The Perth Mint
is Australia's oldest operating mint. The
Perth Mint is owned by Gold Corporation which is wholly-owned by the State Government of Western Australia.
Perth Mint Certificate Program (PMCP)
The PMCP offers offshore storage of precious metals (gold and silver) at The
Perth Mint’s vaults in Western Australia. The Perth Mint has operated
continuously from the same location for well over a century. The PMCP is the
only government-guaranteed, precious metals program in the world. This
unique precious metals storage program is fully owned and backed by the
government of Western Australia and insured by Lloyds of London.
- Your vaulting relationship with The Perth Mint is private, protected
under the Gold Corporation Act 1987 and
the Perth Mint Certificate Program's administrative procedures.
- This is the world's only Government guaranteed precious metal
- The Mint is operated by Gold Corporation that is wholly owned by the
Government of Western Australia.
Perth Mint Problem #1: PMCP is Paper Gold
Evidence shows that the Perth Mint is selling paper gold.
After all, a certificate, by nature, is nothing more than a promise to the
bearer. Owning a gold certificate is someone's promise to pay gold to
you. According to James Turk, doing business
with Perth Mint means you are a general creditor of Gold Corporation.
For instance, in 2002, its financial statement showed that the Mint had approximately
4.5 times more
debt than equity ($96.2 million of gold on hand against $234 million of
liabilities). In 2006, the leverage ratio had increased above 18.
For details feel free to read
Is the Perth Mint telling me the whole truth?
||Perth Mint Leverage Ratio
||Gold Available for Redemption
There are numerous warnings from others, such as Jim
Sinclair and Jason Hommel, regarding the Perth Mint
selling paper promises.
Perth Mint Problem #2: Gold Confiscation
All countries have a confiscation risk on the basis that we are dealing with
In our view, Australia has a relatively high risk of gold
because Australian law already has a mechanism in place to require delivery
of gold to the Reserve Bank of Australia (RBA). If you read Part IV of
Act 1959 (the compilation was prepared on 7 July 2008, taking into
account amendments up to Act No. 73 of 2008), you will notice the
Governor-General may confiscate gold "for the protection of the currency or
of the public credit of the Commonwealth". Section 41(1) says "A
person shall not, except with the consent in writing of the Reserve Bank,
take or send any gold out of Australia". Section 42(1) says "a person
who has any gold in the person’s possession or under the person’s control
shall deliver the gold to the Reserve Bank, or as prescribed, within one
month after the gold comes into the person’s possession or under the
person’s control". Section 43 says "all gold delivered in pursuance of
section 42 shall thereupon vest in the Reserve Bank absolutely, free from
any mortgage, charge, lien, trust or other interest in or affecting the
gold". Section 44 says "the amount to be paid for any gold delivered
in pursuance of section 42 shall be an amount determined in accordance with
such price as is fixed and published by the Reserve Bank". Section
45(1) says "a person shall not sell or otherwise dispose of gold to a person
other than the Reserve Bank or a person authorized in writing by the Reserve
Bank to purchase gold; and a person, other than the Reserve Bank or a person
so authorized, shall not buy or otherwise obtain gold from any person."
The Perth Mint cannot default on its allocated gold without
breaking the law. Gold Corporation and the Western Australia
government can default on the Perth Mint's UNallocated
bullion certificates by using Perth Mint's "force majeure"
clause. Read all the fine print written on the certificate,
including: "The Perth Mint will not be liable or
responsible for delivery delays due to causes beyond its
There is no need for the Government of the day to have to rush new
legislation through that may attract public comment or opposition. All that
is required is the Governor-General to proclaim that Part IV shall come into
operation. The Governor-General is a figurehead role and is not
elected. The Governor-General may dismiss the Government, as it
11 November 1975. It is therefore theoretically possible that
the Governor-General could bring Part IV into force against the wishes of
the Government if he/she thought that it was “expedient so to do, for the
protection of the currency or of the public credit of the Commonwealth”
(Section 40(2)). See http://goldchat.blogspot.com/2008/11/australian-gold-confiscation.html
for a further in-dept analysis.
Ironically, some people argue that Gold Confiscation
won't apply to the Perth Mint Certificates because
these are just certificates. The government
confiscating gold wants the delivery of physical
gold; not paper claims. As far as iGolder is
concerned, we will not chose between purchasing paper gold
nor having our physical gold stolen by the
government. Instead, we will buy and store our
Perth Mint Problem #3: Socialist Government
The Australian Government is running big deficits,
and who knows what the next elected government may
do towards the Perth Mint.
Runaway inflation will be a worldwide problem, and
the need to stabilize the currency will become a
priority. Will the government decide to bring
Part IV into force to address the issue of runaway
inflation? At iGolder, we anticipate
an inflationary economic depression comparable in
severity and scope to the Great Depression of the
1930s. We created iGolder to
provide stability and prevent the
division of labor
from shrinking which causes mass unemployment. Political stability is very
important to us, therefore it becomes strategic to
store our gold in a country having respect for
private property (gold ownership).
Politicians, craving for power, may promise
confiscating gold to resolve the financial crisis.
Of course, stealing the gold won't solve the
problem, however it will probably buy a few votes to
"Democracy is two wolves and a lamb voting on what
to have for lunch." (Benjamin Franklin). The
scenario of a politician promising to confiscate the
gold belonging to foreigners cannot be discarded.
Our Conclusion Regarding the Perth Mint Certificate Program
Given all the problems listed above, iGolder does not consider prudent to
purchase Perth Mint Certificates for storing your gold. We welcome Australian businesses, as
long as they are not linked to the Government. No government should be
trusted. If you are relying on a government guarantee, you
may be relying upon a hollow promise. We
encourage you to do your own due diligence before purchasing Perth Mint