What were the reasons for you wanting to join LBMA and what do you see as the key benefits of membership?
Trust is an invaluable commodity in our core business of wealth protection. It is the foundation from which we have built all our services, from bullion retailing to vaulting, testing, collateralisation and facility management. LBMA is internationally recognised as the trusted standard-setting body in the precious metals industry, so it aligns with our values.
Joining LBMA is an important milestone because it facilitates relationships with other LBMA members as well as institutions at large, opening up opportunities which might have been more challenging to achieve otherwise. There are many synergies in how we can work with LBMA and its members toward the industry’s continuous improvement.
Tell us about your company’s role in the precious metals market?
We view physical precious metals as an ideal, intergenerational, wealth insurance and have specialised in minimising counterparty, currency and jurisdictional risks for our clients. Our clients seek us out to provide them with reliable wealth preservation solutions against black swan economic collapses and systemic crises that can upset the global order.
We believe that Singapore is an ideal jurisdiction for wealth protection and we have invested in a high-capacity, 180,000 sq ft vaulting facility which can hold up to 500 million ounces of precious metals, rare earth metals as well as art pieces and luxury watches.
Our capital intensive vertical-integration approach is highly unusual in the precious metals industry, but we view it as a natural evolution of our intergenerational wealth protection philosophy.
What’s the background and history of the company?
Founded in 2009 by Gregor Gregersen, Silver Bullion was borne out of the 2008 global financial crisis. The lesson from this crisis was that direct ownership of physical precious metals in a safe jurisdiction were one of the few stores of wealth that did not depend on somebody’s solvency, but only if storage counterparty and sovereign risks were minimised or eliminated.
Silver Bullion had modest beginnings, but a strong sense of mission and software development capabilities, which allowed the company to operate efficiently and
innovate, eventually growing to a company valuation of SGD 290 million.
What factors do you expect to impact your business in the short to long term?
We believe that escalating internal conflicts within nations, driven by political polarisation, unsustainable debt burdens and increasing geopolitical tension will lead to a sharp increase of physical precious metal demand in many countries.
Owning physical metals abroad, in a safe jurisdiction such as Singapore, is prudent precaution in an increasingly unpredictable world. In 2024, for example, we expect three factors to be potential catalysts of this demand:
- In late February 2024, frozen Russian state assets held in Western banks might be confiscated in violation of the International Emergency Economic Powers Act (IEEPA). This would create a precedent that is likely to accelerate the ‘flight to physical’ as more investors, institutions and sovereigns reduce their risk exposures by switching to physical ownership.
- In April 2024, the Silver Institute will release silver demand and supply statistics for the year 2023. We believe that, driven by growth in photovoltaic applications, silver demand will be much higher than expected and will be set to keep increasing faster than mining supply for the foreseeable future. Positive mainstream media coverage could then propel interest in silver and precious metals.
- In November 2024, the United States elections will create anxiety for millions of people, which will naturally be a driver for demand into safe haven assets such as physical precious metals.
What are your future plans for the business?
We want to be a driver for increased public awareness and resurgence of physical precious metals as a mainstream investment.
At the end of the stagflationary period which lasted from 1973 until 1982, it is estimated that as much as 8% of assets in US portfolios were invested in precious metals and related assets. In 2024, it is less than 1%.
In our increasingly litigious and over-indebted world, precious metals ownership should be much higher than it is today. The Reserve’s iconic design is meant to be a physical manifestation of precious metal’s resurgence in popularity as a mainstream investment.
The main vault schematic.
