-----Original Message-----
From: Douglas Jackson
>precisely what risk(s) does Lloyd's insure the Mint against
>http://www.perthmint.com.au/depository/faq/insurance.shtml ?
>What are
>the liability limits of the Lloyd's policy? Could you fax me a copy
of
>the pertinent provisions of the Lloyd's policy? Are they insuring the
>Mint's performance vis-a-vis unallocated deposits too? or are they
>insuring against losses of physical specie relating to physical
security
>etc.?
>From Perth mint user agreement:
2.5 Insurance
PMDS shall ensure that a Client's Precious Metal is stored at PMDS's
risk and
insured against damage or loss for 100% of its market value.
I am not a legal expert, but that seems fairly clear to me... maybe I
have missed something, it will be interesting to see the reply you get
from the mint, please post it.
>Would they pay in gold?
Good question.
>As for that, does the State set aside a reserve to enable it to
perform
>in the event it must cover the Mint's unallocated deposit
liabilities?
>Does it publish financial statements detailing its exposure to the
>Mint's unallocated deposit liabilities?
Again From the User agreement:
2.3 Unallocated Precious Metal
Unallocated Precious Metal shall be stored by PMDS on the following
terms:
a . The Unallocated Precious Metal purchased by the Client shall be
recorded in
the Client's Metal Account on the PMDS register maintained by The
Perth
Mint.
b. The Client shall own, as an owner in common, an undivided interest
in a pool
of Unallocated Precious Metal maintained in bulk storage on a fungible
basis
with the Unallocated Precious Metal of other owners, which will not
permit
the identification of the Client's Unallocated Precious Metal.
c. PMDS may use or deal in all or part of the Client's Unallocated
Precious
Metal for its own account as if it were the owner.
d. Any gain or loss arising from the use of or dealing in the
Client's Unallocated
Precious Metal shall accrue to PMDS's account.
e. Any use of or dealing in the Client's Unallocated Precious Metal
by PMDS
will be without prejudice to the Client's right at any time to
instruct PMDS to
sell or take delivery of Allocated Precious Metal equivalent to the
type and
quantity of Unallocated Precious Metal in the Client's Metal Account.
Note point b. the storage is "on a fungible basis..."
>From websters.com:
fun.gi.ble (fnj-bl)
adj.
Law. Returnable or negotiable in kind or by substitution, as a
quantity of grain for an equal amount of the same kind of grain.
Interchangeable.
n.
Something that is exchangeable or substitutable. Often used in the
plural.
So the unallocated metal is always physically in the vault... Point c.
and d. allow the mint to use the unallocated gold to trade BUT point
e. is notable: "...without prejudice to the Client's right at any
time to instruct PMDS to sell or take delivery of Allocated Precious
Metal..."
Add to this the Lloyds insurance, and the Govt guarantee, not to
mention the Perth mint's impeccable track record for over 100 years
and IMHO the unallocated storage at Perth mint is VERY secure.
>While on subject, what proportion of its unallocated deposit
liabilities
>does the Mint typically reserve against with physical metal?
Interesting question, but taking into account that the WA is the third
largest producer of gold in the world, my take is that they have
pretty substantial reserves "in the ground"....
>Finally,
>how much gold liability is the Mint exposed to with its unallocated
>storage facility?
I wonder if they will answer this...
Regards,
Sidd.
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