GSR ideas To kick off this new discussion, here are a few quotes I lifted from various places- some going back 5 years. Apologies for no source references. "Viewed from a volatility perspective, the odds favor a move upward in the gold/silver ratio, meaning gold's purchasing power is more likely to increase rather than wane. Traders heeding the odds would then buy gold futures against the short sale of silver contracts." "There's something else these probability tables tell us. A hike in the gold/silver ratio would indicate the metals' fear premium is strengthening—a likely consequence of continuing dismay over economic prospects. Downticks in the ratio would indicate more enthusiasm for silver and its industrial applications in an improving economy." "The historical ratio is 16:1 (it has taken 16 ounces of silver to buy 1 ounce of gold)
For the last 100 years, the ratio has been 30:1
In the last 12 years, the ratio has held closer to 60:1
In just the past 5 years, the ratio has fluctuated from 45 to 85
As of December 3, 2010, the gold:silver ratio was sitting slightly above 48:1
How do we take advantage of this fluctuation?
FIRST – we time our purchases based on the ratio. When the ratio is relatively high, we favor silver in new purchases. When the ratio is relatively low, we favor gold.
NEXT – we buy the form of silver or gold that offers the possibility of greater profits. During periods of high demand, investors will often bid up the premium on certain items 20 to 40% or more of their underlying metal value. At that point, we can swap those high premium items for others with lower premiums – capturing much of the difference, and converting that difference into extra ounces of metal.
LAST – we act when the ratio reaches tops and bottoms. When the ratio is high, we swap gold for silver. Then when the ratio drops, we swap silver back into gold. Said another way, we swap silver for gold when silver has appreciated faster than gold. Then, we swap gold back into silver when silver becomes “cheap” relative to gold. Every time we go through this cycle – gold to silver and back to gold – we increase our ounces. That’s the whole objective." "For anyone not familiar with statistics, the mean is a better indicator than average. It is the number at which 1/2 the data are (the word "data" is plural) above and 1/2 below. If you use average, a skewed number (outliers) or two will distort the picture. Any rate, from 2002 to 2011 the mean Gold:Silver was 62.8:1 and the standard deviation was 10.7. So, to use Saulmine's example of when to move from gold to silver or vice versa, when the ratio is 41.4:1 (or less) trade silver to gold and when the ratio is 84.2:1 or greater, trade to silver. Tell you the truth, the low limit sounds close to right but the upper sounds too high. Totally unscientific but the numbers of -2 SD's and +1 SD from the mean sounds a lot better to me." "Also, there is a wild card which plays hugely to Silver's favor. That is the moment in time when central banks begin to accumulate Silver as well as Gold. China is already doing this, though they don't talk much about it. Maybe their gold is at the 'bank' and the silver is in an 'industrial warehouse' - though both with tight security." "In economics and finance, arbitrage is the practice of taking advantage of a price differential between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices. When used by academics, an arbitrage is a transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state; in simple terms, a risk-free profit. An entity such as a bank or brokerage firm that engages in arbitrage is called an arbitrageur. The term is mainly applied to trading in financial instruments, such as bonds, stocks, derivatives, commodities, and currencies. (Source Wikipedia.)"
GSR 20 in 2012? How? What will cause the GSR to head down to extreme outlier points of 20 in 1.) 2012 (postulated Oct/Nov) and 2.) 110 in (postulated late 2013)? 1. GSR 20 To get a GSR of 20 means a disproportionate relative value of silver to that of gold (at least in the Cartel's suppression of Silver paradigm). Ie. A very high silver price or corresponding lower gold price, or expensive silver, cheap gold. So, the highest price of gold and silver for 2012 by the "expert" commentators is as per https://www.tfmetalsreport.com/sites/default/files/users/u5265/gold__sil... silver $59.29, gold $2242 yielding a GSR = 38 So per the experts, from the two predictive respective 2012 highs, we don't get that close to GSR of 20, although what we are looking for is a higher silver, lower gold ratio. (Most of the expert price predictions are about 20% on top of the 2011 highest price achieved ). For a GSR of 20, Gold would have to be almost twice the above experts highest at $4500 with silver then needing to be at $225 (almost 4 times more their average call), or maybe silver at $125 (silver twice as much as their average call )with gold at around $2250. (Or even scarier still for gold, something like $1400 gold with $70 silver? Is this possible or even likely this year again? Jim Sinclair said to expect massive volitility around his angel of $1764 up and down!) What events or Cartel motives would contrive to drive gold and silver up to the levels above or the lower gold of $1400and higher silver at $70? i) A collapse of the Crimex price discovery mechanism would likely simultaneously drive up the prices to more like $4500 gold and $1000 silver, however, it is likely that in this scenario that silver would vastly outsrtip gold and the GSR would likely top 100+. However, the EE probably won't lose control this year or even until late in the following year, to enable silver and gold reach these much higher than the maximum highs plus 20% ! ii) War in the Middle East? Usually a spike in the oil price which would lead to a spike in the gold price (just based on production costs) but maybe not enough to reach these highs, and I guess, dragging silver along too? During the Iraq war (the second one of 2002), prices really didn't explode in gold, and then only until about 12 months later. However, Iran would be a whole different ball game with 40% World's oil going through the Straight of Hormuz. My money is still on an early 2013 invasion, as Russia and China haven't done a deal yet to sell Iran out, and this should take considerable time to put together. Time needed for China to increase strategic oil reserves to cover the disruption and get "something" major in return for tacitly allowing the USA to go ahead. What deal does Russia get? (Maybe those pesky Islands offshore Alaska as referred to on previous posts?) mmm so maybe this scenario not so much! iii) Maybe false information released concerning hundreds of thousands of tonnes of gold from the Dragon Family been falsely verified, at the same time as Sprott tryng to get more PSLV offerings filled with difficulty due to silver physical shortage, causing gold to plummet momentarily and silver to radically increase or at least stay the same? The hundreds of thousands of tonnes is on the balance of probabilities -bullshit. I mean if the current World's total gold is around 150 000 tonnes mined for the last 5000 years, how does many multiples of this amount somehow magically show up? I don't think this pig will fly iv) Maybe a country like China, makes a radical move to secure the bulk of the World's production, through share acquisitions, causing an instant shortage, and a price spike? Nah, they stealthily acquire and work slowly and patiently. v) Maybe the Morgue decides just to show who is in control, and needing to make a shit load of money quickly by going short gold and long silver at the same time, as a once off rarely seen gold/silver price combo, smoking all the outside speculators? Maybe this volatility is what they do to further destroy the sheeple's confidence in getting into bullion as a seemingly too shaky an investment, just as confidence in other asset classes are copping a flogging too? With PAGE starting in Jun/Jul, (in gold at least initially), maybe the Morgue will lose "some" control in the gold arena, but still have a death grip on the silver side until PAGE moves to silver (somewhere later in 2012?) My money is on this scenario. Just because they can, and they stand to make a lotta moolah, and it is their game plan of fleecing as much of the sheeple's wealth as possible. I'd welcome other inputs or scenarios? 2.) GSR 110 For a GSR of 110 to be achieved, suggests some very different propositions. A very very high gold price, with silver in the dunny (toilet or WC for the Northern philistines) Egs, $4500 gold, $40 silver. $2500 gold, $22 silver What the hell could cause this? No physical silver would be available at this price by this stage late in 2013? I don't know if a GSR will ever hit 100 plus after this time? i) Crimex is toast or on the way out with no price discovery mechanism useful for physical acquisition, and paper silver price trending towards zero? Possible. ii) Gold monetised through IMF dodgy SDR instruments, with silver being marginalised by the Central Banks initially, until real world demand overcomes Central Bank manipulation? On the demand side, industry still going apeshit for the stuff. Silver is the peon's metal, so Investment demand is likely to continue escalating. On the supply side, peak silver long gone, no major strategic reserves, with this element first to be depleted on periodic table (est 2020?) (By depleted, doesn't mean totally exhausted, but the easy stuff is gone, with massive new investment (only achievable through a high price) required to find new mining locations with a much higher EROEI ) Also possible. iii) Ivar's charts support this, although I don't understand his methodology. iv) I'm out. Trying to come up with bodgy scenarios to fit my bodgy predictions is tough! Any other thoughts out there for me to explore?
On a recent previous post, I examined the Power of GSR Trades in increasing your Bullion stash. I was particularly interested last year in IVAR's Gold, Silver and GSR predictive charts, which by the way, seem to be holding up pretty good so far. Some Turdites questioned the veracity of predictions spanning all the way up to 2016, and I must admit, I questioned how any metodology or predictive tool could come close to being accurate. As one who has constantly been in "the World is coming to an end now" mode since 2007, I have to now admit to being damn wrong on the timing. So I am now in the James Sinclair, Gordon T Long, Alf Fields and many others who see this can kicking going on for another 3 to 4 years at least. The Daily Reckoning's Bill Bonner and Doug Casey have always maintained that in turbulent, end game times, there is mucho volatility and hence mucho opportunity for profit. Mike Malonney's philosophy endorses observance of asset classes measured in gold and silver, and then switching into the asset class so undervalued. In 2007, I decided bullion was the asset class of the next 2 decades as monetary and financial systems end and new beginnings underpinned by something more tangible, like true money Gold and Silver. Without an income stream anymore, and minimal cash reserves, and not wanting to relinquish my stash, I have had to learn how to survive using bullion swops. I am hoping for some extreme oscillations between the gold and silver relative pricing in the coming years, and so hope that the facade can continue allowing us all time to plan, prepare and accumulate wealth to help those we care about in the future. The following scenario below is what I am fervantly hoping for, and is close to what Ivars was predicting in magnitude not necessarily timing. Ok, So we need some major luck with the 4 GSR major movements in the next 3 years. I am Heavy Silver currently, bugger all gold. 1. GSR #1 move to 20 by late 2012, (Results in Heavy Gold)
2. GSR #2 move to 60 by early 2013 (Results in Heavy Silver)
3. GSR #3 move to 30 by late 2013. (Results in Heavy Gold)
4. GSR #4 move to 110 by late 2014 (Results in Heavy Silver)
5. GSR #5 moves down to maybe even as low as GSR 1 somewhere from 2015 to 2020. Exchange below starting GSR30 downwards. Assume you have 2000 ounces of silver round number now (A reasonable not immodest stash, and certainly possible with cashing in a retirement fund say?) Major GSR #1 1000 oz's silver for 40 oz's gold at GSR25, 1000 oz's silver for 50 oz's gold at GSR20 Major GSR #2 40 oz's gold for 2000 oz's silver at GSR50, 50 oz's gold for 3000 oz's silver at GSR60 Major GSR #3 Taking entire 5000 oz's silver for 166 oz's for gold at GSR30 Major GSR # 4 30 oz's gold for 1800 silver oz's at GSR60 30 oz's gold for 2100 silver oz's at GSR70 30 oz's gold for 2400 silver oz's at GSR 80 30 oz's gold for 2700 silver oz's at GSR 90 30 oz's gold for 3000 silver oz's at GSR 100 16 oz's gold for 1760 silver oz's at GSR 110 TOTAL 13760 oz's silver from 2000 oz's silver original in 3 years Of course, if we had a crystal ball any investing is easy, but I am relying on the fact that we routinely see moves of GSR 30 to 60 in a year, and the GSR moves should oscillate more radically as the current system decays. Whilst the CRIMEX seems to have the ability of postponing the inevitable default indefinately as well as capping the price, limited price explosions in one of the metals are bound to happen in increasing magnitude. My thoughts, (worth all of what you are paying for them?) is that maybe the gold and silver will be largely range bound, or at least move together until the November elections. After this, all the effort to keep the market gyrating it's death throes in check until Barry gets reelected could explode in one of the metals, particularly silver, resulting in the GSR 20. Early in the 2013 new year, (seems to be the timing of past MENA invasions), the war in IRAN is commenced, sending gold relative to silver to the moon for our GSR major move 2. You would have to think that the Euro and Europe have defaulted by this time leading to the GSR major moves 3 and 4? What the hell do I know, however this is my humble game plan, and if it pans out, feel free to send some love my way in the form of some "precious". I don't have the background in trading as many Turdites such as pailin, Eric Original and of course mighty Turd, but even if I did, the MFGlobal fiasco put the wind up me. So for me, always having my hot sweaty meat hooks on physical is all I can consider now. Some other thoughts on GSR. 1. It is probably best to trade in bars of silver for bars of gold-the cheaper premium stuff and not the highly polished, machined bars. ie. the big bars with the lowest unit wise premiums. 2. If using coins, then trade coins for coins, or keep these as non GSR trading, but insurance that the GSR continues down from where you had planned. For example, if you end up gold heavy, say after GSR Move 3, and then all shit happens and silver finally ends close to, or even 1:1 with gold, then trade your silver coins for gold coins. 3. Keep an eye out for the Platinum Gold Silver ratio, as if it is still significantly cheaper than gold when you are doing a gold for silver swop, it might hedge your bets further(plus it is a damn sexy metal!) 4. Metals like Palladium in Australia are not classified as "precious" in terms of our tax law, so they attract 10% GST. So I steer away from these. 5. If the paper and physical price diverges, I hope these GSR trades can continue, albeit with a different price discovery mechanism than the CRIMEX. (PAGE commencement in Jun/Jul this year will be interesting)
You are here: Home BullionVault Review
BullionVault Review October 26, 2011 at 10:50truthing
The Executive Team Paul Tustain
Paul Tustain: Director Alex Edwards: Chief Operations Officer Kris Jenkins: Chief Technical Officer Adrian Ash: Head of Research Catherine Little: Cash Manager Nittin Seehakoo: European Operations Executive (French) Robert Nigg: European Operations Executive (German & French) Jaroslaw Pietrzak: European Operations Executive (Polish & French) Atsuko Whitehouse: Far East Operations Executive (Japanese) Simin Gurler: European Operations Executive (German) BullionVault is owned by Galmarley Limited, which is company number 4943684 registered in Great Britain. As at October 2008 the company had 47 shareholders. For a modest fee you can obtain a full and formal shareholder list, updated annually, from Companies House on https://www.companieshouse.gov.uk. Our services are delivered to you by our own computer machinery hosted in separate locations in Britain and USA, which we connect to and manage from our London offices. Galmarley is involved exclusively in bullion and bullion-related information technology. It owns not only www.BullionVault.com but also www.galmarley.com
Buy, Sell and store Gold and Silver using Allocated Account & LBMA Accredited Storage. [Clause 8 of Terms & Conditions] Scroll down to the last item on the left side column.
Supports 6 major currencies (USD, CAD, EUR, GBP, CHF & JPY).
Excellent online realtime trading platform for active traders of physical bullion (similar to stock broker platform).
Transportation and physical custody is operated by VIA MAT International on behalf of BullionVault.
Choice of 3 vaults – London, Zurich and New York.
Bar reservation is very easy, with online facility to select your bars from a Bar List showing serial numbers, refiners and bar weights.
Bar registration available for both gold and silver.
Taking Physical Delivery
Unlike GoldMoney, taking physical delivery is discouraged, and is also more costly.
This is what they say in “Your Right of Withdrawal” clause.
You have a right of withdrawal of your gold and silver from BullionVault, but you acknowledge BullionVault is not designed primarily as a service for those who wish to take physical possession of bullion. Your wish to withdraw gold will be accommodated only in the form of whole numbers of appropriate gold bars of varying sizes and of generally accepted gold bullion coins to be selected at BullionVault’s discretion. Your wish to withdraw silver will be accommodated only in the form of whole numbers of 1,000 troy oz bars. Fees Gold
Buy commission ranges from 0.8% to 0.02% depending on volume traded in one year.
Sell commission ranges from 0.8% to 0.02% depending on volume traded in one year.
Annual Storage & Insurance ranges from 0.96% to 0.12% depending on quantity, charged monthly in USD, with minimum of $4 per month. Fees are the same in all vaults with rates calculated based on cumulative holdings in all vaults.
Bar registration for 400 oz bar is 0.1%, with cost of storage rising from 0.12% to 0.18% per annum.
All fees are in USD or equivalent, and not in grams or ounces of metals.
Buy commission ranges from 0.8% to 0.02% depending on volume traded in one year.
Sell commission ranges from 0.8% to 0.02% depending on volume traded in one year.
Annual Storage & Insurance ranges from 1.92% to 0.48% depending on quantity, charged monthly in USD, with minimum of $8 per month. Fees are the same in all vaults with rates calculated based on cumulative holdings in all vaults.
Bar registration for 1,000 oz bar is 0.1%, with cost of storage rising from 0.48% to 0.72% per annum.
All fees are in USD or equivalent, and not in grams or ounces of metals.
Buy and Sell mechanism
The unique feature of BullionVault is the ability to trade bullion as you do stocks in a stock broker’s online account. Realtime bid and ask prices are displayed for immediate buy or sell at market prices, or you can place a limit order to be executed when your price targets are met.
When buying, other BullionVault clients compete with BullionVault in offering you the lowest price, and vice versa when selling. Either way, BullionVault adds their trading commission on top of the transacted price.
After each transaction, you will be advised if BullionVault was the principal or dealer for that transaction.
Transactions are in realtime, and you see your bullion and cash balances updated immediately.
Trading is available 24×7, 7 days a week, even when external markets are closed.
Account Opening, Client Identity Verification and Account Funding
Open a free account online in realtime. Once new account has been created, you’ll be credited with a free gram of gold, 1 USD, 1 EUR and 1 GBP. You can begin trading immediately to test out the system.
No mention of restrictions on client’s’ country of residence on their website.
Client identity verification can be done online by uploading scanned copies of photo ID and bank statement of your funding bank (the bank account from which you will remit funds to your BullionVault account). No hard copies are required.
Able to fund your account and start trading even before account verification is completed. However, you cannot withdraw funds from your BullionVault account until the account verification is completed.
Remitting funds into your BullionVault account can be done only from one bank account (funding account).
Not necessary to apply or notify BullionVault when funding, so long as the funds originate from the same funding account.
Withdrawal of funds from BullionVault can only be made to the same funding account and nowhere else (unless special application is made to change the funding account).
Security & Safety features
Optional SMS alarm notifications (not verification) for critical transactions (login, fund transfers, buy/sell) are charged at $0.20 per SMS. Email alerts are free.
The linking of your BullionVault account to one and only one external funding account is considered “failsafe” by BullionVault.
Corporate Profile and Corporate Governance Development of BullionVault software/service began in 2003. First recorded online presence was in 2004 and the first full year of trading was in 2006. Started online trading and storage services as we know it today in 2004.
BullionVault is owned by Galmarley Limited, which is based in West London (UK).
BullionVault’s shareholders list and 2009 audited company accounts are available online.
Current reports are available at Companies House for a fee.
In June 2010, The Telegraph reported that Lord Rothschild Fund and World Gold Council invested £12.5m in BullionVault. Depending on how you view the Rothschild Fund & WGC, their involvement may influence your opinion of BullionVault.
Daily client bullion and currency audit is carried out by BullionVault and the results published online in the public domain (no login required). Audit shows BullionVault’s total holdings of various currencies, gold and silver bullion in the various vaults together with a complete bar list. You can basically view your account (including list of your registered bars) online without login, but your privacy is assured as all accounts and registered bars are identified through an anonymous code (Nickname) chosen by and known only to you. (see screenshot below).
Annual external audit is conducted by Albert Goodman and audit reports to BullionVault are published on the auditor’s website (instead of BullionVault’s website).
As discussed in the Counterparty Risks section, holding bullion through BullionVault’s Allocated Accounts gives you outright title to your metals. As noted, there is a minor Performance Risk with all service providers. BullionVault shows its commitment to minimise this risk through their “Accepting Responsibility” principle:-
As the head of the board and majority shareholder Paul Tustain accepts responsibility within the company for organising BullionVault’s system controls and arranging individual responsibilities within the BullionVault team, and its custody providers, so as to maximise the security of customers’ gold and cash. In addition to development capital Paul Tustain has provided management bonds to the company which is held as gold and cash segregated in favour of customers. These management bonds are non-refundable except in final liquidation, in which circumstance they rank behind all other customer property for repayment. The value of equity in the company and this loan would therefore be lost before any BullionVault customer incurred any loss resulting from breaches of faith or security on BullionVault.com. This arrangement is structured to underpin the meaning of ‘accepting responsibility’. Communications & Client Relations
No secure online messaging system within their website for correspondence between BullionVault and clients.
Communications through normal emails.
Not responsive to suggestions or questions regarding website features. I’ve 3 emails totally ignored. Yes, totally no replies.
Summary & Opinion Safe, Secure, Reliable. You are the outright owner of professional grade bullion (Good Delivery Bars).
Excellent trading platform with low trading commissions, low spreads and low storage fees.
Ideal for active traders of physical bullion or if you wish to occasionally swap gold for silver or vice versa depending on the Gold/Silver Ratio.
High transparency and good corporate governance but poor client relations.
-- Screenshot: Trading platform - The above is a typical screenshot showing Market Depth for gold traded and stored in Zurich. You can see buy and sell offers (at price intervals as low as $1) on queue together with the spread. What I like about BV is their low commission plus very low spread (seen here at 0.28%). When you buy, the sell offers can come from other BV clients or from BV themselves (through their trading robots – more details here). So in a way, they are competing to give you the lowest price. The same holds true when you sell. You are also able to see Market Spread at all their vaults in a single screen as shown below. - Tip: You often get better deals by breaking up your order into multiple small orders. - Screenshot: Daily Audit (partial view) BullionVault Daily Audit posted online in public domain
- You can easily open an account and start playing around with their trading platform with a free gram of gold. - Disclaimer: The above information is provided on a best-effort basis. It’s accuracy is not guaranteed, and may not reflect the most recent changes made by the service providers. Please perform your own due diligence and verify the information from their respective websites before making any decisions. The reviews are the personal opinion of the author and does not constitute any endorsement or recommendation. How to Buy and Store Share this post: Tweet thisShare on FacebookStumble itShare on RedditDigg itAdd to Delicious!Add to TechnoratiAdd to GoogleAdd to MyspaceSubscribe to RSS Gold & Silver Interviews
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Just a place marker for now. I never seem to be able to find the forum I'm looking for.