Time Stamp References:1:00 - How he started the BMG fund.2:55 - Minimums and there other funds.4:10 - Portfolio allocation recommendations.6:10 - Storage risk considerations.9:10 - Collectible forms of precious metals.11:25 - Correlating gold with US Debt.12:40 - Real estate crash and debt concerns.15:55 - Force majeure clauses in leases.16:50 - Comex concerns and delivery demand.18:04 - China's physical gold holdings.20:30 - Risk to the US dollar.21:20 - Why miners should hold gold.
Tom welcomes Nick Barisheff, President and CEO of BMG, to the show. Nick started the BMG fund in 1998 to create a safe precious metals product that qualified for Canadian retirement accounts. He wanted it structured so that there could be no interference or encumbrance with the bullion.
He discusses the risk of confiscation of gold and why the correct term should be "expropriation." Currently, the chance of this action seems remote since the price would need to be a lot higher. It's more likely that governments would instead tax excessive profits on these types of investments.
When you compare US debt levels to the current price of gold, we are still quite undervalued. Money printing has grown dramatically, and soon they will need to stimulate the economy again.
Further defaults are coming this fall, and we will likely see a pattern of cascading failures. These failures will occur across sectors like commercial real estate. Also, there is a general exodus occurring from the cities to the country.
Nick discusses the increasing demand for metals and the possibilities for a failure to deliver in futures. He cautions that the Comex can always change the rules.
China has stated that they want to have more gold than the United States. Both China and Russia have been keeping all the gold they produce. China has been acquiring gold through their sovereign wealth funds while under-reporting. He thinks China will not announce they're true holdings until shortages develop. When China proves ownership of 10,000 tons, that will also reveal to the world that the US no longer has the gold it claims.