Several decades ago investors were buying silver and gold from Bullion Reserve of North America. They were allowing the company to store the metal for them in “secure vaults”. It was later revealed that Bullion Reserve of North America was a front organization for the Mafia. Rather than buying precious metals with the money investors were sending them, they were simply embezzling the money. Approximately 30,000 investors lost a total of ~$60,000,000 in this scam. Very little of it was ever recovered.
Large multi-national banks practice “fractional reserve banking” when it comes to precious metals purchase and storage for their customers. They buy a fraction of the metal that their customers thought was being purchased for them. The remaining customer capital is invested to earn interest. The banks are betting that their customers will not all ask for delivery of their metal at once. Most of these banks disclose this fractional reserve practice in the fine print of their prospectus. But, who reads that? If there is ever a run on these precious metals inventories the banks will be scrambling to cover their short positions. At least one of these banks was actually charging storage fees on metal it had not even purchased and had to pay large fines.
It is a sad fact that stories like these proliferate in the precious metals market. You must not only be careful of who you buy precious metals from, but also be careful how you store it. It is often recommended that you take delivery of your metals and not allow someone to store them for you. Either way there is risk of theft. Having someone else store your metal for you will also cause you to incur fees.
If you want to store your metal somewhere other than your home then consider a private storage facility rather than a bank vault. Did you know the Homeland Security Agency can invade your safety deposit box in times of national emergency and steal your metals? Be sure you can get to your metal faster than they can lock up your wealth.
Private allocated storage facilities are another possible way to go. Check out this one in Canada: http://www.kitco.com/cas/faq.html
Home storage is another alternative. Some buy a safe, others build a false wall, some hide it under a lose floor board or in the attic, and some bury it in the back yard (in the right kind of container). Realize if you plan to bury your silver that some kinds of plastic will react to the silver.
Whether you choose a bank, your back yard, or you safe, never talk with anyone about your wealth. Stealth wealth is your best protection. The world is full of thieves today. There are over 8,000 home invasions daily in North America. In this day and age one should not only consider installing a home security system, and buying a dog, but having bars on the windows and firearms at the ready.
christew.myamericangoldreserve.com Investing in stocks and precious metals is risky and could result in losing money. I am offering ideas for your consideration and education. I am not offering financial advice. Please do your own due diligence. I am not an investment adviser. Precious metals is not for everyone. I sell precious metals through American Gold Reserve. You should do your own due diligence when making investment decisions of any kind. You should consult your own financial advisers before making any investment decision. I make no guarantees that by following any advice or suggestion I might make that you will realize any return. Beware, all commodity markets and other markets carry risk of loss.