One of the primary reasons why investors like us purchase physical precious metals aside from inflation protection is our family legacy's financial privacy.
The right to financial privacy is something that no American should take for granted. The advantage of holding assets that aren't subject to excessive fees, non-owner access, surveillance, digitization, and potential confiscation is invaluable.
Cash stored at a bank is subject to all of the above from either the bank itself or the government.
In contrast, non-CUSIP gold and silver coins or bars stored at a private depository are 100% private and accessible only to the owners, beneficiaries, or permitted parties.
Well, that’s about to change.
Soon, the right to privacy may be “indirectly” revoked by the government through a sleight-of-hand maneuver that most precious metals investors may not even be aware of.
Depending on where you bought your precious metals, your personal data about your metals holdings may be recorded and subject to review by the government.
This is NOT a conspiracy theory. This is the hand of the government intervening in private business. It’s also 100% legal. Here’s how it happened and how it might affect your precious metals transactions in the future.
A Monopoly is Forming As Top US Super Dealers Merge
Monopolies are generally unfavorable as they’re anti-competitive. But this monopoly is not one concerning vendors; instead, it concerns information-gathering. How so? Let’s start from the beginning.
In 2019, at the beginning of the pandemic-precious metals scramble, Provident Metals was acquired by the premiere online dealer JM Bullion.
Last week, on February 9, A-Mark Precious Metals Inc. purchased JM Bullion for close to $180m, and here’s where the problems start.
These government contractors are called “Authorized Purchasers” or APs. A-Mark is one of them. So, what’s the big deal?
In order to become an AP, you are required to follow certain procedures. One of them, on page 7 of the application, requests the following:
"Applying firms are requested to label “proprietary/confidential” on each page of the documentation submitted, which contains proprietary and/or confidential information that should not be made available for public release. Upon receipt, all documents will become the property of the U.S. government and will not be returned."
APs Help the Government Track Its Citizens’ Private Gold and Silver Holdings
So if you bought precious metals from any of the online mega dealers like Apmex, Provident, or JM Bullion, all of your private transaction information is now in the hands of the government.
These government contractors are tough to avoid if you are in the market for gold and silver. Their sites gather your search data directly through Google's "Tag Manager," next, they feed your browsing history into Programmatic Display Marketing software to tantalize you to buy their products weeks after your visit. They spend millions of dollars per week and cut margins to the bone to ensure you buy from their government-linked organization.
If part of your objective as a precious metals investor was to avoid digitization or exercise your right to financial privacy, your privacy might have been abolished if your dealer’s transactional records are under the ownership of an AP.
Take JM Bullion. The number of new users and data from their 2020 sales records are astonishing;
- Net sales of $1.49 billion;
- 1.3 million total users (up approximately 30% year-over-year), of which more than 300,000 purchased products during the year (up approximately 70% year-over-year);
- Processed 794,000 orders (up approximately 80% year-over-year); and
- Sold more than 21 million ounces of silver (up approximately 120% year-over-year) and more than 500,000 ounces of gold (up approximately 170% year-over-year).
The fact that this data with client users--buyers and sellers--will now be in the hands of the government is nothing short of a major infringement on privacy and a disruption of many investors’ objectives to maintain the privacy of their holdings.
Fortunately, there are a few dealers that are not subject to the government’s overreach of client data. GSI Exchange is one of them.
And if you read our posts regularly, this is one of the reasons we always emphasize non-CUSIP gold and silver.
The American Bankers Association does not track Non-CUSIP gold and silver and hence it's not as easily confiscatable, should certain laws be activated in times of national emergency to justify the seizure of precious metals.
Ownership of non-CUSIP metals stored in your safe at home or in a private depository, are 100% owned by your estate and accessible only by you or your beneficiaries.
At GSI Exchange, we understand the sacred value of your financial privacy and would never be instrumental to the government’s overreaching intrusion into what you buy, sell, or hold.