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TDV Interview With Swiss Metals: How To Profit From Strategic Rare Metals And Their Coming Shortage
[The following interview is conducted by TDV Chief Editor Jeff Berwick]
At The Dollar Vigilante (TDV) we are always looking for ingenuitive ways to keep the majority of your assets outside of the current financial and monetary system. At numerous conferences we keep running into Knut Andersen, the President and CEO of SwissMetal Inc., and Knut and SwissMetal are also the Gold Sponsor at the Anarchapulco freedom event coming up at the end of this month.
SwissMetal is based in Panama and has a very unique and interesting way to invest in hard assets, like rare and strategic metals with a focus on asset protection of individual and industrial investors.
I had the opportunity to speak with Knut this week to get some insights into what they offer.
The Dollar Vigilante (TDV): Knut, thank you for taking the time! First, why don’t you tell us a little about SwissMetal and also your role there?
Knut Andersen (KA): Swissmetal Inc. helps individuals protect their assets and move away from volatile capital markets by using rare strategic metals.
I am the President and CEO, and lead an experienced team of account managers who provide personalized access to these metals for clients worldwide. I also speak at conferences around the world showing investors how to profit from this brand new asset class.
Strategic metals are a set of metals which are vital in 95% of products that are manufactured today, including air, sea, and land equipment, medical equipment, pharmaceuticals, TV’s, cell phones, computers, armaments, night vision goggles, jet engines, clothing, cosmetics and creams, hybrid and electric vehicles, solar panels, and much more.
By purchasing and storing these metals for the future, clients can fight inflation, and make profits by reselling these assets back into the industry when prices increase.
Strategic metals are free from the manipulation that plagues the gold and silver market, completely private and non-reportable since they are non-financial assets, and are fiat currency proof since they can be cashed out in any currency, anywhere in the world. Normally our clients choose to store their metals in our bank level secure vaults, which are 100% insured, and where their assets are fully allocated and segregated.
TDV: Those benefits tick a lot of the boxes for TDV readers. Give us some examples of what you mean by “strategic metals”. Which metals exactly?
KA: Strategic metals are a set of elements needed by industry that are either rare, or expensive and difficult to produce. Many of these metals are byproducts of other metal production, and are not found on their own in nature. We focus on metals our industry contacts tell us are in short supply, or are currently difficult to find.
At this time, that includes indium, hafnium, gallium, tellurium, tantalum, bismuth, molybdenum, chromium, cobalt, zirconium, tungsten, rhenium, dysprosium, germanium, and niobium. We also supply gold and silver in the forms most often wanted by industry.
We separate these metals into 4 different diverse baskets focusing on different industries, or they can be purchased as single metals for a more direct play.
TDV: This is a very interesting approach! I haven’t heard of other companies doing similar things. Do you have competition in this market?
KA: This can be answered a couple of different ways depending on who you consider as competitors.
Within the Strategic Metals space, there are two types of companies you can buy from. The first is from companies who sell strategic metals to industry. These companies aren’t competition for us because they deal with large companies needing manufacturing metals, not individuals looking to stockpile metals for the future.
The second type do sell individual strategic rare metals to individual investors. However those companies haven’t done the leg work to form relationships with industry buyers. So while they will sell you a kilogram of a strategic metal, you are on your own to try find a buyer, and large manufacturing firms aren’t going to purchase that kilogram of metal. They also have very little or no guidance on which metals are in demand, and why.
Swissmetal Inc on the other hand has been working with industry insiders to create diverse baskets focusing on specific industries. We also have the contacts and the network built who are willing to buy back these metals and sell them into the industry. Our group currently manages over 300 million dollars in strategic metals, and within the next few years will manage the biggest stockpile outside of China, so we have the industry clout to actually make the assets work for our clients.
Our real competition comes from outside of the strategic metals world, and is in other asset protection tools, the biggest two being gold and silver. We don’t knock gold and silver, and can actually help our clients with those. But we see strategic metals as an add on because while gold and silver both are prone to manipulation in the market, and gold doesn’t have a strong industrial demand, strategic metals can fill both those gaps.
TDV: Can you expand on that a little, why would clients choose these little known metals over the much more popular gold and silver?
KA: There are a few reasons, and one of them hinges on the popularity itself. Gold and silver are both traded as a paper product on the major exchanges. Because of this, there is much more gold and silver traded on a daily basis than actually exists in the physical form. This causes 2 problems. First, if everyone were to sell at one time, there would be a run on gold and silver, similar to a run on a bank, where there isn’t enough actual metal to meet all the paper flying around.
Next, big entities are in a position to manipulate the market by shorting massive amounts of these precious metals. That drives prices lower causing a panic sell by leveraged investors who would be forced to cover their assets, driving prices even lower. The large entities can then swoop in and buy more precious metals, either in physical or paper form because they have driven the prices so low.
Owning physical gold and silver protects you somewhat from the above problems, but they can still cause volatility in prices if you need to sell in a hurry.
The next issue comes down to supply and demand. Especially in the case of gold. Strategic metals have a growing demand in so many critical items we need in a day-to-day basis. Gold on the other hand, has a few industrial applications like high end connectors, but other than that is little more than a pretty yellow metal. That’s why historically gold is a great hedge against inflation, but if you don’t time it perfectly it isn’t really a profit tool.
TDV: At Anarchapulco, your keynote speech title is “How To Profit From The Upcoming Wave Of Technological Metals Shortages.” Could you tell us what that is about?
KA: The world is experiencing an unprecedented technological boom right now, and unlike other booms in the past (like the industrial revolution), the technological boom doesn’t experience the same limitations. For example, during the technological revolution man invented flight, which was a huge advancement. Since then planes have evolved, but there hasn’t been the same jump.
Technology on the other hand feeds itself, so the more innovation we have, the more technology can be developed. This innovation can speed up infinitely until we reach singularity, or the point where new technology is developed instantaneously.
Strategic metals are also known as technological metals because almost all technology relies on these metals to exist. As the technology is increasing at this incredible pace, the mining and production of these metals can’t progress at the same pace, so shortages are very near on the horizon. These shortages are already seen as critical problems in most countries growth plans, and prices should skyrocket as manufactures fight to acquire the metals they need to foster current and future growing demand. We are already seeing the crunch in several metals.
Like I said earlier, strategic metals are crucial in 95% of all products manufactured today, not just technological products. But technology is definitely one of the aspects we are most excited about, and will increase the shortages experienced in all of those other industries.
Another exciting prospect is the fact over 1 billion people will be emerging from poverty over the next few years. All of those people will demand the products you and I take for granted. Everything from cellphones and other technology to clothing, cosmetics, and pharmaceuticals.
TDV: This is a fascinating service you are offering to individual investors that they would not be able to do on their own without. What kind of clients do you accept? Do you accept American clients (that is always a big question nowadays)? What is the minimum investment amount accepted?
KA: Yes, we do take clients from the US, in fact it’s an area we specialize in because of the difficulty Americans have in many alternative investments. One of the big advantages strategic metals have over other asset protection tools like gold and silver, is they are not considered financial assets or accounts.
So for that reason, there are no reporting requirements, just like there are no reporting requirements if you purchase a car. In fact, we don’t have a mechanism for reporting even if we wanted to. They are completely private and confidential making us a very popular choice for anyone who values their financial privacy.
Of course, depending on the country of citizenship and residency, clients may have reporting requirements when they sell their metals, and need to report a gain. But it is between them and their financial / tax advisers what those reporting requirements are, and we don’t report purchase or sales to anyone.
Another advantage of our business model is, we opened the strategic metals market to almost any investor, as opposed the the millions of dollars it used to take to get involved. Our baskets, or groups of metals, start at around $10,500, and go up to around $53,000. But you can purchase as many baskets and mix and match for the best diversification to suit your portfolio.
For investors wanting a direct play in single metals, the minimum investment is $25,000.
TDV: How does metals ownership work? Do owners need to find storage for their metals?
KA: Owners are welcome to take delivery of their metals, but due to the cost and logistics, most choose to have us arrange storage for them. We store the metals in bank level secure vaults in either Panama or Switzerland depending on the metal. All metals are allocated and segregated to the owner, and are fully 100% insured.
The metals themselves can be owned a number of different ways. Some of our owners choose to just purchase the metals in their own name, while others prefer the added privacy of an entity like an LLC.
Funds for metals can be paid onshore, directly to a bank in the US, and then transferred offshore by us. Or, if funds are already offshore, they can be transferred to Panama or Germany in any currency. We also accept Bitcoin, which I think would be of interest to many people seeing this interview.
TDV: You’ve probably heard of the new MyRA plan in the US, and many of us think this might be a path to nationalizing the IRA. Do you have any thoughts on how to protect those?
KA: Yes, we have a fully compliant IRA / 401K program.
We will work with you and a US-based IRA custodian to setup an offshore LLC which owns the metals, and then the IRA owns the LLC. This is a perfectly legal structure that protects your assets from confiscation, lawsuits and more.
Plus thanks to the magic of triple compounding, profits can really soar in this type of structure.
There’s a little bit more complexity to it, but we’ve compressed it down to 3 simple steps, and it’s a very popular option for anyone with assets in an IRA they would like to protect, and get out of the volatile capital markets. Look at what happened in 2008, many IRA’s were virtually wiped out.
TDV: Speaking of profits, what kinds of return are you getting on these investments.
KA: Since we’ve launched, the gains have averaged around 12% across all of our diversified baskets. But where we really add value, are the inside contacts, and the huge stockpiles we manage. We are able to sell metals back directly into industry, and can take advantage of short term shortages when prices can increase rapidly.
For example, in 2010 prices of one of our baskets jumped 47%. With the shortages we expect on the horizon, those gains could look like small potatoes.
The thing with strategic metals is only minute quantities are used in different products, so from a per unit cost basis, even big jumps in price don’t make a very big per unit cost difference. Even if prices doubled or tripled, a company like Boeing wouldn’t feel too much of a hit on the cost of an engine. But if you are the person holding the stock pile, profits could be massive.
TDV: For many Americans, looking to get into hard assets outside of the US, this appears to be a very, very enticing product, especially in this day and age of Foreign Account Tax Compliance Act (FATCA) reporting. And, even for non-Americans, this is a unique approach that I am not aware of anyone else doing, anywhere. I would recommend for those looking for this type of investment/service to contact SwissMetal for more information. How is the best way for them to contact you?
KA: Getting a hold of us is easy, we are available during normal US business hours and can be reached by phone at 1-855-854-4679 from the US, or elsewhere at 1-786-693-1135. For more information, you can download our full color catalog here. Of course we can also be visited at Anarchapulco this year, or anytime in our Panama based office.
TDV: Thank you for your time Knut and I’ll see you next week!
Questions or comments? Join us at the TDV Blog.
The Dollar Vigilante is a free-market financial newsletter focused on covering all aspects of the ongoing financial collapse. The newsletter has news, information and analysis on investments for safety and for profit during the collapse including investments in gold, silver, energy and agriculture commodities and publicly traded stocks. As well, the newsletter covers other aspects including expatriation, both financially and physically and news and info on health, safety and other ways to survive the coming collapse of the US Dollar safely and comfortably. You can sign up to receive our FREE monthly newsletter, our Basic Newsletter ($15/month) or our Full Newsletter ($25/month) with specific stock recommendations and updates at our Subscriptions page on our website at DollarVigilante.com.
Source: http://www.dollarvigilante.com/blog/2015/2/18/tdv-interview-with-swiss-metals-how-to-profit-from-strategic.html#6767
