Is my BullionVault math right?

[KenJackson]

I'm constantly weighing options and trying to imagine the dollar's collapse and what to do about it before it happens. One piece of advice that seems to pop up repeatedly is to own gold in another country. I've dismissed that to date because it seems too expensive, of questionable necessity and appears to make the IRS hate you.

But I'm thinking about BullionVault (http://BullionVault.com/) any way. Here are my considerations. Am I missing anything?

They charge a minimum of $4/month for storage, so it makes sense to store at least the break-even amount, which at 0.01% is $40,000. But there's a 0.5% transfer fee too. So the minimum most-efficient amount to transfer (including a year's worth of storage fee) would be:

($40,000 + $48) / (1 - 0.005) = $40249.25

The $4/month storage fee really offended me until I realized that's a total of 3% over 25 years while inflation has been knocking down the dollar by at least that much each year.

That's the low end. But there's the question about IRS Form 8938, which I might have to file if the balance goes even momentarily above $50,000. However, the help comment points out that the IRS guidance doesn't define what "directly held" means, so maybe I don't need to file it. And it's not clear what information FATCA would require them to file about me directly to the evil-doers at the IRS.

Therefore, setting an upper limit of $49,999 would be convenient to reduce the probability of becoming a red flag. But, of course, if the value of gold suddenly takes off or even "sky rockets" as some are predicting, I won't complain about the fees or any extra hassles.

Does anyone have experience with BullionVault?
Are my assumptions valid?
Are there any unexpected fees?

I'm assuming I can use ACH to transfer funds for free instead of wiring them for $30. Is this a valid assumption?

[osoab]

I think a knowledgeable Puerto Rican on this site coined the term "If you don't hold it, you don't own it."

[StreetsOfGold]

I think a knowledgeable Puerto Rican on this site coined the term "If you don't hold it, you don't own it."

I thought he said he was Cuban? Or is it just FROM cuba?

[BrewTech]

I thought he said he was Cuban? Or is it just FROM cuba?

Exactly! That's why it's funny! ;)

[Dogman]

Exactly! That's why it's funny! ;) Yep!

He is really from Alpha Centauri, but clams he is from cuba, so we call him a Puerto Rican!

Now that the air has been cleared!

What is next?

[KenJackson]

... coined the term "If you don't hold it, you don't own it."
I'm very familiar with the quote. I see it all over the place. It's the kind of quote that has many fathers.

But it's not helpful.

What good does it do to have 30 ounces of gold in your house where you can touch it if the unrest following the collapse rolls through your house and the looters take it all? Hide it? OK, so it gets lost in the fire.

Doesn't anybody here have even an ounce of gold at BullionVault? Could you please weigh in?

[Dogman]

I'm very familiar with the quote. I see it all over the place. It's the kind of quote that has many fathers.

But it's not helpful.

What good does it do to have 30 ounces of gold in your house where you can touch it if the unrest following the collapse rolls through your house and the looters take it all? Hide it? OK, so it gets lost in the fire.

Doesn't anybody here have even an ounce of gold at BullionVault? Could you please weigh in?.

Most keep their PM's in a boat!


That unfortunately sunk at night during a storm in unknown dark and murky waters and cannot be found!

[Hitch]

What good does it do to have 30 ounces of gold in your house where you can touch it if the unrest following the collapse rolls through your house and the looters take it all? Hide it? OK, so it gets lost in the fire.

Doesn't anybody here have even an ounce of gold at BullionVault? Could you please weigh in?

PM's can't really get lost in a fire. Once the fire is out, just go collect your melted PM's, the gold will still be there. As far as looting, most here (I think) would either fight off the looters or end up dead. Nobody's looting my house while I'm still alive. Buy guns before you buy any gold.

[hoarder]

What good does it do to have 30 ounces of gold in your house where you can touch it if the unrest following the collapse rolls through your house and the looters take it all? Do you really think you could get your gold back from BullionVault after the unrest following the collapse?

[KenJackson]

PM's can't really get lost in a fire. Once the fire is out, just go collect your melted PM's, the gold will still be there. As far as looting, most here (I think) would either fight off the looters or end up dead. Nobody's looting my house while I'm still alive. Buy guns before you buy any gold.

All that's easy to say before the fire in time of peace. But fires and conflict don't cooperate.

You have irrational confidence in your ability to recover gold from an ash heap. The looters may be 14-year olds. And you may recognize them as sons of your acquaintances. You'll hesitate. And while you point your gun at them and shout at them, the quiet 20-year old behind you will hit you with his baseball bat. If it ever goes to court, he'll testify he was saving the lives of those poor kids.


Do you really think you could get your gold back from BullionVault after the unrest following the collapse?

Well that's exactly the kind of thing I'm questioning. But I don't care about cynical teenager attitudes. I want serious opinions from people who've weighed all the options.

No choice is perfect. Diversification makes sense--some PM hidden at home and some in a remote location. But aside from cynicism, what's the experience with BullionVault?

[hoarder]

Do you remember what happened with Tulving? I had many dealings with him, both buying and selling and in large quantities. All those experiences were good.
The fact remains that regardless of how good the integrity of a business is, it is only good until it isn't. Most likely WTSHTF (or whatever happens), the reputations and integrity of many of those businesses will change.

So asking people what their experiences with BullionVault were is of very limited value in the scenario that you describe.

If you don't hold it you don't own it.

[Hitch]

All that's easy to say before the fire in time of peace. But fires and conflict don't cooperate.

You have irrational confidence in your ability to recover gold from an ash heap. The looters may be 14-year olds. And you may recognize them as sons of your acquaintances. You'll hesitate. And while you point your gun at them and shout at them, the quiet 20-year old behind you will hit you with his baseball bat. If it ever goes to court, he'll testify he was saving the lives of those poor kids.

Ken, those are good points. However, to store PM's with a third party, are you willing to accept the third party risks with doing that? Here's a thought. I live on a boat. For what should be obvious reasons, I have to deal with fire, possible looting as you suggest, and add the possibility of a sinking risk as well. And, that's not even counting all the boating accidents. For these reasons, I don't store the bulk of my meager PM stash on board. I do keep some 90% for SHTF bartering, and a few small gold coins, but that is it. If I lost those for some reason, it would not set me back in life too much.

The idea being, if I lost the boat, everything I have....I can rebuild with PM's safely away. Much like off site storage of data in IT backups.

What I would offer to suggest, is that you find an offsite location, with people you trust your life with, and find a safe place to hide some PM's. Multiple locations, even better. But I think that's a better plan than trusting folks you don't know, such as a company promising safe keeping.

[osoab]

I'm very familiar with the quote. I see it all over the place. It's the kind of quote that has many fathers.

But it's not helpful.


No pissing on Ponce, that ain't nice.



What good does it do to have 30 ounces of gold in your house where you can touch it if the unrest following the collapse rolls through your house and the looters take it all? Hide it? OK, so it gets lost in the fire.



Why are you sticking around for looters? Better yet, if sits under smoldering embers, it is still safe. Dig a hole somewhere and limit your potential liabilities.




Doesn't anybody here have even an ounce of gold at BullionVault? Could you please weigh in?

I do not have anything with Bullion Vault and I have never considered the thought. It has been years since I have even looked at their site. So I just went a looked again.

After perusing their site, they are somewhat owned (no percentage given) by the World Gold Council and a member of the LBMA. Two great entities.

Shit look at the wiki page for ownership.



http://en.wikipedia.org/wiki/BullionVault


Founded by Paul Tustain in 2005,[1] (http://en.wikipedia.org/wiki/BullionVault#cite_note-1) BullionVault is the sole operating business of Galmarley Ltd. On 17th June 2010 the World Gold Council (http://en.wikipedia.org/wiki/World_Gold_Council) and Augmentum Capital each bought an 11.4% equity stake, investing a total of £12.5m (US$18.8m). Augmentum's first fund, Augmentum I LP, is backed solely by RIT Capital Partners (http://en.wikipedia.org/wiki/RIT_Capital_Partners), the FTSE (http://en.wikipedia.org/wiki/FTSE_Group)-listed investment trust in which Lord Rothschild and the Rothschild family (http://en.wikipedia.org/wiki/Rothschild_family) are substantial investors.[2] (http://en.wikipedia.org/wiki/BullionVault#cite_note-2)

As of the end of October 2013, more than 50,000 people had used BullionVault to buy, store and trade physical gold and silver. Between them, they owned $1.4 billion worth of gold bullion (£860m, €1bn, ¥135bn)[3] (http://en.wikipedia.org/wiki/BullionVault#cite_note-3) – more than is held by most of the world's central banks[4] (http://en.wikipedia.org/wiki/BullionVault#cite_note-4) – plus a further $305m (£190m, €224m, ¥30bn) in physical silver.


Buy sell prices are nice, but what are you really seeing?

They change status to "allocated" when you buy. I would guess that you are buying into a portion of a Au good delivery bar. Why do you want a portion of a good delivery bar? How do you collect on a portion of good delivery bar? If things turn to shit currency wise (which I believe is your line of thought), why do you want to cash out your portion for another soon to be shit currency?

If you are picking up one whole delivery bar for yourself, I don't know why you wouldn't have other sources of information other than this board.



We take care of $2 billion for more than 50,000 users.

They really should start pushing their services in India and China. What an untapped market.


Bars are stored in professional-market vaults in Zurich, London, New York, Toronto or Singapore. You choose where. Because of our size, you benefit from the low storage costs (https://www.bullionvault.com/modal/_gold-silver-storage-rates-modal.html) we have negotiated, which always include insurance.

Ah, storage costs. You see the metal is already sitting in a vault of your choice, you just need to add you name to that 2 ounces on that good delivery bar. Then we will charge you storage, because we have to keep it safe, you know.

Their storage fees seem purposefully ambiguous. .01% and .04% of what? Ounces in FRNs, in EURs, in GBP, or in total ounces? And why does wilver have a higher minimum premium.


In closing to my rambling, hold on to the metal or go buy ammo before you start buying a bunch of pm to protect from lootie.

edit to add:

read hoarder's post again and then re-read them.

[KenJackson]

Thank you for the sober response, Hitch. I'm still weighing what to do.

One think that really appeals to me about BullionVault's pitch is that it sounds just like a bank account with the balance held in gold bullion. (They hold silver too, but you have to cough up a 20% VAT when you withdraw. :o That's a non-starter.)

It's different than a ETF. ETFs sell shares, not gold. But actual gold is allocated and owned when you make a deposit here, even if specific bars are not reserved.

I still have nearly a year's worth of emergency cash in money market bank accounts. There are two problems with that. One is that it earns less than inflation so it's shrinking instead of growing. And second is the whispers that the US may do what Cyprus did and just confiscate a certain percentage of money saved by responsible people to pay for profligate irresponsible government spending.

Who knows if their reach would extend to London to grab some of my gold. But if I can convince myself that the vault is as liquid as my MM account, I could position my emergency cash to be part of the sky rocket instead of the waste.

I guess most reading this thread would advise me to withdraw my emergency cash, buy PMs and store bullion in the closet. But I fear being sure I could sell it fast enough and safely enough to be able to spend it when I need it.

[Dogman]

Ken, I do not know if you are pitching for that outfit?

But most here do believe holding the real thing and not trusting paper.


Metals in hand or direct control trumps any stinking paper that needs faith that it has value!

Just saying!

[Hitch]

Ken, emergency cash has to be just that, cash. Paper bills, out of the digital system. 1's, 5's, 20 dollar cash bills completely OUT of the system. That is emergency cash. Not digits in a computer somewhere. If a cyprus event happens here, see how far your emergency cash in you money market account gets you.

Pull all that out. I think 3 months in physical paper cash for emergencies is just plenty. The rest should be in PM's or other preps, or if you want, gamble it in the market.

My two tired bits. Worked 13 hours today, and have another 12 hour shift tomorrow. This blue collar stiff is signing out...be well folks.

[KenJackson]

But most here do believe holding the real thing and not trusting paper.

That message is coming through loud and clear.

I appreciate all the input. I'm weighing the counter party risk of some company storing my gold vs the risk of holding it myself. I suspect "most here" put too little weight in the risks of holding it oneself and too much weight in the value of a gun.

[KenJackson]

Ken, emergency cash has to be just that, cash. Paper bills, out of the digital system.
What I meant by "emergency cash" in this context was loss-of-a-job cash.

Though there's definitely merit to holding a stack of paper 20s also (I even made that point in a different thread).

That could segue to a different topic. It's been a couple decades since I've lived for more than a few minutes without electric power. I pay all my bills by computer these days, so adapting to a SHTF event where we loose electric power and digital transactions would be truly traumatic.