Silver Possession Versus
Silver Trust – A Safe Alternative to Direct Possession?
By Dr. Jeffrey Lewis
investors are increasingly returning to the precious metals market. Furthermore,
many of them will undoubtedly gravitate toward using the more conveniently
traded alternatives to self-storing the metals.
The idea of taking
physical possession of gold or silver currently seems almost taboo in the mind
of the mainstream precious metals investor, although many alternative minded
investors tend to see personal physical possession as the only safe option in
the event of a financial collapse scenario.
With that noted,
the various widely-traded precious metals funds have taken on the burdensome
task of owning and storing physical metal for their investors.
and widely traded precious metals funds currently exist. Some of the more
popular include CEF, SLV (and other ETF's), and PSLV.
Eric Sprott is the
outspoken portfolio manager behind PSLV and the current CEO and Chairman of
Sprott Asset Management. In essence, Sprott is taking the manipulative precious
metal market shorts to task. He is practically the only one doing this, and he
seems to be blazing a trail for others to follow.
people still worry about confiscation of his funds’ physical precious metals
stocks by the government, but one would hope that Mr. Sprott and his
well-financed legal team could defend their investors’ interests far better than
any individual ever could.
issue of confiscation is often on the minds of precious metals investors. If
this is your primary concern, just ask yourself what would be easier:
confiscation from individuals or stopping redemption?
In the most likely
scenario, authorities would go after the low hanging fruit first, such as
electronic accounts or perhaps 'convincing' investors to rollover their
retirement accounts into annuities.
most insidious theft of precious metals confiscation will be widely cheered on
by the mainstream financial media who currently clamor hands down for more money
printing. Nevertheless, it seems doubtful that authorities will go after the
precious metals directly.
Perhaps they will
nationalize precious metal miners at some point, but too few individuals
currently hold enough metal for the authorities to make a difference by going
door to door to collect private stashes. Besides, they do not need precious
metals to debase their paper currencies anymore, all they need is a rolling
money printing press.
Of course, the
backdrop for this situation is that Fort Knox has not been officially audited
for decades, and Germany has been engaging in a well-publicized attempt to get
its gold back from New York. Every day, the world is slowing turning away from
using the U.S. Dollar as the world’s primary reserve currency.
Precious Metal CEFs
PSLV and PHYS are
most likely the best precious metal Closed-End Funds or CEF's on the market
today. The silver fund, PSLV, is fully backed by 97% London Good Delivery Silver
Bullion that is fully allocated and stored in the Canadian Mint.
currently seem preferable as investments to the precious metal Exchange Traded
Funds or ETFs, SLV and GLD. These ETFs appear questionable investments to say
the least, and they have been wrapped in a controversy that arises over an
apparent conflict of interest because their warehouses are run by the same banks
that dominate the short position at COMEX. Furthermore, redemption limits apply,
and there is a minimum amount and time invested to be eligible.
if already vested in the precious metals, is the tax hit associated with the
liquidation of a profitable position. Nevertheless, it is easy to rationalize
your profits potentially eclipsing that 'fee' when precious metal prices
eventually return to their fair values.
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