by Theodore Butler
We live in perilous financial times. If you are not alarmed with the flow of financial events, then you are just not paying attention. The problems are serious and growing, the solutions limited. It’s as if everything that could go wrong, has gone wrong. I’d much prefer to write of a growing domestic and world economy, with increased demand for silver. But financial and economic headwinds have converged to interrupt world growth.
What does this portend for silver? As I have written recently, the current bad news is good news for silver. That’s due to silver’s unique dual role as a vital industrial commodity, as well as an age-old investment asset that the world has always turned to when times get tough. When times are good, silver can be compared with natural resources, like copper and oil. When times are bad, silver should be compared to gold as a financial lifesaver. Sad to say, times are bad. To highlight just how bad, I’d like to reference some recent events and what I think they portend for silver.
There is a worldwide flight into assets of quality. This is no minor event, it is a tsunami. In the past week, demand for four-week U.S. Treasury Bills, considered by many to be the ultimate flight to quality asset, was so great that investors bought them at auction for the lowest yield in history - zero percent. In other words, investors in these securities were willing to forgo any return on the $30 billion purchased, for the promise of the return of the principal amount. The demand for the return of principal for these securities was so great that investors bid for four times the amount actually sold. None of us has ever witnessed this kind of demand for such low-yielding securities. Safety is the name of the game.
It is easy to see why the safety of one’s financial assets is suddenly all-important. The news is truly rotten and wealth is disappearing before our eyes. It is estimated that already more than $10 trillion ($10,000 billion) of value has been lost in the world market decline so far. Governments around the world, including the U.S., have responded with trillions of dollars of bailouts, stimulus and massive deficit spending programs. The scale and scope of the destruction of asset values and the offsetting financial injections are almost beyond our ability to grasp. Mind-boggling is not an overstatement.
Unlike government securities and unlike gold, the value of silver is sharply lower this year. That decline is not the result of the selling of physical silver, but of the paper variety on the COMEX. In fact, compared to gold, the physical shortage and premiums on various forms of retail silver are higher and delays in some cases are longer. This may prove that physical silver is tighter than gold. The price decline in silver, relative to gold, indicates silver is dramatically undervalued to gold.
This is not a knock on gold. All the conditions appear in place for a big gold price rise. The market structure on the COMEX, the growing physical demand, the palpable fear in the air, all point to gold as an important go-to asset. Gold holds no counterparty risk and that’s especially relevant in the current climate. All the positives about gold apply to silver, in spades. Silver is rarer and scarcer than gold and it sells for less than 1.5% of the price of gold. So, if you like gold, you should love silver.
Gold is finite and there are physical limitations on creating more. Compare this to the infinite amounts of paper and electronic money being created out of thin air. Recently, I have read sober analysis that suggests gold will be priced at multiples of its current price due to the rapid expansion of monetary reserves. Take those same calculations and apply them to a comparison of gold versus silver. This is an oversight that creates a special opportunity for those that investigate the facts. Dollar for dollar, there is 400 times more gold than silver in the world. Let that one fact sink in and everything else will fall into place.
The next time you read of hundreds of billions, or trillions of dollars of bailouts and government simulative spending, remember there is only $10 billion of silver bullion in the entire world. And very little of that is available for sale, as it is strongly held by true silver believers. The inevitable rush to safety into such a small pool of metal will send the price soaring.
Warning Signs
By now, the world is aware of the largest Ponzi scheme in history, the alleged $50 billion fraud by Bernard Madoff, a fixture on Wall Street for almost 50 years, and of special significance for silver. Madoff was widely respected and trusted by his clients. The pain of betrayal compounds the financial devastation. Knowing you have been cheated makes it much worse. Victims include well-known individuals, charitable organizations, hedge funds and banks. It is said to be the largest investment fraud in history. This will only accentuate the flight to safety. The more people reflect on this episode, the more they will be motivated to buy gold and silver. For thousands of years, gold and silver have been trusted assets in times of distrust. Silver (and gold) may go up or down, but they can’t defraud you.
There are some remarkable similarities between the Madoff fraud and the manipulation that I have alleged in silver for the past 20 years. Both have occurred over long periods of times. Both involved sophisticated investors, including individuals and institutions. Both occurred under the nose of government regulators expressly created to prevent such frauds - the SEC in the Madoff fraud and the CFTC in the silver manipulation. Both regulators were given numerous public warnings of wrongdoing for many years. Both agencies neglected to look into the allegations or investigated and found nothing wrong.
Of course, there are differences. All are now aware of the Madoff fraud while only a few thousand are aware of the COMEX fraud. It is not a mainstream media event. The SEC is under intense and well-deserved criticism for its failure to regulate and terminate the fraud. Criticism of the CFTC will come in the future.
Another difference between the Madoff and COMEX silver frauds is that evidence of fraud was largely concealed by Madoff, while the evidence of fraud in COMEX silver is contained in government data. There was no readily available public data that would have made it easy to see that Madoff was running a fraud. Some sophisticated investors did investigate and steered clear after performing their due diligence. In silver, the data contained in the CFTC’s Bank Participation and Commitment of Traders Reports are all that a reasonable person needs to see. These freely accessible reports clearly indicate a concentrated short position in COMEX silver far beyond anything held in any other commodity. Rather than offer a plausible explanation for how one or two U.S. banks holding 25% of the annual world production of any commodity could not be manipulating, the CFTC instead stalled and began a drawn out investigation during which silver investors were devastated.
Sadly, for Madoff investors, it is too late. For silver investors, it is starkly different. The manipulation has caused prices to nosedive, but this same fraud promises phenomenal future returns. When the Madoff fraud was revealed, it was all over, the money was gone. In silver, when the fraud is universally recognized, the payday for silver investors will have just begun. We will then have embarked on the long-term journey of sharply higher prices that rewards all silver investors properly positioned. With Madoff, not being in was the key. With silver, being in is all that matters. Make sure you are in.
The only real risk facing silver investors is how you hold your metal. This Madoff affair should wake up metals investors holding pool or certificate accounts with no serial numbers. Hold your silver in your personal possession or in bona fide storage. The storage facility should be separate and distinct from the sales agent. The big problem with Madoff is that he held everyone’s funds. When he went under, everyone’s money went under with him. As certain as I am of silver’s coming price advance, I am equally certain that many silver investors will lose their money by holding bogus accounts. You have one of the great opportunities of a lifetime with silver. Don’t expose your profit potential to unnecessary risk.
Bullionmark comment
I agree with Teds assessment that bullion is best held in personal posession. However this is not really a practical solution for many especially in silver. Segregated and allocated metal in private storage vaults are an ideal solution as is the Perth Mint Depository program. Much rumour has been spread about the Perth Mint but after detailed meetings with the Mint management in Perth last week, I am of the strong view that the Mint is fully hedged and a safe place to store metal. It is backed by the Western Australian government. Bullionmark holds much of its metal on an allocated basis at the Perth Mint but also uses private vaults in Sydney and Melbourne. Diversification is important. I have published several articles on the issue of storage and encourage you to re read before making a final decision on storage of your metal.
http://www.bullionmark.com/2008/10/bank-vault-safety.html
http://www.bullionmark.com/2008/10/paper-v-physical.html
http://www.bullionmark.com/2008/10/storing-at-home.html
One of the most common questions we get at Bullionmark is should I buy 1000oz bars or 1oz coins? Logic suggests you should buy maximum number of ounces as close to spot as possible. However in most cases this approach does not maximise your returns.
When investing in silver you must consider that you are warehousing silver today for sale at a higher price sometime in the future. So deciding the target market for the future sale has a pretty important influence in your purchasing decisions today right?
If an investment mania in silver occurs it will be the average Joe who will bid up the price for your warehoused stocks. Average Joe is going to pay the biggest premium for bullion coins because it is recognisable, real money, transferrable, trustworthy. Most of those qualities do not apply to large bars. You are an early entrant into this investment opportunity, just be smart about your choices today and you will do well. This is a business not just a fun hobby, so think clearly about your exit plans. Think about who will buy your silver in future and plan your mix accordingly.
As an example right 1oz silver coins are selling at over 100% premium to spot up from 50% 6 months ago and 25% in 2007. It is not your buying price thats critical its demand potential and selling price (margin) that counts. Coins have and will continue to provide the best margin potential and greatest demand. Alternatively if you buy a 1000oz bar today I pay $15.50 but only get $13 in resale a 16% decline versus spot. Why because the only demand is from a dealer who has to make his own margin at your expense. I know paying such high prices over spot is somewhat counterintuitive but owning the products that will have the greatest demand is the best route to profitability.
- Coins are portable for trading goods & services and resale to joe sixpack at some date in the future
- Mid sized bars are a good convenient store of value easily go in safety deposit boxes or safes. Are reasonably easy to trade with Joe sixpack if branded by recognisable mint.
- 1000oz bars are for your families store of wealth & security if you can securely store them and transport when necessary. Strategically safe and accessible storage is critical, but very expensive and complex. Due to a limited target maket they are difficult to offload and likely to be the worst retun on investment
Whilst I support the quest to accumulate as many ounces as you can afford, make sure they are profitable ounces.
Some important things you should consider as silver bullion investors.
· Silver in bullion form is a very safe investment – it is no one elses liability
· In your possession it is totally removed from the financial system & government
· On almost any inflation adjusted measure silver’s true value is well in excess of $100 per oz but it may take years for the market to recognise this
· Silver is money at all times under all circumstances – paper money has and will come and go, silver has stood as money in all cultures for hundreds if not thousands of years
· Silver is a great inflation hedge – its buying power has stood the test of time. Silver still buys the same litres of oil as it did in 1950 or same bushels of wheat it did in 1600.
· Silver is a great catastrophe hedge – war, famine, disease, financial meltdown . Unlike financial assets silver excels in these environments.
· Silver ownership by the masses is at the lowest point of history
· It took 1000 ounces of silver to buy a house in Sydney in 1980, today it takes over 35,000
· Silver is dramatically undervalued versus gold – 500 years of ratio 15-1 (sometimes even parity) today it is 60-1
· Unlike gold most of the silver mined in history no longer exists
· Silver mining supply is diminishing rapidly due to rising mining costs and the fact that silver is most often a by product of other metals such as zinc or copper
· Silver has the most patents pending of any metal due to its unique medicinal, antibacterial and conductive properties
· Silver is the most conductive of all metals its use in nano technology is rising dramatically
· Silver is set to compete with platinum for use in catalytic converters for diesel engines
· Demand for physical silver is increasing rapidly at industrial and investment level
· Worldwide shortages of physical investment coins and bars is an early sign smart money is mobilising into silver
· Most wealthy families in history have used gold and silver as a store of wealth
Alternatively,
· Silver and Gold are political metals inciting war and deception throughout history
· Silver and gold are the governments and banking systems worst enemy because they hold governments to account on printing money, controlling interest rates, are difficult to tax and generate little commission because they are hoarded not traded.
· Silver is a volatile metal – price can fluctuate 30% in one trading day
· Paper silver (futures, ETF’s options, derivatives, shares etc) often trades at a significant discount to real market prices for physical
· Silver (&gold) are manipulated in price by central banks and governments
· Manipulation to restrict the price is actually a good thing because it creates value for those willing to buy on discount hold for the longer term
· Gold has been confiscated and deemed illegal to own by governments including US (1930 – 1971)
· Paper silver would be impacted by government price controls or ownership restrictions, but physical gold and silver would likely thrive in underground market (as happened in depression & WW2)
· Never give (sell) your bullion back to the government under any circumstances – bury and say its lost.
· Silver can be melted down if you require smaller denominations
Day to day rules,
· Don’t watch the daily price – this is a minimum 4 year investment I would recommend no selling until at least Mar 2012, but prefer 2018.
· In my view we could see a worldwide collapse of the financial system within 6 months, under these circumstances it is almost certain paper gold & silver will go down as leverage is unwound and people strive for cash. However, in this situation the physical market will thrive with the paper market catching up shortly after as bankers realise the only safe haven will be gold & silver. Great buying opportunity.
· Dont panic!!! Silver will never be worth nothing like paper money will be.
· If you can average down, buy more as the price declines
· Price is not important, its all about how many ounces you own!!!
· Even if silver goes to $5 per ounce petrol will be 50c per litre. Your buying power in todays dollars will be maintained. Dont see this happening though do you?????? Especially with peak oil with us.
· Remember in 1980 dollars 400z of silver is just under half a Sydney house!!!!!!
· Be patient................
There are several ways of storing bullion, both physical metal and metal held with a third party, as listed below.
IntroductionDepending upon your own opinion of the economy in general, you may feel that the global financial system is robust enough to withstand any major downturn in the economic future and you therefore probably feel confident enough that the financial system can provide a safe environment for your fiat (paper) money. However, to be aware of any risks will afford you the wisdom to seek sanctuary. Investing in precious metals may appear to be a somewhat unusual thing to do for some, however many people do decide that this is an option they would like to pursue in order to safeguard a proportion of their wealth against any monetary problems, such as inflation. If you fall into the latter group, you would be wise to locate and research a safe method of storage. A good idea might be to diversify or divide your bullion holding with various reputable and recognised storage facilities, in order to spread any risks that may arise.Trading gold and silver bullion is similar to trading a currency, whereby you can purchase your bullion just above spot price however, when you decide to sell your bullion, the metal will normally be purchased from you below the market spot price and in some cases, the bullion may also need to be assayed. This is a similar process to when you go on holiday, for example. When changing money at a Bureau de Change, you will never get a market price for the currency you are exchanging and sometimes, there may even be a fee associated with the transaction.In addition, there is usually a fabrication fee levied on newly minted physical bullion precious metal, because there are always costs associated with producing bars/ingots and coins, such as labour and machinery costs. The difference between the purchase and sale price, as well as any fabrication costs on new products; is how the bullion dealer makes their money on the transactions.
Contents
Storing Your Own Physical Bullion and Coins - Keeping it at Home - Bank Storage - Safety Deposit Boxes
Storing with a Bullion Dealer/Organisation - Overview - Allocated Storage - Unallocated Storage - Pooled Accounts - Allocated Pooled Account - Unallocated Pooled Account
Storing Your Own Physical Bullion and Coins
Keeping it at HomeBy far the best way to store and own your bullion is to take full possession of the metal if you have purchased a small quantity, which can be easily handled and hidden somewhere in your home, either in a safe, concealed inside a false wall or secret cupboard, or even buried in your back yard! This makes your precious metals easily accessible should you need to trade them for any basic necessities in times of trouble.
It may therefore be prudent to:-
Divide up your bullion holding and conceal in different places.
Choose a place that is not obvious to any burglars.
Remember that precious metals could melt if your house has a severe fire.
Not tell anyone about your precious metals, not even your friends as most thefts are usually linked by a common denominator
Naturally, there are also disadvantages to this form of storage in that it is a potential security risk, could either be forgotten about altogether, you may not remember exactly where it has been hidden, or if something should ever happen to you, would anyone be able to trace it? In addition, precious metals could melt if there was a severe fire on your property.
The wonderful thing about precious metals is their intrinsic value, which is easily identifiable and would even be exchangeable for goods and services in deeply troubling times and a couple of kilos of gold would not be difficult to take with you should you need to flee from political turmoil or natural disasters. Because precious metal (notably gold and silver) is a currency in its own right, it can also be easily exchanged with other currencies should you need to cross the border into a neighbouring country. A fairly grim picture has been painted here, but it may happen.
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Bank StorageThere are two different ways of placing your money into a bank, which may be simply explained in the following examples:-
When you deposit money into a bank account, you are handing over your property into the care of the bank, who then have the right to use your money in terms of the working capital of the bank. Your money becomes the bank's property, but also its liability. The bank also reserves the right to loan this out to other customers. You have therefore loaned your money to the bank and become an unsecured creditor, until such time as you claim your money back by withdrawing it from your account. This is a common practice which, for the most part, seems to work rather well. However, should the bank run into trouble, or even become insolvent, under banking law it becomes the client's 'own commercial error for investing in a bank account' and let's face it, the banking business is just that, a business.
If you were to place your money into an envelope and hand it over the counter at the same bank, asking the cashier to store the envelope in the bank's vault for safe custody, you would find that there would be an annual storage charge for your money which remains sealed in that envelope and the bank has no claim whatsoever on your property. Should the bank become bankrupt, your envelope containing money would still remain your property and no-one would have any claim on it but you. It is worth noting that the bank is not necessarily responsible for any insurance on your envelope & money and can decline any claim you may have should your envelope be stolen or the bank suffers a fire etc. The bank's obligation is to store your money envelope under lock and key only.
The above principles may also be applied to precious metals storage and it would therefore be prudent to pay close attention to what type of storage you decide to use.
It is however, worthwhile recalling what occurred in Argentina between 1999-2002 with the economic crisis faced by that country. In 1999, Argentina's GDP dropped 4% and the country entered a recession. Argentina quickly lost the confidence of investors and the flight of money away from the country increased. At its peak in 2001, people fearing the worst began withdrawing large sums of money from their bank accounts, turning pesos into dollars and sending them abroad. The government then enacted a set of measures (informally known as the corralito) that effectively froze all bank accounts, allowing for only minor sums of cash & holdings to be withdrawn. Many banks closed their doors entirely. Because of the allowance limit and with the serious problems it caused in certain cases, many Argentines became enraged and took to the streets of important cities, especially Buenos Aires.Safety Deposit Boxes
One method of storing your bullion is in a safety deposit box held within a bank. However, because all things are never equal, there is a downside to bank storage in that should any government decide to confiscate private gold held by any person, as has happened in the past, see The Roosevelt Gold Confiscation Order Of April 3 1933 (Executive Order 6102), it would mean by law that there would be a freeze on all safety deposit boxes (and indeed, any gold held within the jurisdiction of the Government) until they have been checked and cleared and therefore owners would not have access to their holdings.There is also another cause for concern in that if your gold is held within a bank, and the bank becomes insolvent, or ceases trading for whatever reason, you may find it difficult to gain access to your safety deposit box, as you would most definitely not have the keys to open the doors to get into the bank, let alone opening your deposit box! Although the property within the deposit box will remain your property, it could take weeks, months or even years should the worst case scenario occur such as widespread banking failure, affecting several major banks and financial institutions and their doors would close indefinitely, literally overnight! One further thought - if and when the bank does eventually re-open its doors, there is no guarantee that the contents of your safety deposit will remain intact because there is never any 'proof of contents' established with this method of storage.It would therefore be a good idea to consider the following:-
Find a good solid bank that can weather a financial 'storm'.
Always monitor any governmental trends and economic influences.
Try to find a safety deposit box in a company that is not exposed to any financial risks, which could cause them to foreclose on you.
Try to find a safety deposit box, which has 24-hour access throughout the year.
Make sure that the safety deposit box you choose is not too great a distance from your home.
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Storage with a Bullion Dealer / Organisation
OverviewThere are a lot of bullion dealers or bullion organisations that will hold your bullion metal in their vaults on your behalf for a small storage fee, the main advantages for holding your bullion with these entities are firstly, the security issue rather than keeping it at home; secondly, that it would be easy to sell your bullion into the market place if it is already held within the vault of the dealer and thus eliminates the risk of transportation between your home and the bullion dealer. In some cases, you may have to provide your own insurance for the storage. Also note that some of the smaller businesses may open during public holidays and possibly outside normal office hours, if pre arranged and at additional cost.There is one notable advantage to storing directly with a bullion dealer/organisation, in that they know exactly, the origins of their bullion. Provided the bullion remains in their possession, it can then be easily sold back to the supplier without the need for assay.
It may be prudent to check into any bullion dealer that you plan to use, as follows:-
1. How long have they been in business?
2. How long have they traded at their current address?
3. Are there any legal issues currently outstanding with the bullion dealer?
4. Try to talk to any other customers that use their service.
5. Is your bullion insured? (always contact the insurance company to confirm that the payments are up to date, or provide your own insurance, and always make sure your covered)
6. Always check documents / receipts on your holding, including serial numbers, that they match up with your bullion.
7. Is your metal segregated from everyone else’s metal? (see below)
8. Always compare their storage and buy/sell prices with other bullion dealers for comparison.
9. What are the charges should you wish to take delivery of your bullion metal?
10. Keep in touch with your bullion dealer, and check on the above comments.
11. Check whether the bullion can be sold back to the dealer without the need for assay
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Allocated Storage
When you opt for allocated precious metal storage, you are placing your physical bullion metal into storage. Your bullion would remain segregated from everyone else’s bullion, and your parcel would have all your details attached to it. Your account would show how many ounces of which metal you own as well as any serial numbers that are stamped onto the bars.
This type of storage is the most secure, as there can be no claim on the metal from a third party unless you yourself have become insolvent or bankrupt, for example, when a claim could be made directly against you and your assets. When using an allocated storage facility with a bullion dealer, safety deposit box or some other service provider, you should always check that there is an insurance policy provided on your bullion, and contact the insurance company to confirm that the insurance policy is up-to-date. You may consider providing your own insurance to cover not only theft, but also against natural disasters and even acts of terrorism.
A few things you need to consider about allocated storage:
Always contact the company and check their integrity and services.
Check the term and conditions of storage
Check for insurance, and the terms of the insurance, as well as the integrity of the insurance company. It is also advisable to consider raising the value of your insurance policy as the price of the metal increases.
Try to find a storage facility close to where you live, or at least located in a country that has a stable political and economic situation.
Try not to tell too many people about your bullion holding in order to ensure your own personal safety. Only give out this information to your most trusted confidantes.
Try to avoid removing your bullion from a recognised bullion storage facility unless you plan to have it transported to a similar fully recognised storage facility administered from within the industry. Basically, try not to break the 'chain of integrity'.
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Unallocated Storage
This is a service provided mainly by bullion banks, however there are some Mints and financial institutions that provide the same service. Precious metals are purchased on your behalf at a mutually agreed spot price.
As the bullion has not been allocated to you specifically, you do not own the bullion and the transaction becomes a promise to supply you with a generic quantity of bullion as and when you request it, at the current market value, or spot price. In other words, the money you used to originally buy the bullion has technically become a loan to the holder of your unallocated precious metal bullion. One of the good things about this system is that there are no storage fees incurred, as there is no specific bullion to store. However, when you decide to take delivery of bullion, you will incur a charge for converting from ‘unallocated’ to ‘allocated’, or physical, bullion. This service can be a cheaper alternative, because selling your bullion can be carried out easily and as this is only a paper transaction, there is no physical metal to sell.
What you must bear in mind however is that by choosing unallocated storage, you will effectively become an unsecured creditor to the institution you are dealing with. It would therefore be prudent to do some careful research beforehand on the storage institution because, should they ever become insolvent, you may run the risk of losing your investment and should there ever be a real shortage of physical metal in the market place and you decide to take delivery of your bullion, you may find that you would have to accept a cash settlement as there would be limited, if any, bullion in the market place to deliver. However, in the case of The Perth Mint certificate program (PMCP), it is fully backed by the Western Australian Government, whose economy is largely based on the resource sector (note: you can also opt for allocated storage with the PMCP). The best thing about an unallocated account is that it is easy and cost-effective to buy and sell your bullion holding.
The question is, are you comfortable with possible risks involved in this type of transaction?
Things to consider with this type of bullion trade:-
This is a financial vehicle for trading bullion, not a storage facility for your physical metal.
Taking delivery of your bullion in troubled times may prove difficult if not impossible should there be a shortage of metal in the market place.
You are entrusting your money to a bank or institution; effectively you have become an unsecured creditor (you have loaned your money) to that financial organisation/institution.
Participating in this kind of trade tends to create a misleading impression of the bullion market, where the distinction between physical metal and paper metal becomes blurred. GATA (Gold Anti Trust Action) committee have done extensive research into this problem, you can find out more by going to www.gata.org.
Should the financial institution become insolvent, there is a risk that you could lose your investment, which is money you have loaned out, and let’s face it, they will not tell you if they are in trouble, so be diligent.
Should the economic system become fragile, you may decide that having the physical metal may have a greater value than paper money in a financial crisis, which could preserve your purchasing power.
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Pooled Accounts
A pooled account is an account which has all the gold held in mass quantity as a single holding, and each precious metals investor owns a percentage of the holding. This process minimises administration costs, thus minimising the cost to the investor, and because gold is a fungible commodity, it doesn’t matter how the gold is held ie. 400 ounce bars, so long as it has the same weight and purity equal to the accounts held by the investors.
This type of holding could be held in a secure vault anywhere in the world, and there could be a cost imposed should you wish to take physical delivery.
There are two types of pooled holdings - allocated pool account and unallocated pool account:-
Allocated pool account means that an investor owns a percentage of all the physical metal held collectively within the vault.
Unallocated pool account means that an investor owns a percentage of a paper contract issued by a financial institution/bullion bank. You, as an investor, would therefore be an unsecured creditor to the financial institution/bullion bank, not a direct owner of the metal itself, leaving you exposed to any economic turmoil. A disadvantage is that you may find it difficult to convert your account into an allocated account or take physical bullion should there be a shortage of physical metal, and generally speaking a cost would almost certainly be administered.
Things to consider:-
Consider opting for allocated accounts rather than unallocated accounts.
Always check into the integrity of the company providing you with the service, and try to find out about other investors opinions if possible.
Check for any insurance protection on allocated accounts. Is it possible to take physical delivery, and what are the costs that you would be expected to pay?
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