Why Choose A Private Offshore Vault

When choosing a place to buy and store gold and silver bullion, there are several aspects that need to be considered, especially for those who are new to storing their precious metals. Physical precious metals are almost always purchased for the purpose of wealth protection but how good is such ‘protection’ in a systemic crisis?

Physical Ownership of Bullion – If you cannot hold it, you don’t own it!

When purchasing precious metals with a plan to physically own and store in a vault, it is important to make sure that buyers are the legal title owners of the stored bullion rather than just creditors being owed bullion.

Typically, banks and dealers will sell and store precious metals on an unallocated or fully allocated basis and issue statements showing an owed gold or silver balance. Such statements are almost always IOUs (I Owe You) that confer no ownership as the bullion remains on the balance sheet of the bank or a dealer. Legally this means that customers are just creditors who could be defaulted against rather than actual owners of physical property.

Furthermore, as it is still legally owned by the dealer, such bullion can potentially be leased out to third parties or be used as in-stock inventory for sale to other customers. Sometimes the bullion is not even there, despite the collection of storage fees, as banks often see no need to acquire physical bullion to cover a liability which could be hedged much more cheaply with paper and settled in cash or by ordering bullion on demand.

An illustrative example was a law suit filed by US resident Selwyn Silberblatt against Morgan Stanley. According to the complaint, the bank led investors to believe that “they were making one type of investment—the purchase of precious metals which the investor would fully own when, in fact, Morgan Stanley was actually making either no investment on behalf of its clients or an entirely different ‘unallocated’ investment for which there is no storage”.