Bullion Storage Planning Acquires New Importance

<span>Bullion Storage Planning</span> Acquires New Importance

Bullion Storage Planning Acquires New Importance

While investing in bullion is not a complicated activity, in and of itself, the process does raise several issues for potential investors. Does one buy gold or silver (or both)? Does one swap their paper currency for bullion coins or bars? Lastly, once one has obtained their wealth insurance; how and where do they choose to store that bullion?

Previous commentaries have endeavoured to provide guidance for several of these questions. However least-discussed amongst them has been the issue of bullion storage.

There are several reasons why this topic has not received as much attention as have other bullion-related topics. To begin with; for bullion investors of more modest financial needs, the question of bullion storage is an entirely personal and private decision. Do they keep their bullion at home in a safe, do they store it in a safety deposit box; or, do they come up with a ‘more creative’ means for storing/hiding their bullion?

For those investors; the question of “in which jurisdiction do I store my bullion” is moot. It would be financially impractical for those individuals to consume a significant portion of their own financial resources just to keep their bullion secure.

The other reason why bullion storage has not previously drawn much discussion is the principal legal issue involved here, counterparty risk. For newer readers for whom this term is unfamiliar, counterparty risk arises any time we choose to place the custody of some of our wealth into the hands of a third party. The risk is that we may not be able to retrieve what we have placed in the hands of this third party.

This financial risk is most typically considered with respect to paper assets. Indeed, it is now a paramount consideration, with Western governments implementing bail-ins.

With respect to any wealth we hold in paper form, the only paper which is safe, is cash in our hands. At least that used to be the case, until Western governments began leaking-out propaganda on their newest scheme for financial oppression: the War on Cash.

With the corporate media now posting opinions on a near-daily basis from various Western officials and pseudo-experts that banning cash would be “a good idea”; a ban-on-cash is coming. The only remaining questions are how and when. Furthermore, as previously noted; any ban on cash would inevitably be extended to bullion confiscation.

The reasoning here is simple, and seemingly irrefutable. Currently, there are two ways for us to personally hold our wealth in the form of currency; the paper currencies pumped-out in near-infinite quantities, or gold and silver. Obviously banning cash would create a massive motive amongst the general population to convert their cash into bullion.

Furthermore, either concurrently or shortly after; any ban on cash would undoubtedly be extended to a ban on bullion, accompanied almost certainly by some form of bullion confiscation. Among the many dramatic consequences of the latest criminal conspiracy by these governments; a ban on cash would turn the issue of counterparty risk literally upside down.

If it became illegal for people to hold their own wealth personally in the form of cash, then, Western governments would transform the issue of counterparty risk into a totally different subject: counterparty protection.

If we are forced to personally divest ourselves of our own wealth, or engage in civil disobedience (and be subject to forfeiture and prosecution); then suddenly the subject of bullion storage – in some outside jurisdiction – takes on a new aura of importance. It is beyond the scope of this article to attempt to provide readers with any detailed assessment and ranking of particular jurisdictions with respect to bullion storage. Rather, the goal of this article is to help readers and investors begin this quest.

Some of the narrowing-down of options here is simple. First, no investor should be so foolish as to store their precious bullion with any financial institution which refers to itself as a bank.

Equally, we can automatically reject several jurisdictions. Most of the world’s financial storage (bullion and otherwise) is provided in London and New York.

However, not only are these cities the two global focal points for all financial crime; they are located in jurisdictions which are at the heart of the uncertainties we find ourselves surrounded by today. Other Western jurisdictions, represent merely lower levels of the same problem. So what about the East?

Only a decade ago, any such East-versus-West comparison would have evoked laughter amongst most readers. Western jurisdictions were still deemed to fastidiously adhere to the rule of law, while many Eastern governments were deemed to be both much more authoritarian and only minimally committed to the rule of law.

Today, these same governments are now regarded by well-informed sources as being legally superior to the West. However, this change in perception is not due to any significant improvement in the laws or constitutions of these nations. Rather, it is merely the extreme and rapid descent of the West into lawlessness which has made these nations appear relatively more attractive than in previous years.

Singapore? Hong Kong? Shanghai? Different investors, with different perspectives and their own, personal experiences, would likely pick a different favorite here. For readers and investors struggling with this choice, a new bullion storage destination has appeared on the horizon.

Sprott Money has recently partnered with Strategic Wealth Preservation Ltd. (SWP) to introduce a new bullion storage option in the Caribbean: the Cayman Islands. Many readers will already be familiar with this jurisdiction as a safe haven and preferred destination for the wise and wealthy. The Cayman Islands is the world’s 5th largest financial centre and enjoys favorable legislation surrounding its financial services industry that allows for the fluid movement of assets to and from the island. The Cayman government understands the importance and significance of its status as a top-tiered financial centre and further appreciates the benefits this status has created for its population. With the word bail-in not continually on the lips and in the vocabulary of Caymanians; some readers will find these factors alone, to be a strong drawing-card for this new bullion storage destination.


This article was contributed by Jeff Nielson for Sprott Money. Sprott Money is Strategic Wealth Preservation’s primary dealer-partner, together servicing the needs of precious metal investors seeking to internationalize their assets. This article does not necessarily reflect the personal views or opinions of Strategic Wealth Preservation, its owners or its employees.

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