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(Bring it! Perth Mint's $715 million precious
metal liability revealed!)
Silver Stock Report
by Jason Hommel, May 16, 2008
How
Desperate is Kitco?
Kitco's
President, Bart Kitner, sent to me by Federal Express, a letter which I got
today, in which he demanded and threatened the following:
May
8, 2008
REGISTERED
MAIL
WITHOUT
PREJUDICE
Mr.
Jason Hommel
Mr.
Hommel,
As
I'm sure you are well aware, trust and confidence are the two most important
attributes a precious metals company must earn from its customers and
potential customers in order to build and maintain a successful
enterprise. I have invested the last 30 years building the finest
reputation for Kitco.
The
libelous public allegations you published on the Internet on March 26, 2008
and April 1, 2008 have compromised these efforts and have resulted in
financial damages. It is my intention to hold you responsible for the
damages and loss to our reputation that these false and injurious statements
and accusations have resulted in.
Every
single ounce of metal that Kitco holds in an unallocated pool account on
behalf of its customers is backed up by actual real metal. Providing
all of the authenticated documentation needed to prove this fact in a court
of law will be a simple task for us. As approved dealers of the Perth
Mint who sell their certificate program, we would not risk our own reputation
of carrying their product if I thought there was any possibility that they
were not acting responsiblyl. There is no shortage of evidence and
first hand witnesses to prove the information you have published as facts or
theories have been invented. Kindly refer to the attached copy of an
email sent by the Perth Mint to all of their Approved Dealers in February 08
as some such evidence.
To
avoid becoming the defendant in a defamation lawsuit, I expect to see you
publish a full apology and retraction using text that meets our
approval. If I don't receive a response from you or a representative of
yours within ten days of delivery of this letter, then we will begin legal
proceedings. That should give you enough time to do some research and
get the facts. If you were hoping to gain publicity from this I can
assure you that will not happen. Kitco will never publish anything
negative that mentions your name or the name of your organization.
In
summary, I am offering the opportunity to choose between a retraction/apology
and a defamation suit.
Please
govern yourself accordingly.
KITCO
METALS Inc.
Bart D. Kitner
President
BK/srb
Enclosure
Attachment is a copy of an email from Perth Mint to distributors.
From:
Nigel Moffatt
Sent: Tuesday, February 19, 2008
To: Bart Kitner, (and about 10 others)
Dear
All
XXX XXX XXX
Nigel
Moffatt
Treasurer
and Manager,
Perth
Mint Depository
Content
deleted by me, in respectful observance of the following disclaimer:
"This
email, together with any attachments, is intended for the addressee
only. It may contain confidential or privileged information. If
you are not the intended recipient of this email, please notify the sender,
delete the email and attachments from your system and destroy any copies you
may have taken of the email and its attachments. Duplication or further
distribution by hardcopy, by electronic means or verbally is not permitted
without permission.
While
every care has been taken, The Perth mint cannot be held responsible for any
statistic, statement or representation made in this email. The perth Mint cannot accept
liability for any loss suffered as a result of any action of any kind
whatsoever taken by any perons based on information in this email.
====================
This
then, is my official reponse.
Bart Kitner, this is not about a dispute between me and you. This is
about my concern for some of your customers, and how Perth Mint is
treating their customers, because some of your customers and the Perth
Mint's customers are some of my customers.
Bart
Kitner, you took about a month and a half to respond to my emails. Why
so long? It takes me mere hours to respond to events in the
marketplace. I can only assume you consulted with lawyers, who told you
that there are no libelous statements in my emails, and that they would not
take your case, nor write any sort of "cease and desist" or
"retraction demand" letter to me on your behalf.
Checking the dates you used in your letter, I assume you refer to the
following reports:
Perth Mint and Kitco Scheme Exposed
March 26, 2008
Silver Shortage Drives Men Nuts
March 31, 2008
I
re-read my reports, and I cannot find any allegations made by me about
Kitco whatsoever, let alone any libelous ones. Therefore, since
you don't list any libelous allegations, I'm at a loss to know what to
retract.
So if you want me to say something, you are going to have to be more
specific.
Next, I find it odd that you would rely on an email from the Perth
Mint as "evidence" that says specifically to not rely on
it. That email's disclaimer is precisely what is wrong with the Perth
Mint. If they want to issue reassurances to the public that they have
silver available, then I would think they should do that publicly, and
not through a private and confidential and unreliable email to you, that
you shamefully leaked to me.
If the Perth Mint wants to leak rumors to the Internet, my reports are
not the forum for that. You, at Kitco have your own forum where you can
leak all the rumors you want.
And if the Perth Mint wants to buy advertising space in my newsletter, they
are free to do so.
Further, I don't see how you could possibly sue me for any damages, since the
Perth letter specifically says that they want to slow down people
buying silver in their programs. So, if you allege that fewer people
have been buying silver through Kitco and Perth because of me, then [(edit):
you would be alledging that] I've succeeded in doing exactly what Perth
wants you to do!
I find your first statment both shocking, and telling:
"As I'm sure you are well aware, trust and confidence are the two most
important attributes a precious metals company must earn from its customers
and potential customers in order to build and maintain a successful
enterprise."
In point of fact, no I'm not aware of that at all. If I was asked, I
would have assumed that trust and confidence were the last things needed by a
precious metals company. I would have thought a reputation for honest
weights and measures, and thus truth would be far more important, and these
are the things I strive to cultivate in my business. I routinely tell
people to not trust me, but to do their own research to confirm the things I
say. The entire point of precious metals ownership is that no trust is
required, since once you have the metals in your hand, you don't need to
trust anyone's promise anymore, so I'm utterly shocked that you would think
that trust and confidence are so important, unless your business
model primarily requires people trusting you to hold their metals for them,
which, by this admission, I suppose it does.
You know, if you really want to show people that you have silver, in today's
modern age of communication, you don't need to rely on trust and confidence
anymore at all. You can prove your faithfulness very quickly and easily
in about 5 minutes. Just take a cell phone or video camera into the
vaults and show all the silver that you have, and the upload the video to
youtube.com and then post the link at your website. I would think that
could easily answer all questions about your integrity.
While we are communicating, you might want to ask Jon Nadler to cut
out the snide remarks towards investors who believe in taking delivery of
silver, and towards advisors who advise taking delivery of the precious
metals. That does not help your cause, but rather, exposes you.
==================
In the meantime, I have further evidence about the Perth Mint that you may
wish to consider, such as emails from my readers, which are "consumer
reports" which I have the free right to publish in a land of free
speech:
Hi
Jason,
I
tried to buy silver today in Melbourne Australia,nothing at all.Ive been
trying for a few weeks,The Perth mint has had nothing at all in the way
of bars either,and can not tell me when they will have.Very suspect.any
ideas?I enjoy your emails thanks.
Best
regards,
Blair.
===========
Jason,
I
told you that I had been trying to convert my 31,000 oz of unallocated silver
at Perth Mint to allocated silver since the middle of March, and you asked to
be told when this happened. The answer is the 7th of May. Mind you, I was
pretty forceful with their agent so perhaps they made an exception to shut me
up. So it took seven weeks of increasingly acerbic emailsfrom me to buy what
they claim to be selling.
Keep
up the good work and God bless.
John
Edwards
(Jason notes: Holy smokes! It took 7 weeks just to move
unallocated silver to allocated silver? And you didn't even take
delivery? Wow!)
===========
Hi
Jason, Just dropping a line to confirm all that you say about the
silver shortage. I together with some friends have recently invested quite a
substantial amount of money into silver and gold at the Perth
mint. However, I’m awaiting a small delivery ($40 000.00 Aus$) for
silver bullion for 6 weeks now and still no clue when the order will be
ready. Love the product and quality of the Perth Mint is good, but just
thought I will confirm what you’ve been saying all along, God only help
them if we decide to transfer our certificates into physical bullion. Regards
Mark, Perth, Western
Australia. P.S. Thanks for a wonderful web
site.
===========
Here
is a Perth Mint update -- both pro and con-- by an actual, 'long term'
customer this past month.
Since
2005, I was/am a Perth MInt Certificate holder of around 24,000 unallocated
ounces of silver, and some gold. I always intended to take delivery at
some future point, because I believe that due to possible physical shortages
of silver, actual holders of physical, deliverable metal will be able to get
higher prices than holders of 'paper silver'.
About
six weeks ago, partly due to Ted Butler and Jason Hommel's alarming articles,
I asked about taking delivery. Everyone associated with the PMCs was assuring
me the program was extremely safe, government backed. ASI urged me to
sell the PMCs instead of taking delivery, because fabricating and shipping
(to a European location) would be very expensive and time-consuming.
(Yes,
it is expensive -- but not even
1/3 the cost of paying long term capital gains on bullion at 28%, which
nobody tells you is due when precious metals are sold!)
However,
what convinced me to take delivery was discovering that the Perth Mint had
just discontinued making 100 oz. bars of silver, claiming there was little
demand, except from a few Americans.
And...
to take delivery from unallocated metals requires that the 'pooled' metal be
separated out and fabricated into your choice of coins or bars. These
fees used to be quite reasonable. They have just increased.
Currently,
the silver choices are 1 oz. coins (which now cost around $5.00 to fabricate,
up from $3.00) 10 oz. bars, 1 kilo bars, and then no intermediate sizes until
the 1000 oz bars (which require about $17,000 to buy at current POS).
The fabrication fees to turn those unallocated oz. to deliverable 1000
oz bars has quietly TRIPLED since mid-January 08 -- from $85 each to
$270 each (27 cents per ounce. )
Gold
fabrication fees have increased as well.
These
new high fabrication fees ( and the eliminating of a silver 100 oz. bar
choice) have the accidental -- or not -- effect of making it more
inconvenient and expensive to take delivery of PMC silver, especially smaller
amounts of silver between 100 - 1000 oz.
Another
curve ball -- since Federal Express won't ship items in the USA over 80 lbs.,
1000 oz bar deliveries in the USA have to be made by armored carriers, which
cost a lot more-- and they won't
go to private homes! So if you intend to take delivery in the US you
will pay heavily, either by higher proportional new fabrication fees for
coins or 1 kilo bars, or paying for armored trucks and a bank deposit box to
deliver 1000 oz bars.
The
Perth Mint now only uses an expensive private carrier for shipping,
because they say that Fed Ex has lost some shipments. Or you have
to make your own arrangements -- we saved about $2,000 by contacting an
international bonded PM shipper, but it took several international phone
calls and faxes to different time zones.
----------------
Here's
the good news! Once I proved determined to take actual delivery, Glen
Kirsch, one of the designers of the Perth Mint Certificate Program, and
executive V.P. at Asset Strategies International, helped me through the
entire complex process with courtesy and gracious good humor.
My silver was fabricated and safely delivered within six weeks, with
no problems or excuses.
And
it could have been sooner if I had simply used Perth Mint's shipper, because
coordinating
the various paperwork and shipping aspects took a lot of time and attention.
I
also switched my unallocated pool gold at the the Perth MInt to allocated
storage and am storing a numbered gold bar at their facility. (To ship that
with the silver or separately would have cost around $2,000!)
----------
If
your clients want to participate in potential precious metal price gains, and
want to eventually sell for cash, without taking delivery of any metal, then
the PMC program seems like an excellent choice.
If
they want to hold metals intending to eventually take delivery with a PMC,
then they need to know that the guidelines and fees for fabrication and
shipping can rapidly change -- and it has recently become a pricey and
ponderous process -- but my experience has proved it CAN be done.
It
might be far easier to buy bullion from a reputable dealer like Glen Kirsch
at Asset Strategies International
and
store it where you want.
Glen
Kirsch has my highest recommendation.
Best
Wishes,
S.M.
================
My latest to Bill Murphy
-----------------------------
Hi Bill -
Very good article on the Royal Canadian Mint gold and silver leases by Vince
Byfield:
http://news.silverseek.com/SilverSeek/1210053660.php
If we apply similar ratios of gold vs silver leases to the Perth Mint
situation the size of the problem is increased exponentially.
For example, the Perth Mint claims to have AUS $715,000,000 (about US $622M
on 1/1/08) of precious metal leases on page 65 of the 2007 annual report: http://www.perthmint.com.au/about_us_the_perth_mint_annual_reports.aspx
The Perth Mint says most of these leases are to AGR Matthey for inventory
purposes BUT AGR Matthey has a "Treasury" function which
facilitiates:
|
·
Sales and Purchases of precious
metal
·
Location Swaps
·
Leasing, Consignment Stock and
Funding Facilities
·
Price Hedging
|
http://www.agrmatthey.com.au/wps/wcm/connect/AGRInternet/agr/treasury/about_treasury/
If we apply the same gold/silver ratios to the Perth Mint as was discovered
in the Canadian Mint leasing operations the conclusions are almost 4x as
large.
Total $ Leases
Silver oz Leased Gold oz Leased
Canadian Mint
$224,000,000
2,652,776 (17%)
221,636 (83%)
Perth Mint $622,000,000
7,159,106 (17%)
619,537 (83%)
Totals
$846,000,000
9,811,882 oz
841,173 oz
I wish I had the Kitco leases to add to these but those are under "Super
Secret Security" ( as the Mogombo Guru would say....aka "SSS")
by Kitco's "#1 Man of Mystery"....Mr. Jon Nadler.
Of course, these are very rough estimates and does not provide concrete
evidence that any of these leased oz are being used in the suppression
operations of the manipulators BUT it does provide better clarity in the very
cloudy practice of precious metal leasing.
Now let's look at WHO may be responsible for the size and scope of the
unallocated metal leasing scam....WELL THERE HE IS AGAIN!
Looks like our friend Jon Nadler has talked The Royal Canadian Mint into
setting up their own "Unallocated Pooled Accounts" also!
https://online.kitco.com/rcm/introduction.html
Well we know ole' Jonny boy got his feet wet on gold market manipulation from
HSBC and Bank of America before he brought his
"Unallocated Pooled Account" program to the Perth Mint, then Kitco,
and now The Royal Canadian Mint.
http://www.ibtimes.com/forex/forexperts/biography/jon-nadler.htm
No wonder their gold leasing is going through the roof at the Perth Mint and
the Royal Canadian Mint...and likely at the privately held Kitco!
VERY, VERY interesting to note that Mr. Nadler also "consulted on
marketing and product development issues" for The US Mint.... NOT THEM
TOO!
The insanity never ends!
Bix
=================
Oh, and Bart, while you are investigating these things yourself, can you ask
the Perth Mint what their $715 million precious metal liability is all about,
on page 65 of their 2007 annual report, here:
http://www.perthmint.com.au/about_us_the_perth_mint_annual_reports.aspx
I assume that this precious metals liability denominated
in Australian dollars will grow as the prices of precious metals
increase, and that's why they are asking you to not promote silver
anymore. But that's just a guess, and I'm making no allegation.
Don't trust me, click on the link to verify, and use your own head to come to
your own conclusion.
Thank you.
Sincerely,
Jason Hommel
silverstockreport.com
miningpedia.com
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