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The Solari Report – 19 Feb 2009
I first met James Turk in the late 1970’s while interviewing for jobs on Wall Street. It was many years later thanks to the Gold Anti-Trust Action Committee that I had the opportunity to get to know him. There is no more astute commentator today on the gold and silver markets and their role at the heart of financial and geopolitical events.
James is the founder of GoldMoney, the author with John Rubino of The Collapse of the Dollar and How to Profit from It and publishes The Freemarket Gold & Money Report.
James will be joining me on Thursday, February 19th on The Solari Report. We will be talking about recent events in the precious metals markets, the state of the global economy and the outlook for the US economy and the dollar.
If you are a subscriber to The Solari Report, you can post your questions at your private panel or feel free to also post them at this blog post. If you would like to learn more about The Solari Report and subscribe, click here.
IS GOLDMONEY REALLY CONCERNED ABOUT THEIR CUSTOMER’S BEST INTERESTS?
Lloyds of London was in financial trouble long before the recent credit crunch so I have to conclude that by allowing the involvement of Lloyds of London GoldMoney wasn’t taking into consideration what would happen if they actually needed to call on Lloyds of London to make good on the policy. In other words for marketing purposes it sounded good in print but in reality the customer is screwed if something went wrong.
My question to GoldMoney regarding Lloyds of London followed by their reply.
“…Is this the same Lloyds of London which has been in dire financial trouble for years? If it is then how was it possible for your customers to be adequately insured if they were being insured by a company which was for all intents and purposes broke? It seems that Lloyds of London is the British equivalent of America’s AIG and that’s not a fun thought….”
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Their reply:
Please visit the below link for a copy of the insurance certificate. Please call Marsh Ltd directly if you have any queries on the certificate itself.
http://goldmoney.com/documents/storage-insurance.pdf
GoldMoney has been operating for over seven years and Lloyds were our original insurers back in 2001 when there was no credit crunch and it was not apparent to anyone the problems all banks had got themselves into. Lloyds has now more or less been nationalised by the UK government and therefore, Lloyds will only go bankrupt if the UK government goes bankrupt. The UK government has given billions to Lloyds and I personally do not envisage the UK government to allow Lloyds to go under because Lloyds is a retail bank and the government have already made it clear it will do what is necessary to keep the retail banks afloat.
The insurance is against theft from the vault which is highly unlikely. For your metal not to be protected a scenario would have to happen where Via Mat vaults were robbed at the exact same time Lloyds of London goes bankrupt.
I hope I have allayed your fears but please contact me should you have any further queries.
By being a customer of GoldMoney am I exposed to the value added tax (VAT) and if so under what conditions?
One of the issues I’m concerned about is getting blindsided with the VAT which apparently could be as high as 17.5%. YIKES!!!!!! In the interview I quoted in an earlier message that in their situation the VAT applied when a person took physical delivery of the precious metal.
So I tried to get GoldMoney to define the exact meaning of taking possession. I asked them if I have gold or silver shipped to me have I legally taken possession when it leaves the vault, and thus exposed to VAT, or do I take possession when it’s placed in my hand?
When you read their reply I’d like to to tell me if they answered my question. It’s my opinion that they didn’t.
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GoldMoney customers can physically receive possession of their metal but we only deal in bar form only. Therefore, a customer must own at least 12,500 goldgrams or 1,000 oz of silver in their Holding to take possession of a bar, as this is the weight of the bars that comprise the gold and silver held for customers in GoldMoney. Via Mat our vault operator will only deliver one gold bar and/or 30,000 ounces of silver (one pallet board of silver) to our GoldMoney customers.
There is a USD400.00 upfront fee for GoldMoney to draft up a quote as the quote takes into account the location, shipping, insurance and handling costs involved to deliver a bar to whichever part of the world you wish to receive the physical bullion. The USD400.00 will be deducted off the final quote.
However, for smaller US investors they can receive smaller denominations of their physical gold or silver such as gold/silver coins through our affiliate Kitco.
For more information, please visit the below link to receive Kitco’s contact e-mail address. Please confirm to Kitco that you own a GoldMoney Holding and you wish to receive physical delivery of your metal in gold/silver coins. Please confirm with Kitco the current availability of gold/silver coins.
http://www.goldmoney.com/en/bullion-into-gg.html
Therefore, if you own 400 oz of gold, Via Mat will deliver to you in America but at a secure location such as a bank etc. If you own 30,000 (30 silver bars) Via Mat will deliver to you in the US at a secure location. Smaller amounts of gold/silver can be received by transferring your bullion from your GoldMoney Holding through to Kitco’s GoldMoney Holding and thereafter Kitco will arrange delivery to you.
If you have any additional questions, please don’t hesitate to contact us.
Dear Catherine
The following are snippets from 2 of your replies to me.
“…Without law and without ethical, competent people, and broad based community support for the same, hard to know what will work….”
“…Again, in this type of situation, I put more store in the quality of the people governing the arrangements and the nature of the operation than in the insurance….”
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I know you are a strong advocate of networking, where integrity is an integral component, in order to achieve a common goal for all involved and I admire you for “walking the walk” in this area.
However, based on what I’ve read, observed and unfortunately even experienced I’ve come to the conclusion that when it comes to dealing with family, friends or fellow members of a church on financial matters it is best to treat the transaction in a strictly business manner. Binding agreements or contracts are written and everyone insures that all the I’s are dotted and the T’s are crossed.
And this brings me to what I’m experiencing in trying to deal with GoldMoney. I’ll try to be short.
I asked them:
‘…does an American customer of GoldMoney have any legal (tax or otherwise) obligations or resonsibilities to Jersey?…’
Their reply was:
‘…I am afraid I cannot answer your question because we are not authorised to do so. We cannot be seen to be answering ANY tax queries because it could be deemed as TAX ADVICE….’
So I asked them:
Can you give me an e-mail address the of the Jersey authorities who can either
1) tell me what Jersey regulations, laws and tax laws apply to me OR
2) tell me what depatment(s) in the Jersey government I need to contact in order to get these questions answered?
And their reply was:
I am sorry I cannot provide this information. You will need to contact your own tax specialists in the United States to obtain clarification of your questions.
I am sorry I could not be of further help.
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I’ll cover other GoldMoney issues in following posts.
Needless to say when it comes to their willingness to help a potential customer avoid any potential issues with Jersey I’M NOT IMPRESSED and very disappointed.
LoT