counter party risks, but it was easy to get into. I'm a typical gold fan in that I don't forsee ever selling any. From that standpoint, GLD sucks. I mean, I don't really own gold, yet I pay 0.40% fees for paper equivalent. Actually I don't pay fees, they sell my "gold" to meet the fees. If I had had a vault storage relationship figured out in 2008, I would been happier in the long run to have done that instead. I would still be paying fees of course, but at least it would be my gold.

GLD probably isn't in much danger from market conditions because it's all paper and none of the authorized participants are likely to demand gold. I hope I don't ever have to eat those words. As far as fraud, I can't begin to guess how many ways the custodian or sub-agents could take out the fund. Supposedly it's all backed up by real gold in the vault. Unless they've loaned it to someone. Hoo boy.

(I guess one might logically ask why I don't sell it. Well, taxes. I'd lose roughly 15% of my balance in order to move it to another form of gold. )
Post Reply