I read number of SS threads about unallocated and allocated storage in a bullion club. My silly question on allocated storage is lets say a club gone to admin, will our physical PMs in allocated storage be seized by the administator (to pay to secured creditors/unpaid wages for examples) or return straight back to owners? Will the process be complicated and labour intensive for owners to claim their physical PMs? I suppose any liquidation is always a hairy arse. Your thought? LD
You'd have to check the T&Cs of each individual company to see how they're structuring their storage products.
Allocated is owned by you and stored on your behalf, it is not subject to liquidation. However, you must be confident that whoever is holding your bullion for you is managing and segregating your metal properly. Ensure the allocated is segregated and not pooled for greater protection. It should be boxed or bagged with your name on it. Always read the agreement, and the fine print associated with it. Expect to pay storage fees for allocated and segregated storage. If it is being stored for free, then beware, it is more likely to be following what I would term as a pool unallocated model. The definition of these terms unfortunately varies from dealer to dealer. So read the fine print. Ck.
Murphy's Law (If anything can go wrong, it will) and Ponce's Law (If you don't hold it, you don't own it). Disregard them at your peril!
Everything CK has said Is correct in my opinion too. Allocated which is stored separately either in a box/bag with your name on it is yours, and cannot be touched by liquidators/administrators. Effectively the company has sold the bullion and therefore it doesn't own it or have any right to it.
The customer would then need access to the premises to retrieve his bullion. However, there has been some press recently regarded the practices of some liquidators. I would imagine the T&C would need to cover this contingency pretty thoroughly.
Gerald Celente gave an example of where he tried to get a lot of cash of out his bank after 9/11, because he was planning on driving to Canada, and the bank would not let him have HIS cash. Subsequent to that incident, he experienced a similar incident where he was made to jump through hoops & hurdles to get his cash out. After that he now advises, with specific regard to CASH, that "if you don't hold it, you don't own it." This is also true of bullion. And its funny that Mike Maloney is the guy mostly associated with this saying, that has become quite popular. So it is ironic, that he now also advocates storing a portion of your gold in another country. If your gold is vaulted somewhere, and after an "event", a security guard denies you access to the vault, do you really "hold it?" Or do you prefer to store all your gold & silver in your own home, where you truly can "hold it". You can bury it in your back yard, but this is not "holding it", unless you dig it up each evening to check that it is indeed still buried there.
Depends on how much you have.... I know another major silver-celebrity guru type that has 1/3 of his Silver in another country. But if I lived in the US, I'd consider that mandatory. If you need to flee the country ... for whatever reason ... go to your money.