To the government of Western Australia
(There may be a problem!)
Silver Stock Report
by Jason Hommel, May 21, 2008
Complaints; Premier Alan Carpenter
Treasurer Eric S Ripper
Department of Consumer and Employment Protection
Department of the Attorney General
Department of Treasury and Finance
Economic Regulation Authority
Office of the Auditor General
Western Australian Treasury Corporation
Gold Corporation / Perth Mint
To various agencies of the government of Western Australia,
You may have a growing precious metals liability of over $880 million
Australian dollars at the Perth Mint, which is backed by you, the
government of Western Australia.
I have received about 30-50 complaints about the Perth Mint over the
last few months from investors who have tried to purchase silver bullion
coins, kilo bars, and 100 ounce bars and 1000 ounce bars who have had
their orders refused, or delayed.
I have received these complaints because I have an email list of about
80,000 investors who are interested in the merits of buying silver or
silver stocks; and I have refered many investors in Asia to the Perth Mint
over the years.
The Perth Mint has a certificate program, and they hold up to $880
million Australian dollars worth of these certificates as a precious
metals liability which is used for an operating pool of metal.
I don't understand how a Mint can have that much metal at their
disposal to be used as an operating pool, yet can run out of metal for
walk-in customers, and also have difficulty in redeeming metal for
existing customers. It seems to me that the entire purpose of having
an operating pool would be to satisfy such orders, yet they are reportedly
having difficulty doing so.
I'm further concerned for the government of Western Australia, because
my readers have sent to me two copies of two different emails from Nigel
Moffett, the Treasurer and manager of the Perth Mint, who has said that
investors in the certificates do not need to worry about the solvency of
the Perth Mint, but rather the solvency of the government of Western
Australia, which has a surplus of $2 billion/year. This seems to be
a particularly alarming statement of over-reliance on a government
bailout, and I suggest to you that if there is a problem, the sooner you
discover it and deal with it, the cheaper it will be to fix it and to bail
them out, especially in a market of rising precious metals prices.
Many of us experts in precious metals expect the prices of silver and
gold to double perhaps within a year, and if so, the Perth Mint's
liability will double, too, which can be particularly alarming if they do
not have the metal, but have consumed it in wasteful operations expenses.
I would suggest that you pay particularly close attention to the
following statements by the Perth Mint and AGR Matthey:
"The $880 million of precious metals deposited by Perth Mint Depository
clients (note 17) was used in operations by Gold Corporation as inventory
($381 million - Note 8b) with the balance in the refining operations of
AGR Matthey (Note 8a).
p. 81, bottom
"Treasury undertakes a leasing program to either lend or borrow
precious metal within the terms of a lease agreement between AGR Matthey
and approved counter parties."
As you investigate, I would warn you to not be swayed by slick
excuses. Do not be swayed by statements that their precious metals
liability is balanced by other liabilities of other entities who also may
not have the silver or gold. Ask to see the precious metal that they
are supposed to have in their vaults to be used in operations, and don't
be deceived, as it can be very costly.
The size of the precious metals liability is particularly alarming to
me, in light of the fact that total silver investment demand world wide
for 2007 was estimated at 75 million ounces, or about $1.1 billion dollars
by the CPM group.
Nobody has reported to me any problem in obtaining any gold, only
But the real reason I'm writing is this:
Please let me know which government agency I should send any
information to, and also, let me know so I can direct my readers to
complain to the proper agency.
In case you miss an email,
check the archives:
You can buy silver in
lots of 100-500 oz. at my auctions at www.seekbullion.com
Auctions end M-Th, Sat, At 7PM Pacific, but you can place bids anytime, 24/7.
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You can also buy silver at www.momsilvershop.com
ship overseas, and also in lots of more or less than 100
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