Hi new to the forum, but a long time silver bull and a gold and silver investor. I was reading the forum for the first time today and noticed the subject of this thread. Bearing in mind there have been many precious metals commentators harping on about the dangers of unallocated storage for years now I was amazed how this thread seemed designed to suck in the uninformed and gullible on this crucial matter of investment security. I was so shocked to see unallocated storage being recommended, I joined the forum in particular to warn those reading it of the dangers of these accounts.
Firstly 100kg to 200kg is not a large physical amount. 20kg of silver bullion will easily fit into a container only one third the size of a shoebox. That is not a difficult volume to conceal safely. In a world gripped by financial crisis and socialist ideals there is a real potential that Australian government wealth confiscation will extend beyond your mining company share ownership. Remember all a government have to do is announce that precious metals are a key ingredient to central bank stability, then declare a financial crisis and it could become illegal for private ownership of precious metals. The higher prices go the closer to that reality we are. Guess where authorites will go straight away if such a law is passed?...the Cash for Gold stand at the shopping mall??
Storing precious metals in unallocated accounts is a bad idea.
Unallocated silver storage gives your storer the express right to lease out your metal and make their own money on your investment. This is how it works; the storer leases out the metal in unallocated storage to a bullion bank and pockets the profit. There are no costs to them as they arent paying you any royalty to have temporary ownership of your scarce metal. A bullion bank will lease the metal from say the Perth Mint, and against it sell silver short contracts on COMEX in either a spread or outright short position and influence the price of silver downward. There are more silver short positions on COMEX than for any other commodity. Bart Chilton Commissioner of the CFTC has clearly stated he believes the big banks have been (trying to) fraudulently influencing the price of silver on COMEX. In the past 6 months JP Morgan and HSBC have all had multiple class action lawsuits launched against them for this reason. The silver that you deposit in an unallocated account is thus not only providing a means for the bullion banks to fraudulently restrain silver prices but to provide them profit while they do it, and this is all done without physical silver changing hands. Remember if they had to go to the market to buy silver against which to write their short positions, that would be driving silver prices higher. But no, unallocated storage gives the COMEX manipulators instant access to massive amounts of metal which they use as a weapon against the small investor gullible enough to believe they are getting a bargain by not having to pay storage fees. Storing your silver in an unallocated account, is working in direct opposition to your investment realising the gain it deserves, and should not be undertaken by anyone who believes their silver is valuable. Storing your silver in unallocated accounts is not the same as owning physical metal. It does not give the the full tenure, security or rights of ownership of the actual metal. Storing your silver in unallocated accounts is like owning paper silver promises only.
The higher silver prices go the more windfall profits the storers will reap on your poor decision. The commentators i refer to also agree that at some stage the market may shoot for the stars, blowing up the massive short positions on COMEX, the metal will become impossible to obtain at any price (hyperinflation) and the silver and gold will disappear from unallocated accounts because someone else has claimed it before you.
To explain why unallocated accounts are such a bad idea for you (great idea for the storer and the bullion banks) let me put it another way. Suppose you bought a new Aston Martin DB9 because you knew it would increase in value at some stage in the future to the extent that they would become extrenely highly sought after, but for some reason didnt have the foresight to own a lockable garage. There was this guy in a suit who owned a high security car garage across the other side of the country offering a fantastic deal where he would store your car for free in his high security garage on a couple of simple provisos;
1. You pay him the money to buy your car outright, he buys it and stores it in his garage without your help at all. In fact the system is so good you dont even have to go to the inconvenience of shopping for it or taking it for a test drive to show your friends
2. The car would be one of 10 DB9's in the same garage, none of which you have the right of ownership in particular
3. While the car was stored in his garage you gave him the right to take your car out for a joyride without notification
4. The car may be hired out for high school graduations and bucks nights at his profit not yours
5. The car may be leased to to bank robbers and used in holdups and getaways bearing your license plate
6. When you want the car back you cant have it straight away because it may be at the repairers and take a while to either find or fix
7. If one (or more) of the 10 cars is crashed in a getaway while on lease to a bank robber, (COMEX failure) the police may well let the bank robber off the hook and there will only be nine (or so) left
8. If you show up to claim your car and in the event of 6. above you are the tenth (or so) person in line. Better find another DB9
I have explained above why unallocated accounts are such a bad idea for precious metals investors. Dont be a dope, do some basic research if you dont believe me or ask some questions, I realise this is only a brief intro to a complex issue, but I will stick around to answer questions. Above all dont trust your wealth will increase if you hold your paper metal held in unallocated accounts.
