how to buy gold the right way

7/30/2019 How to Buy Gold the Right Way

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P u b l i s h e d B y Q W e a l t h L t d w w w . Q W e a l t h R e p o r t . c o m


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2 HOWTOINVESTINGOLDTHERIGHTWAY

TableofContents

WhyShouldIInvestInGold? ...........................................................................................................................

ShouldIInvestinGoldNow? ...........................................................................................................................

TheRightWayToBuy,Own,andInvestInGold...............................................................................................

PhysicalGoldorDigitalGold? ..................................................................................................................................................

WhatAboutTheZKBGoldETF? ...............................................................................................................................................

TimeToGoPhysicallyAllocated...............................................................................................................................................

BestWayToBuyPhysicalGold-GlobalGold....................................................................................................

BuyandStoreGoldOffshoreOrAtHome? ......................................................................................................

BenefitsandDrawbackstoBuyingGoldAtHome................................................................................................................

WhyBuyGoldOffshore?..........................................................................................................................................................

2011QWealthLimited,PortVila,VanuatuAllrightsreserved

Thisguidecontainsconfidentialproprietaryinformationandisnotdesignedforthegeneralpublic.ItisproducedexclusivelyformemofTheQWealthReportfortheirexclusivepersonalandprivateuseandknowledge,andundertheirownresponsibilityassophistic

investors.Usingordisseminatingthisinformationforanyotherpurposeotherthanforwhatitisintendedisabreachofcopyrightw

maybesubjecttocriminalandcivilpenalties,includingimprisonment.Disclosure:theauthorsowngoldlotsofit!

QWealthCommunicationsOffice:

Tel+44203384199

[email protected]

QWealthReportWebsite

http://www.qwealthreport.com


3/12

HOWTOINVESTINGOLDTHERIGHTWAY 3

WhyShouldIInvestInGold?

Forcenturies,goldhasattractedinvestorsseeking

toprotecttheirwealthandprovideasafehaven

introubledoruncertaintimes.Thisremainsa

realityformoderninvestorstoo,althoughthere

arealsoanumberofotherreasonsthatunderpin

thewidespreadrenewalofinvestorinterestin

gold.Goldcanaddanelementofpotentially

outstandingcapitalgainstoyoursafety-oriented

portfolio.And,ifstructuredadequately,goldwill

entailaminimaldownsiderisk.

WeatQWealthReportconsiderbuyinggoldthe

rightwaytobeaHOTtopic.Hereswhy:

Diversification:Goldallowsyoutodiversifyout

ofcontinuouslydevaluingfiat(paper)currencies,

therebyprotectingyourassetsagainstlossof

purchasingpowerAND,atthesametime,settingit

upforcapitalgains.

Retainingliquidityandpurchasingpower:Gold

willalwaysretainitsvalue.Yourpurchasingpower

willnotbediminishedforthenextupturnin

businesscycles(whichinourviewhasNOTarrived

yetandwillnotarriveforquitesometime),

therebysecuringtheopportunityoftakingpartandbenefitingfromit.Itisimportantthatthegold

formatonechoosesissupportedbyaliquid

market,i.e.youwanttobeabletobuyandsell

rapidlyifneedbe.Moreonhowtoachievethis

laterinthisreport.

Safehaven:Involatileanduncertaintimes,

expectaflighttoqualityasinvestorsseekto

protecttheircapitalbymovingitintohardmoney.

Goldisamongahandfuloffinancialassetsthatdo

notrelyonanissuerspromisetopay,offeringrefugefromdefaultrisk.Itprovidesinsurance

againstextrememovementsthatoftenoccurinthe

valueoftraditionalassetclassesinunsettledtimes.

Papercurrencyhedge:Goldisoftenusedasan

effectivehedgeagainstfluctuationsinfiat

currencies.Inparticular,acloserelationshiptends

toexistwiththeU.S.dollar.Whenthegreenback

appreciates,thedollargoldpricefallswhileafall

inthedollarrelativetotheothermaincurrencies

producesariseinthegoldprice.Whilethismay

alsobetrueofotherassets,goldhasconsistently

provedamongthemosteffectiveinprotecting

againstdollarweakness.

Itisourviewthatthedollarwillcontinuetoweaken

overtheforeseeablefuture.Theinternational

centralbankerswilltrytoseetoitthatthedollar,theeuroandtheyendevalueatmuchthesame

rate,soexchangeratesstayconstantandmost

peoplewillnevernoticethedevaluation.Wecallthisstealthdevaluation.

Addedassetprotectionandprivacy:Structuring

yourstrategyappropriatelycanprovidea

considerablelevelofprivacy.Dependingonthe

formatgoldisboughtin,thereareconsiderable

privacyandsafetyrelateddifferences.More

specifically,buyinggoldtherightwaycanmean

legallybypassingreportingrequirements,aswellas

minimizingrisksofconfiscationbythegovernment

Itiswellknownthatafterthelastmajorfinancial

crisis,inthe1930s,theUSgovernmentconfiscated

allprivatelyheldgoldintheUSA.Privatebullion

ownershipwasnotpermittedagainuntilthe1970sThesamethingcouldhappenagain.

Portfoliodiversification:Mostinvestment

portfoliosareinvestedintraditionalfinancialasset

suchasstocksandbonds.Thisappliesparticularly

toretirementsavingsandpensionplans.

Governmentsaretryingtopersuadepeoplethat

governmentbondsaresafeassets,wheninfact

governmentsaroundtheworldareeffectively

bankrupt.Itisonlyamatterofhowlong

governmentscankeepupthischarade.The

reasonforholdingdiverseinvestmentsistoprotec

theportfolioagainstfluctuationsinthevalueof

anysingleassetorgroupofassetsthatreactinacommonfashion.Portfolioscontaininggoldare

generallymorerobustandsecure.

Physicalorvirtualownership:Youcanbuygold

initsphysicalformandstorethecoins,goldbarso

jewelrythatyouhaveacquired.Oryoucanhold

goldthroughvirtualmeansincludingETFs,digital

gold,andservicessuchasGoldMoneyand

BullionVault.


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ShouldIInvestinGoldNow?

Gold,duringthepastfewyears,hasbeenoneof

thebestinvestmentsouttherewhenmeasuredin

fiatcurrencyterms.During2010,despiteweakness

ingeneralcommoditiesmarkets,goldkeptmoving

up.Thisisbecausegoldisnotreallyacommodity,

butalongtermsafehavenstoreofvalue.

Whateverscenariowemoveinto,beitdeflationary

orinflationary,webelievethistrendwillcontinue.

Goldhasbeenrecognizedbyagrowingnumberof

investors.Moreandmorepeoplearecatchingon

tothefactthattherecoverystoryisnotforreal

afterall.EconomistswhoprojectedtheU.S.

recoverywouldgainspeedinthesecondhalfof

lastyeararenowscalingbackthoseforecastsone

byone.Moreandmorepeopleareconcernedover

growingfiscalandmonetaryimbalances,

particularlyinwesterneconomies.Moreandmore

investors,therefore,arelookingforsafetyinhard

assets.Goldistheobviouschoice.

Whencomparingstockmarketperformanceswith

thatofgold,itiseasilyvisiblethatstockmarkets

haveformedaprettysoliddownwardtrend,while

goldhasconfirmeditstrendontheupside.

Investorsareaccumulatingenoughbulliontofillall

Switzerlandsvaultstwiceover.Someofthemost

respectedgoldanalystsagreethatthelongestgold

rallyinatleastninedecadeshasalotfurthertogonomatterwhattheeconomyholds.Accordingto

anarticlefromBloomberg,analystsraisedtheir

2011forecastsmorethanforanyotherprecious

metalthepasttwomonths,predictinga10th

annualadvance.Awidelyheldoptionongold

futurestradedinNewYorkisfor$2,000anounce

byDecember2011.

WhenGoldhit$700anouncesomepeopleaskedus,ShouldntIwaitforapullbackinthegoldprice

beforebuying?Theyarestillasking


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TheRightWayToBuy,Own,and

InvestInGold

Analmosthystericalantagonismtowardthegold

standardisoneissuewhichunitesstatistsofall

persuasions.Theyseemtosense...thatgoldand

economicfreedomareinseparable.

~AlanGreenspan

Forthoseofyouwhoareconcernedaboutthe

healthofourworldsfinancialsystem,Istrongly

urgeyoutoreadthisreportthoroughly.Ibelieve

thatwehavereachedacrossroads.Formanifold

reasons,financialmarketsaheadpromisetobe

sluggishandbumpyatbest,catastrophicatworst.

Youneedtoprepareforthat.Today,morethan

ever,gold--and,toalesserdegree,silver--

ownershipneedstobepartofyourwealth

preservationplan.Ifyoualreadyownprecious

metals,thatisgood.However,themessageIwant

todrivehomeinthischapterandthisreport,is

thatyoumustownitTHERIGHTWAY.

Iregularlytalkwithinvestorswhosaythatthey

ownphysicalgoldandsilver.Myfirstquestionto

thatstatementis:"Areyousure?"

Ifyouranswerisno,pleasereadon.Ifyour

answerisyes,Iwillaskyouagain:"Areyou

sure???"

PhysicalGoldorDigitalGold?

Howyoubuygoldorsilverdependsverymuchon

yourbeliefsystemandyourobjectives.Ifyouare

notconcernedatallaboutthecurrenteconomic

climateandthestateoftheinternationalfinancial

system,thenyoumaybemuchlesspickyabout

HOWyoubuyyourgold.

Undersuchcircumstances,youmight,forexample,

beperfectlycomfortablewithoneofthevarious

metalsaccountsorcertificatesofferedbybanks.

Youarethen,ofcourse,vestingyourtrustina

financialinstitutionanditscapacitytoselland/or

deliverthemetalsthatyouhaveaclaimto

wheneveryousaytheword.And,undernormal

marketconditions,yourassumptionsmaygenerally

befine.Butyoumustrealizethatyoudontreally

ownthemetalsinthesescenarios.Youjustowna

claimagainsttheissuer(bank)foracertain

amountofgold.Iftheissuercannotpayforany

reason,yourclaimisworthless.

Tous,thiskindofdefeatsthewholepointof

havingasafehavenandavoidingexposuretothe

globalfinancialsystem.

Similarly,ifyouareinterestedinahigh-turnover,

in-and-outmetalstradingstrategy,youmay

bebestoffusingETFs(ExchangeTradedFunds),or

possiblyoneoftheother"digital",internet-based

preciousmetalsprogramsavailabletoday.

Youare,insuchprograms,atbestinvestingin

fractionsofbullionbars,generallythe12.5

kilogramformat(GoldMoneyorBullionVault,for

example)-ormoreofteninunallocatedownership

orclaimsthatarenotentirelybackedbypreciousmetalsatall(GLD,theworldslargestgoldfund,is

themostprominentexample).

Theadvantageofsuchstructuresisthat

transactionswillobviouslybequickerunder

normalcircumstances.Youcanbuyandsell

cheaplywiththeclickofyourmouseprovided

marketsarefunctioningnormally.

Ofcourse,ifacatastropheofanykindstrikes,

marketswillbeclosed(ashappenedinthedaysafterSeptember11th,2001)andyouwontbeable

tobuyorsellanythinginthismanner.

However,ifyouarelikemeandyouwanttomake

sureoftrue,allocated,directownership,ifyou

wanttoprotectyourselffromacrisisduringwhich

goldandsilverpricesshootup,whenthe

availabilityofphysicalmetalswillbelimitedor

non-existent,orwhenthefinancialsystemstalls


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andsellingpreciousmetalsthroughthebanking

worldsimplywontwork,thenGLDandthelikewill

notdo...notevenclose.

10ReasonsToStayAwayFromDigitalGold

liketheGLDExchangeTradedFund

1.DependenceontheNewYorkStockExchange-

Forthosewhoacquirepreciousmetalsasan

insuranceagainstacrisissituationandasahedge

againstfinancialcrisis,accessandfluidtransaction

capabilityatalltimesiscritical.GLDdoesnotallow

forthat.ItistradedexclusivelyontheNYSE.During

periodsoffinancialcrisis,theNYSEstopstrading,

andhasevenbeenknowntounwindandreverse

transactions.Therefore,accessandtheabilityto

buyand/orsellpreciousmetalsatexactlythetime

whenitismostimportantmaywellberestricted.

2.ThefunddoesNOTallowin-kindredemptions

ofitsgoldbullion-GLDsrefusaltofacilitateanin

kindredemption--inotherwords,thedeliveryof

physicalgolduponrequestoftheinvestor--does

atleastraisequestions.

OfallthepreciousmetalETFsoutthere,weare

awareofonlytwoworldwidethatinfactallowforphysicaldistributionandwhicharealmostentirely

physicallybacked.TheyarebothSwiss.Oneof

themistheGoldETFissuedbytheZrcher

Kantonalbank(ZKB),whichwewilldiscussinmore

detaillater.ThisETFcomeswithconsiderable

limitationstoo.However,ifyouabsolutelywantto

useanETF,thisistheonewewouldrecommend.

3.GLDdoesNOTappeartohavestorageissues-

Oneofthekeychallengesofaphysicallyallocated

goldprogramistoprovideforsecureandcost-

efficientstorage.Thisisaproblemthatwas

encounteredlastyearbyZKB,forinstance.When

theirGoldETFreachedaround70tons,theyhadto

findmoregoldstoragespace.Itwasalloverthe

news.Nosuchnewsistobefoundanywhereon

GLD.Thatdoesraisesuspicions.

4.TheGLDgoldholdingsareNOTaudited-There

arenoauditsonGLD!?!?Asreflectedinthe

excerptsfromthefunds10-Kformbelow,even

monitoringislimited.Infact,thesub-custodians

dontevenhavetoprovideanydocumentationfor

proofoftheexistenceoftheunderlyinggold.The

obviousquestionthenbecomeshowisan

investorsupposedtoknowthereisactuallyany

goldinthevaultsatall?

TheabilityoftheTrusteetomonitorthe

performanceoftheCustodianmaybelimited

becauseundertheCustodyAgreementstheTrusteemayonlyuptotwiceayearvisitthepremisesofthe

CustodianforthepurposeofexaminingtheTrusts

goldandcertainrelatedrecordsmaintainedbytheCustodian.

Inaddition,theTrusteehasnorighttovisitthe

premisesofanysubcustodianforthepurposesof

examiningtheTrustsgoldoranyrecords

maintainedbythesubcustodian,andno

subcustodianisobligatedtocooperateinany

reviewtheTrusteemaywishtoconductofthe

facilities,procedures,recordsorcreditworthinessof

suchsubcustodian.Source:SECForm10-K,September30th2009

5.ThegoldholdingsofGLD(iftherewereany?)

areNOTinsured-The"Trustsgoldmaybesubjecttoloss,damage,theftorrestrictiononaccess".

Theseareobviouslyriskfactorsthatanyallocated

goldprogramwillface.Solidgoldprogramsdeal

withitbyinsuringthevalueofthegoldinstorage.

InthecaseofGLD,allriskispassedontothe

investor.

TheTrustsgoldmaybesubjecttoloss,damage,theftorrestrictiononaccess.

ThereisariskthatsomeoralloftheTrustsgoldbarsheldbytheCustodianoranysubcustodianon

behalfoftheTrustcouldbelost,damagedor

stolen.AccesstotheTrustsgoldbarscouldalsoberestrictedbynaturalevents(suchasan

earthquake)orhumanactions(suchasaterrorist

attack).Anyoftheseeventsmayadverselyaffect

theoperationsofthetrustand,consequently,aninvestmentintheShares.


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TheTrustmaynothaveadequatesourcesof

recoveryifitsgoldislost,damaged,stolenor

destroyedandrecoverymaybelimited,eveninthe

eventoffraud,tothemarketvalueofthegoldat

thetimethefraudisdiscovered-Source:

ProspectusSPDRGoldTrust

6.ThequalityofthegoldisNOTconfirmed-

"NeithertheTrusteenortheCustodianconfirms

thefinenessofthegold..."Ourconclusiontothis

statement?Youarenotonlyunsureofanygold

beingthereatall,butnowyouarenotsureofits

purity.IftherewereANYTHINGphysicalheldin

storage,youstillwouldntknowwhetheritis

investmentgradegoldorjustaheapoftungsten!

GoldbarsallocatedtotheTrustinconnectionwith

thecreationofaBasketmaynotmeettheLondon

GoodDeliveryStandardsand,ifaBasketisusedagainstsuchgold,theTrustmaysufferaloss.

NeithertheTrusteenortheCustodian

independentlyconfirmsthefinenessofthegold

barsallocatedtothetrustinconnectionwiththe

creationofaBasket.-Source:ProspectusSPDRGoldTrust

7.TheissuersareNOTinterestedinprotectingthe

strengthandvalueofGLD-Mostgoldandsilver

ETFsarecreatedbysuchfinancialgiantsasJPMorgan,HSBCorBarclaysBankthatalsoserveas

custodiansandsub-custodians.Theyhavehuge

conflictsofinterest.

Thesearetheveryfirmsthathavebeeninvolvedin

theprocessofshortsellinggoldandsilverinhuge

quantities.Thattheywouldbeinvolvedincreating

ETFsthatarephysicallybackedbyREALprecious

metalshastobeconsideredasmostunlikelyunless

theyhadahiddenagendaandhighlyquestionablepurposes.

8.ThegoldisNOTprotectedfromthecustodians

insolvency-Inthecaseofthecustodians

insolvency,yourinvestmentisnotprotectedor

insuredinanyway.Youbeartheriskentirely.Itis

notsegregatedfromthecustodiansbalancesheet

andthusisexposedtothebankscreditor

obligations.

Thisneedstobetranslated:Iftherewereanygold

instorage(whichatthispoint,youwillrealizeis

questionable),YOUdontreallyownit.Contraryto

investinginastock,forinstance,whereyouown

anactualshareofacompany,withGLDyouown

nothingmorethanaclaimtogold--apromise--

whichcompletelyandentirelyhingesonthe

financialhealthofthecustodianorsub-custodian,

thirdandfourthpartiesoverwhichthe

administratorsofGLDhavenocontrol.

Ifyouwanttoinvestingoldinordertoprotect

yourselffromafinancialcrisis,thethingyouwant

leastistodependonthepromiseofabankand

survivalofthelikesofJPMorgan.

GoldheldintheTrustsunallocatedgoldaccount

andanyAuthorizedParticipantsunallocatedgoldaccountwillnotbesegregatedfromthe

Custodiansassets.IftheCustodianbecomesinsolvent,itsassetsmaynotbeadequatetosatisfy

aclaimbytheTrustoranyAuthorizedParticipant.

Inaddition,intheeventoftheCustodians

insolvency,theremaybeadelayandcostsincurred

inidentifyingthegoldbarsheldintheTrusts

allocatedgoldaccount.-Source:Prospectus

SPDRGoldTrust

9.GLDdoesNOTexcludethepossibilityofleasing,

shortsellingorpledgingthegoldthatit

(supposedly)hasinstorage-Furthermore,the

trustsstorageislocatedinLondon,wheremostof

theworldsgoldleasingoccurs.Iftheissuersof

GLDhadwantedtoinspireanyconfidenceinits

goldholdings,theycertainlychosethewrong

location.Londonhasahistoricroleasthemarket

ofchoiceforcentralbankseffortstosuppressgold

prices.Thefactthatmuchoftheworldsgold

leasingoccursinLondononlyaddstotheuncertainty.

10.GLDisNOTprotectedfromthewhimsofUS

government-Asmentionedabove,GLDisaWall

Streetproduct,whichtranslatesintohighexposure

toWashington.TheinstitutionsonWallStreetare

backedbygovernment.Programsrunbythem

provideforZEROprotectionfromconfiscation,

taxation,orregulatoryshenanigans.


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Insummary,GLDsownprospectusmakesvery

clearthatyouarenotprotectedfromanything.

YOUbearalltherisks:

-thelackofadequatesourcesofrecovery

-thefailuretomeettheLondonGoodDelivery

Standards

-thefailureofsub-custodianstoexerciseduecare

intheirsafekeeping

-therisksofleasingoutgold,whichisallowedin

theprospectus

-theinsolvencyoftheCustodian

-etc.etc.etc.

Assumingyouareinterestedintruegold

ownershipandsolidpreservationofwealth,GLD

andmostotherETFsareNOTwhatyouneed.GLD

isissuedbytheinstitutionsthatgaveussubprimeCDOs,auctionrate,andothersupposedlysafe

securities.RememberAAAsecuritiesthatare"as

goodascash..."?WhatarethechancesofGLD

turningouttobeas"safe"astheirAAA-ratedtoxic

waste?

WhatAboutTheZKBGoldETF?

Asmentionedabove,ifyoupreferanexchange

tradableproduct,forwhateverreasonsyoumight

have,thenatleastinvestinanETFthatisinfact

(largely)backedbygold.Inthatrespect,and

despitethedrawbacksthatwewillcommenton

below,theETFissuedbytheCantonalBankof

Zrich(ZKB)canbeconsideredasgenerallysolid.

TheZKBGoldETFisbackedbyphysicalmetals,or

gooddeliverybarsasdefinedbytheLBMA

(LondonBullionMarketAssociation).Itoffersall

fourpreciousmetals-gold,silver,platinum,

palladium.Storageisregularlyauditedandthegold

isfullyinsured.

However,aswithanyotherETF,youdontreally

OWNthephysicalpreciousmetalsinstorage.You

onlyhaveaCLAIMtothemetalsheldinstorage.

Therefore,yourinvestmentdependsonthe

financialhealthofthefinancialsystem.

Furthermore,youdonthaveadistinctlyallocated

product;youdonthaveaclaimtospecificpieces,a

1kggoldbaror1oztKrugerrandcoin,forexample.

Youownunits/fractionsofbullionbars.Inthecase

oftheZKBGoldETF,its12.5kilogoldbars.

Physicaldeliveryisonlypossibleinthisformatof

12.5kilobars(currentlyworthapprox.USD

500,000).

And,likeallETFs,theZKBETFissubjectto

considerablelackoftransparencywhenitcomesto

pricingandthepercentageofactualholdingofthe

underlyingmetalsperunitofthefund.

WhileETFsliketobragabouttheirtransparencies,

weinviteyoutocontacttheissuersandaskfor

detailsontheactualspreads,productcostsor

weightofpreciousmetalsofyourtransaction.Youwillrunintoahostofquestionmarks,justaswe

did.

Finally,justlikealltherest,thisETFhascash

settlementclausestoo.Inthecaseofacrisisor

"irregularmarkets",itisatthefundsdiscretionto

payyouincashinsteadofphysicalmetals.TheZKB

prospectusmakesveryclearthatitisnotgearedto

investorsinterestedinsolid,crisis-proofprotection

Whathappens,forexample,ifalotofinvestors

wanttoselland/ordeliveratonce?[thatsthe

precisescenarioonewouldexpectinafinancial

meltdown,forinstance...]

HeresanexcerptfromtheProspectus,whichwe

unfortunatelyonlyfoundinGerman:

"DieFondsleitungkannimInteressederGesamtheitderAnlegerdie

RckzahlungderAnteilevorbergehendundausnahmsweiseaufschieben,wenn:

(a)"DerGoldhandelinNewYork,welcherGrundlagefrdieBewertungdesFondsvermgensbildet,geschlossenistoderwennderGoldhandelinNew

Yorkbeschrnktoderausgesetztist;

(b)"Einpolitischer,wirtschaftlicher,militrischer,monetreroderanderer

Notfallvorliegt;

(c)"WegenBeschrnkungendesDevisenkursesoderBeschrnkungenderbertragungoderVerusserbarkeitvonGoldoderflssigenMitteln

GeschftefrdenAnlagefondsundurchfhrbarwerden;

(d)"ZahlreicheAnteilegekndigtwerdenunddadurchdieInteressender

brigenAnlegerwesentlichbeeintrchtigtwerdenknnen."


9/12


ForthoseofuswhodontspeakGerman,letme

summarizewhatthistellsus:

Thefundmaybesuspendedtemporarilyatthe

discretionofthefundsmanagersifgoldtradingin

NewYorkisinterruptedforsomereason;ifa

political,economic,military,monetaryorother

emergency(thisprettymuchcoversitall)occurs;if

alotofredemptionsareplaced,whichmightin

turnharmtheinterestsoftheotherinvestorsin

thefund.

Obviously,althoughamoresolidETFsolution,the

ZKBETFtooisonlyanotherbanksolutionthatwill

absolutelynotmeettheneedsofprudentinvestors

lookingtoprotectthemselvesfromaseverecrisis

situation.

TimeToGoPhysicallyAllocated

Basically,itisagoodthingforinvestorswithgold

whenrisingdemandpushesthepriceup.However,

itisalsoasignalthatwemaybeenteringthenext

phaseinthegoldbullmarket,anditshouldalert

youtothegrowingprospectsofanimpending

crisis.Goldhasnotsimplyrisenalongsidestocks

andotherinvestments.IthasrisenCONTRARYtotheirweakness,andBECAUSEofthegrowing

concernsoveraglobaleconomiccrisis.

Wehaverecommendedholdinggoldandsilver

sinceQWealthwasfoundedbackin1996.From

theverybeginning,like-mindedportfoliomanagers

haveinvestedconsiderablepartsoftheirclients

assetsinphysical,allocatedpreciousmetals.

Untilrecently,theyalsoheldpartoftheir

investmentsinamixofunallocatedprogramssuchasthePerthMintCertificateProgram(PMCP).

Manyofourmembershavebeenandstillare

investedinthatprogram.

ThePerthMintalsooffersanallocatedprogram,

whichweconsiderbetterthanothers.However,

still,inthatprogramyouarevestingyourtrustand

wealthintheWesternAustraliangovernment.We

arenotsureyoushouldtrustyourfortunetoany

governmentatthisstage.Furthermore,thefeesof

Perthsallocatedserviceareprettyhigh.Goldis

storedat1.5%perannum,silverat2.5%per

annum.Thosecostscanaddupovertheyearsofa

buy-and-holdstrategy.

Itisforthesereasonsthatweareadvisingclients

withPerthMintCertificatestoswitchtotheGlobal

GoldProgram.Weareoftheopinionthatneitheranunallocatednoragovernment-sponsored

programoffersthesafetyfeaturesneeded.Asthe

momentumingoldandsilvermarketspickupand

theeconomicconditionsdemandaction,youwant

anon-bank,non-government,100%allocated

program.

Webelievestronglythatitistimetoswitchtoa

SAFE,ALLOCATEDprogram.Youwanttobecertain

nowthatyouownphysicallyallocatedpreciousmetals.Thismeansthatyouwanttobesurethatif

youbought100Krugerrand1oztgoldcoinsthat

those100coinsarestoredsomewheresafely,

ownedbyyou,andcanbePROMPTLYdeliveredto

youanywhereintheworld,orsoldby/foryou

wheneveryoudesire.

Obviously,ifyouareinterestedininvestingin

preciousmetalsforashortperiod,possiblyinaday

trademode,in-and-out,concernedmostlyabout

makingashort-termprofit,thenthatisadifferent

matter.Youwouldbebesttouseanumberofthe

betterETFsorclaimaccounts.Butifyouare

lookingforprotection,forasafenest-egginyour

portfolio,itistimetosecureyourphysicalgold

positionnow.

Whengoingtheoffshoreroute,bewareof

strategiesthatsoundtoosimple.Thinktheprocess

through.Andconsidertheheftyfeesandtaxes

(VAT)youwillpayinsomeEuropeancountries.

Thebackyardsolutionismoreconvenientand

efficient(moreinformationonthissolutioncanbe

foundonpage10ofthisreport).Thekeyrisk,in

caseofaseverecrisis,isgovernmentconfiscation.

Itappears,however,thatifapproachedcleverly,

theseriskscanbeminimized.


10/12


BestWayToBuyPhysicalGold-

GlobalGold

Thereisoneprogramthatmeetsallourstandards.

ItiscalledGlobalGoldandisaSwissprecious

metalsprogramavailabletoallinvestorsfrom

aroundtheworld.Itholdswhatotherprograms

promise.WithGlobalGoldyouareinvestedthe

rightway:

1.Yourmetalsarestoredsafelyandfullyinsured-

GlobalGoldstoresitsmetalsinsecure,non-bank

vaultsinSwitzerland,insuredforthefullvalue;the

vaultsareinthetax-freezonetoavoidallVAT

costs.And,theyareusedalsobyotherlargefinancialinstitutionsandSwissbanks.

2.Themetalsacquiredbyyouarefullyandsafely

allocated-atGlobalGold,theyarestoredin-kind

inhighsecurityvaults.Theyarenotleased,pledged

orotherwisefiddledwith.

3.Thevaultsandinventoriesareregularlyaudited

bythirdindependentparties-theGlobalGold

vaultsareregularlyinspectedbytheSwisscustomsdepartment,andtheyareauditedannuallybyone

oftheBigFouraccountingfirms.

4.Youownaspecificamountofaspecificformat-

withtheGlobalGoldprogram,youownaspecific

numberofcoinsorbars,notjustfractionsordigital

unitsdefinedinsomeprospectus,butnottangibly

existent.Youown1oztKrugerands,MapleLeafs,

AmericanEagles,BritanniasorPhilharmonics.You

ownbarsofspecificweights.

Thisisparticularlyimportantfortaxandregulatory

reasons.Forexample,weunderstandthatUSIRAs

mayonlyholdUSbullioncoins.Inthatcaseyou

wouldchooseAmericanEagles.UKclientsshould

chooseBritannias,asunlikeothergoldbullion,UK

coinsarenotsubjecttoCapitalGainsTax.

5.Youcantakephysicaldeliveryorsellpromptly

andconveniently-becausethecoinsandbarsare

there,storedphysically,youcansellordeliver

thempromptlyandconveniently,noifs,ands,or

buts,andnounexpectedback-alleycash

settlementclauses.Youdonthavetoshowupto

takedeliveryorinitiateyourtransactions.Youcan

effectuateallmattersbyfax,e-mail,letter,or

phone.Youarenotevendependentonthe

internet.Allthisisparticularlycriticalinasevere

crisissituation.

6.DeliveryismadeinSwitzerlandor

internationally-GlobalGoldarrangesdeliveries

withinSwitzerlandandinternationallyatanytime

onacostbasis,withaveryreasonable

administrativefee.Transportsarefullyinsuredand

conductedwithleadinginternationalhigh-security

logisticsfirms.Youmightnotbeabletotravel

whenbanksandstockmarketsmaynotallowfor

trading,etc.

7.Youbenefitfromfairandtransparentpricing-

duetoexcellentsourcingcontractswithanumber

ofmintsandwholesalers,GlobalGoldoffers

excellentproductprices.Also,theProgramDealers

arerestrictedinthetransactioncommissionsthey

areallowedtocharge.Thefeesaredisplayed

transparently.Youknowexactlyanddistinctlywha

theproductpriceandbrokeragefeesare.Global

Goldalsooffersaninstitutionalprogramtobanks,assetmanagers,familyofficesandthelike.Thefact

thatSwissfinancialinstitutionsbuyfromGlobal

Goldisproofofthecompanyscompetitivepricing

8.Youhaveconvenientandpromptaccessto

willingbuyers-itisimportantthatyourownership

issetupinawaythat,whenyouwanttosell,you

candosoquicklyandconveniently.Someclients

periodicallyask,"whyshouldInotsimplyburymy

metalsinmybackyardorkeepitinasafedeposit

box,possiblyeveninSwitzerland?"

Frankly,Ihavestrongreservationsabouttheback-

yardstrategy,formanyreasons.However,asafe

depositboxmaywellbeanoption.Thedrawback

tothesafedepositboxisthatyouhaveto

personallypickupyourmetals.Andshouldyou

wishtosell,youmaynothaveabuyerlinedup.It

maytakevaluabletime,particularlyinafast-

movingmarket.Furthermore,intightmarkets,asa


11/12


privateinvestoryouwillalmostcertainlysellyour

metalsatapricethatistoolow,whereasGlobal

Goldgetsinstitutionalprices.Youcantapintothat

benefitasaGlobalGoldclient.

Inconclusion,thesearesomeoftheunique

benefitsofbuyingthroughGlobalGold.Obviously,

youalsoneedtoensurethequalityofproduct,you

musthavetrustworthycounterparty,etc.Global

Goldoffersthistoo.Thatshouldbetakenasgiven

andisinfactthecasewhendealingwithsuch

providersas,forexample,ZKB(ZurichCantonal

Bank).Thecompletepackageofbenefitslisted

above,ontheotherhand,isquiteunique.

Alotofinvestorsarewatchingandwondering

whichdirectionthepriceofgoldwilltakenext.It

canbeverybeneficialtobuywhendemandis

generallylowandliquidityishighinthegoldmarket,particularlywhenyouarebuyinggold

coins.Themarketpricingofsuchcoinscanvary

substantiallyandspreadstendtoshootupwhen

availabilityislow.So,nowisagoodtimetoensure

yourSAFEANDCONVENIENTpreciousmetals

ownership.

BuyandStoreGoldOffshoreOrAt

Home?

Akeyissuethatstillneedstobeaddressedis

whetheraninvestorshouldbuygoldoffshoreor

athome.Theanswerwillnotbethesamefor

everyone.

Dependingonyourspecificobjectivesand

situation,youmaybebetteroffkeepingyour

assetsinyourhomecountryandstoringphysical

goldinyourlocalbanksdepositbox.Youmight,however,bewelladvisedtobuyandstorephysical

goldoffshore.Or,maybe,youshouldconsidera

mixofboth.

BenefitsandDrawbackstoBuyingGoldAt

Home

Obviously,thisis(abit)moreconvenient,simply

forthefactthatyouarenotdealingwithtimeand

languagedifferences.Furthermore,youcanhave

thegolddeliveredtoyourhomeordirectlytothe

localbankorstoragefacilityofyourchoicewith

moredirectcontroloveryourassets.

However,akeyissuearisesandthisappliesto

U.S.investorsinparticularinregardstotheriskofgovernmentconfiscationwhenbuyingand

storinggoldathome!

Howmightagoldconfiscationbepossible70

yearsafterthelastoneoccurred?Thisquestionis

bestansweredwithaseriesofotherquestions:

Firstly,howwillthemassiveU.S.federaldebt

(nearly$6trillionandgrowing)andtheoutstanding

internationaldollarfloat(resultingfromtheU.S.

tradeandbudgetdeficits)bereconciled?

Currently,theU.S.dollar(still)enjoysaspecial

statusaroundtheworldastheprimaryreserve

currency.Thisstatusencouragescentralbanksand

individualinvestorsaroundtheworldtoholdit.

Leavingthevariouscircumstancesandpotential

scenariosaside,whatwouldbetheoutcomeifthe

stiltsthatproppeditupwerekickedoutfrom

underneaththisbuilt-indollarmarket?

HowmighttheU.S.governmentreacttoan

economicemergencyinwhichindividuals,beset

byeitheradevastatingdomesticinflationora

deflationarynightmareorbothwerefleeing

thebanksandequitymarketsforgoldasameans

ofpreservingtheirpersonalcapital?

Historically,confiscationhasalltoooftenbeenthe

optiontakenbygovernmentsbesetbyan

economicbreakdown.Justasgoldistheassetof

lastresortfortheindividualportfoliodoingservice

inthemostfinanciallythreateningtimes,itisoftentimestheassetoflastresortfortroubled

governmentsaswell.Asrecentlyas1998,during

theAsianContagion,bothSouthKoreaand

Thailandimplementedvoluntarygoldcall-ins.

Thetemptationpresentedbyitscitizensgold

holdingswassimplytoofaciletoresist.

Nomatterhowyoulookatit,investorsmust

bewareofgovernmentconfiscationrisksthatrise

exponentiallyintimesofasevereeconomiccrisis


12/12

12 HOW TO INVEST IN GOLD THE RIGHT WAY

(asseenunderU.S.PresidentFranklinD.Roosevelt

in1933).

WhyBuyGoldOffshore?

Theadvantagesofbuyingandstoringgoldoffshore

areprimarilyrelatedtoFINANCIALPRIVACYand

ASSETPROTECTION.However,whatisrequiredtoreapthesebenefitsisastructurethatallowsyouto

re-allocateyourpreciousmetalsrapidlyandstore

themsafely.Ideally,thisisdoneinanefficientand

low-costmodedespiteanygeographicdistance

issues.

Somereadersmaypreferbuyingandstoring

physicalgoldoveravirtualgoldaccountor

certificate.Theyperceiveahigherdegreeofsafety

inthisstrategybecauseofthefactthattheyare

allocatedaspecificandtangiblelotofgold.

However,storingphysicalgoldisobviouslymore

costly.And,itisgenerallylessliquidthanits

virtualsisters.

Despitepotentiallyhigherholdingfeesandless

liquidity,intodaysenvironment,weultimately

recommendholdingphysicallyallocatedprecious

metals,preferablyinbullioncoinorbarformat.

ThisreportisbasedonanarticlethatoriginallyappearedinTheQWealthReport,aprivately-publishedquarterlynewsletter,foundedin1996,coveringfinancialfreedom,wealthcreationandpreservation,and

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