Gold Money; Gold Politics

I first met James Turk in the late 1970’s while interviewing for jobs on Wall Street. It was many years later thanks to the Gold Anti-Trust Action Committee that I had the opportunity to get to know him. There is no more astute commentator today on the gold and silver markets and their role at the heart of financial and geopolitical events.

James is the founder of GoldMoney, the author with John Rubino of The Collapse of the Dollar and How to Profit from It and publishes The Freemarket Gold & Money Report.

James will be joining me on Thursday, February 19th on The Solari Report. We will be talking about recent events in the precious metals markets, the state of the global economy and the outlook for the US economy and the dollar.

If you are a subscriber to The Solari Report, you can post your questions at your private panel or feel free to also post them at this blog post. If you would like to learn more about The Solari Report and subscribe, click here.

17 Comments

  1. Hello Catherine,
    Looking forward to your next report with James Turk. If possible, could you ask him how changes in the value of one’s goldgrams (relative to one’s home currency) are dealt with in terms of taxation in the US? Thank you.

  2. Are there preferred ways to protect ourselves in this global climate of debt destruction, currency devaluations, bank holidays, government confiscation, inflation, deflation and high oil prices?

    Gold bullion, silver bullion?
    American Eagle coins?
    Quality gold mines? Mutual funds?
    Etfs such as GLD?

    Thank you.

  3. Hi, I do not have a 401k. My dollars are in the BBT bank. I do not own a home or land. I am currently out of work and I am not on welfare or unemployment. Should I buy an acre of land even though I can’t afford the home just so I have a land in the country or is it best to take it out of the bank even though it is earning interest and buy a little gold? What would you do in my situation. I have 15 thousand left in the bank that is being used now to buy food and other bills. I thought that if I move to the country and get a tent maybe I could grow my own food and cut out some bills

  4. Mr. Turk, I have enjoyed reading your books and have learned alot about what is
    happening now with all the financial market problems. 4 years ago I decided to
    put a little Gold and Silver into my portfolio,(Mostly Bullion)! I always am
    curious as to know what is the best Coins to hold onto for the big Dollar bust?
    I’m worried that the government might “install confiscation” before I can exchange
    my personal precious metal investment for a better return!
    Your thoughts are well appreciated!
    Thanks, Jeff

  5. Katie, if you are on welfare, you are in no position to worry about buying gold nor property. This economic downturn is for the working people who have some real assets to lose. You are already down, and you need to only survive paycheck to paycheque on the dole.

  6. I’m new to the idea of placing funds overseas. There are a few things I’ve ran across which make me very nervous.
    1) GoldMoney is insured by Lloyds of London. It’s my understanding that Lloyds of London is on the ropes financially.

    Laws of other countries (tax laws in particular) – GoldMoney is located Jersey so I’m wondering

    2) Are they governed by the laws of Great Britain?

    3) What is their track record regarding confiscating gold?

    4) Do they have VAT taxes and would that be something that could bite me? The same applies to income taxes, etc. I’ve seen in an interview of a representative of Anglo Far East and this person said that if their client takes possession of the gold they’d be hit with a VAT tax which, depending on the country, could range from 7 to 17 percent.

  7. About 2 hours after my post I saw a headline on CNBC about the dire straits Lloyds of London is in. They’ve been in trouble for a considerable amount of time.

    So if I knew about this and it’s been common knowledge for a long time I have to wonder why didn’t the GoldMoney folks know about this and why did they decide to go along with Lloyds being used for insuring the gold?

  8. Long of Tooth:

    There is a place in their website where you can direct all your questions. It is much more appropriate that they answer them.

    I for one value real gold sitting in a vault more than insurance these days. That is why it is critical to understand the quality of people governing the gold sitting in the vault.

    Without law and without ethical, competent people, and broad based community support for the same, hard to know what will work.

    Catherine

  9. Dear Catherine

    I’d already submitted those questions to GoldMoney (probably because of the weekend they haven’t yet replied) before posting them here. I posted them here because I wasn’t sure that either you or your followers were aware of the Lloyds situation, and I quote from the GoldMoney website:

    ——
    http://goldmoney.com/en/stored-and-insured-gold-and-silver.html
    “…VIA MAT insures the vaults against risks such as theft so that your precious metals are thoroughly protected. The insurance is underwritten at Lloyds of London. VIA MAT’s highly secure vaulting and transport facilities are recognised by its insurers who in turn provide their coverage at exceptionally low cost. The insurance coverage is included in our competitively priced precious metals storage fees.…”

    ——
    You’ve said you have funds in GoldMoney, so I was wondering if it gives you warm fuzzy feelings knowing that GoldMoney accepted insurance that was underwritten by Lloyds of London? Isn’t that sort of like being insured by AIG?

    I hope you realize that I know I’m just a nobody and you are much more intelligent, better educated and far wiser than me. I’m asking these questions because of how much respect I have for you and how much I value your opinion.

    LoT

  10. Long of Tooth:

    I know that Gold Money uses Lloyds. There are certain types of insurance situations where the options are limited and if you use insurance, you end up with one of a handful of institutions. I believe this is one of those situations, but I leave it to Gold Money to answer.

    Again, in this type of situation, I put more store in the quality of the people governing the arrangements and the nature of the operation than in the insurance.

    Best,

    Catherine

  11. Nyguen, sorry, but your comment was shitty.
    If you read what she said,
    Katie said “I am currently out of work and I am NOT on welfare or unemployment.”
    BTW, poor people “on the dole” are merely pawns in the games of the elite, read Catherine and John Gatto on how prisons are bursting with the poor, who are often innocent or jailed for minor offenses. Our prison system is a growth industry for the mega-rich, with the USA imprisoning far more people than in RUSSIA.
    Then, ask yourself if you see any executives of AIG or Goldmansucks in jail?
    Don’t blame the poor or get your kicks out of feeling superior to them. There’s enough of that going around. The writing is on the wall for how they will be manipulated into rioting, which is diabolical planning on the part of evil-geniuses who feed on misery.
    This time, know your enemy, the people outlined in these pages, who are are stealing TRILLIONS from your grandchildren’s future.

    Mar 1st, 2009 at 9:00 pm

    Katie, if you are on welfare, you are in no position to worry about buying gold nor property. This economic downturn is for the working people who have some real assets to lose. You are already down, and you need to only survive paycheck to paycheque on the dole.

  12. I’m glad to see that there are at least 3 of us monitoring this thread and I’m hoping that there are a lot more than that. I say that because I’m hoping we can educate ourselves and each other about what’s involved in an investment such as GoldMoney. I’m hoping that we can identify the risks and pitfalls so that each of us can make an informed investment rather than an uninformed one.

    In this post I’m going to share GoldMoney’s reply w.r.t. my inquiry about potential tax exposure when dealing with them. The reason I’m asking them about tax exposure is I found the following in an interview with a representative of Anglo Far East, which I believe is a competitor of GoldMoney.

    “…We’ve got readers Roughly 50 percent are in the United States and approximately 38 percent are in Canada. And then it’s sprinkled around the world. In several jurisdictions, there’s a value added tax problem, you might call it, through most of Europe. And it varies as high as, I think, 17.5% on silver in the United Kingdom. I believe it’s 7 or 8 percent in some of the Eastern European countries. How does that affect a client of Anglo Far East?

    Judge: Because the bullion is held within a custodial arrangement within a bonded facility, at this point there is no VAT paid on the transaction. We do charge front fees, of course, which include insurance and the bailment process. However, VAT doesn’t apply until such time as someone wants to take physical possession or physical delivery. Then there will be a VAT applied. Typically if that release into safe custody of a client happens within Switzerland, I think it’s abut a 7.5% VAT. But, if not, if it’s being shipped, it’s shipped less VAT into the jurisdiction where that person is going to take delivery. The client will also pay local VAT within that jurisdiction as it applies to their local area….”

    Sorry about being so long winded but I thought it was important to share those 2 paragraphs with you.

    For me they raised a lot of flags which I need to get answers to.

    If I do business with GoldMoney:

    1) What exposure do I have to Jersey taxes? They’ve responded to this question but I’m not pleased with their response. See below.

    2) Currently we don’t have VAT taxes here in America but if I did want to take delivery would I be hit with United Kingdom VAT taxes even if it was delivered to me in the U.S.? I’ve submitted that question to them today. If I were hit with a 17.5% VAT tax I wouldn’t consider that to be a lot of fun. Also, I’m assuming it would be 17.5% of any increase in value but I guess it could be 17.5% of the value of the precious metal. VAT is supposed to mean Value Added Tax but I think we’d be stupid if we didn’t make sure we knew exactly what that means and how it applies to us.

    I’m hoping that if any of you out there have questions which I haven’t raised you’ll share them with me (us) and perhaps even help with getting answers to any questions that have been raised or that you have come up with.

    —–Here’s the response from GoldMoney. I have no issue with most of it except for the fact that they aren’t prepared to tell me how the laws of their country would apply to me if I were their customer. I’m not asking them to tell me of any U.S. tax obligations or any tax obligations I may have to the state in which I live. But, it’s my humble opinion that they should be able to tell me if I have a tax obligation to Jersy if I do business with GoldMoney. You’ll note that they make sure to say that it’s my responsibility to comply with Jersey’s laws but they don’t tell me what those laws are and I’m not happy about that. As an example, if I buy into a MLP and that MLP does business in the state of Oklahoma I’m responsible for filing a State of Oklahoma tax return even though I don’t live in Oklahoma. The MLP I was interested in was able to tell me that. Why can’t GoldMoney do the same?

    Dear Customer,

    Thank you for your message.

    GoldMoney is not certified to give accounting or tax advice. We have customers in over 100 countries worldwide, so it is impractical for us to stay abreast of the legislation in all of these countries. Consequently, our User Agreement states that each user is responsible for complying with the regulations, if any, from the country in which he/she accesses GoldMoney.

    GoldMoney does not file or submit any tax forms to any third party. Customers are responsible for complying with tax laws in their jurisdiction.

    Section XXI of the GoldMoney User Agreement states:

    “XXI. CONFORMING TO LAWS
    A. The User is responsible for complying and shall comply with all laws of the territory from which the User accesses the GoldMoney Website (including without limitation those of Jersey). The User shall at all times be solely responsible for obtaining any authorisations required by any authoritative body in this territory. The User’s obligations under this provision shall remain in effect after termination of this Agreement.”

    http://goldmoney.com/en/agreement.html

    Therefore, if you have questions in regard to your own personal situation, we would suggest consulting with an accountant or tax specialist in your jurisdiction for potential tax implications, if any.

    If you have any additional questions, please do not hesitate to contact us.

    With kind regards.

    James Mitchell
    GoldMoney Support Team
    Telephone Number: 011 44 1534 511977 (Greenwich Mean Time)

  13. Dear Catherine

    The following are snippets from 2 of your replies to me.

    “…Without law and without ethical, competent people, and broad based community support for the same, hard to know what will work….”

    “…Again, in this type of situation, I put more store in the quality of the people governing the arrangements and the nature of the operation than in the insurance….”

    ———-
    I know you are a strong advocate of networking, where integrity is an integral component, in order to achieve a common goal for all involved and I admire you for “walking the walk” in this area.

    However, based on what I’ve read, observed and unfortunately even experienced I’ve come to the conclusion that when it comes to dealing with family, friends or fellow members of a church on financial matters it is best to treat the transaction in a strictly business manner. Binding agreements or contracts are written and everyone insures that all the I’s are dotted and the T’s are crossed.

    And this brings me to what I’m experiencing in trying to deal with GoldMoney. I’ll try to be short.

    I asked them:
    ‘…does an American customer of GoldMoney have any legal (tax or otherwise) obligations or resonsibilities to Jersey?…’

    Their reply was:
    ‘…I am afraid I cannot answer your question because we are not authorised to do so. We cannot be seen to be answering ANY tax queries because it could be deemed as TAX ADVICE….’

    So I asked them:
    Can you give me an e-mail address the of the Jersey authorities who can either
    1) tell me what Jersey regulations, laws and tax laws apply to me OR
    2) tell me what depatment(s) in the Jersey government I need to contact in order to get these questions answered?

    And their reply was:
    I am sorry I cannot provide this information. You will need to contact your own tax specialists in the United States to obtain clarification of your questions.

    I am sorry I could not be of further help.

    ———
    I’ll cover other GoldMoney issues in following posts.

    Needless to say when it comes to their willingness to help a potential customer avoid any potential issues with Jersey I’M NOT IMPRESSED and very disappointed.

    LoT

  14. By being a customer of GoldMoney am I exposed to the value added tax (VAT) and if so under what conditions?

    One of the issues I’m concerned about is getting blindsided with the VAT which apparently could be as high as 17.5%. YIKES!!!!!! In the interview I quoted in an earlier message that in their situation the VAT applied when a person took physical delivery of the precious metal.

    So I tried to get GoldMoney to define the exact meaning of taking possession. I asked them if I have gold or silver shipped to me have I legally taken possession when it leaves the vault, and thus exposed to VAT, or do I take possession when it’s placed in my hand?

    When you read their reply I’d like to to tell me if they answered my question. It’s my opinion that they didn’t.

    ————————
    GoldMoney customers can physically receive possession of their metal but we only deal in bar form only. Therefore, a customer must own at least 12,500 goldgrams or 1,000 oz of silver in their Holding to take possession of a bar, as this is the weight of the bars that comprise the gold and silver held for customers in GoldMoney. Via Mat our vault operator will only deliver one gold bar and/or 30,000 ounces of silver (one pallet board of silver) to our GoldMoney customers.

    There is a USD400.00 upfront fee for GoldMoney to draft up a quote as the quote takes into account the location, shipping, insurance and handling costs involved to deliver a bar to whichever part of the world you wish to receive the physical bullion. The USD400.00 will be deducted off the final quote.

    However, for smaller US investors they can receive smaller denominations of their physical gold or silver such as gold/silver coins through our affiliate Kitco.

    For more information, please visit the below link to receive Kitco’s contact e-mail address. Please confirm to Kitco that you own a GoldMoney Holding and you wish to receive physical delivery of your metal in gold/silver coins. Please confirm with Kitco the current availability of gold/silver coins.

    http://www.goldmoney.com/en/bullion-into-gg.html

    Therefore, if you own 400 oz of gold, Via Mat will deliver to you in America but at a secure location such as a bank etc. If you own 30,000 (30 silver bars) Via Mat will deliver to you in the US at a secure location. Smaller amounts of gold/silver can be received by transferring your bullion from your GoldMoney Holding through to Kitco’s GoldMoney Holding and thereafter Kitco will arrange delivery to you.

    If you have any additional questions, please don’t hesitate to contact us.

  15. IS GOLDMONEY REALLY CONCERNED ABOUT THEIR CUSTOMER’S BEST INTERESTS?

    Lloyds of London was in financial trouble long before the recent credit crunch so I have to conclude that by allowing the involvement of Lloyds of London GoldMoney wasn’t taking into consideration what would happen if they actually needed to call on Lloyds of London to make good on the policy. In other words for marketing purposes it sounded good in print but in reality the customer is screwed if something went wrong.

    My question to GoldMoney regarding Lloyds of London followed by their reply.

    “…Is this the same Lloyds of London which has been in dire financial trouble for years? If it is then how was it possible for your customers to be adequately insured if they were being insured by a company which was for all intents and purposes broke? It seems that Lloyds of London is the British equivalent of America’s AIG and that’s not a fun thought….”

    ——————–
    Their reply:
    Please visit the below link for a copy of the insurance certificate. Please call Marsh Ltd directly if you have any queries on the certificate itself.

    http://goldmoney.com/documents/storage-insurance.pdf

    GoldMoney has been operating for over seven years and Lloyds were our original insurers back in 2001 when there was no credit crunch and it was not apparent to anyone the problems all banks had got themselves into. Lloyds has now more or less been nationalised by the UK government and therefore, Lloyds will only go bankrupt if the UK government goes bankrupt. The UK government has given billions to Lloyds and I personally do not envisage the UK government to allow Lloyds to go under because Lloyds is a retail bank and the government have already made it clear it will do what is necessary to keep the retail banks afloat.

    The insurance is against theft from the vault which is highly unlikely. For your metal not to be protected a scenario would have to happen where Via Mat vaults were robbed at the exact same time Lloyds of London goes bankrupt.

    I hope I have allayed your fears but please contact me should you have any further queries.

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