I am also coming to the realisation that both Stedlar and boston have the driest sense of humour on this forum. I think. I never can quite tell with these 2.
You're a trusting fellow hey All metal backing the new pool allocated will be held by the Perth Mint in its vaults. We don't outsource vaulting like GoldMoney, BullionVault etc.
I will be very happy indeed if i was incorrectly informed regarding this matter. I only related what i've been told by people supposedly knowing what they're talking about, but you're right in that it stinks because it does not seem right or fair - not that that was ever a prerequisite with respect to taxation law. I am definately motivated to go back to my tax consultant and challenge him on this matter. I apologise for repeating the same incorrect information in ten different posts - that was not my intention
hmmm quoted from a friend of a friend who is an accountant. " the ATO sometimes classifies you as a trader rather than an investor which means you must mark to market all your assets at the end of the financial year because they are treated as inventory it's more like running a business and that's exactly what the ATO do if you look like you're in the business of trading in their eyes, they will classify you as a trader which means mark to market at EOFY and pay tax on any paper gains/losses, " if you buy and hold, i don't see how the ATO can possibly make the call your SMSF is trading....if you buy and hold its clearly investing imo.... YIPPE: are you referring to you're SMSF being taxed or you personally? i know my accountant told me if I traded gold and silver he would need to know the values so i could personally pay CGT...
Been following this thread - Just didn't make sense. This explanation is the most logical reasoning so far - Makes sense to me. Thanks
+1 I agree that this the most plausible explanation and could be why my accountant wanted the "inventory" value held at the end of the tax year. It just seems like they're jumping the gun a bit - i mean there would have to be a hellova lot of buying and selling going on before the ATO could classify the SMSF as a "trader"... I would definately appeal that decision immediately on the basis that i am an investor and it is up to them (ATO) to prove differently... Thanks for that - you've given me renewed hope. I - and others here i hope - will not tolerate such unfair taxation treatment.
The old clause 13, they can pay you in paper : http://www.caseyresearch.com/sites/default/files/Perth-Mint1_1.jpg
So, Bron, PM selling unallocated is taking pressure off the physical market? But wait, dont you also say that the funds paid to PM by investors is used to buy working stock. ie to buy physical silver on a ounce for ounce basis? These are contradictory positions. Anyway, with the 'working stock' claim, PM can still go *weeks* without having stock for sale. How long does it take to manufacture a bar anyway? Now PM is saying they dont need any more working stock. At the same time Royal Canadian Mint officials recently admitted publicly they are finding it difficult to source silver. You quite often challenge anyone that PM can supply silver in any quantity a customer may desire. This is clearly false, as the entire PM annual production of all silver products is only a good months worth of ASE sales... Lets gets some facts from PM. 1. How many ounces of silver are held in PM unallocated silver accounts? 2. At what average price was this silver purchased by investors? 3. What is the total amount of actual physical silver held in PM vaults, or anywhere else within the confines of the Perth Mint vaults and workshops, to back the silver bought in point 1 above? 4. Are any of the funds accepted by PM in the unallocated silver program used for ANYTHING else but buying physical silver, or is it used as funds to purchase equipment, pay wages, bonuses or any other of the running costs for the Mint? If we get some straight answers to the above straight questions, we could all see what the real PM liability is to investors and ultimately th Govt of WA.
The "take pressure off the physical market" is a quote from someone else and based on his assumption that is it unbacked, then you take pressure off the physical market by continuing to sell paper silver. By his logic, closing actually puts pressure on the physical market. Please tell me the time that the Mint went for weeks without selling ANY silver. Just because we stop selling one size or another is not not having stock for sale. It is not about time to make a bar but a decision on what coins and bars to make with only X amount of production capacity. My challenge is never that we can supply silver in whatever form a customer may desire. However the challenge is that we can supply silver in 1000oz bar form (the raw, wholesale form) that anyone desires. The point of the challenge is that manufacturing capacity limitations do not mean shortage of silver itself. Yes we are small, which is actually why if RCM or US Mint have problems and everyone comes to us we can reach capacity very quickly. Our smallness is also a great counter the idea that we would not buy metal and just keep cash as part of some conspiracy to keep prices down. As you point out, our entire annual production = one month of ASE sales so any attempt by us to just keep client's cash would make f-all difference to the spot price. In which case why take on massive liability for no gain, if we were indeed directed by NWO to suppress the price. We don't break down our gold vs silver (i have and am working to make those numbers public) but we do say we have around $3 billion worth of metal. There is a very straight answer to your question and it can be found in note 25b to our annual report http://www.perthmint.com.au//documents/GOLD_CORPORATION_ANNUAL_REPORT_2010.pdf where we indicate our audited (by outside auditors, with additional review/oversight by auditor general) value of Depository liabilities and precious metal assets that back it. And don't give me some crap about not trusting auditors. Auditing physical metal is not subject to interpretation and judgement - either the metal is there in the stocktake or it isn't and it isn't hard to add up client account balances to work out the liability. If we were keeping cash and not buying metal it would be very obvious to even the most stupid auditor. If we didn't use all client funds to buy metal we would have a gap, which would grow over time. If you think about it what do you think the fabrication cost that we charge people for our coins and bars is mean to cover if not our equipment, wages and running costs. You might have a point if our fabrication/premium prices were incredibly cheap, but if anything I see people here complaining how expensive we are.
Well that's clear enough, thanks. It's just that you didn't say it and where the metal is and how it is accounted for is the very thing every one is concerned about when outsourcing their storage. No disrespect intended, I just wanted to make sure I understood what was intended. I personally like the Mint and have not had any bad experiences dealing with it. . . beyond the cost of delivery, where it is cheaper to fly to Perth and pick up your metal yourself than have an insured delivery.
Of the four questions asked, you havent provided a single straight answer. 1. How many ounces of silver are held in PM unallocated silver accounts? 2. At what average price was this silver purchased by investors? 3. What is the total amount of actual physical silver held in PM vaults, or anywhere else within the confines of the Perth Mint vaults and workshops, to back the silver bought in point 1 above? 4. Are any of the funds accepted by PM in the unallocated silver program used for ANYTHING else but buying physical silver, or is it used as funds to purchase equipment, pay wages, bonuses or any other of the running costs for the Mint?
Silvery Moon, Pointing out the bleeding obvious - but the mint is a commercial for-profit enterprise, and I'd say every one of those questions can't be answered on a public forum (regardless how benign or reassuring the answers might be) as it would be commercial-in-confidence. I suggest you direct such enquiries to the mint in writing rather than anonymously via the internet at an employee who is technically posting in a personal capacity.
goldpelican, that wasnt what Bron said, he 'tried' to answer the questions, in his own way. With respect, unless you are the PMs spokesman, I would prefer to hear from Bron, at least he can say he and/or PM isnt able to provide straight answers. There are also some followup questions that arise from his initial response that I would like to see him attempt to answer.
With respect, I'm the forum owner. You're seeking answers to questions of a commercial nature, and I made a relevant suggestion as to how you can seek the answers via the "correct" channel.
As goldpelican pointed out, a straight answer in the context of an anonymous forum such as this one would probably be "No comment". Bron is obviously doing his best to explain the situation and how things work in a general sense, but there are obvious privacy implications in publicly stating things like private investors' average purchase prices and I wouldn't expect that kind of information to be put out there in the public domain (or put another way, I'd be pissed if someone managing my investments put that sort of information out in the public domain).
and from the mob that takes are of my SMSF ( esuperfund): Dear Johnny, Thank you for your email. We advise that tax is only paid on investments that are realised (sold).
No, I was saying from the point of view of the logic of our detractors, continuing to sell unallocated should be according to them taking pressure off the market, so by their logic us stopping it makes no sense if by their theory we are trying to supress the price. Let me make it clear, when a client buys unallocated from us we buy metal from the market, thereby transmitting the client's purchase into the market and affecting the price as if they purchased directly in the wholesale markets themselves. Yes, no stock of that one, single product. You said "stock" in a general sense, ie all. When at the same time we are continuing to sell tonnes of silver in other coin and bar sizes the idea that not being able to sell one product indicates a shortage makes no sense. We refine around 300t of gold and 160t of silver a year - that stuff comes in every week consistently (mines aren't stop/start businesses) - plus we source silver directly from other refiners and bullion banks when needed. We do not have a problem getting metal, period. Yes, we shut down entire product sizes, because our "machines" can be used to make multiple products so if we get a lot of interest in 1oz coins for example compared to Kilo coins, then we will focus that machine on 1oz because, guess what, we make more money on 1oz coins. The only reason you have drawn the conclusion that supply of raw material is an issue is because you think that machines can only do one products. You think that because, to be blunt and a bit rude, you obviously have never worked in a manufacturing business and have any appreciation for the practical issues involved in making real products. Factory managers have to deal with things like bottlenecks, line balancing, setup costs vs production run size etc etc. Two seconds on google, here is a link to start you off on appreciating the calculations that need to be made in optimising output and profit http://www.scribd.com/doc/21556744/Operations-Management-Bottlenecks-Critical-Path-Line-Balancing It is not factory specific, but I don't have time to find you a nice worked out example. So you are calling me a liar? We have had no problem getting raw silver either from mines or the market in 1000oz bar form. RCM's problem may reflect their local supply/demand issues and also would reflect their larger size. All I know is we are not seeing any problems, and we are not seeing RCM, or Sprott or anyone else coming to Australia bidding for silver so they can't be that desperate. Management's view is that it is commercially sensitive and as it relates to our operational metal, may also represent a security risk. You can be reassured that the Mint is not playing games because we are audited and why I directed you to our annual report. That is the point of an independent audit. You didn't really think about what you said. Such a cross metal price exposure would be obvious in our balance sheet and would be impossible to maintain over time a balance between dollar equivalent value of ounce liabilities and dollar equivalent value of ounce assets given the variability in metal prices. It would be a significant risk that auditors would have to identify and draw to the attention of the audit committee and board. It would result in such variable profit and loss as prices changed that would be impossible to "hide". We back gold ounce for gold ounce and silver ounce for silver ounce. As I said, currently management's decision is they don't want to reveal this commercial information. As I have said that we buy the specific metal the client has bought from us, this question does not need to be answered as there is no exposure to silver prices. In other words, the difference between the average prices paid by our investors and the current silver price is irrelevant to us because we have no shortfall of silver because we bought the silver when the client bought from us. As indicated above, the view is that being too specific as to how much of what metal and where we hold it gives too much information to our competitors as well as criminals. None, all funds (excluding those sent to us for storage fees, fabrication fees and other explicitly non-metal related amounts) accepted by PM in the unallocated silver program are used to buy metal. Happy?
