Perth Mint vs Kitco Canadian Allocated Storage

[steve]

Personally I have gold bullion and GTU . I am a big fan of GTU.

I have been hearing Perth Mint mentioned more often lately for geographic gold diversification, is there an advantage over Kitco Canadian Allocated Storage?
http://www.kitco.com/cas/

[WildAboutHarry]

Kitco had some legal problems reported back in 2011.  I don't know how/if that was resolved, but Google might offer some information.

[Gosso]

I think the Royal Canadian Mint Prestige Account (RCMPA) would be safer than the Kitco account.  I haven't spent much time researching it, but it appears that Kitco simply runs the website and handles the payments, while the Canadian Mint holds the gold.  So if Kitco goes bankrupt then the Mint will simply find someone else to process the transactions.

Added:  The Kitco Allocated Account also requires a minimum account value of $25,000.  The RCMPA doesn't appear to have a minimum.  Also the RCMPA is unallocated and uninsured, but I'm not sure if that is an issue for a Government Mint.

[quote=RCMPA]The metal is not insured; however, the Royal Canadian Mint is liable to the account holder for the quantity of physical material in their account.[/quote]

So what happens if the Mint gets "Ocean Elevened"?  Does the Canadian Gov't print up some money and give it to the account holders in lieu of the stolen gold?

Added:  It looks like it's not open to new clients.  "Move along, nothing to see here."

[craigr]

Perth mint is my choice over this option. I like the history and govt. guarantee from a major gold refining operation.

[ahhrunforthehills]

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[craigr]

Perth is good, but I trust Australia less than Uncle Sam.  

In Australia part IV of the Banking Act 1959 (the one that allows confiscation of private gold for the good of the commonwealth is merely "suspended" (not removed from law).  The mechanisms are already in place and only need a stroke of the pen from the Governor General to invoke.

Gold in Australia borders would not be able to travel outside of Australia if times are tough over there.  

http://www.comlaw.gov.au/Details/C2011C ... t#param145

Everywhere has risks, you just have to weight the risks.

Any country can seize gold. The US did it with a stoke of the pen already in the past. The main issue is not keeping all your assets under the domain of one government. Recently even the Swiss have manipulated their currency and violated banking trust of their clients. So nothing is perfect. I probably trust the Aussies as much as the Swiss at this point.

[bronsuchecki]

I'm very surprised the Canadian Mint program is not insured. The Perth Mint fully insures its metal, it adds to the cost but add another layer on top of the Government Guarantee.

Further to confiscation, I was the first to highlight that section in the Banking Act and discuss it much more detail here http://goldchat.blogspot.com/2008/11/au ... ation.html - the political dynamics around confiscation, especially in a state with such a large gold mining industry, it not as straightforward as one may expect.

[craigr]

I'm very surprised the Canadian Mint program is not insured. The Perth Mint fully insures its metal, it adds to the cost but add another layer on top of the Government Guarantee.

Further to confiscation, I was the first to highlight that section in the Banking Act and discuss it much more detail here http://goldchat.blogspot.com/2008/11/au ... ation.html - the political dynamics around confiscation, especially in a state with such a large gold mining industry, it not as straightforward as one may expect.

To add to that, the fact that Perth Mint through the mining in Western Australia is responsible for 10% of annual world gold production if I recall. Shutting down those operations would have huge economic and political fallout in Australia. Simply confiscating and prohibiting export of gold in Australia is definitely not straight forward!

[BearBones]

To add to that, the fact that Perth Mint through the mining in Western Australia is responsible for 10% of annual world gold production if I recall. Shutting down those operations would have huge economic and political fallout in Australia. Simply confiscating and prohibiting export of gold in Australia is definitely not straight forward!

Great point! Thanks, Craig. So, since I have not yet read "the book," is this your #1 choice for gold after you accumulate adequate physical buried in the back yard?

[craigr]

To add to that, the fact that Perth Mint through the mining in Western Australia is responsible for 10% of annual world gold production if I recall. Shutting down those operations would have huge economic and political fallout in Australia. Simply confiscating and prohibiting export of gold in Australia is definitely not straight forward!

Great point! Thanks, Craig. So, since I have not yet read "the book," is this your #1 choice for gold after you accumulate adequate physical buried in the back yard?

We have several options listed with pros and cons. But Perth is definitely on the list.

[ahhrunforthehills]

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[ahhrunforthehills]

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[Ad Orientem]

I do not think the majority of politicians are "big picture" kinda folks   ;)

Now your touching on my tag line.

[craigr]

Any country can seize gold. The US did it with a stoke of the pen already in the past. The main issue is not keeping all your assets under the domain of one government.

What if instead of having it in control of one DIFFERENT government as intended, you could be making it worse by having it in control of BOTH governments instead.  

If I put my assets in Australia, I not only need to worry about Australia's government seizing my assets in times of their need... but I also have to worry about the US State Departments ability to basically extradite the assets back (and me personally) to the United States under the guise of fraudulent transfer or tax evasion when Uncle Sam is in need.

There are no guarantees. But look at it from Australia's point of view. A govt. comes and says "excuse me, but we'd like the several billions of dollars of gold you have there that belong to our citizens."

First you'd have to wonder what is going on that is so bad that Uncle Sam is scrounging around for a few mere billions in assets like what Perth holds. Second you'd also have to wonder if the Aussies would do it and effectively shut down that business. Third you'd also wonder if they were watching the news and watching something like that happen in America that perhaps there is a new Hitler rising or such and if ethically they'd do it.

All I know is I'd rather have some assets there then all in the country where you live. At least as an investor you'd have an option of stalling.

I would think the only real government diversification you could rely on would be in a non-extradition govt.  But who the heck feels really safe about keeping their assets in Afghanistan or the Congo

Exactly. I read all sorts of schemes where people want to put assets in third world locales and I just think they are nuts. Any country that can't even respect basic property and human rights is not going to look out for you if the local institution where you put assets, or the govt there, decides to take them.

I will take my risks with keeping the assets in places where I can drink the water and don't need to salute El Presidente as a matter of course.

[ahhrunforthehills]

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[craigr]

Ok I understand. But where do you propose investors put money for overseas diversification that is better?

Understand that my criteria are rather strict:

1) Can't have major financial operations inside the US.
2) Can't be in a third world locale.
3) Strong history of respecting private property and contract rights.
4) Is affordable to the average investor.
5) Is insured satisfactorily against loss by a major government or insurance company.
6) Has a large financial interest in continuing to provide the service and fight against unlawful orders.
7) Won't allow fishing expeditions due to banking privacy laws?

The options we list in the book do all of the above more or less. I have reviewed many other plans which do not. But if anyone has better options I overlooked, please list them because I'd want to update my notes. What I want to avoid is torpedoing a good plan in search for the perfect plan.

[MachineGhost]

Maybe the best thing to do is buy an acre of moon property and bury your gold there.  I have a couple of acres myself.

Who Owns the Moon? The Galactic Government vs. the UN

http://tinyurl.com/n58vh5

[ahhrunforthehills]

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[ahhrunforthehills]

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[murphy_p_t]

For me personally, I have gone full circle.  Going oversees for additional protection... then years later selling it off because IMHO I was just kidding myself when I really sat down and gave it some serious thought.

I'm really interested to know how your thought process progressed. Having no geogrphic diversification because perfection might not be available...why is that the best choice? Especially since you probably had capital gains?

[ahhrunforthehills]

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[craigr]

If you have experience doing overseas real estate I'm sure people here would love to hear your experiences. You may want to start a thread about it.

[craigr]

I hope nobody takes my comments as a personal attack on investing preference.  For me personally, I have gone full circle.  Going oversees for additional protection... then years later selling it off because IMHO I was just kidding myself when I really sat down and gave it some serious thought.

But to each his own   Now foreign real estate, now that might be a different story.  Some countries will even throw in a passport   But now we are getting off subject

Oh I don't take it that way. I am most frustrated with US regulations which are creating effective capital controls with red tape. I'm always interested in hearing about alternatives that are safe and affordable for investors. Unfortunately most options are either not safe and cheap, or pretty safe but expensive in terms of minimums.

[murphy_p_t]

I figured someone named "ahhrunforthehills" would have some useful experience to share

[steve]

When I started this thread I stated that I like GTU Central Gold Trust. My feelings have not changed, I think the best is to hold physical bullion and GTU . For me GTU is the best option. For a taxable investor it has favorable tax treatment, for safety the Gold bullion is stored on an allocated and segregated basis in the underground treasury vaults of the Canadian Imperial Bank of Commerce. I feel that it has an extra level of safety because it is a closed end mutual fund. Seems to me the assests that a closed end Canadian mutual fund holds would be harder and take a lot more time to confiscate thus may add another level of protection. Hopefully I will never find out.