October 23, 2008
Re: Response from the CME Group
Ladies and Gentlemen:
We have received an outpouring of support and interest from the recent letter I sent the CME and the CFTC. Before I get into their response, I would like to mention that many investors, individuals, and institutions are perplexed by the unusually tight (in some cases non-existent) supply of investable/deliverable silver in the world. I find it unusual that silver remains labeled an industrial metal when in fact it has become so scarce for investors.
The reasons for owning gold and silver have been well published by many individuals. What I am more concerned with is the inability to invest in an asset class in which there is currently very little availability. Unlike any other conventional market, gold and silver, seem to be getting harder to find as the paper price drops further.
I am worried about the confidence and perception of the paper metal markets. With the physical supply shortage being real and physical demand being so strong, the concern is that individuals and institutions may start to test the exchange’s credibility through outright demand of their inventory. Unlike the government’s bailout programs for many paper instruments, I do not see that type of shared support for the commodities market, especially precious metals.
Trust is a very fragile commodity, itself. Once broken, it may never be restored. That is the risk the paper metal markets are telling me at this point. Unless there is underlying or fundamental reasons beyond margin calls for the drop in paper prices, my intuition is telling me that something is very wrong. Is someone or some entity building a large position in the precious metals? If that is the case, then you may be concerned about the ability to get physical metal in the future. That is why I wrote the letter to the CFTC and CME Group.
Again, the risks are real and individuals must understand the true difference between the physical and paper world. The paper is only as good as what backs it. In this period of history it is evident many investors are now asking “who can I really trust”. It is that mentality that places a premium on the physical metal versus a paper certificate. As this credit crisis unfolds and the bailouts continue, it is only logical that many exchanges will be tested. As a concerned investor, the last thing I want is to be holding a paper promise that may not be fulfilled.
I would like to thank the CME Group for their quick response. In full disclosure, this was their actual reply to me. I am still waiting to hear from the CFTC.
Bob:
Thank you for your October 17, 2008 email where you inquired:
- "...I would like to buy and take physical delivery of 1 to 5 million ounces
of silver a month on a consistent basis...."
The monthly volume (200/1000 contracts) which you would wish to take delivery is currently within the Exchanges Silver “Expiration Month Limit” and thereby acceptable to the Exchange.
-“… Would there be any obstacles or resistence from either the CME Group/COMEX or the CFTC…”
I can only reply for the CME Group and not the CFTC.
As long as any customer follows the Exchange Rules, there would not be a problem.
Vice President
Market Surveillance
CME GROUP
It is obvious that the rules can change at any moment and this is a concern to many individuals. For now, I would strongly suggest if you were thinking about owning silver, the COMEX is certainly the most cost efficient method of procuring the metal. Please keep in mind that transportation and storage of these bars may involve a cost. These costs have to be weighed in your decision making. We can provide an effective and efficient alternative for those who are not interested in dealing with these issues yet want to participate in the precious metals.
Our programs are determined to follow the rules of the exchange and take physical delivery of their inventory for as long as possible. The structure of our programs and vaulting facilities are very unique and have been designed to fully insure and segregate all physical precious metals. The storage is independent from the financial and bullion dealer system. We specialize in providing private storing, safeguarding, and viewing of your assets. We have made arrangements with armored transportation carriers to pick up, transport, and store the metal to many of our available vaults. Please go to http://profitspluscapital.blogspot.com/ for more information.
For individuals, investment professionals, or institutions who are concerned about the unusual nature between paper and physical gold and silver prices and wish to create a more balanced environment that reflects the true supply and demand imbalances in the market place, please contact me at 208-468-3600 or email me at profitsplus@cableone.net.
Bob Coleman
Managing Member, Profits Plus Capital Management, LLC
Friday, October 24, 2008
Friday, October 17, 2008
Taking delivery of 1 to 5 million ounces a month
October 16, 2008
To Mr. Chilton, Commissioner, CFTC and Ms. Troyke, Director and Associate General Counsel, Market Regulation, CME Group:
In full and proper disclosure, I would like to ask the CME/COMEX and CFTC the following question regarding monthly delivery of silver.
I manage a physical gold and silver bullion fund. In order to stay within the “Model State Commodity Code” of many states, an exempt transaction by the purchaser (in this case the Dollars and Sense Growth Fund) must abide by the following code:
A commodity contract for the purchase of one or more precious metals which requires, and under which the purchaser receives, within seven to twenty-eight calendar days (varies depending on the state) from the payment in good funds of any portion of the purchase price, physical delivery of the quantity of the precious metals purchased by such payment, provided that, for purposes of this paragraph, physical delivery shall be deemed to have occurred if, within such 7 to 28 day period (varies depending on the state), such quantity of precious metals purchased by such payment is delivered whether in specifically segregated or fungible bulk form.
In this environment, it has become very difficult and expensive to buy physical silver from the physical dealer market. The difference in paper prices on the Comex and the physical dealer market have widened considerably. In addition, the overwhelming demand for silver has created delivery time delays of up to 4 months. These delivery delays create a direct violation with many Model State Commodity Codes.
My research has led me to the conclusion that it is much more effective and cost efficient to buy silver directly from the COMEX and take full delivery. The spot prices are much cheaper than the dealer market and the CFTC along with the CME/Comex have stated in reports there are ample supplies of silver available for delivery with no market inhibitions. For an individual or institution wanting to accumulate a position, these are ideal market conditions.
The question I have is this:
I would like to buy and take physical delivery of 1 to 5 million ounces of silver a month on a consistent basis. I am not interested in holding warehouse receipts but taking actual physical delivery from your approved depositories/warehouses. Would there be any obstacles or resistence from either the CME Group/COMEX or the CFTC when I begin to implement or during the ongoing process of this strategy?
I look forward to your reply.
Bob Coleman
profitsplus@cableone.net
To Mr. Chilton, Commissioner, CFTC and Ms. Troyke, Director and Associate General Counsel, Market Regulation, CME Group:
In full and proper disclosure, I would like to ask the CME/COMEX and CFTC the following question regarding monthly delivery of silver.
I manage a physical gold and silver bullion fund. In order to stay within the “Model State Commodity Code” of many states, an exempt transaction by the purchaser (in this case the Dollars and Sense Growth Fund) must abide by the following code:
A commodity contract for the purchase of one or more precious metals which requires, and under which the purchaser receives, within seven to twenty-eight calendar days (varies depending on the state) from the payment in good funds of any portion of the purchase price, physical delivery of the quantity of the precious metals purchased by such payment, provided that, for purposes of this paragraph, physical delivery shall be deemed to have occurred if, within such 7 to 28 day period (varies depending on the state), such quantity of precious metals purchased by such payment is delivered whether in specifically segregated or fungible bulk form.
In this environment, it has become very difficult and expensive to buy physical silver from the physical dealer market. The difference in paper prices on the Comex and the physical dealer market have widened considerably. In addition, the overwhelming demand for silver has created delivery time delays of up to 4 months. These delivery delays create a direct violation with many Model State Commodity Codes.
My research has led me to the conclusion that it is much more effective and cost efficient to buy silver directly from the COMEX and take full delivery. The spot prices are much cheaper than the dealer market and the CFTC along with the CME/Comex have stated in reports there are ample supplies of silver available for delivery with no market inhibitions. For an individual or institution wanting to accumulate a position, these are ideal market conditions.
The question I have is this:
I would like to buy and take physical delivery of 1 to 5 million ounces of silver a month on a consistent basis. I am not interested in holding warehouse receipts but taking actual physical delivery from your approved depositories/warehouses. Would there be any obstacles or resistence from either the CME Group/COMEX or the CFTC when I begin to implement or during the ongoing process of this strategy?
I look forward to your reply.
Bob Coleman
profitsplus@cableone.net
Wednesday, July 2, 2008
Precious Metal Storage and Safekeeping Program
Precious Metal Storage and Safekeeping Program
Through Idaho Armored Services
It is my pleasure to introduce you to a very unique storage and safekeeping program exclusively offered through Idaho Armored Services.
Background
Protecting client’s purchasing power in this unique economic climate demands a criterion that is dynamic and forward thinking.
Idaho Armored Services in combination with Profits Plus Capital Management, LLC created the most competitive and comprehensive gold and silver storage program in North America.
Bob Coleman, has been in the investment and portfolio management business for 15 years. During the last 3 years he spent a lot of time talking with experts all over the world regarding inflation and the uncertain economic climate. Obviously, his studies took him to gold and silver. What were not obvious were the methods in which individuals could safely invest and be protected from inflation and the financial system while owning physical precious metals. Although, there are many gold and silver programs in the world, none provided all the characteristics that Bob was looking for.
Idaho Armored’s program was designed around many important issues that investors may have to face. A few factors investors must consider and plan for when owning physical precious metals are:
Elevated inflation
Danger to the financial system
Confiscation
Geo-political or economic event
Protection and insurance
Accessibility
Capital and exchange controls
Idaho Armored Services has planned for these risks and has created a program to protect the client’s interest first.
When owning physical metal the biggest concern is security for the asset. This has detracted many investors from owning the physical gold and silver. Paper gold and silver programs are certainly convenient but in most instances you are investing in the price of the metal not the actual metal.
If you if currently are involved with or looking at these programs, ask yourself the following questions.
Does the bullion vault lease or actually own the gold and silver they say they have?
How fast can companies turn large bars of gold into deliverable ounces?
Unfortunately, when considering these programs most investors do not think about delivery and accessibility of the physical metal. Most programs are betting that you will never take delivery. Therefore these gold and silver program's business plans are not designed for mobility or flexibility. In my opinion, the perfect gold and silver storage program would have the following characteristics:
Clients invest in deliverable form of physical gold and silver bullion.
Have the precious metal stored in an armored and insured vault.
Have the custodian independent from the financial system.
Have arrangements whereby the program has the availability to store metal in other countries.
Offer accessibility to the metal and have prearranged options for delivery if client wants the metal in hand.
Well, there is one program that incorporates all these ideals.
Idaho Armored Services provides flexible storage arrangements, reporting, transportation, and delivery of the metal. Storing large physical quantities of gold and silver outside the financial system is their specialty.
Why is Idaho Armored Services storage program unique?
Not only does Idaho Armored Services have a centralized location, they have created a network of private vaults to store gold and silver anywhere in North America. These relationships include some of the largest security firms in the world. In other words, for the certain investor needing a more localized approach, they can have the physical metal stored in a closer proximity to their location. There are no depositories that can offer this level of service. In addition, Idaho Armored can diversify holdings of gold and silver among regions or countries throughout the world.
Idaho Armored’s management is well diverse and experienced in the security business. As a fully insured armored vault and transportation company, their approach is simple. They will provide a level of service that exceeds the client’s expectations. Whether your needs are transportation of precious metals or private vaulting services, Idaho Armored can design a program that is tailored to your specific needs.
Fees for this premium storage service will be competitive with any major vault service throughout the world. Storage fees for gold and silver may be as low as 55 basis points (of the market value of the metal) depending on quantity and size of bars or coins.
You get what you pay for. Please distinguish all variables when selecting a program. Ask yourself, “Why are you really buying gold and silver?” Ultimately, gold and silver are owned to protect your interests not others. Choose the program that best fits your long-term goals and objectives.
If you have any questions, please email me at idahoarmored@cableone.net or call Bob Coleman at 208-468-3600. References, custody agreement, and certificate of insurance are available upon request.
Through Idaho Armored Services
It is my pleasure to introduce you to a very unique storage and safekeeping program exclusively offered through Idaho Armored Services.
Background
Protecting client’s purchasing power in this unique economic climate demands a criterion that is dynamic and forward thinking.
Idaho Armored Services in combination with Profits Plus Capital Management, LLC created the most competitive and comprehensive gold and silver storage program in North America.
Bob Coleman, has been in the investment and portfolio management business for 15 years. During the last 3 years he spent a lot of time talking with experts all over the world regarding inflation and the uncertain economic climate. Obviously, his studies took him to gold and silver. What were not obvious were the methods in which individuals could safely invest and be protected from inflation and the financial system while owning physical precious metals. Although, there are many gold and silver programs in the world, none provided all the characteristics that Bob was looking for.
Idaho Armored’s program was designed around many important issues that investors may have to face. A few factors investors must consider and plan for when owning physical precious metals are:
Elevated inflation
Danger to the financial system
Confiscation
Geo-political or economic event
Protection and insurance
Accessibility
Capital and exchange controls
Idaho Armored Services has planned for these risks and has created a program to protect the client’s interest first.
When owning physical metal the biggest concern is security for the asset. This has detracted many investors from owning the physical gold and silver. Paper gold and silver programs are certainly convenient but in most instances you are investing in the price of the metal not the actual metal.
If you if currently are involved with or looking at these programs, ask yourself the following questions.
Does the bullion vault lease or actually own the gold and silver they say they have?
How fast can companies turn large bars of gold into deliverable ounces?
Unfortunately, when considering these programs most investors do not think about delivery and accessibility of the physical metal. Most programs are betting that you will never take delivery. Therefore these gold and silver program's business plans are not designed for mobility or flexibility. In my opinion, the perfect gold and silver storage program would have the following characteristics:
Clients invest in deliverable form of physical gold and silver bullion.
Have the precious metal stored in an armored and insured vault.
Have the custodian independent from the financial system.
Have arrangements whereby the program has the availability to store metal in other countries.
Offer accessibility to the metal and have prearranged options for delivery if client wants the metal in hand.
Well, there is one program that incorporates all these ideals.
Idaho Armored Services provides flexible storage arrangements, reporting, transportation, and delivery of the metal. Storing large physical quantities of gold and silver outside the financial system is their specialty.
Why is Idaho Armored Services storage program unique?
Not only does Idaho Armored Services have a centralized location, they have created a network of private vaults to store gold and silver anywhere in North America. These relationships include some of the largest security firms in the world. In other words, for the certain investor needing a more localized approach, they can have the physical metal stored in a closer proximity to their location. There are no depositories that can offer this level of service. In addition, Idaho Armored can diversify holdings of gold and silver among regions or countries throughout the world.
Idaho Armored’s management is well diverse and experienced in the security business. As a fully insured armored vault and transportation company, their approach is simple. They will provide a level of service that exceeds the client’s expectations. Whether your needs are transportation of precious metals or private vaulting services, Idaho Armored can design a program that is tailored to your specific needs.
Fees for this premium storage service will be competitive with any major vault service throughout the world. Storage fees for gold and silver may be as low as 55 basis points (of the market value of the metal) depending on quantity and size of bars or coins.
You get what you pay for. Please distinguish all variables when selecting a program. Ask yourself, “Why are you really buying gold and silver?” Ultimately, gold and silver are owned to protect your interests not others. Choose the program that best fits your long-term goals and objectives.
If you have any questions, please email me at idahoarmored@cableone.net or call Bob Coleman at 208-468-3600. References, custody agreement, and certificate of insurance are available upon request.
Wednesday, February 6, 2008
Credit System Is Broke?
I want to provide yet another example of why physical metal is so important. Mining shares is not the same as owning physical metal. The following will illustrate why you can not blindly trust the system with your financial life. I hope everyone who reads this understands there are serious risks facing the markets today. Please protect yourself and if you own physical gold and silver, think very carefully where you store it.
Look at the non-borrowed reserve column. This represents the depository
institution's assets on their books. The current release shows the
number going negative this past week.
http://www.federalreserve.gov/releases/h3/current/
This has never happened in the 50
years of data (see the historical data link below).
http://www.federalreserve.gov/releases/h3/hist/h3hist1.pdf
The strain in the system and the volatility in the markets represent great stress. In short, these reports show the over-leverage and over-extended financial positions in the banking system.
This report is a great example of why individuals need to own physical metal in order to protect their wealth. I have a great solution to securing and protecting your wealth through physical ownership of gold and silver. Please see my previous articles for more information.
Please feel free to contact me if you have any questions.
Bob Coleman
Look at the non-borrowed reserve column. This represents the depository
institution's assets on their books. The current release shows the
number going negative this past week.
http://www.federalreserve.gov/releases/h3/current/
This has never happened in the 50
years of data (see the historical data link below).
http://www.federalreserve.gov/releases/h3/hist/h3hist1.pdf
The strain in the system and the volatility in the markets represent great stress. In short, these reports show the over-leverage and over-extended financial positions in the banking system.
This report is a great example of why individuals need to own physical metal in order to protect their wealth. I have a great solution to securing and protecting your wealth through physical ownership of gold and silver. Please see my previous articles for more information.
Please feel free to contact me if you have any questions.
Bob Coleman
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