SG Wealth Builder is pleased to conduct an email interview with Torgny Persson, CEO of BullionStar, a bullion dealer based in Singapore which exempted investment grade precious metals from the goods and services tax (GST). Just like BullionStar, one of the the goals of SG Wealth Builder is to educate Singaporeans on the merits of owning gold and silver bullion as a means of wealth preservation.
1) Mr Torgny, in your opinion, what is the outlook for gold in 2015? Given that the economy recovery is gaining traction in United States, would there be any negative or positive impact for gold prices moving forward?
The so called recovery is a phony recovery in my opinion. The economies in the West are facing a lot of underlying problems with unprecedented debt levels, trade imbalances, high unemployment and misallocated investments. The current monetary system based on fiat credit and fractional reserve banking is going to implode under the debt burden. The price of gold thus hasn’t got so much to do with gold but everything to do with how worthless our currencies get.
Gold will revalue significantly in terms of purchasing power in the monetary reset we are soon to embark on. When exactly? I don’t know, we are still in the run up with hyperdeflationary pressure which may turn to hyperinflation quickly when savers revert back to the “buy now” mentality and all the savings are undone. Paper trading works well up until the moment it doesn’t and then there’s a total loss.
For the short term, I don’t have any prediction for the price of gold. In the long term, my prediction is that gold will revalue significantly as paper money depreciate closer to its intrinsic value of zero.
2) BullionStar was set up only in 2012 but delivered a set of stellar sales result recently. Can you share with the readers the reason for choosing to establish the company in Singapore, since the market here is relatively much smaller than China and India?
Singapore is a bastion for free trade and asset preservation. Singapore ranks first in the world for business friendliness. Singapore is the only free economy in the world where the government actively supports the precious metals industry. Singapore is simply the best country in the world to buy and store precious metals for the following reasons:
– No taxes for bullion whatsoever
– No reporting requirements
– Very low crime with a strong rule of law
– Strong protection of property ownership rights
– Stable politically with a pro-gold government
There’s no other country in the world that can compare.
3) Tax exemption aside, what are the other areas which you think Singapore can do to promote bullion?
The Singaporean government is one of very few pro-gold governments in the world and are already doing a good job of promoting the bullion industry through the trade agency IE Singapore. Singapore e.g. hosted the LBMA forum in 2014. As I’ve previously started two bullion dealers in Europe, Swedish LibertySilver.se and Estonian LibertySilver.ee, I’m in a position to compare the difference in government support in Europe and Singapore. Whereas there’s no support but plenty of bureaucracy and disincentives in Europe, Singapore stands out positively in deregulating and creating a sound transit, trading and storage hub for gold in Asia.
In terms of regulatory environment, the exemption of physical precious metals from GST in 2012 opened up the market in Singapore. If I were to suggest something, it would be that the scope of the exemption is extended. Gold coins must for example currently be of a minimum gold purity of .999 to be exempted which has the effect that the world’s most minted bullion gold coin, the Krugerrand, isn’t exempted from GST.
4) BullionStar is seen as trail-blazer in Singapore as your company is one of the few that accepts bitcoin and pay staff salaries in precious metals! Going forward, would there be more innovative ideas from BullionStar and what exciting developments can Singapore expect from BullionStar?
Yes, absolutely, our business philosophy is to introduce modern technology and usability into the old fashioned bullion industry.
We just released our new chart feature where it’s possible to measure different assets in relative terms e.g. measure with gold as unit of account. We will shortly allow for the transfer-in/deposit of gold and silver to our vault and there’s much more to come. We have a long and ambitious development list!
5) What is the general profiles of your customers? Are there many Singaporeans building wealth with bullion?
Yes, the majority of our customers are Singaporeans. There’s a 50/50 split between customers taking physical delivery/possession and customer’s storing their bullion with us as their vault provider.
We are keen not only on taking market shares but developing the market and the industry as well as sharing information. With our world renowned precious metals analysts Koos Jansen and Ronan Manly, we are covering the trends that matter.