Special Report – August 19, 2011

Gold & Silver Confiscation Protection – Hold Other Metals

Gold and Silver Confiscation – We have been warning about an Obama confiscation of gold and silver. We still feel extremely strong that this is coming and soon. The best way to deal with this is to get a second citizenship/passport from a country that has no taxation on offshore derived income. The country of your new citizenship should also be lacking Mutual Legal Assistance Treaties and Tax Information Exchange Agreements with your home country. This is the correct way to to do it. Then store your gold under this second identity in a secure vault that specializes in holding gold and silver. They have such facilities in Europe and around the world. We will illustrate several other approaches.

Chavez First to Confiscate Gold - The fact that we are seeing Chavez move his gold (211 tonnes) and foreign currency reserves around tells us something in a big way. Add to this the fact that Chavez is nationalizing the gold mines in his country and it gets scary. This is outright confiscation. So it has begun. The amount of people residing in Venezuela holding gold coins and bars would be minimal in our humble opinion. Starting five years ago we saw Venezuelans moving their money out of the country. If they have gold it is probably not held within the country. Venezuela is the fifteenth largest gold producer in the world. Chavez is recalling his gold and foreign currency reserves from the USA and other places . He intends to keep the gold in Venezuela. He will move his foreign currency reserves as well to banks in other countries.

Take a look at this quote “ Chavez's move ... could be the result of looking for alternative jurisdiction from the U.S and Europe, as he sees in the future a threat of international seizure of those assets,' said IHS Global Insight analyst Diego Moya-Ocampos.”

Massive security headache as Hugo Chavez orders 100 tonnes of gold bullion stored in Bank of England vault back to Venezuela

My point is Chavez knows that many countries are looking at grabbing Gold using any excuse to do so. You should learn from Chavez.

The Other Approaches - There is another approach. I am not saying this is the ultimate idea but it does seem to be workable. There are other precious metals around. The ones most likely to be confiscated are gold and possibly silver. The other metals are as follows:

Iridium, Osmium, Palladium, Platinum, Rhenium, Rhodium & Ruthenium.

Now let me say that there are ways that Obama could write an executive order for confiscation that would cover any sort of coins or bullion consisting of any of these metals. They can be most creative in the way they write laws. If any of you ever read the laws on money laundering you would know they are vague, overly broad and set up so as to cover anything they want it to cover. Do not make the mistake of going back to the 1933 executive order and thinking the new one will mimic this old one. They do not work this way and this would be erroneous logic. The executive order or law could stipulate it is illegal to hold, barter, trade or sell with any of these metals in coin, powder, wire or bar form after a certain date unless you are a bona fide industrial user. They will create red tape to establish yourself as an industrial user with licenses, permits, fees, taxes etc. You will only be able to buy for use in manufacturing, not speculation. Exporting would require a special export license. So again the ultimate answer is a second citizenship/passport. For some of you who do not have the means to accomplish this, this solution may save the day, or not! Hindsight is going to be the only way to get 20/20 vision here. In any event I would think holding several metals is better than just sitting on gold and silver and hoping the psychopath Obama does not grab your metals. My guess is Obama may only go after gold, probably 65%. I would then say 25% chance he adds in silver. Then another 10% he goes after other metals. The thing is what will he do with the other metals. It might be not worth the bother but then again they will take every form of wealth you have. Think about it and decide if it is worth the risk. All this gold they get at discounted prices will help shore up their failing economy, of course at your expense. To them you are just an asset to be exploited for their gain.

Platinum and Palladium Coins - Now there are Platinum American Eagles, Platinum Canadian Maple Leafs, and Palladium Canadian Maple Leafs. There are some rhodium privately minted coins but it is a metal that is brittle and does not lend itself to minting of coins. Some were selling this as a powder in a sealed bottle. There will be assay problems with rhodium. This means transfers can be expensive in terms of the assay price. I would suggest strongly that you stay with the platinum and palladium eagles and maple leafs if you go this way. In my opinion the coins are better that the bars or wire because you stand a better chance of avoiding assay costs and delays if you go with the coins. Coins do sell at a premium however.

Warning: The market for these metals is nowhere as liquid as the market for gold and silver. You might get stuck trying to sell and have no buyer. You walk into a local dealer and try to sell 40 Platinum or Palladium coins. He may not have a buyer. He might have only sold five such coins in the last three years. This means you find a dealer who sells on the internet at lower than spot prices. The commission can be high, maybe 5% - 8%. Then the sale may very well need be reported if over $10,000. Selling such coins locally in your own neighborhood may be out of the question due to a lack of demand. How many people do you know who hold gold and silver? And of these how many own any of these other precious metals? See my point. That being said over time they should sell. A whole lot depends on what the psychopath in the white house does. Rest assured he wants everything you have to run his failed joke of a government with for another few months or years.

Platinum has been performing fairly well, but not like gold. In September last year it was $1500 an ounce. Now it is in the $1870 range. In September gold was $1200 and is now $1870 roughly. So gold has been out performing platinum substantially. The point is, it is better to have non confiscated platinum performing worse than gold, than gold that performed well but was confiscated. So this type of move is mostly for protecting from confiscation versus return on investment.

Palladium was selling for about $470 in September and is now selling for $775. Palladium is a performer like gold and it comes in Maple Leafs. Palladium is not as liquid as Platinum.

Gold & Silver – Gold hit $1876 today as it is pushing to break through the $1900 mark. It will hit it again soon and then profit takers sell signals will trigger and it will drop back. It will eventually stabilize in the low $1900's and then start the climb to $2000. The $2000 mark is a big indicator and will trigger a lot of sell orders. Breaking through this $2000 level will be a big event but through it the prices will go. The great one (Obama) will soon announce his innovative QE3 and this should get us to over $2000 in a flash. See Obama can be good for making money with, you just have to know how. Silver is apparently being manipulated to stay at $40 or thereabouts. I think it is because some entities are accumulating, waiting to take silver up sharply. QE3 may be the alibi they use for this.

Precious Stones – Yes you can hold stones. These they never confiscate. Diamonds do not go up anything like gold. They are not good for gains, more for preservation of capital against inflation. See this graph of their prices since Jan. 2006.

Diamond Pricing Trends Index

The USA does not tax entry with loose unmounted stones and this is generally the case in other countries but do inquire before moving stones. Of course you can also hold emeralds and rubies. One can buy a cheap womens necklace and install fine gemstones. This can be readily worn through airports without any unwanted attention. It will still look cheap. You can put a layer of soap on stones to get them to not glimmer in the light. A man can buy a ring with a rare yellow, green or black diamond of substantial size and also wear this through airports. Best to not use clear diamonds. The colored diamonds get mistaken for lesser valued stones other than diamonds. Black diamonds are especially good for this. Stones need to be bought that are laser etched. They can come sealed with a certificate of appraisal but then this can make it harder to transport. You can transport the stones on your person and send the appraisal certificates by courier to your destination. If the stones are laser etched they can be matched to the appraisal certificate readily. Stones are going to be costly to buy and then sell. I would think you should plan on losing 15% to 20% if you buy stones, transport and then sell. Selling stones without reportage is going to be much easier than with gold. Storing stones is easy. If you bury them in backyard they will not trigger a metal detector. They can be placed inside walls in home and will not show with a metal detector. If you insert them in a body cavity they will not be detected by anything currently used in airports but could be spotted in a body cavity search. In passing we started getting reports of law enforcement home searches where metal detectors were deployed in the backyard and on the walls. If they found 100 coins how many do you think they would turn in?

Stones are another way to survive what is coming down the road a piece. I am no expert. You will need to do some studying. Only buy investment grade stones, etched with appraisal certificate that is recognized. Do not take the off brand appraisal certificates.

Watches – Watches and jewelry will not be covered in a confiscation. This is another way to store your wealth. There are a lot of fine swiss watches out there. Many of these come in yellow gold, rose gold, white gold and platinum. When you start buying the watches with a solid gold or platinum bracelet it gets interesting. For instance a rolex president has about 4.5 ounces of 18K gold. Gold coins and bars are 24K. Still it is an impressive amount of gold. One can carry this sort of watch through an airport easily. You can even have a spare or two in your carry on. Now if you add in diamonds on the dial numbers it gets even more interesting. Then we can throw in a diamond bezel for more value. Rolex uses only fine grade stones. Dials can also come with emeralds and rubies. There are some fine swiss watches that will have eight ounces of 18K gold in them. Look at Breitling and Audemars Piguet. Patek Phillipe, IWC, Brueget are some other brands to look at. You are not going to move millions this way. It is a good way to be able to have some wealth with you that does not have to be declared. Watches can be sold easily. The watch store will open the watch to authenticate it. They might phone in the serial numbers to see if it has been reported stolen.

Jewelry – Again this should not be included in any confiscation. Dupont, Cartier and others used to make solid gold cigarette lighters. Well what was done is a 18K gold case was slid onto a lighter. These used to sell for $5,000 to $8,000. They are available used for less today. I do not believe they are still being made with these high prices of gold today. Dupont and other manufacturers also made 18K gold pens that had perhaps 2-3 ounces of gold in them. A man can get a neck chain that will have 6-8 ounces of 18K gold. The chain should be long so as it could be worn inside a shirt and not easily be spotted. The links should be welded together so as to make it very hard for someone to rip it off you. The chain should be sufficiently large enough to go over your head. This can of course be done with womens chains. Such chains are easy to sell but expect to lose 20% to 30% over your purchase price. They are easily moved through airports. Then there are 18K gold belt buckles. There are tennis bracelets which can be made with 30 or 40 fine investment grade diamonds. One can have 18K gold eyeglass frames. You could even get a crown on your tooth designed to hold a fine investment grade diamond just like a rapper. If you get creative, one can move about through airports with as much as a few million dollars worth of jewelry. Of course your emphasis will need to be on precious stones not metals. You could use rings, bracelets, necklaces etc all with precious stones. The bad news is you take a hit when selling them. The good news is they won't be confiscated, something is better than nothing.