Tuesday, September 25, 2012

You're a pension cheat, criminal or tax evader if...

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I had a chuckle at a post on Zero Hedge this morning which listed some of the reasons you might be considered a conspiracy theorist:
You Know You Are A Conspiracy Theorist If...
  • You are capable of critical thinking.
  • You distrust mainstream media.
  • You think that drones in America might not be for Al Qaeda.
  • You think it’s a little strange that WTC building 7 came down at free fall speed on 9/11 yet it was never hit by a plane.
  • You think you have the right to protest.
  • You think the War on Terror is a scam.
  • You think the War on Drugs is a scam.
  • You think the anger directed at America from the Middle East could possibly be related to our foreign policy rather than hating how amazingly free we are.
  • You don’t own a television, and if you do, all you watch is RT, especially the Keiser Report and Capital Account.
  • You think rich, powerful and connected people should be subject to the rule of law and go to jail if they commit crimes. Even if they are bankers and work at JP Morgan or Goldman Sachs.
  • You grow your own food.
  • You buy raw milk.
  • You think allowing a small group of unelected people (The Federal Reserve) to print unlimited amounts of money and distribute it as they please might not be a good idea.
One of those things you read and laugh because there is truth to it (Government or regular people probably think you are a conspiracy nut for such thoughts or actions) at the same time that it is absurd that such thoughts or actions should be considered conspiratorial.

Then later in the day I was linked to an article where a former Reserve Bank Official is suggesting the removal of $50 & $100 notes from circulation in order to curb pensioners, criminals and tax evaders from hoarding the notes (article is trimmed, click here to read in entirety):
ELDERLY Australians committing welfare fraud on a massive scale are behind the extraordinarily high number of $100 notes in circulation, a former senior Reserve Bank official says.
Yesterday the Herald revealed there are now 10 $100 notes in circulation for each Australian, far more than the more commonly seen $20 notes.
One popular explanation is that they are used for illegal transactions as part of the cash economy, something the former Reserve official, Peter Mair, rejects as a "furphy".
In a letter to the Reserve Bank governor, Glenn Stevens, dated July 4, Mr Mair laid the blame squarely on elderly people wanting to get the pension and hiding their income in cash to ensure they qualified for the means-tested benefit.
"The bank is basically facilitating a tax avoidance scheme by issuing high denomination notes," he told the Herald. "They are not needed for day-to-day transaction purposes, or even as reasonable stores of value."
Mr Mair said the return for an Australian close to getting the pension who held $10,000 in cash, rather than declaring it, was "enormous".
"If putting it under the bed or in a cupboard means you qualify for the pensioner card, you get discounted council rates, discounted car registration, discounted phone rental - in percentage terms the return is enormous," he said.
His letter to the governor proposes phasing out the $100 and $50 denominations.
"Cards and the internet have delivered a body blow to high-denomination bank notes. They are redundant," he said. "There is no longer any point in issuing them except to facilitate tax dodging.
The authorities would announce that from, say, June 2015 every $100 and $50 note could be redeemed but no new notes would be issued. After June 2017 every note could only be redeemed at an annual discount of 10 per cent. It would mean that after two years, each $100 note could only be redeemed for $80, and so on."
The letter acknowledges the proposal would be contentious and says it should not be done "in any way precipitously", but as payments become more electronic it will become inevitable.
"What would remain in circulation are coins and a modestly expanded issue of currency notes in the $10 and $20 denominations. There is every reason to expect that a national currency issue of this character would soon be adequate." SMH
The Australian $100 note was introduced in 1984. If we use the RBA Inflation Calculator (Link) we can measure that $100 in 1984 would buy a basket of goods valued at $270 in 2011 Dollars. By the time we were to phase out the $100 bill in 2017 it would purchase less than a third of the equivalent 1984 basket of goods (with an inflation rate of 3% between now and then).

Granted we use a lot more electronic transactions today than in 1984 (EFTPOS didn't become widely adopted until the early to mid 90s), however it shouldn't be assumed that those preferring to go about their business with cash are doing so unlawfully. Some just prefer the privacy or convenience that comes with using cash.

Another recent concern is the push for surveillance of citizens via having their internet & telecommunication services monitored:
AUSTRALIA'S security and law enforcement agencies are world leaders in telecommunications interception and data access and like most successful industries, they want more. Federal Attorney-General Nicola Roxon is canvassing a further expansion of surveillance powers, most controversially a requirement that telecommunications and internet service providers retain at least two years of data for access by government agencies. The Age
We are heading toward an Orwellian State on the current trajectory.

Based on the way Australia is heading with new legislation requesting ISPs keep 2 years internet history logs and the suggestion that we remove $50 & $100 bills from circulation I thought it would be worth coming up with a localised checklist... hence:

You know you are a pension cheat, criminal or tax evader if...
  • You put some cash aside every week and keep it in your house to give out to the grand kids at Christmas time (my Nana did this).
  • You are old enough to remember past bank collapses, understand not to take the system for granted and keep your savings in cash to protect yourself in the high risk environment that we face today.
  • You prefer $100 notes over $50s as you can hold more $ in your wallet with fewer notes.
  • You like keeping any note larger than $20 in your wallet because keeping the number of $20's required to get through your week in your wallet would put your back out every time you sat down.
  • You prefer to draw out cash on an irregular basis to use for daily transactions in order to avoid bank transaction fees.
  • You find it easier/more convenient to manage a budget when you can quickly check your remaining balance by opening your wallet or purse, rather than having to make a phone call or access the internet.
  • You prefer to use cash in order to maintain a reasonable level of privacy when it comes to your personal spending.
  • You hold onto some cash in the event of another global financial crisis where some types of accounts may be frozen in order to prevent a bank run.
  • You hold some cash outside of the banking system given the increasing frequency of bank network outages which take down ATM and EFTPOS services.
  • You use "non-conventional" methods of preserving your purchasing power (such as using cash to purchase and store bullion).
  • You prefer to keep what little money you have in cash to avoid an increasing number of electronic fraud transactions which banks can take significant lengths of time to resolve (4-6 weeks).
  • You prefer to save in a form of money (Gold/Silver) which has been in use for thousands of years rather than one which has been around for less than half a century.
  • You have a joint savings account with your partner and want to buy them a large gift with cash to avoid them finding out about it.
  • You ask to withdraw a large amount of cash in order to purchase a vehicle as the current owner doesn't want to take a cheque.
  • You refuse to provide a private business with your ID in order to secure a purchase of bullion (who wants a business to have your address where they suspect you might store the purchase).
  • You run a small business and need to keep a cash float on hand to operate smoothly.
  • You don't do anything illegal, but would prefer to keep your transactional or internet browsing history private anyway, it's none of the Governments business.
  • You aren't doing anything illegal online, but you might still be prejudiced against for your activities anyway (e.g. organising anti-Government rally).
  • You are pretty sure that there is a greater chance of someone doing something illegal with your information in the department gathering the data than of doing something illegal yourself so would rather keep your data private.
  • You would prefer not to have a Government whose representatives have been known to lie, cheat, steal, spend wastefully, look up inappropriate websites & act like clowns in general to have even greater control over your life than they already do.
I could probably come up with a trillion more (remember the good old days when it was enough to exaggerate with the word million?), but there are only so many hours in the day. If you can think of some good ones drop them below in the comments and I will add them to the post.

BB.

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Sunday, September 16, 2012

Saddle up for bubble phase in Gold & Silver

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Where Are We Now

Back on May 18th I suggested the bottom could be in for Gold it was time for investors to "Get back on the horse"...
The environment is one that Gold should be thriving in with negative real rates, western banks are ready to intervene again (IMO we will see QE3 within the next couple of months which might drive the start of the new trend in Gold), non-western banks are buying Gold, the geopolitical situation is still shaky and there is risk the Iran situation pushes Oil and Gold higher... nothings changed, so stop rocking back and forth and shaking in the corner because the value of your Gold has dropped. Get back on the horse.
Bullion Baron - Good chance Gold and Silver have bottomed
In that post I wrote about reasons not to be concerned that Gold had dropped below the 3 year trend line (which had some t/a traders frothing at the mouth for a huge fall), as it had done so in the last serious correction (2008) from which it rebounded strongly.

Gold fell below trend in last major correction also

I also pointed out several other indicators (sentiment, volume suggesting capitulation) were suggesting a bottom was in or very close.

A couple of days after that post I followed up with another to add some context and further reasoning for the call:
First I would like to clarify what I meant by a "bottom" in Gold and Silver. There is of course the potential for Gold and Silver to trade lower than the recent lows at $1526/$27, however I think there is a good chance that these prices formed a low point which won't be breached again before the end of the bull market (if ever).

Big call I know. One which may prove to be wrong, but the only scenario I see the metals going a lot lower than these price points is in a credit crunch similar to that seen in 2008 and I think that there is enough gunpowder left in the barrels of the Fed, ECB and other intervening central banks to push risk of such a crisis down the road.
Miss out on this buying opportunity at your own risk. Current prices are a gift. 
It so happened that the bottom for Gold was in as I'd speculated.

I followed up on these posts with two more on Silver in early July (July 1st and 5th) where I speculated a major bottom was forming or had formed. While I agreed that nothing is a given and breakout below $26 would initiate a deeper correction, my opinion was that depressed sentiment in Silver, bullish USD sentiment, strong support at $26, oversold RSI & a bullish flag pattern forming on the monthly chart  was indicating that the bottom was likely in. I suggested that a strong recovery (like that seen in late 2008/early 2009) would be likely:
I was a heavier buyer of physical Silver at the lows seen in late 2008. I am a buyer at current levels and I think $26-28 Silver will be seen as a catch when the price is much higher in the months and years ahead. 

Those who bought Silver in late 2008 at US$11 instead of catching the exact bottom at US$9 are probably not all that concerned that they didn't catch the exact bottom, they are happy they got in before the price multiplied over the years following. 

Within 4 months of the $9 low in October 2008, the price of Silver had rallied over 60% to almost $15. A price move like that today would take us back into the $40s and I wouldn't be surprised to see such a move over the coming months if the European situation has been stabilised.
I followed up the above post with a summary from a YouTube clip showing that the COT report for Silver was also pointing a low being in or very close:


At the time I wrote the post on May 18th (morning, May 17th US time) Gold was trading at around US$1570 after having traded low $1500's the day prior. Gold closed on Friday at $1770 (+12.7% on $1570).

Silver had closed Friday at US$27.42 over the weekend I wrote the post on July 1st having tested the support just above $26 on the Thursday. Silver closed on Friday at $34.68 (+26.5% on $27.42).

Gold and Silver have now broken out of their correctional down trend and found support at the 200DMA:

Gold breaks out and finds support at 200DMA
Silver breaks out and finds support at 200DMA

Explosive Triggers

Central Banks have announced "unlimited" quantitative easing measures, the first announcement just over a week ago from the ECB:
Overnight Mario Draghi announced the new emergency program designed to support the ailing Eurozone. Most of the package was leaked out prior to the meeting so it wasn’t too much of a surprise when it was announced.  The “unlimited” scale was, however, certainly an upside surprise. Macro Business
Followed by the Fed a few days ago:
From FOMC Statement: To support a  stronger economic recovery and to help ensure that inflation, over time, is at  the rate most consistent with its dual mandate, the Committee agreed today to  increase policy accommodation by purchasing additional agency mortgage-backed  securities at a pace of $40 billion per month. Macro Busines
These policies of no surprise to most, although the timing and scale were not easy to guess. When I wrote the below in December last year I would not have guessed that I would be waiting a further 10 months for Bernanke to unleash QE3:
Deflation, contraction and debt cancellation could come about as opposed to the hyper-inflationary, end of all fiat currencies destruction that some predict. Although I don't think Bernanke & The Fed are going to go down this path (deflationary) without a fight. They have continued to highlight that they are "prepared to use their tools to promote a stronger economic recovery in a context of price stability". I think 2012 is likely to bring in the use of increased stimulatory measures by the Fed, most likely to be publicly titled as QE3 (4/5/6?).

It is my opinion that these last ditch efforts by the Fed to avoid deflation will send the USD tumbling and Gold soaring as it launches into the final bubble phase of this bull market. The deflationary bust that briefly predicts could come about after this in a couple of years and be the driver of Gold's bear market following the bubble.
Bullion Baron - Gold/Silver on the verge of bubble phase
Central Bank policies aren't the only catalyst which could put a rocket under the price of Gold, Captain Overkill summarises on his blog Doomberg the situation in South Africa where workers at some mines are on strike:
The next major potential shock to metals prices is if South African mines go "offline." South Africa is responsible for the production of 80% of the world's platinum and is also the world's third largest gold producer. South African miners went on strike on August 10th at a mine owned by Lonmin Plc, a British platinum producer and the third largest in the world. The situation drastically escalated on August 16th when the police lost control of the situation and fired live ammunition at the strikers, killing 34 of them and injuring 78.

There are now calls by some South African politicians and political organizers for a general strike among all South Africa miners. The reason gold owners need to watch this situation is because of the effect the strikes are having on platinum prices. The disruptions right now are relatively minimal, but it has already caused platinum to rise almost 20% as of Wednesday, and the linked article was written before QE3 was launched today. If the strikes spread and South Africa stops exporting precious metals for a significant period of time, there are going to major supply disruptions. Platinum will be affected the worst by far, but gold supplies will also be squeezed. This is on top of what is already going on with QE3. Doomberg
With China already hoarding their mine supply (world's largest producer of Gold) and above situation in South Africa there's the potential for new mine supply to be disrupted. Of course as Gold isn't consumed like most other commodities, there is still plenty of supply to go around from existing holders (unlike Platinum), but at what price? Even though the mine supply disruptions would probably have minimal effect on the Gold market, speculators will likely use the news as an excuse to chase the metal higher.

The Doomberg blog post also refers to tensions between Israel and Iran having the potential to drive an oil price shock (although the official Israel stance is that no war is imminent). 

In my opinion the situation in Iran is a powder keg ready to blow. High levels of inflation are driving a very unstable currency situation:
Iran’s inflation rate rose to 23.5 percent in the month that ended on Aug. 20 from 22.9 percent the previous month, the central bank said today on its website.

While the central bank said in its report that inflation will continue to increase, President Mahmoud Ahmadinejad said in a televised interview late yesterday that “the inflation growth rate has declined this year. The inflation rate will decrease in the second half of this year.” Bloomberg
The high inflation and destabilization are a result of sanctions on Iran as a result of their ongoing nuclear program. It seems unlikely that this situation will just work itself out peacefully and without incident.

Third Phase

Long term readers of the blog (or those who have read back through my early posts) would be aware that I think we are in the early stages of the third phase for the Gold and Silver bull market. In January 2011 I made the following observations:
- Price action is mimicking a bubble chart
- Similar length of time to 1970s bull market
- Mainstream media coverage increasing
- Record mint production of retail products
- Shortages of retail sized products
- Premiums where retail public is buying
It's been my opinion for a few months now that we are entering the 3rd phase of the precious metals bull market. I believe that there is not much time left in this bull market and that we will have seen the peak within 2-3 years (max), quite possibly much sooner.

That does not mean I'm about to close my positions at today's prices.

It does not mean I think the metals are close to a "price" peak.

All it means is that I think the bull market will soon come to an end (likely in a parabolic blow off) and there have been several indicators that are leading me to this opinion.
That was all in this post: Gold/Silver entering the 3rd phase of the bullmarket?

Around 19 months on and I still think this is likely the case (we are in the early stages of the bubble phase). We've seen some fireworks in the metals already with blow off spikes in both Silver and Gold last year, but I think that will just be a taste of what is to come. In my opinion a bubble peak may still come before the end of 2013, but if not I wouldn't imagine it will be much more than a year later than I expected./

Gold continues to have increased coverage in mainstream media. Where a few years ago Gold/Silver commentators were rarely seen on CNBC and other news programs, we now see them regularly and even the hosts themselves have mentioned high price targets and manipulation without laughing in the same sentence.

Not only is Gold now enjoying a strong presence in mainstream media, but suggestions of return to a Gold standard have moved from fringe political candidates to that of the Republican party:
The gold standard has returned to mainstream U.S. politics for the first time in 30 years, with a “gold commission” set to become part of official Republican party policy.

Drafts of the party platform, which it will adopt at a convention in Tampa Bay, Florida, next week, call for an audit of Federal Reserve monetary policy and a commission to look at restoring the link between the dollar and gold.

The move shows how five years of easy monetary policy — and the efforts of congressman Ron Paul — have made the once-fringe idea of returning to gold-as-money a legitimate part of Republican debate. CNBC
I think return to a Gold standard is extremely unlikely in the near term, but the very fact that it's being discussed rationally by a regular political party is very interesting and a sign that Gold as a monetary unit is not so extreme an idea anymore.

Price Targets

Over the final 2 years of the bull market that ended parabolic into January 1980 the price of Gold quintupled (5x), rising from $170 to a peak at $850. Over the same period Silver rose from under $5 to over $49 (almost a 10x increase), although this was in part due to the Hunt Brothers cornering the Silver market. Many say that the rise in Silver was an anomaly, but given the right conditions I think we could see similar performance relative to Gold in this bull market (a return in the Gold:Silver Ratio to under 20). With the Gold:Silver Ratio currently at 51, I am expecting Silver to more than double Gold's performance into the peak of the bull market:

GSR Currently 51, expecting a fall back to 20 or lower as in 1980
Zero Hedge speculates in an article that Gold may reach $3350 as the Fed expands their balance sheet to $5 Trillion over the next 3 years. A Silver estimate based on this target and a GSR of 20 provides a target for Silver of $167.50, a price which while speculatively calculated is not out of the question. Also consider that $3350 as a price target for Gold may end up being on the low side... while an inflation adjusted target using official figures suggests around $2500oz would reflect the 1980 high, an alternative set of statistics shows that the inflation adjusted peak could be much higher:
Another easy way to demonstrate that gold is not in a bubble is to look at the inflation-adjusted highs. The nominal highs for gold and silver occurred during January of 1980, when gold topped out at $850 and silver at $49.45. Official government inflation statistics tell us that in today’s dollar terms, gold would need to reach $2,500 and silver $150 before matching their true 1980 highs. But it is well known that the government significantly understates the inflation rate in order to mask the impact of their fiscal policies.

John Williams, the economist behind the website Shadow Stats, has done us the favor of stripping out the government gimmicks in order to derive the true inflation rate over the past thirty years. Using his SGS-Alternate Consumer Inflation Measure, gold would need to reach $8,890 per troy ounce and silver would need to reach $517 per troy ounce to match the highs from January of 1980. Seeking Alpha
Of course there is no guarantee an inflation adjusted high (using any measure) will be met by Gold this time around, but it is one of the measuring sticks that we can put Gold against to see when it is overvalued (at an inflation adjusted high, measured from the last peak, it is potentially overvalued).

Gold tends to maintain relative value over long periods of time, but short term it's purchasing power can fluctuate wildly and it is this fluctuation from undervalued to overvalued that my intention is to ride out.

I like to use multiple measures of Gold's value relative to other assets such as property, oil, stocks and wages. I have covered each of these ratios on the blog previously providing potential targets for Gold and Silver based on ratios at which the metals have peaked in the past (of course there is no guarantee the metals will reach such an overvalued stage again, but I think given the crisis in confidence we are likely to see as a result of central bank printing that we will see some very similar ratios to those seen at the peak in 1980):

Political / Energy Crisis to Drive Gold Higher? (Gold/Oil Ratio)
Australian Houses: Gold / Silver Ratio - June Update
AUD Gold Price Exceeds Weekly Aussie Wage
DOW:GOLD ratio at new lows (6.5 to 1)

Some of the targets in these posts may seem unreal, but in my opinion any are possible should this bull market reach a point it goes parabolic (as most bull markets do). In the final 2 months of the bull market into January 1980 the price of Gold doubled and then fell back quickly, a volatile peak may come quickly and give you little chance to sell, so in my opinion selling at several levels on the way to where you think Gold will top out is a good idea as opposed to assuming you will be able to catch the exact peak.

Australian Perspective

As I said in a recent post:
Recent strength in the Australian Dollar is partly a result of recent central bank diversification into the Australian Dollar (such as these instances reported on MacroBusiness: Czech Republic, Germany), as well as investors seeking exposure to one of the (seemingly) strongest economies (for now) around given the slowdown being experienced in most other developed countries.

It's unlikely that the Australian Dollar will trade above resistance of $1.11 against the USD and it's more likely to trade lower as our two speed economy continues to take it's toll on the larger populace. So in my opinion there is limited upside for the Australian Dollar which reduces the potential for the AUD/USD exchange rate to influence the AUD price of Gold lower.
Bullion Baron - AUD Gold Price Falls Below Support
In my opinion the Australian Dollar is heading lower in the years ahead, regardless of the Fed policy to print. The trigger for a lower AUD might be rate cuts from the RBA or data showing weaknesses in our economy or banking system as house prices continue their slow melt.

The high AUD in the meantime is a blessing in disguise for precious metals investors as the way I see it you can buy metal on sale!

The "Pascoe Indicator" or "Pascometer" is a contrarian indicator used when expecting the opposite of Australian financial journalist Michael Pascoe's opinion to take effect. In the past his articles on Gold (in which he talks the metal down) have been particularly effective in marking a low point for the price of Gold in Australia, as can be seen in the chart previously used on the blog (see this blog post for further details):


The Pascometer has once again burned bright red as Michael Pascoe opened his mouth about Gold last week:
What we do know is that open-ended quantitative easing will continue to weaken the greenback, something that delights gold bugs and depresses Australian exporters of good denominated in US dollars – which is most of the key stuff.

Gold bugs talk about their yellow metal being an inflation hedge, or a deflation hedge, or whatever excuse is current, but the 2.2 per cent jump in gold prices overnight was all about the on-going debasement of the US currency. The Federal Reserve pumping out greenbacks means an increase in supply when there’s no particular increase in demand, therefore pushing down the price. SMH
Is Pascoe's Gold negativity going to once again market a major low point? Gold has already rallied from a low of just above AUD$1500 to almost AUD$1700, so this Pascoe article wasn't timely enough to catch the very bottom, but I suspect looking back in 6-12 months the price will be well higher and have rallied on much more than US currency debasement.

Mining Stocks

Some may be wondering where I'm sitting on Gold & Silver stocks... I think many are undervalued. I made some good money on them during the 2009-2010 rebound from late 2008 lows as the Fed QE programs worked their magic on the markets, but exited most of the juniors I held during 2011. Many Gold & Silver stocks have struggled profusely over the past 12-18 months as Eurozone problems have only further exacerbated a difficult environment with the metals in correction mode. 

Many juniors that I traded/held several years ago have been heavily diluted as they've had to raise capital at a low share price, destroying shareholder value. Some of these companies have been issuing (printing!) new shares in a Bernanke like fashion with no regard for their shareholders. Picking the right stocks is difficult and I've chosen to position myself with a higher level of exposure to spot price rather than stocks this time around. That said I still hold a portfolio of ASX300 Gold mining stocks in my super and I think that the right mix of Gold stocks will outperform the physical metal. You can find a list of ASX300 Gold/Silver mining stocks in this post from earlier in the year:


The HUI:GOLD ratio shows that the stocks still have a way to catchup to where they were over 2010 and they could easily overshoot to the upside:

HUI:GOLD Ratio shows Gold mining stocks undervalued
This rebound could happen faster than most expect. The HUI has already rallied 33.5% from late July lows (387 to 517) and given the right conditions we could see a rally to new highs by end of the year (630+).

HUI Strong rally from late July lows
It's possible that you may see some  Gold/Silver stock profiles on the blog as I've written in the past, but likely only if I find time to put in the heavy research to invest some more of my capital in the space again.

Final Words

It's unlikely that you will ever see again any wording as strong as my posts in May (for Gold) and July (for Silver) on an opportune time to buy. As we get into the business end of this bull market, if the price does start to rise in a parabolic fashion it will become more and more dangerous to take a large position in the metals. I have been close to "all in" on Gold and Silver (and related exposure via equities) since the lows in late 2008 when I was buying hand over fist.

Short term the metals and stocks are overbought, they have rallied hard from very oversold conditions and may correct short term or consolidate, but it's possible they just keep powering higher with the Fed's unlimited QE surprise having had only 2 trading sessions to sink in.

Whatever happens I hope you are well positioned to take advantage of what should be an exciting ride. Saddle up and hold on, the horse is only trotting at the moment, by the climax she'll be bolting faster than Black Caviar!

BB.


 Buy bullion online - quickly, safely and at low prices

Tuesday, September 4, 2012

Perth Mint Gates Blockaded: Lunar Proof Release

For a writeup on yesterdays bullion Lunar Coin launch checkout yesterday's post and this post on Silver Lunar for more details on the Proof coin release (in addition to those I listed in the Proof coin post a 1/2oz Proof Silver coin was also released with 8,000 coin mintage).

I headed over to the Perth Mint again this morning for the proof release (got to the gate around 8.45am) and was amused to see the coin store owner from across the street with a group of around 10 people some of which I assume may have been friends and family (or possibly hired goons ;) ?) blocking up the gates in order to secure proof coins (the coin store owner who is likely to put those he buys in his window for an inflated price). 

Apparently many in the group had been there since before 8am. The group blockading the gate included several children who were also probably being used to secure proof coins given the strict (per person) coin limits.

Is all fair in love and securing Proof Lunar coins?

Coin Store Owner & Family/Friends (left in pic) Blockade Perth Mint Gates
I was able to order a 3-Coin Silver Proof set after missing out on the website last night where they were gone within minutes. I didn't bother trying for the 1oz Silver Proof coin.

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BB.

 Buy bullion online - quickly, safely and at low prices

Monday, September 3, 2012

2013 Lunar Snake Bullion Launch & Proof Release

For more information about Lunar Series coin releases checkout my Lunar Coin Series blog: www.SilverLunar.com

Today, September 3rd marked the release of the bullion Lunar Series Coins from Perth Mint as well as the Kookaburra:

2013 Australian Lunar – Year of the Snake Gold Bullion Coin Series
2013 Australian Lunar – Year of the Snake Silver Bullion Coin Series
2013 Australian Kookaburra Silver Bullion Coin Series

You can checkout some video's of the coins posted today on the Perth Mint Blog (Link) or pictures of all 2013 bullion designs posted previously on my blog in this post.

I attended the launch event this morning from 8am at the Perth Mint. Several dozen of us were let in early and guided toward the back of the Mint where a makeshift presentation room was setup with chairs and a projector.

Ed Harbuz (CEO of Perth Mint) welcomed us briefly after which Ron Currie took over and played a marketing video showcasing the new bullion series coin designs. Ron then discussed the releases and opened up the room to questions. 

A couple of prickly questions were asked regarding privy coins, reminting Kookaburras and mintage limits, which Ron addressed. Bron Suchecki, also present, briefly addressed the room regarding one of his previous interviews on the potential for Perth Mint's (and other global Mints) struggle to keep up with demand if we have a public mania phase to this bull market.

A few interesting facts which Ron mentioned during his presentation:

- Perth Mint received expressions of interest for the purchase of 1.2m 1oz Silver Lunar Snake coins (for a mintage of 300,000).
- Perth Mint has gone from minting only 1.5 million coins per year a few years ago to around 5 million today.
- Perth Mint exports roughly 85-90% of their output, bringing in valuable revenue to Australia, with profits going to WA Government

Following the Q&A there was a lucky door prize with all attendees in the draw to win a very special boxed Lunar Snake coin which was only otherwise distributed to dealers in Frankfurt as part of Perth Mint promotional exercises. The lucky winner was Captain Kookaburra, thank his lucky feathers!

We were then able to move on to the bullion counters to purchase the bullion series coins released on the day (strict limits applied to the 1oz Gold/Silver Snakes). Following an unruly dash to get to the counters (not really) we were able to handover our plastic fiat notes of no intrinsic value in return for Perth Mint Gold & Silver coins.

A little while later we moved back into the presentation room which had been rearranged for an auction of some fine Silver coins and bars. A Silver Lunar Snake (purchased only moments prior) sold for $46. A 1990 Kookaburra sold for $47. A couple of 5oz Silver Scottsdale bars sold for only a couple of dollars over spot price ($330?). I won 2x 1975 (World Trade) Silver Dragon rounds for $75. There may have been a couple of other items which escape my memory.

After the auction a few of us went on the Perth Mint tour, hearing some history of the WA Gold rush, the Perth Mint and large nugget discoveries. We got to wander a room of Gold bars, coins and nuggets, worth millions of dollars including the 1 tonne Gold Kangaroo (which although impressive in size, is unfortunately rather uninspiring in finish, the way the Gold has been hammered out makes it look more like plastic in most parts!). Also being able handle a 400oz Gold bar (worth around $660,000) is pretty cool. We saw a bar being poured in a demonstration on how they used to produce the Gold bars and were able to peek into the minting room where they were carefully producing some of the latest 2013 bullion releases.

It was also great to catch up with a few people and put some more faces to online handles.

Thanks to those involved at Perth Mint for hosting the launch & Ben from Silver Stackers for organising the event.

I'll be heading into the Perth Mint again tomorrow morning for the release of the Perth Mint Lunar Proof Coins (as previously mentioned on Silver Lunar here). I think if there is any coins which will appreciate quickly in value it will be the 2013 Snake Silver Proof 1oz Coin (Mintage: 5,000) & 2013 Snake Silver Proof Three-Coin Set (Mintage: 1,000).

They will go on sale in a few hours on the Perth Mint website, keep an eye out on the Latest Releases page (found here: Link).

I will probably post a few more photos down the track, but in the meantime here is a photo of the bullion Silver coin from my phone camera:


Perth Mint 2013 Silver Lunar Snake 1oz Coin (Real photo, no computer rendering)

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