Saturday, October 26, 2013 8:02:29 AM
How To Own Physical Gold in Singapore - A Low Cost Strategy
Oct. 23, 2013
By Nick Giambruno
International Man
The ultimate way to diversify your savings internationally is to transfer your stored purchasing power out of the immediate reach of your home government and into something tangible. Something that cannot be easily confiscated, nationalized, frozen, or devalued at the drop of a hat or with a couple of taps on the keyboard—while retaining as much privacy as legally possible.
The two assets that fit the bill here are physical gold stored abroad in a private vault (or safe deposit box) and foreign real estate—neither of which are currently reportable to the US government so long as they are held in your name and not with an LLC, trust, or other structure.
Although I believe owning foreign real estate offers excellent internationalization benefits (see more here), it can be an expensive option.
Fortunately owning physical gold stored in a private vault that is outside of the banking system and located in a safe jurisdiction (such as Singapore) is a low cost solution that is within reach for people of modest means.
Taking this critical step to owning something tangible outside of your home country will go a long way in diversifying the political risk to your savings. You will have preempted capital controls, confiscation, nationalization, or any other dirty tricks your desperate home government may have up its sleeve.
When you are dealing with a desperate government, it is always better to be proactive than reactive.
It's like the saying from an old Quentin Tarantino movie, "It's better to have a gun and not need it than to need a gun and not have it."
There are a couple of steps to converting your savings stored in a domestic financial account—denominated in an intangible fiat currency abstraction that exists only as digits inside a bank's computer—into physical gold bullion held in a private vault in Singapore, that you can go visit and hold in your own hand.
Step #1: Get Set Up
The first step in the process is to open an account with the Hard Assets Alliance (HAA), which is a very convenient platform for buying, selling, and storing precious metals at various locations around the world.
Casey Research is one of the founding members of HAA and counts it as one of our highly-coveted top picks for precious metals.
It is true that HAA is a US institution and thus susceptible to the edicts of the US government. This should not cause significant concern since HAA is not the final destination of your savings. Rather, HAA acts as a bridge to Singapore, an intermediate step in transforming your domestic savings into physical gold held in a private vault in Singapore.
As you will see below, the ultimate destination of your savings is, however, completely disconnected from the US.
Also, since your HAA account is a US account, you don't have to worry about reporting it to the US government as you would if it were a foreign institution—even if your HAA account itself holds gold offshore.
Recently, we had a chance to directly question the managers at HAA from our top reader questions. You can catch that video here. I’d highly recommend that you view it in case you are unfamiliar with HAA or have some questions about it.
Step #2: Accumulate
The next step is to start accumulating gold (or silver) in a foreign country through your HAA account, which allows you to own gold in Singapore, Switzerland, Australia, the UK, and the US.
Let's continue with Singapore as our example. HAA uses Malca Amit as its vaulting partner in Singapore.
A handy way to build your precious metals position in Singapore is through HAA's MetalStream program. This program allows you to automatically buy a little bit each month (minimum $250) and is a great low-cost tool to build up a precious metals position stored in a safe jurisdiction. Also, it helps average the cost of your position as it builds over time.
Once you've accumulated the equivalent of one ounce of gold (or 100 ounces of silver) you can convert it into a whole bar that sits in storage solely on your behalf. At this point you are able to take delivery of the physical bullion.
Another benefit of HAA that is worth mentioning is its competitive premiums. A colleague of mine was recently in Singapore and reports spot premiums there for one ounce gold coins to be roughly 5.5% to 7.6%, depending on the coin or bar. Compared to the premium that HAA offers for bullion in Singapore (you can check the latest figures here), it's clear that HAA is a good deal.
The reason for this discrepancy is that HAA has direct access to refiners, bullion banks, and institutional level dealers, which helps drive its relatively lower global premiums. Your order is bid out to this pool of institutions that then compete for the business, ensuring the best available price.
Step #3: Take Delivery
The next step in the process is to take delivery abroad of the bullion that you have accumulated with your HAA account.
A key benefit of using the Hard Assets Alliance to accumulate and store gold abroad—before you totally disconnect it from the US—is that you are relieved of the major burden of having to transport it yourself.
Personally transporting more than a couple ounces of gold bullion across international borders can be very risky, and I strongly advise against it. It is simply a very bad idea, and you are asking for trouble if you attempt it.
In addition to the risks of uninsured losses from theft and misplacement, the biggest risk that you will face comes from the armed fellows wearing the government-issued costumes. Each country has different, often complex, and ill-defined regulations on importing/exporting gold bullion. It is very possible that customs agents in whatever country you are travelling through will not fully understand the regulations and may decide to confiscate your metals and let the courts sort it out… if you are lucky.
In extreme cases, they might even detain you—simply for carrying gold, as what happened to an American on his way from the US to Panama via Mexico. (Read that story here.)
If you have built up a position in Singapore through HAA, you don't have to worry about transportation, insurance, import duties, declarations, confusing regulations, the TSA, or a customs officer who has probably never seen a gold coin in his life, much less understands the regulations surrounding it.
However in order to take delivery of your gold that has been built up in storage in Singapore, you actually have to go to Singapore, sign for it, and make arrangements in advance with HAA to verify your identity.
As a side note, for those interested in purchasing a significant amount of bullion (over $200,000), HAA can make special arrangements on an individual basis to facilitate delivery to a private vault in Singapore without you having to actually be there.
Step #4: Move to a Private Vaulting Facility
The final step is to take the physical gold bullion that you have taken delivery from your HAA account and store it in a private vault abroad.
Once you have completed this step you will have completely disconnected your physical gold from any connections to the US. And as long as you are not using an LLC, trust, or other structure, the gold you directly hold in a private vault abroad is not reportable to the US government.
At International Man and Casey Research, we have done due diligence and on-the-ground research on a number of private vaults and storage facilities around the world. We outline our preferred jurisdictions (Singapore is one of them, of course) and private vaulting companies here.
Speaking of our preferred solution in Singapore, their smallest safe deposit box (which will hold about 128 one ounce gold coins) will set you back only around $80/year. Plus you have the option to prepay in cash for multiple years in advance.
Be Proactive, Not Reactive
I believe physical gold stored abroad is a superior form of savings.
It sure beats the alternative of keeping it within the grasp of a desperate government, inside an unsound banking system, and denominated in a fiat currency whose value is ultimately a floating abstraction tied to a bankrupt government's promise.
Following these four steps—and using the Hard Assets Alliance as a bridge to the final offshore destination—is a low-cost strategy to internationalize your savings that most people should be able to implement if they really want to.
Achieving the diversification benefits of this strategy goes a long way to protecting yourself from capital controls, confiscation, nationalization, seizures, currency devaluations, and any type of shenanigan a desperate government might try to pull.
(This is not intended, nor should it be construed, as tax reporting advice. Please consult a tax specialist or accountant.)
http://www.internationalman.com/78-global-perspectives/1028-how-to-own-physical-gold-in-singapore%E2%80%94a-low-cost-strategy#
Oct. 23, 2013
By Nick Giambruno
International Man
The ultimate way to diversify your savings internationally is to transfer your stored purchasing power out of the immediate reach of your home government and into something tangible. Something that cannot be easily confiscated, nationalized, frozen, or devalued at the drop of a hat or with a couple of taps on the keyboard—while retaining as much privacy as legally possible.
The two assets that fit the bill here are physical gold stored abroad in a private vault (or safe deposit box) and foreign real estate—neither of which are currently reportable to the US government so long as they are held in your name and not with an LLC, trust, or other structure.
Although I believe owning foreign real estate offers excellent internationalization benefits (see more here), it can be an expensive option.
Fortunately owning physical gold stored in a private vault that is outside of the banking system and located in a safe jurisdiction (such as Singapore) is a low cost solution that is within reach for people of modest means.
Taking this critical step to owning something tangible outside of your home country will go a long way in diversifying the political risk to your savings. You will have preempted capital controls, confiscation, nationalization, or any other dirty tricks your desperate home government may have up its sleeve.
When you are dealing with a desperate government, it is always better to be proactive than reactive.
It's like the saying from an old Quentin Tarantino movie, "It's better to have a gun and not need it than to need a gun and not have it."
There are a couple of steps to converting your savings stored in a domestic financial account—denominated in an intangible fiat currency abstraction that exists only as digits inside a bank's computer—into physical gold bullion held in a private vault in Singapore, that you can go visit and hold in your own hand.
Step #1: Get Set Up
The first step in the process is to open an account with the Hard Assets Alliance (HAA), which is a very convenient platform for buying, selling, and storing precious metals at various locations around the world.
Casey Research is one of the founding members of HAA and counts it as one of our highly-coveted top picks for precious metals.
It is true that HAA is a US institution and thus susceptible to the edicts of the US government. This should not cause significant concern since HAA is not the final destination of your savings. Rather, HAA acts as a bridge to Singapore, an intermediate step in transforming your domestic savings into physical gold held in a private vault in Singapore.
As you will see below, the ultimate destination of your savings is, however, completely disconnected from the US.
Also, since your HAA account is a US account, you don't have to worry about reporting it to the US government as you would if it were a foreign institution—even if your HAA account itself holds gold offshore.
Recently, we had a chance to directly question the managers at HAA from our top reader questions. You can catch that video here. I’d highly recommend that you view it in case you are unfamiliar with HAA or have some questions about it.
Step #2: Accumulate
The next step is to start accumulating gold (or silver) in a foreign country through your HAA account, which allows you to own gold in Singapore, Switzerland, Australia, the UK, and the US.
Let's continue with Singapore as our example. HAA uses Malca Amit as its vaulting partner in Singapore.
A handy way to build your precious metals position in Singapore is through HAA's MetalStream program. This program allows you to automatically buy a little bit each month (minimum $250) and is a great low-cost tool to build up a precious metals position stored in a safe jurisdiction. Also, it helps average the cost of your position as it builds over time.
Once you've accumulated the equivalent of one ounce of gold (or 100 ounces of silver) you can convert it into a whole bar that sits in storage solely on your behalf. At this point you are able to take delivery of the physical bullion.
Another benefit of HAA that is worth mentioning is its competitive premiums. A colleague of mine was recently in Singapore and reports spot premiums there for one ounce gold coins to be roughly 5.5% to 7.6%, depending on the coin or bar. Compared to the premium that HAA offers for bullion in Singapore (you can check the latest figures here), it's clear that HAA is a good deal.
The reason for this discrepancy is that HAA has direct access to refiners, bullion banks, and institutional level dealers, which helps drive its relatively lower global premiums. Your order is bid out to this pool of institutions that then compete for the business, ensuring the best available price.
Step #3: Take Delivery
The next step in the process is to take delivery abroad of the bullion that you have accumulated with your HAA account.
A key benefit of using the Hard Assets Alliance to accumulate and store gold abroad—before you totally disconnect it from the US—is that you are relieved of the major burden of having to transport it yourself.
Personally transporting more than a couple ounces of gold bullion across international borders can be very risky, and I strongly advise against it. It is simply a very bad idea, and you are asking for trouble if you attempt it.
In addition to the risks of uninsured losses from theft and misplacement, the biggest risk that you will face comes from the armed fellows wearing the government-issued costumes. Each country has different, often complex, and ill-defined regulations on importing/exporting gold bullion. It is very possible that customs agents in whatever country you are travelling through will not fully understand the regulations and may decide to confiscate your metals and let the courts sort it out… if you are lucky.
In extreme cases, they might even detain you—simply for carrying gold, as what happened to an American on his way from the US to Panama via Mexico. (Read that story here.)
If you have built up a position in Singapore through HAA, you don't have to worry about transportation, insurance, import duties, declarations, confusing regulations, the TSA, or a customs officer who has probably never seen a gold coin in his life, much less understands the regulations surrounding it.
However in order to take delivery of your gold that has been built up in storage in Singapore, you actually have to go to Singapore, sign for it, and make arrangements in advance with HAA to verify your identity.
As a side note, for those interested in purchasing a significant amount of bullion (over $200,000), HAA can make special arrangements on an individual basis to facilitate delivery to a private vault in Singapore without you having to actually be there.
Step #4: Move to a Private Vaulting Facility
The final step is to take the physical gold bullion that you have taken delivery from your HAA account and store it in a private vault abroad.
Once you have completed this step you will have completely disconnected your physical gold from any connections to the US. And as long as you are not using an LLC, trust, or other structure, the gold you directly hold in a private vault abroad is not reportable to the US government.
At International Man and Casey Research, we have done due diligence and on-the-ground research on a number of private vaults and storage facilities around the world. We outline our preferred jurisdictions (Singapore is one of them, of course) and private vaulting companies here.
Speaking of our preferred solution in Singapore, their smallest safe deposit box (which will hold about 128 one ounce gold coins) will set you back only around $80/year. Plus you have the option to prepay in cash for multiple years in advance.
Be Proactive, Not Reactive
I believe physical gold stored abroad is a superior form of savings.
It sure beats the alternative of keeping it within the grasp of a desperate government, inside an unsound banking system, and denominated in a fiat currency whose value is ultimately a floating abstraction tied to a bankrupt government's promise.
Following these four steps—and using the Hard Assets Alliance as a bridge to the final offshore destination—is a low-cost strategy to internationalize your savings that most people should be able to implement if they really want to.
Achieving the diversification benefits of this strategy goes a long way to protecting yourself from capital controls, confiscation, nationalization, seizures, currency devaluations, and any type of shenanigan a desperate government might try to pull.
(This is not intended, nor should it be construed, as tax reporting advice. Please consult a tax specialist or accountant.)
http://www.internationalman.com/78-global-perspectives/1028-how-to-own-physical-gold-in-singapore%E2%80%94a-low-cost-strategy#
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