Jim Willie and The Doc Radio Broadcast Transcript

[KMS]

The site and link are available through our "Gold and Silver News" page, but I enjoyed this article and wanted to point it out to our members.

Link here

 

[pmbug]

... I remember when gold went below $1800 and plumbed the depths of $1700, I sent a message to one of best sources of gold information who’s a trader in a foreign country- he’s not an American citizen. And I said, if you don’t mind, what are you seeing for the prevailing physical gold price as we’re at $1720 or $1730 right now one the supposed price discovery out of COMEX. And he said, well, you have to pay very little attention to COMEX, it might show $1730, but I could show you lots and lots of sales in the multiple millions of gold in the $1950 range. So there was a $230 premium for physical. ...

I don't understand what Jim Willie is saying here. I don't understand how anyone buying huge volume was paying significantly higher premiums than retail available to Joe Blow at tulving, apmex, etc.

 

[KMS]

It appears he is claiming that according to his source who lives and trades outside of the U.S., informed him that the premium necessary to acquire Physical in volume was much higher than spot. Numbers like $80 million in physical, etc.

Weren't we just talking about that issue in another thread? Big buyers cannot get delivery without resorting to a much higher premium for bulk?

 

[DoChenRollingBearing]

I have two problems with Jim Willie, who is in general a great read. But:

1) He claims that in the recent past that some purchasers of gold contracts from the COMEX who wanted PHYSICAL gold were instead paid huge cash amounts (20% - 25%) above the price to accept cash instead of gold. I have read that elsewhere, but NO ONE has shown any documentation... If I were offered a 20% cash premium over gold, I would take the money and buy 100 oz physical (Tulving for example) and enjoy my 20% cash bonus! So, logically, that sounds wrong.

2) It "kind of" seems wrong that BIG buyers have to pay more per oz. Although FOFOA agrees with that. And Sprott was turned down in his efforts to buy 100 tons. If it is true that big buyers (say, one tonne or more (26,400 toz worth roughly $42,000,000)) have to pay way over spot, I would think that at some point pretty soon the PHYSICAL gold price and the "paper gold" prices will have to diverge. Maybe this "problem 2" I have with JW really is not, that we may be in some kind of foreplay before the price of physical TAKES WAY OFF. I do not know...

But, I sure as h*** feel much better at having an "adequate" amount of gold, and look forward as ever to buying more as income arrives.

 

[Steven Douglas]

2) It "kind of" seems wrong that BIG buyers have to pay more per oz. Although FOFOA agrees with that. And Sprott was turned down in his efforts to buy 100 tons.

What I don't understand about any of this, assuming it is true (they pay more, have to wait longer, can be turned down, etc.,), is why Sprott et al aren't exercising "normal" channels as well (apmex et al), placing constant orders at "near spot" in a way that continuously swamps all of their available supplies.

 

[DoChenRollingBearing]

I can see it S.D...



Ring, ring:

HT: Alo?

Sprott: Yo, Hannes. How much gold and silver do you have in stock?

HT: PMBug says I have 300,000 oz of silver and 4000 oz of gold.

Sprott: OK, I'll take it. How much? Wire transfer in an hour.

HT: Ahh... Ahh... You just made my day, sir!

 

[Unobtanium]

I can see it S.D...



Ring, ring:

HT: Alo?

Sprott: Yo, Hannes. How much gold and silver do you have in stock?

HT: PMBug says I have 300,000 oz of silver and 4000 oz of gold.

Sprott: OK, I'll take it. How much? Wire transfer in an hour.

HT: Ahh... Ahh... You just made my day, sir!

ROTFL! Good one Bearing! Love the HT accent too.

 

[pmbug]

What I don't understand about any of this, assuming it is true (they pay more, have to wait longer, can be turned down, etc.,), is why Sprott et al aren't exercising "normal" channels as well (apmex et al), placing constant orders at "near spot" in a way that continuously swamps all of their available supplies.

For one thing, Sprott has certain specifications for the metal he buys - bars of a certain size with serial numbers IIRC. There is only a small percentage of a retail dealer's inventory which would meet his criteria I think. He's not buying monster boxes of coins, small bars/rounds or large bars without serial numbers.

 

[KMS]

Well not that I need to point out the obvious then, but perhaps all those other really rich buyers are using the same standards as Sprott, wisely, and therefore such purchases are in fact commanding the premiums that they are reporting. Crazy eh?

 

[DoChenRollingBearing]

KMS! That is a good point! That may be why the premiums for Sprott's PM funds are higher than spot. Very good!

+ $1660

 

[Steven Douglas]

Well not that I need to point out the obvious then, but perhaps all those other really rich buyers are using the same standards as Sprott, wisely, and therefore such purchases are in fact commanding the premiums that they are reporting. Crazy eh?

Actually, you did need to point that out, as it wasn't obvious to me. And thanks for pointing it out!

 

[rblong2us]

Interesting that although weve all been preaching about how cheap gold is at any price weve already seen and weve also discussed ad nauseum just how much physical p.m. is actually out there for sale, yet we fail to accept the reports of big premiums for very large purchases, when they are simply confirming what we already know.

Thats the normalcy bias thing I guess.