posted
Is anyone aware of ways to buy bullion Gold/Silver in Africa or so-called "third world countries" for reasonable prices?
I imagine it would be pragmatic and constructive to buy from African mines (i.e. investing money in my own people & economy) but is it safe to do so and are the mines being run by Africans?
I would really appreciate constructive input as I am considering buying a fair amount from a popular/reliable Mint here in the UK. Before I do so, I would like to know if I might be better off buying Afro Gold...
Posts: 3423 | From: the jungle - when y'all stop playing games, call me. | Registered: Jul 2006
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posted
^lol , I really wasn't bragging (this time), I just wanted to see if there is a better way to buy bullion than I know. Gold isn't that expensive (I mean, it depends on how much of it you're buying - a student would do well to get some bullion coins right now, especially if living in USA).
Money is not success Arwa, success is "freedom". I am 'at work' typing this and would rather be somewhere else. I'm not really free ... not yet
P.S.> kenndo, if you're reading this, PLEASE help me out - since you're very good at finding out about African businesses.Posts: 3423 | From: the jungle - when y'all stop playing games, call me. | Registered: Jul 2006
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quote:Originally posted by H*O*R*I*Z*O*N^*^H*O*R*U*S: I would really appreciate constructive input as I am considering buying a fair amount from a popular/reliable Mint here in the UK.
Some important facts:
UK: Specialist coin dealers often provide a very competitive service. Naturally it is advisable to find a reputable one. Any members of the BNTA, the British Numismatic Trade Association, should be safe enough.
Taxation of precious metals
Precious metals are subject to taxation in most countries, because of their's high economic value. In most countries capital gains tax applies when precious metals are sold for profit, but in many countries also value added tax (VAT) applies for some but not all precious metals. In the European Union the trading of recognized gold coins and bullion products is VAT exempt, but no such allowance is given to silver. Silver is taxed 17.5%.
U.S. citizens may be taxed on their gold profits at 15, 23, 28 or 35 percent, depending on the investment vehicle used.
Other than storing gold in your home; gold can also be placed with a bank or dealer. In the case of the latter going bankrupt, the client will be unable to claim the gold and would become a general creditor, whereas gold held in a bank it should be returned to the client in full.
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Posts: 1549 | From: California, USA | Registered: Jan 2006
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posted
^Many Thanks as usual Myra . I'm already hip to the UK situation though, I was hoping there's a way to buy from African mines. Do you know of any?
Posts: 3423 | From: the jungle - when y'all stop playing games, call me. | Registered: Jul 2006
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quote:Originally posted by H*O*R*I*Z*O*N^*^H*O*R*U*S: I was hoping there's a way to buy from African mines. Do you know of any?
Not unless you can find an African country that is producing their own bullion gold coins like what was done with the 1-ounce South African gold Krugerrand. Back in the days it was not politically correct to own Krugerrands. Sanctions against the import of the Krugerrand were removed by most countries in the 1990s. Maybe someone can give us some insight in owning one now?
I do not know of any other African country that produced they own bullion coin. Many other gold-producing nations minting their own bullion coins, the American Eagles, Canadian Maple Leafs, Chinese Panda, British Britannias, and Austrian Philharmonics.
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Posts: 1549 | From: California, USA | Registered: Jan 2006
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posted
^How unfortunate . I heard Akon (Senegalese-American R'n'B Pop-Star) bought a mine a few years a go. Not sure what he mines in there though.
I reckon the Perth Mint (Perth, Australia) gives you the best deal/situation for anything from $10,000. See PMCPPosts: 3423 | From: the jungle - when y'all stop playing games, call me. | Registered: Jul 2006
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quote:Originally posted by Myra Wysinger: It is neat!
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These are too nice. The (Chinese) writing gives the coin a rare special feel. I must go get them already.
Posts: 3423 | From: the jungle - when y'all stop playing games, call me. | Registered: Jul 2006
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quote:Originally posted by H*O*R*I*Z*O*N^*^H*O*R*U*S: I see you have a taste for the finer coins in life. I am of the same ilk
I'm a silver coin collector, mint condition mostly. I sold my gold some time ago to renovate a house. I held my gold for about 25 years so I got pretty good returns. It is a good idea to think long term as a young investor when it comes to precious metals.
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Posts: 1549 | From: California, USA | Registered: Jan 2006
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quote:Originally posted by H*O*R*I*Z*O*N^*^H*O*R*U*S: I heard Akon (Senegalese-American R'n'B Pop-Star) bought a mine a few years a go. Not sure what he mines in there though.
Akon: So what if I own a diamond mine?
Friday, 16 February 2007
There's bling and there's bling: while most urban music stars might feel somewhat naked being seen without the requisite rocks, how many can boast of owning their own diamond mine? Akon is currently the proud owner of one in South Africa and is remarkably matter-of-fact about his acquisition. "I don't even believe in conflict diamonds," he announces. "That's just a movie. Think about it. Ain't nobody thought about nothing about no conflict diamonds until the movie came out. Where was all that **** before the movie? That's the problem with people - they believe everything they read or see on TV." He slaps my knee and emits a hearty laugh. He's getting excited. "It's no different from The Blair Witch Project. Everybody thought that was real. That campaign and marketing was incredible. After that, they're getting Oscars. Unless you go to Sierra Leone and see what's going down, don't believe everything you're reading or see on TV. Trust me."
It's not often you come across an R&B star who's willing to let you past the polished lothario façade and is prepared to have a decent political dispute. And it gets good. "If anything, there's conflict oil," he continues. "Worry about the oil - you see what the oil is doing to people. You see what Bush is doing over there... oil is conflict. When you're driving your cars, you're driving conflict fuel. It's killing thousands of people a minute. Diamonds are the least of our worries."
He also has his own charity for underprivileged children in Africa called Konfidence Foundation.
quote:Originally posted by H*O*R*I*Z*O*N^*^H*O*R*U*S: I see you have a taste for the finer coins in life. I am of the same ilk
It is a good idea to think long term as a young investor when it comes to precious metals.
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I totally agree. Thanks for the advice .
Posts: 3423 | From: the jungle - when y'all stop playing games, call me. | Registered: Jul 2006
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quote:Originally posted by H*O*R*I*Z*O*N^*^H*O*R*U*S: I see you have a taste for the finer coins in life. I am of the same ilk
I'm a silver coin collector, mint condition mostly. I sold my gold some time ago to renovate a house. I held my gold for about 25 years so I got pretty good returns. It is a good idea to think long term as a young investor when it comes to precious metals.
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I'm curious about why you have sold your gold collection and now collect silver - is there something on the horizon I should know about?
I know silver is more useful/ethical to collect where gold is more of a vanity affair.
Posts: 3423 | From: the jungle - when y'all stop playing games, call me. | Registered: Jul 2006
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posted
I have also been looking into buying some gold. I am told you can hold gold in your IRA but its a funny way you have to go about doing it. In the meantime i think i will just settle for some gold bonds or indexes.
Posts: 2463 | From: New Jersey USA | Registered: Dec 2007
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Bonds & Indexes are a bad idea. Always make sure you buy real as oppossed to imaginary precious metals. It's better to buy physical bullion and arrange to get it stored somewhere near you. A good rule of thumb is when buying any precious metals, make sure you at least have a serial-number to prove that you purchased "something that exists".
If you must get "unallocated" Gold, go for the Perth Mint Certificate Program (PMCP), at least it is backed by the govt. of Western Australia if they go bust.
Ideally, you don't want to buy pipe dreams (stocks etc) when it comes to precious metals.
Posts: 3423 | From: the jungle - when y'all stop playing games, call me. | Registered: Jul 2006
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Lately, I have been thinking once again about investment pool accounts and certificate programs for unallocated silver (and other precious metals). Although I have written about such accounts frequently in the past, I still get questions from readers. So let me be clear. My new thoughts lead me to believe that at some point it must end in disaster for both the buyers and issuers of these programs. I will try to explain why and convince you to the best of my ability to get out of these programs now.
What is a silver pool account or a certificate program for unallocated silver? In simple terms, these are purely paper promises or bookkeeping-only entries that are sold as an alternative for owning the specifically earmarked real silver of segregated or unallocated type accounts. For illustrative purposes, an example of a pool type account would be kitco.com www.kitco.com and for unallocated certificates the Perth Mint of Australia www.perthmint.com.au But they are not the only examples. Most people who buy this paper form of silver are not aware that there is no specific silver backing up these accounts, only a promise of some type by the issuer. If a problem develops either in the silver market (a shortage) or with the issuer (insolvency) the buyer could end up high and dry. The buyer pays full cash value for the silver, yet may not get the silver or the value of the silver.
I consider pool accounts and certificate programs with no serial numbers of bars on a par with the great failed experiment of leasing and forward selling of gold and silver by mining companies. Long-time readers may know that this issue was what prompted me to first write on the Internet, 10 years ago. To my knowledge, I was the first to write of the stupidity and manipulative effect of leasing. One great thing about the Internet and the printed word is the time record created.
For newer readers, leasing transactions failed because they didn’t pass the test of common sense. Great quantities of physical central bank gold and silver were dumped on the market through leasing. This artificially depressed the price (to below $300 on gold). The mining companies obligated themselves to pay back years of production at those depressed prices. It was an accident waiting to happen when the price rose and the transactions were unwound. Leasing participants were too concerned about transaction fees and cheap financing to step back and look at the big picture. They convinced themselves they were hedging, even though legitimate hedging never involves the physical short sale of a commodity or obligates years of production.
The disaster did occur, as it had to. Gold prices rose when the dumping stopped and gold was bought back ([HORUS^*^ HIGHLIGHTS: tip: the silver has yet to be bought back ]). The cumulative losses to date in gold from this wacky experiment are in the tens of billions of dollars and there is still a significant portion left to be closed out. That’s tens of billions of dollars in losses from an idea that shouldn’t have passed muster.
Although it seems clear in hindsight just what a mistake this forward selling was, at the time it was an accepted practice that almost no one spoke against. I have a confession. Back when I publicly started writing about leasing and Barrick Gold and others involved in this nutty practice, I would sometimes wait for the process server to knock on my door with libel lawsuit papers. (Yes, there were many days I’ve waited for COMEX related papers, as well.)
What does leasing/forward selling have to do with pool accounts and unallocated silver storage? Quite a lot, in my opinion. For starters, they both sound good, until you think about what’s really involved. A transaction must be examined from the perspective of all parties to see if it makes sense, or even if it is legitimate. For the buyers of silver (or gold) in a pool or unallocated account, the great allure is that it is cheaper and easier than buying and storing real silver. Cheap and easy are powerful incentives, and, all things being equal, they win every time. And in today’s modern world, technology enables us to do many things cheaper and easier (like e-mail and online shopping and securities trading), so we’re not always suspicious of things cheap and easy.
Are all things equal between pool accounts and owning the real thing? Do you save enough to justify it? I don’t think so. (The real thing is actual metal segregated and held in your name by a large and reputable third party. That’s generally not the dealer you bought the metal from. In the case of 1000-ounce bars, professional storage identifies them by serial numbers.)
In the typical pool account or certificate program, the buyer incurs a very small sales charge and zero storage charges. Your common sense should tell you that this is only possible if there is no real silver being purchased. Zero storage charges equals zero real silver. So the trade-off for the buyer is that no real silver exists. There may be statements given by the issuer that there is real silver backing the pool or certificate account, but no specific proof. Further, there is usually a provision that the buyer can get real silver if he is willing to pay an additional charge. While this sounds reassuring, this should further prove to the buyer that no real silver backs a pool or an unallocated certificate account.
What about looking at these transactions from the issuers’ perspective? What’s in it for them? Well, certainly not sales commissions or storage fees. But these are for-profit organizations. They are in business to make money. How do they make money or even cover costs, if they don’t charge storage fees? They make it on the float, or the use of the buyers’ money. That’s the only way they can make money. The issuer puts the buyers’ money at interest or into the business. Since no actual metal back ups these pools, the financial strength of the issuer becomes a factor. In other words, it is not real metal that backs up these accounts, but the financial security of the issuers themselves. Make no mistake – these pool and unallocated certificate accounts are unsecured obligations of the issuing entity.
Now some people who are aware of these circumstances claim they are content doing business this way, because there have been no known problems to date. I can understand that, but things can change and how could you know if they did? Others would say the Perth Mint also offers a guarantee from the provincial government. I understand that as well, but real metal holders don’t need a government guarantee because unencumbered metal is an asset that is no one else’s liability. A pool account or an unallocated certificate account, by definition, turns an asset that is no one’s liability into an asset that is decidedly someone’s liability. That’s perverse.
In no way am I attempting to malign the reputations of kitco.com or the Perth Mint or any other issuer of pool or unallocated silver accounts. On the contrary, I am trying to save them and their customers great potential harm and heartache. My motivation in writing about leasing/forward selling ten years ago was to alert all participants to the inherent flaws in those transactions. By not heeding the warnings, the mining industry went on to lose tens of billions of dollars that would have enriched their shareholders.
My motivation today is similar. The worst thing that could happen to a silver investor is to have bought at the right time and then discovered, too late, that he held the wrong form of silver. I am convinced that silver in pool accounts and unallocated certificates are the worst form of silver and that it is highly likely, if not near certain, that they will end badly for all involved. That’s because the issuers are at risk in a price rise. As the price rises, the buyers are accruing profits and the issuers are accruing losses. The issuers have to actually pay out the losses only as buyers sell at a profit or convert their pool accounts or certificates to real metal. But there is no way of measuring the issuers’ total liability to the buyers. As long as only a few buyers are selling out, or if there are new buyers coming in, the cash outlays by the issuers may be minimal. As long as pool investors think silver is a buy or hold, they will not cash out and require the issuer to pay out cash. This can allow an issuer’s financial condition to deteriorate as the price rises. The only real issue becomes when is this likely to reach a tipping point? The obvious, if imprecise, answer is when the price is high enough to cause people to sell while no new buyers appear.
What I’ve just described is a classic Ponzi scheme, in which old investors are paid out with new investor money. The scheme can only last until new investors stop investing. Then it collapses. Do I think that any of the pool issuers intentionally set out to construct a Ponzi scheme? Absolutely not! Just as I didn’t think that Barrick Gold would intentionally deprive their shareholders of many billions of dollars with their foolish forward sales. Just as I don’t think some large trader at the COMEX woke up one day with the bright idea to intentionally manipulate the silver market with concentrated short sales. That’s not how things normally work in the real world. The way things work in the real world is that unintended consequences develop when people take questionable actions without thinking things through.
Pool accounts and unallocated silver certificates are a bad idea. They create unacceptable trade-offs. It costs a small amount of money to store and insure real silver. You can’t do it for free. You can store non-existent silver for free, but that’s a bad idea. Compounding the problem is the lack of public information. I’ve read the annual reports of the Perth Mint, and I am concerned with the lack of financial detail and their reliance on leased metal. Pool operators like kitco.com are private companies and financial data is not available. Worse still is the lack of regulatory oversight. If you think there’s a problem with the silver ETF, you can at least petition the SEC, or Barclays, a public company. The CFTC may sidestep complaints about the COMEX, but at least they have to go on record. Who oversees the pool accounts and certificate issuers?
Investors should rid themselves of these pool and unallocated accounts while they can. There are too many good alternatives for holding real silver. Also, a deployment out of non-existent silver to real silver will help the price. The issuers should stop dealing in these potentially ruinous financial concoctions, which are not central to their basic business. It may prove temporarily painful but, in the long run, it may save these businesses. Ten years ago, very few envisioned what damage leasing and forward selling would do to the miners. Years from now, I think the same thing will be said about pool and unallocated silver accounts.
Source: BUYER BEWAREPosts: 3423 | From: the jungle - when y'all stop playing games, call me. | Registered: Jul 2006
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quote:Originally posted by HORUS^*^: I'm curious about why you have sold your gold collection and now collect silver - is there something on the horizon I should know about?
My 35 year old U.S. silver collection is a hobby not a investment. I collect by dates, and put them in coin books. I have a world-wide and U.S. stamp collection also that is just as old. I have collected just about all the U.S. Presidental Quarters, and now working on the Presidental Dollar coins. It's just a hobby.
The gold was an investment. Before I retired I sold it and fixed up some property I have.
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Posts: 1549 | From: California, USA | Registered: Jan 2006
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posted
The Gold Information Network has documented historic gold prices as a research tool for gold bullion buyers and gold coin researchers.
Price of gold:
1980: $675.30 2002: $281.65
Early 1980s recession brought the price of gold to go up, but then started going down after economic recovery.
Reason for the recession. Tight monetary policy in the United States to control inflation caused recession. The changes were made largely because of inflation that was carried over from the previous decade due to the 1973 oil crisis.
quote:Originally posted by Myra Wysinger: I do not know of any other African country that produced they own bullion coin...
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How feasible do you think it is to get into this business? I know there is a gold mine the British used to pimp (pardon my language) in the colonial times somewhere in Nigeria I'm very familiar with.
I would get great satisfication (ego nourishment? lol ) from minting my very own 'Yoruba Orishas' ...
Posts: 3423 | From: the jungle - when y'all stop playing games, call me. | Registered: Jul 2006
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posted
Thanks for the heads up. So if I have like 10k free in a retirement account what would be the way to go?
Posts: 2463 | From: New Jersey USA | Registered: Dec 2007
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posted
From what I've heard very recently. It might be better to actually leave your money in a high-interest savings account till next year before looking at your options again. This is because of the very uncertain US economy.
But if you must spend: considering you were going to put your money in pm bonds, Perth Mint Certificate Program*** is a good deal. They will charge you an annual fee of 1% of the value of your precious metals for "allocated" holdings. They won't charge you anything for "unallocated" holdings which is fantastic but there is always the risk of you losing *ALL* your money if the PerthMint ever goes belly up (which I doubt will happen anytime soon). Also, even if the PerthMint dies, the govt. of Western Australia guarantees to bail 'em out - which is also a good thing.
If you decide to cash in on your holdings, you will incur a fee of about 1% of value. If you decide you want to take the metals "physically" into your own possesion or private storage: for unallocated metals, it will take about 3 weeks to get your gear minted from their pool. If your holdings are allocated, I believe they dispatch it immediately to a location of your choosing.
***I don't have any shares in this company. Honest .
Posts: 3423 | From: the jungle - when y'all stop playing games, call me. | Registered: Jul 2006
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quote:Originally posted by H*O*R*I*Z*O*N^*^H*O*R*U*S:
quote:Originally posted by Myra Wysinger: It is neat!
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These are too nice. The (Chinese) writing gives the coin a rare special feel. I must go get them already.
Hi Myra, could you point me in the right direction for purchasing these? I would like to collect some silver ones.
Posts: 3423 | From: the jungle - when y'all stop playing games, call me. | Registered: Jul 2006
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quote:Originally posted by HORUS^*^: . . . could you point me in the right direction for purchasing these? I would like to collect some silver ones.
History of Silver Investment:
During the recession in 1980 the silver price rose to an all-time high of US $49.45 per troy ounce. By December 2001 the price had dropped to US $4.15 per ounce, and in May 2006 it had risen back as high as US $15.21 per ounce. As of 2006, silver prices (and most other metal prices) have been rather volatile, for example, quickly dropping from the May high of US $15.21 per ounce to a June low of US $9.60 per ounce before rising back above US $12.00 per ounce by August. As of March 2008, it has hovered around US $20 per troy ounce.
If you want to own these coins, you can buy them at any coin dealer in your area.
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Posts: 1549 | From: California, USA | Registered: Jan 2006
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quote:Originally posted by Myra Wysinger: The Gold Information Network has documented historic gold prices as a research tool for gold bullion buyers and gold coin researchers.
Price of gold:
1980: $675.30 2002: $281.65
Early 1980s recession brought the price of gold to go up, but then started going down after economic recovery.
Reason for the recession. Tight monetary policy in the United States to control inflation caused recession. The changes were made largely because of inflation that was carried over from the previous decade due to the 1973 oil crisis.
I'm not very near Lancashire (quite a long drive), but I've seen that website before - I just wasn't sure of how trustworthy they were. Now that you mention it, I'll get my pandas from there.
Thanks again .
Posts: 3423 | From: the jungle - when y'all stop playing games, call me. | Registered: Jul 2006
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, I really wasn't bragging (this time), I just wanted to see if there is a better way to buy bullion than I know. Gold isn't that expensive (I mean, it depends on how much of it you're buying - a student would do well to get some bullion coins right now, especially if living in USA).![[Wink]](wink.gif)
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. I heard Akon (Senegalese-American R'n'B Pop-Star) bought a mine a few years a go. Not sure what he mines in there though.
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