Allocated and un-allocated. Whats the difference when you put silver in storage? Can un-allocated be sold out from under you in a worse case situation when stored outside of the banking system and possibly leave you with nothing? Does allocated mean the exact bars/coins you bought will be the exact same ones you recieve when you ask for them back? Is this a more secure way to store silver?
Depends entirely where you're talking about - private dealer, Perth Mint or an ETF? There's not really industry standard definitions.
I am fairly sure that in a SHTF situation un-allocated or allocated could be sold out from under you in a worse case situation when stored inside of the banking system and possibly leave you with nothing. Governments are already taking money directly from bank deposits, I can't see how any other asset stored with them would be any safer.
The bank or the Government has NO knowledge of what is in their safe custody boxes, and the bank has NO title to it. All they have is a contract to store and protect, for an annual fee. OC
Safety deposit boxes maybe, but in an unallocated or allocated holding then of course they know what is in them, they have no claim to them but they had no claim to the Cypriot bank customers assets either. The hypothesis was for a SHTF situation, not for day-to-day operations. Plus in a SHTF situation you are going to find that normal banking hours probably don't exist so actually getting hold of it might be difficult. Plus the police can gain access to the contents under certain situations. You were right in your first post when you said the only "allocated" was in your hands.
This must go down to your due diligence. Pick an organisation that you feel is away from federal government intervention. I prefer to hold, but if I was doing allocated first, and unallocated second, I would do it in my home city or state. If in a SHTF situation you would want to move quickly!
For me, Allocated/Unallocated in just another way of spreading the risk (geographically & institutionally). The only bullion I know of "inside the banking system" would be paper ETF bullion. (good luck to anyone there, that investment can be stolen with the click of a button). I think most bullion investors here would be well informed & prudent enough to extract their investment (in physical form) from bank strong rooms and/or bullion dealer's vaults (including SMSF metal) well ahead of any bank holiday/collapse. Even in Cyprus, the writing was on the wall weeks before the 'great theft'.
tbh I have a hard time picturing the local bank manager sitting on the floor of the vault sprawled out surrounded by forced open safety deposit boxes. Passports and birth certificates all over the floor and a pile of "winners" which includes precious metals, money and jewellery
Depends a lot on who is offering the service so make sure you read the Terms and Conditions of each offering very carefully. Unallocated is essentially an IOU for metal rather than dollars. The two main risks are: 1. The dealer operating the unallocated account going bust, 2. The entire banking system going bust and the government reaching beyond the banks to confiscate/nationalise other assets. IMHO, the greater risk lies with the provider of the unallocated account going bust, or modifying the Ts & Cs or changing the nature of the service in a significant way. That doesn't necessarily mean you will incur an actual loss, but it might mean that you have to take some action which is inconvenient or not preferable. For example, GoldMoney had to stop providing their unallocated account to customers in the Netherlands after they found they weren't licence to operate a "financial service" that did business with Dutch customers. Allocated accounts mean that you have direct ownership of actual, physical metal and you're simply engaging the account operator to store it for you and the account operator is typically the one you obtain your property from initially. Be aware that there are some "allocated" accounts which could better be described as "semi allocated" where the service provider might temporarily borrow a particular type of coin or bar to fill another customer's order and replace it later with another one of the same size and type. Again, read the Ts & Cs to see if the service provider is allowed to do that. There are some people on the forum who have found this being done with serial numbered bars in their allocated accounts and weren't too happy about it. That may not be a concern for you if you trust the service provider and are aware it can happen. You don't get bank notes with the same serial numbers back when you withdraw money you'd previously deposited in a bank either, but make sure you know how a particular allocated account works first before you start using it. Safety deposit boxes are the next level up and are essentially the same as when you hire a Kennards Self-Storage locker and stuff it full of old bookshelves, couches and DVDs you're never going to watch again. Nobody but you knows what's in there and the only way to find out would be for the police to get a warrant that compels you to open it for them or drill the lock out if you won't co-operate. There may be ways to obtain a safety deposit box anonymously, but again you'd have to read the Ts & Cs and work out what documentation is generated and what payment methods could be used to achieve that.
Thanks! Very informative reply and gives me some things to look into. Does anyone know if there are safety deposit boxes available in QLD for the public to rent? I have only seen them in Sydney.
I bought unallocated through Aus bullion companya and had no problems at all. As I have explained previously, there is very little risk associated with these big holders of silver regardless of what others say. The big problem lies at the end of a bull run and the probable parabolic blow off like 1980 where it is possible that you sell close to spot like a lot of other people and if there is not enough buyers at that price and the silver company are not quick enough to hedge the sale, the silver company will not have enough money to fulfill sales and you may end up with the silver that you don't want.
It really depends on your definition of SHTF. If there is another party holding "your" PMs There is counter party risk. Un-allocated + SHTF = sorry bullion trading is closed indefinitely due to SHTF. Allocated + SHTF = sorry we are temporarily closed due to SHTF. Please come back after SHTF and we endeavour to supply your Ag then. Maybe in 7 years if it's tonnes of Au and you're Germany One of the major attractions of physically stacking PMs are there is minimal counterparty risk. As far as I am aware there is nothing else that provides that security.
