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Offshore Bullion Storage or 3 eggs?

What does one hundred trillion dollars buy you?

How about a mansion in every country, an airplane at every airport and a private island in every ocean?

How about 3 eggs?

When Zimbabwe issued its infamous 100 000 000 000 000 dollar bill, it could buy 3 eggs on the day it was issued. A few days later, it could only buy one egg.

Zimbabwe 100 trillion dollar note buying 3 eggs

Hyperinflating Currencies

Unbacked fiat/paper/credit, and nowadays electronic currency, has a poor track record. After studying this list of 609 defunct currencies, out of which 153 died due to hyperinflation, it's obvious that every time fiat currencies are tried, they die through hyperinflation, war or political decrees.

Using the debt-based US Dollar as a store of value creates massive imbalances and misallocations globally. With an unprecedented debt bubble fuelling paper markets such as stocks and bonds, we stand on the cliff edge of a vertical drop.

Since the Nixon era, we have suffered under a fiat currency ponzi scheme wiping out most of the purchasing power of our currencies.

In MLM schemes, the idea is to recruit naive participants downstream to generate compensation for the recruiter.

This is exactly how the US Dollar and other fiat currencies work.

Early receivers of the MLM scheme such as the government, the banks and the central bank gain purchasing power whereas late receivers, such as us normal people, lose purchasing power.

Fiat paper currency is nothing but a cleverly designed MLM scheme to slowly over time steal and redistribute your private wealth.

Defend Your Assets

With the massive redistribution of wealth taking place through taxation and inflation, you have to defend your assets. Key self-defensive tactics include:

- Protect yourself by keeping your assets out of reach for the government and banks
- Minimize counter-party risks
- Ensure you are protected against currency collapses and bank runs
- Hold your assets in such a way that there's no reporting required to government
- Protect yourself against exchange and capital controls

Crooks can't help steal whether it's directly in broad daylight through a bail-in like in Cyprus in 2013, through taxation, through inflation or through confiscation such as the gold confiscation in the 1930's when the US president Roosevelt took the United States off the gold standard and confiscated private gold holdings.

How can you protect yourself? Gold is the natural answer as it resists inflation, maintains purchasing power and can be held confidentially.

Buying gold isn't enough though. What if your gold purchase is within reach of the government? If you buy gold in your home country, a tax agency such as the IRS in the United States can easily audit the bullion dealer to find out about your purchases. In addition, there's also reporting requirements for certain bullion transactions.

Defend your bullion from confiscation risks

When it comes to bullion storage, diversification is key. It's certainly wise to keep some of your bullion in your own possession but don't put all your gold eggs in one basket.

Offshore Bullion Storage

With the financial repression we are witnessing in the West expressing itself through taxation, inflation, bail-ins and confiscations, it's important to store some of your bullion offshore in a safe jurisdiction favoring confidentiality and security.

Gold has traditionally been stored in financial hubs such as in London, New York and Zurich. With doubts whether there is any gold left in the London and New York vaults which isn't already encumbered, Singapore is emerging as the strongest alternative for offshore bullion storage. Singapore clearly distinguishes itself as the best jurisdiction in the world to buy and store gold:

  • Singapore has no taxes on bullion
  • Singapore has no reporting requirements when you buy/sell/store bullion
  • Singapore has a stable pro-gold government creating a gold trading hub
  • Singapore has a strong rule of law and is one of the safest countries in the world
  • Singapore is a centre for wealth and asset preservation
  • Singapore consistently ranks top 3 in the world for business friendliness
  • Singapore strongly protects property ownership rights

Although we don't recommend holding wealth with banks, other than what you need for short-term expenses, Singapore is host to some of the best capitalized banks in the world such as DBS, UOB and OCBC.

With banks and international institutions pushing for a cashless society so as to be able to impose negative interest rates, surveil your transactions, and impose restrictions on your wealth, Singapore continues to be a cash-friendly jurisdiction. Although Singapore in 2014 stopped printing the world's most valuable banknote, the SGD 10000 dollar note, it's possible to use cash for all purchases including purchasing bullion. The SGD 10000 dollar note will continue to be valid indefinitely and the SGD 1000 note is still one of the most valuable worldwide.

Offshore bullion storage pamp gold bars sgd 10000 sgd 1000

With Singapore emerging as the new global center for wealth protection, it's wise to check how you can buy & store gold in Singapore.

Silver Bullion in Singapore

Singapore is one of the best jurisdictions in the world for buying silver bullion. Both silver coins and silver bars are exempted from GST in Singapore.

For physical silver bars the criteria is that the silver bar has to be produced by an LBMA-approved refinery and be of a minimum purity of 99.9% silver.

For silver coins, there’s a list of silver coins exempted from GST published by the Singaporean tax authority, IRAS.

When you buy silver bullion in Singapore you should thus make sure that you buy either a silver bar that is produced by an LBMA-approved refinery or a silver coin included on the below list.

The following silver bullion coins are exempted from GST in Singapore:

Canadian Silver Maple
American Silver Eagle
Austrian Silver Philharmonics
Australian Silver Kookaburra
Australian Silver Koala
Australian Silver Lunar Series
Chinese Silver Panda
Mexican Silver Libertad
Silver Britannia

Heraeus silver bars
Heraeus Silver Bars

Why Buy Silver?

One of the most common questions we get here at BullionStar is whether to buy gold or buy silver. It’s a difficult question to answer but we will go through some of the fundamentals for buying silver bullion in this article.

American Silver Eagles - 1 troy oz
American Silver Eagles

The silver price has been dropping the last couple of years. The price of silver has been dropping even more than the price of gold. This means that the gold/silver price ratio is currently at 76 which is a very high level historically.

gold silver ratio

Industrial demand make up as much as 56% of the demand for silver according to the Silver Institute. This is in contrast to gold where a large majority of the demand is originating from investment or jewelry demand. The silver price is therefore more correlated to, and dependent on, general economic factors.

You can read much more about the most important fundamentals of silver bullion in this article.

Is it better to buy Silver Bars or Silver Coins?

When buying silver bullion you have to consider whether silver bars or silver coins is your best option. The choice depends on your personal preferences. There are a few differences consider.

Price premiums for silver are generally higher than price premiums for gold. Silver bars generally have a slightly lower price premium than silver coins. This means that the price per troy ounce or gram is lower for silver bars than for silver coins. It can thus be argued that you get more silver for your money with silver bars.

Albeit a slightly higher price premium, a good case can however be made for choosing silver coins. Most minted silver coins are weighing 1 troy ounce i.e. 31.1 grams and comes packaged in mint tubes of 20 or 25 coins which in turn are packaged in so called monster boxes of 500 coins. In case there’s a meltdown in the monetary system and silver returns as money, it may be better to sit on plenty of small 1 oz silver coins than a few large silver bars. With 1 oz silver coins you can easily sell or barter a small portion of your silver holdings. If you choose to buy Canadian Silver Maples, the most sold silver coin in the world currently, you get a coin recognised around the world. The Silver Maple together with other popular silver coins like the Silver Eagle and the Silver Philharmonic are all highly liquid silver investment coins.

Silver Storage

There’s many different ways of storing silver bullion. With the high gold/silver price ratio, the main difference to storing gold is that silver bullion is bulky and takes space. If you live in a secure area and have a safe and a safe house, it may be convenient to store your silver bullion at home.

BullionStar however offers a superior solution for silver bullion storage. With us, you can store securely in our vault with us as your vault storage provider. You can control your silver 24/7 online through BullionStar’s online solution, My Vault Storage. If you want to sell your silver or withdraw your silver, you can do so in a matter of seconds from the online interface. With BullionStar’s storage solution, you can also physically audit or physically withdraw your silver at any time without any prior notification.

Another alternative is to store your silver bullion in a safe deposit box with a bank. When you store silver in a safe deposit box, the bank isn’t formally allowed to confiscate or encumber your silver. Do however consider what could happen in case of a bank run if the bank simply closes its doors with an angry crowd outside. Will you be able to take possession of your silver?

BullionStar Financials 2015 – The Year in Review

2015 was a momentous year for BullionStar with sales revenues totaling SGD 89.6m*, a 69.1% increase from 2014.  2015 also marked the first full calendar year in operation for our unique bullion retail shop, showroom and built-in vault which was launched in July 2014.

In 2015, we increased our product range to include over 370 different bullion and numismatics products across 9 different product categories. We also released our very own BullionStar Minted Gold Bars and BullionStar Minted Silver Bars – which offer no spread between the buy and sell price.

We also launched the possibility to keep funds on account with BullionStar thereby simplifying the transactional process and allowing for greater convenience throughout the bullion trading process. Furthermore, we enhanced our Bullion Savings Program (formerly Vault Grams) enabling our customers to convert their BSP Grams to physical bullion where they can take full physical delivery at any time without any charge.

Sales in 2015Fin1

BullionStar’s sales revenue for 2015 was SGD 89.6m*, up 69.1% from 2014.

Comparatively, the total global bullion demand increased by 1% in 2015 if calculated in tonnage and decreased 7.9% if calculated in USD (based on data from the World Gold Council for Q1 to Q3 2015 compared with data for Q1 to Q3 2014). BullionStar's strong and rapid growth is thus rather spectacular when compared to the industry development as a whole.


Overall bullion demand in Singapore decreased from 5.9 tonnes to 4.8 tonnes marking an 18.6% decrease for the first three quarters of 2015 according to the same publication. For the first three quarters of 2015, BullionStar sold approximately 0.9 tonnes of bullion gold, thereby contributing to 18.4% of the total Singaporean bullion market based on the data published by the World Gold Council.

Despite consolidating market conditions in the bullion industry as a whole, we grew our sales revenue steadily during the year and picked up the pace during the second half of the year. The sales revenue of SGD 53.7m for 2H15 was markedly higher than the SGD 35.9m reported for 1H15. Our growth is derived from a mix of increased sales to domestic and international customers. 


By comparing the below pie chart to the corresponding chart for 2014, we can see that gold increased in popularity compared to silver in 2015. Gold consisted of 67.20% of total sales for 2014 whereas it increased to 72.39% of total sales for 2015. One explanation for the proportionate increase in the popularity of gold may be the increasing gold/silver ratio, where 76.4 grams of silver was equivalent in value to 1 gram of gold at the end of 2015, a figure being close to its multi-year highs. With the fall in commodity prices in 2015, silver has been affected to a greater extent than gold due to its predominant industrial usage. Gold, on the other hand, has once again re-emerged as the ultimate safe harbor in times of uncertainty.


What lies ahead

The first couple of weeks of the new year has been characterized by renewed volatility on the global markets following concerns about global debt levels and poor growth. We expect global markets to continue to be volatile during the year. Consequently, bullion stored in a safe and stable jurisdiction like Singapore emerges as a natural diversification option for an increasing number of savers and investors. We expect bullion demand to increase globally in 2016 and particularly here at BullionStar where our strategic focus will be to continue our internationalization efforts by marketing Singapore as the world’s outstanding jurisdiction for buying and storing bullion.

Another noteworthy trend is the increasing popularity of gold coins which have been driven by the increased demand for Canadian Gold Maples for which the Royal Canadian Mint introduced an amended design with improved security features in 2015.

Gold & Silver Prices

The gold price, denominated in Singapore Dollars, declined 4.3% during the year. The gold price started the year at SGD 50.48/gram and ended at SGD 48.33/gram.


The silver price, denominated in Singapore Dollars, declined 6% during the year. The silver price started the year at SGD 0.67/gram and ended at SGD 0.63/gram.


BullionStar Vault Storage

When our customers store their metals with us, they have full control of their bullion portfolio online 24/7. We employ no less than 5 different audit schemes, including third party audits by the LBMA-approved auditor Bureau Veritas, to verify the existence and correctness of the stored bullion. With our vault being integrated in the same venue as our shop and showroom, customers can physically audit and withdraw their precious metals without any prior notification.

By the end of 2015, we stored approximately SGD 53m in precious metals as vault storage provider on behalf of our customers. This corresponds to an increase of 39.5% compared to one year ago.


Customer Satisfaction

We are proud to have earned an outstanding reputation in the bullion industry. At BullionStar, we strive to continuously develop our offering by giving our customers usable online tools, physical accessibility and by sharing our competence and knowledge about precious metals.


About BullionStar

BullionStar is Singapore's premier bullion dealer offering a wide range of precious metals products and services. BullionStar is breaking new ground by introducing modern technology into the age-old precious metals industry. With a proprietary online platform, BullionStar offers customers the ability to efficiently handle and control their bullion holdings 24/7 at their convenience.

BullionStar runs a one-stop retail shop and vault for precious metals at 45 New Bridge Road in Singapore where customers can view, buy, sell, value, deposit, test, audit and physically withdraw precious metals.

With original research and analysis covering the precious metals market on a whole and the Asian market specifically, world renowned analysts Koos Jansen and Ronan Manly keep readers updated on the news that matters.

* This is an indicative report. BullionStar's financial year is 1 July - 30 June. All figures are based on reports from our administration system, are indicative in nature and based on our best efforts.

Amazing Gold Videos

Uncertainty in the Chinese economy and sliding stock markets has dominated the financial news as of late. While the stock markets are sliding, gold and silver prices are up a few percent since the start of the year.

So in the midst of all this, we thought it would good to remind ourselves of the primary reasons why we hold on to physical Gold and Silver. The following videos proudly shot by our customers and friends puts forward the case for physical precious metals better than words can.

These videos were the prize winning videos of a video competition we publicized a few months ago and if we may say so - the quality of the responses were exceptional. Our heartfelt thanks to the following people who put their minds and their hearts into this. Here are the winners:

1st prize: Zachary Shepherdson - The Banana Currency

2nd prize: Jake Oh - Why and Where to Buy Precious Metals in Singapore

3rd prize: Tan Li Na - The Silver Odyssey

3rd prize: Angelo Anthony Agujo - Precious Messages Preserved in Precious Metalsangelo_3rd_prize_bright

The Real Ponzi Scheme

BullionStar was founded on the belief that precious metals generally, and gold specifically, has a central role in the monetary sphere.

Gold is rare, beautiful and has superior metallic characteristics to other metals. Furthermore, gold is durable, portable, divisible, fungible and possesses intrinsic value.  This has led to gold being used as money throughout most of recorded human history. One of the strongest historical value propositions of gold as money is that gold naturally emerged as money in different civilizations and continents worldwide, without the civilizations being aware of each other.

Unbacked fiat/paper/credit, and nowadays electronic currency, has a poor track record. Every time it has been tried historically, it has vanished through hyperinflation, war or political decrees. The fiat currencies of today actually have comparatively good track records, but even so, most currencies in circulation a century ago are no longer in existence today and the ones that are have lost 99% or more of their purchasing power.

Still, there's a lot of gold bashing in the mainstream media as the gold price has fallen slightly over the last couple of years when priced in some of the fiat currencies. Measuring gold in something worthless (fiat currency) is upside down though. Gold has maintained and even increased its purchasing power in the last century, whereas all fiat currencies have lost 99% - 100% of their purchasing power.

Why are there no fiat currency bashing articles in mainstream media? 99% - 100% lost in a century - What a fraud!

Governments are keen, and rightfully so, about going after companies setting up Multi-Level Marketing (MLM) and Ponzi schemes, but always exempt themselves, and their buddies at the central bank, from the rules.

In an MLM scheme, the idea is to recruit downstream marketing participants, known as ‘downline’, so as to generate multiple levels of compensation for the recruiter. This form of pyramid scheme is exactly what we have today with our fiat currencies. Early receivers of newly printed money i.e. governments, central banks and commercial banks are gaining purchasing power, whereas late receivers, read: most normal people, are losing purchasing power.

Today's monetary system, built on the fragile basis of fractional reserves, is a system that is doomed to go bust. You just can't borrow forever and in the process create the money out of thin air with no intention of paying anything back.

For the last four decades, we have experienced tremendous monetary inflation and money printing. The worst villain, the United States, has hyperinflated its currency, and although we've seen substantial price inflation, it hasn't been as high as the monetary inflation. The reason for this is the exorbitant privilege the US is holding in terms of printing the reserve currency of the world, the US Dollar. The only reason the system is holding up is the promise of more and more easy credit to infinity.

However, in the end, the problem of too much debt can't be solved with more debt.

What we are witnessing now is the USD quickly losing structural foreign support as a reserve currency. This is one of the topics I recently covered at BullionStar's 3 year anniversary.

Governments and central banks around the world are no longer interested in increasing their holdings of US Dollar denominated debt. China, the largest sovereign holder of US debt, has not increased its holdings of US debt for four years and the pattern is the same for other surplus countries.


The only reason the system is still holding up is due to the increase in private non-US demand of US Dollar denominated debt. With many developing markets and their currencies crashing, and with people being conditioned to run to the US Dollar as a safe haven in the short-term, this is the savior for the time being.

The US has a national debt of USD 17,000,000,000,000 and unfunded liabilities of USD 100,000,000,000,000 - USD 200,000,000,000,000. How's that for a safe haven?

In reality, everyone knows that the US has no credibility, but it's when people start to act on the knowledge that the US has no credibility that we will see a loss of confidence triggering an avalanche of deleveraging. In previous instances when private support for US debt decreased, there was always foreign government support, but that's no longer the case.

We are at the beginning of the end. Everything today is pointing towards a deflationary depression, but it's when, in a deflationary depression, the government starts to buy debt/credit with cash at all costs coupled with a loss of confidence that we arrive at the end stage - hyperinflation. Policy has never and will never allow for deflation.

Why is the government protecting the most fraudulent schemes?

The Monetary Authority of Singapore recently announced plans for enhancements to its regulatory framework for safeguarding investors' interests.

This is likely an effect of several large MLM/Ponzi gold schemes, like those offered by Genneva Gold, The Gold Guarantee and Suisse International in Singapore, failing during the last 3 years. It's startling that people still fall for scam after scam with guaranteed interest payouts of 20 plus percent and/or guaranteed gold buy-back prices.

One of the suggested measures in Singapore to be tabled in Parliament during 2016 is that buy back schemes where a seller sells gold with a guaranteed buy-back at an agreed price will be regulated as debentures. This is a very good measure which will hopefully clear the Singaporean market from the scammers for good as it will then be clearly illegal to run unlicensed MLM gold schemes.

At BullionStar, we support these steps taken by the MAS.

A larger question however, is whether government authorities around the world are missing out on the really big Ponzi schemes.

The world's largest wholesale gold market is the London Gold Market. The London Gold Market is generally very opaque in nature and there isn’t any trade turnover data published, only net clearing volumes. The trend is unfortunately that transparency is decreasing as the London Bullion Market Association (LBMA) forward market makers have stopped publishing the interest rate for lending gold (GOFO), have ceased supplying data on gold forwards, and has chosen not to be transparent about the process used in the LBMA gold price auction.

To give a hint of the trading volumes at the London Gold Market, the most recent data available is from a survey conducted by the LBMA in the first quarter of 2011. 36 of LBMA's 56 participating members submitted trading statistics for the quarter in question. The average daily trading volume reported, after adjusting for double accounting, turned out to be 170,195 tons of gold for the quarter or 2,700 tons of gold per day. Albeit a staggering number, it's likely that the real volume is even higher as only 64% of the LBMA’s members participated in the survey.

In the survey, the LBMA stated that "it can also be seen that there is an approximately ten to one ratio between the turnover figures and the clearing statistics". 

Using the approximation that trade volume is approximately 10 times higher than net clearing volume (which is conservative as mentioned above) and looking at the LBMA clearing statistics since 2011, there was a slight surge in volume in 2013 inferring a daily average about 3,413 tons of gold traded per day after adjusting for double-accounting. For 2015, volumes have decreased slightly to 2,756 tons of gold traded per day equivalent to about USD 100 billion per day based on the current gold price.

Let's put this into perspective.

According to the World Gold Council's report on Gold Demand Trends for the second quarter 2015, the annual global gold mining production for 2014 was 3,133 tons.

The volume traded during one day on the London Gold Market is thus at least 88% of a whole year's gold mining production. Assuming about 250 trading days in a year, the volume traded solely on the London Gold Market is about 22,000% higher than the world's annual mining production. And this is a conservative estimation.

The clearing and turnover volumes are nothing short of shocking.

As the London Gold Market, together with the New York market, is the global price discovery market for gold, it's apparent that physical supply and demand of gold has nothing to do with the price of gold.

Which do you think carries a higher weight when it comes to influencing the price of gold; An increase or decrease of 10 tons of physical gold demand for the Indian wedding season in a quarter, or the 170,195 tons of paper gold changing ownership each quarter in the London Gold Market?

Factors like Indian wedding demand are often cited by media as a cause of price movements, whereas the London Gold Market volumes are never mentioned. Whether demand is high during the Indian wedding season or not does not matter one ounce in terms of price fluctuations. It totally misses the point as the London Gold Market, together with the US/New York market, dominates price discovery.

Physical demand matters in stressing and ultimately breaking the market structure but it does not matter for the (paper) price of gold today. The fundamentals for physical gold are completely separated from the paper price of gold. The paper price of gold has nothing to do with the physical market whatsoever.

The price for physical bullion products is never traded at parity with the paper price. There is always a price premium. When demand for physical gold is increasing, as we have seen over the last couple of months, price premiums are shooting up, diverging the physical price from the paper price even further.

BullionStar deals only in physical precious metals

When putting the above in perspective, it's clear that the paper trading of precious metals is irrelevant to physical gold and that it is unsustainable in the longer term.

That's why we at BullionStar have a strong aversion to all forms of paper trading of precious metals.

At BullionStar, we don't engage, trade or speculate on any paper markets, financial markets, commodity exchanges, commodity platforms or anything similar. We don't engage in forwards, futures, spot commodity trading or anything of the kind. We never in any capacity work with brokerages of any kind.

BullionStar merely purchases fabricated precious metals items, and to a smaller extent numismatics and jewellery, from wholesalers, mints and refineries and retails these items.

Physical precious metals decoupling

Prices for physical precious metals are in the process of decoupling from the paper price.

The first phase, in which we are now, is that we get shortages of physical bullion.

The second phase is that the physical flow completely dries up and the physical price resets based on physical supply and demand at a higher level few people can imagine today.

Paper gold trading needs to have a functional physical market in the background for keeping up the confidence in the paper trading. When gold supply dries up on the physical market, there will no longer be any confidence in the paper market as everyone will realize that the paper market consisted by nothing but paper gold created out of thin air. As a result the paper gold market will crash and the price of physical gold will reset higher.

When this happens, it's important that you deal with a bullion dealer without any exposure to paper commodity markets that only deals in physical precious metals.

BullionStar operates with the ideological belief that physical precious metals have important monetary properties and that paper trading is inherently risky. That is why we refrain from participating in the paper trading casino style market. The bullion we offer is physical in nature. We have never and will never offer any unbacked metal, collateralization of customers’ physical bullion, forwards, futures or leveraged trading. All bullion you buy from BullionStar is fabricated, unencumbered, and fully physically allocated bullion.

By Torgny Persson, CEO BullionStar