Miles Franklin hosted a webinar on Febraury 13, 2012. The webinar allowed for participants to submit their questions on-line, regarding precious metals. Following are the participants questions and the answers provided by Andy Schectman.
Q: Are safes at home affected by temperature and humidity and could that affect the metals?
A: In general no. But I don’t think it is a good idea to expose metal safes to excessive moisture.
Q: Aren’t Silver Maple leafs a better buy than Silver Eagles, simply because their face value is $5vs$1 for the Silver Eagle?
A: No. The face value is irrelevant with the exception of international travel purposes and customs declarations. When you travel between the US and Canada or Western Europe it is the face value that is used for declaration purposes, not the actual metal value.
Q: Can your service assist people in Australia.
Q: Do you think Miles Franklin can produce a commemorative coin with their logo? It would be nice to have a family heirloom that we could all have since we are a family bonded by sincere appreciation for your business, newsletters and of course PM’s.
A: Thank you for the compliment, it is appreciated! It is possible, but the cost of producing the mold and stamping coins that in reality would have less demand for them than most other forms of silver we sell, in my mind would be prohibitive.
Q: For someone making their first investment in silver is it best to have bullion bars, or coins like the Silver Eagle and Maple Leaf?
A: In general in this industry, you get what you pay for. And I do believe in the end, it’s about the number of ounces owned that will matter. However, there is a fine line between getting a good deal and being penny wise and pound foolish. For the small extra premium you pay for coins over bars, my preference is in the recognizable government issued coins.
Q: I have purchased both gold and silver from Miles Franklin and feel that it has been a good decision. I realize it is money but when I decide to turn it into currency, what taxes will need to be paid at that time?
A: Most items you will sell will not trigger a 1099, so the honor system dictates you file and pay a 28% collectable tax.
Q: I want to trade gold tenth ounce gold eagles and 90% silver halves for all mercury dimes. If I can do it with Miles Franklin, how do you I go about it? I was thinking its best to have greatest divisibility in metals with dimes…what do you think?
A: I can see your logic, but I would keep the halves. The difference in silver between the halves and the dimes, in my mind is too small to justify paying the bid/ask spread. With the tenth ounce gold coins we would simply lock the buyback and the purchase in simultaneously, and then help you send them back insured. Upon receipt of the gold we would send you back your dimes. Simple as that!
Q: If I wanted to invest in physical gold/silver, is there a recommendation of buying Legal tender coins are better, or minted Bars are better ? Considering about the liquidation issue in the near future, when we wanted to sell.
A: In general in this industry you get what you pay for. And I do believe in the end, it’s about the number of ounces owned that will matter. However, there is a fine line between getting a good deal and being penny wise and pound foolish. For the small extra premium you pay for coins over bars, my preference is in the recognizable government issued coins.
Q: If there is a confiscation, would you make records available to the government of who bought metals, or do you destroy your records after awhile? Do you think silver would be subject to confiscation also?
A: I don’t think it would be a wise business decision to knowingly destroy records from the government.
Q: Suppose I have a box of Silver Eagles to sell. What’s the process? What securities are built in for me?
A: We would lock in the buy price, help you send back the box with insurance and then immediately send you your funds by check or wire.
Q: If I buried my phyzz in my yard, could a metal detector just detect that there’s metal there (which I could disguise by using metal construction debris to fool the person), OR do metal detectors exist that can actually “see” my silver coins beneath the construction debris? What have you heard?
A: You absolutely could disguise it with the construction debris. There’s no metal detector in the world that will see the coins under the metal construction debris.
Q: A 40:1 or 50:1 ratio in dollars or ounces???
Q: Please give an example of total cost of purchasing 100 ounces oz gold and silver from Miles Franklin and then selling both back to Miles Franklin, based on present. Also, what is cost proposal for storage of bullion in Fargo/Montreal?
A: Depending on product the bid ask spread will range between 1.5 and 3%. Our bid price is consistently the highest in the industry, so are spreads are consistently the narrowest. The cost of segregated storage in Fargo for all products is 3/4 of 1%. The cost of segregated storage in Canada is $1 per ounce per month for gold and 3.5 cents per month per ounce for silver.
Q: I am currently purchasing my physical silver from Bullion Vault in London, I am concerned that although they do a full audit every 24 hrs and it is accessible to the public for viewing. Their prices are very close to spot i.e. very small spread between paper and their and yet physical
A: I do not know anything about bullion vault, positive or negative. However their cost on silver rounds could be as low as .25-.50 cents over spot per ounce and be in line with fair value wholesale costs.
Q: What is the cost of your storage options?
A: The cost of segregated storage in Fargo for all products is 3/4 of 1%. The cost of segregated storage in Canada is $1 per ounce per month for gold and 3.5 cents per month per ounce for silver.
Q: What you will recommend bullion or numismatics for long term purchasing power preservation and wealth building?
A: Bullion is my immediate reaction, but at current prices, the circulated $10 and $20 gold pieces, priced at or below billion prices are as good of a value as anything I have seen in 22 years of business!
Q: What about modern day numismatic coins 2009-2012 MS70? Would you recommend them vs. bullion coins as a smart investment?
A: No! They are like putting earrings on a pig! I would never buy modern numismatics over regular bullion.
Q: Where do I go to find local insured private storage for precious metals (such as Dallas, Texas)?
A: Diamond State Depository in Texas.
Q: With regards to Silver American Eagles and the US demand out pacing supply of silver… is it a reality that the US mints will run out of physical supply for 2012?
A: It has happened before. It could rapidly and easily happen again.
Q: With regards to how recognizable and future value?
A: The eagles are the most recognized and demanded.
Q: If there was only one (1) ounce bullion coin you could buy what would it be? Maples, Eagles, etc…
A: Definitely the Eagle. The eagle is the most demanded gold coin in the US. The 22 karat purity makes it a very durable coin. The coin weighs 1.1 ounces, with a tenth ounce of silver copper alloy added on top of the 1 ounce of pure gold to give it strength.
Q: Would it be wise for me to buy silver to capitalize on the greater % of growth and then convert to gold?
A: Potentially yes. There are times when ratios swing in favor of making those kinds of switches.
Q: Would you recommend one ounce gold coins over one ounce gold bars?
A: The only gold bars I ever buy for myself are 1 ounce Perth Mint or Pamp Suisse bars. They are every bit as marketable as 1 ounce coins, but slightly less sought after than the government issued coins.
Q: You mentioned the 1,004,272.5ratio of gold to silver that one should consider owning/holding, how much platinum and/or palladium would you recommend? would you recommend holding platinum/palladium coins or bars? and can the latter be held in the Miles Franklin account in Canada?
A: I like both platinum and palladium. I personally own about 10-15% of my metals in those 2 metals. Yes they can be stored the Miles Franklin International Precious Metal Storage Program.