Perth Mint Crisis Watch 5
(More horror stories!)
Silver Stock Report
by Jason Hommel, June 5, 2008
I'm happy to report a rumor that I heard a few
days ago that the Perth Mint had a few hundred 100 oz. bars now for
investors who want to take delivery. Fantastic. Get them while
you can. I hear the bars are available for about $1.80 over spot.
Let's do the math on that, shall we?
200 bars x 100 oz. x ($17.30 +
$1.80) = $382,000
Remember, Perth Mint has a total of an $880
million in bullion liability to certificate holders.
So, they may
have had $382,000/$880,000,000 or $1 worth of 100 oz.
bars for every $2303 on deposit. If true,
that's much less than a 1% backing, actually 0.04% backing! Wow! No
shortage there! Get the bars while, or if, you
Peter Schiff slandered me in his radio
program yesterday. Don't worry Peter, I won't sue, as I don't expect
justice from the system anymore, which is why I buy silver.
4th, start listening at 31:00 and Peter discusses me and Perth Mint at
can hear it half way through.
Peter has a dual bias. Peter sells
the Perth Mint certificates. And he is woefully
Peter starts out saying that the Perth Mint
certificate program is good in case of government confiscation by the U.S.
government. But he seems to ignore the possiblity of current or past
confiscation by the Australian government! Irony of
Peter thinks I've gotten a "couple emails" about
delivery delays from customers of the Perth Mint. No Peter, it's about
30-50 complaints. Are they all lying? What a conspiracy!?
And I'm not the customer service rep for the Perth Mint, so why are
so many people complaining to me? See past reports, with complaints,
Perth Mint Crisis Watch May 23, 2008
Perth Mint Crisis: Solutions and
Ramifications May 23, 2008
To the largest newspapers in
Australia May 22, 2008
To the government of Western
Australia May 21, 2008
Poor Prospects for
Kitco/Perth/Matthey May 19,
Kitco / Perth Mint / AGR Matthey / Bullion Bank
Connections May 17, 2008
Will Kitco Sue me?! May 16,
Silver Shortage Drives Men Nuts
March 31, 2008
Perth Mint and Kitco Scheme Exposed
March 26, 2008
I find it rather humorous how Peter really
stammers and stumbles when he tries to explain that the Perth Mint has all
their silver in the form of 1000 ounce bars, and, and, and, and, and, if
people want 1 ounce rounds or "little bars" then the mint has to fabricate
them, and it takes time depending on how busy they are.
But the whole reason for even offering the
certificate program, is
ostensibly, to be able to provide silver for operations so that
they will have those final silver products available for their customers. It's ridiculous for them to ever
run out, since the entire reason for the certificate program
in the first place is to provide the silver to make sure
that they have the silver for operations so that they never run
out! Therefore, if they run out, it's evidence of a serious
And hey, if "running out" is no indication of any
problem, then what, pray tell me, would be an indication of a problem? What other evidence would indicate
a problem if not that? Do you expect to see Perth Mint employees
leaving the building with hands painted red? Come on!
me, saying I've made "bogus accusations", but I've not made any
accusations, many Perth Mint customers have.
While Peter is
incensed at the possibility that the Perth Mint might not have a full
backing for their precious metals, Peter asks, "Why would the government
do that?" I've answered that already.
I don't think the Perth Mint is engaged in any conspiracy to
defraud people. More likely, they're simply "doing their
jobs." I believe that the trouble was low silver prices. For
years, silver remained at $5/oz., and minting costs, I assume, were about
$2.00 per ounce, at the bare minimum in the private sector. Like
most government agencies, the Perth Mint was probably not too concerned
During silver's bear market, a lot of silver was coming to market
by investors as "recycled siver", who were dumping their silver, thus
depressing prices of all silver products, below market prices, which, as
all student of free markets know, creates a challenging environment for
all producers, who usually find it hard to compete under such
What would you do if you worked at the mint? You might not
even know if minting costs were as high as $3-5.00/oz on top of the silver
price, because things might be done the typical inefficient way of all
governments, and your job may well have depended on continuing to mint
coinage, whether at a profit, or loss.
The Perth Mint appears to me to have been funded for years, by
precious metals loans from banks, which is similar to how all government
operations on the planet are funded, by loans. Are there any
governments not in debt? The difference is that these are precious
metals loans. The other difference is that these precious metals
loans were transfered to the public via the selling of the Perth Mint
The Perth Mint says in their annual report that these are "non
interest bearing loans" and technically, that is correct. However,
with precious metals prices rising at about 25% per year, these loans are
quite expensive, and will grow much more expensive as precious metals
prices continue to rise.
So, I have left several
questions on Peter's answering machine. I asked him:
Do you know how
many complaints I've gotten about the Perth Mint? It's about 30-50,
not "a couple".
Why would so many complain to me, given that I'm
not a perth Mint customer service rep?
Do you know the size of the Perth
Mint's liabilities of their certificate program? (It's $880 million
Australian dollars (which are worth about the same as a U.S. dollar.)
Do you know the estimated annual silver demand in
ounces and dollars? (It's about 60 million ounces, or about $1
billion at $16.66/oz.
THE PERTH MINT'S LIABILITY IS WORTH ABOUT AN
ENTIRE YEAR'S WORTH OF SILVER INVESTMENT DEMAND!
Do you know the
Perth Mint's production capacity of making 100 oz. silver bars? I don't. But
the Perth Mint ought to know their own production capacity, and so should
their certificate resellers, such as Peter Schiff.
Peter, let me
warn you. If you don't figure this out, some of your customers might
start calling you Peter Shifty or Peter Shiftless, or worse.
It's your reputation on the line here, not mine. Because I'm not
selling any paper silver, and I'm not making any accusations. Just
By the way, the Perth Mint's lawyers covered themselves,
and let the real truth slip out:
See Page 3, two paragraphs from the bottom of the page,
where it says:
"Gold Corporation continues to be the owner of the gold bullion
backing the PMG [ie, certificate]. However,
even though Gold
Corporation holds gold bullion in order to back the PMGs, it is not
to do so and does not hold gold bullion for the
benefit of the Holder."
Peter, have you ever heard
that if you are sitting at a poker table, and if you cannot figure out who
the mark is, then you are the mark? Figure it out.
Peter also wonders what my "agenda" is. Peter, I'm extremely
transparant. I'm trying to help people acquire physical
Peter, we know your agenda, to line your own pockets
as you are a Perth Mint certificate reseller. Tell us, what are your
commissions on that program? And if they can affford to pay you a
cut and commission as they surely must be doing, how can they afford to
buy silver in the open market for their customers?
Perth Mint cannot handle the situation today, how will they handle the
increased volumes as silver prices rise as they certainly
Here's a rather shocking complaint posted at
goldismoney.info. The author is saying that the Mint is badmouthing
their customers, and inventing extra charges at whim to
take delivery of physical bullion now, saying that people will be assigned
a 6 month storage fee if they try to get delivery of physical
silver bullion bars.
Here's another Perth Mint hell-story:
I was dealing over the last 2 years with the Perth Mint buying
and selling over $200,000 worth of gold and silver via the Dublin agents
- each transaction was one cock up after another, long delays,
Dublin/Perth not executing at the right buy/sell fixes I wanted,
certificates getting lost because they were not sent to me by registered
mail (to save money...) ... it all became too much and I'm now all in
physical and can sleep soundly at night...
When things go ballistic Perth will not be able to cope, they can barely
cope now, not answering phones etc etc etc
It is a disaster waiting to happen. And BTW I do believe parts of the
Perth operation/govt of western Oz is insured by Lloyds (I may be
wrong), but if several major banks implode, which is still a
possibility, the derivatives crisis in waiting could easily take Lloyds
The good news is that people are growing concerned
enough about the Perth Mint to start taking actions, such as closing out
their unallocated accounts with the Perth Mint. These actions are
also showing up as questions to the other "experts", like Peter
Schiff. This is a very encouraging sign, as it means more and
more people are waking up to the real situation, which will bring the
real situation out into the open, and the truth is coming out.
coming default of the Perth Mint could well be the exact kind of
major catalyst that drives the silver price upwards beyond what we are
By the way, regarding the U.S. Mint's
illegal rationing of American Silver Eagles. No, I don't intend
to sue or to organize any "class action" lawsuit because no, I don't
expect justice from any judges in the land.
The only "class action"
that people need to take, is to buy and bid up the prices
of real physical silver. When judges ignore the law, the law
will still prevail. It's the law of supply and demand, and it will
not be denied!
notice: Please feel free to copy, translate, improve,
re-write, re-post, any and all of my works to promote your own
services. (It generally works best for you if you give credit,
such as a web link, or reference to my name, otherwise, other people may
assume you are not being intellectually honest.)
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.
Wires only. USA Shipping only.
You can also buy silver at www.momsilvershop.com
ship overseas, and also in lots of more or less than 100
See us also at:
4870 Granite Drive, Rocklin, CA 95677