[New post] Perth Mint: We Know What You Did Last Summer
User ID posted: " https://www.youtube.com/watch?v=olniLL1hlSo Perth Mint: We Know What You Did Last Summer by Robert Kientz New Bombshell Drop!! We are back with CFA Daniel Vigario to examine the 2021 Perth Mint published financial report in the stunning conclusion"
We are back with CFA Daniel Vigario to examine the 2021 Perth Mint published financial report in the stunning conclusion of this saga.
Daniel has done an excellent job breaking down the numbers, and more importantly, telling us exactly how the Perth Mint used customer metals holdings to help their S&P rated counterparty and earn interest on lending.
In other words, the Perth Mint was a bullion bank and put their customer metals deposits at risk!!
Further, our previous work in this series has forced the Perth Mint to update their financial disclosures, giving us stunning new information on what they have been doing with their customer assets the last few years.
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Robert Kientz: Everybody this is Rob Kientz to goldsilverpros.com it is Thursday, September 30 2021. And back with me is my good friend Daniel Vigario. Many of you know him from our Perth Mint series where Daniel as a CFA had to analyze the 2020 financial statements for the Perth Mint and found through his analysis, rebuilding the trial balance, and doing some extrapolations of the data in the report, that he believed that they're running a fractional reserve gold system and doing quite a few other things he's going to explain for those of you who are new to the program, and haven't seen that Perth Mint series, what we found in last year's financials. And what we'll spend the bulk of the time talking about today is the 2021 financials because those have come out recently. And Daniel has analyzed those and has some new insights for us on the Perth Mint. Daniel, how are you doing today?
Daniel Vigario: Hi, Rob, good to see you again. It's great to be with you once again and the viewers. Thank you.
Robert Kientz: Yeah, thank you. And first of all, Daniel, thank you for taking the time to join us. And secondly, all of the hours that you put into this, I know doing rebuilding trial balance sheets is hard work, it takes a long time, it takes a high level of expertise. So you know, I think the audience definitely appreciates all the time you put into this because if we hadn't had you looking at this, this probably would have gone unnoticed and all the conclusions that we have from it, the public wouldn't know about. And I know that you had expressed a little bit of frustration that it appears as though Perth Mint kind of got away with what they did. But I think the value here is in letting the public know what they did. Because eventually, you know, all the things going on the middle markets coming to life, people are starting to wake up to that fact. And there's going to be a pushback coming. And this will contribute to that this will contribute to the education. So I just want to say thank you for that. And, and I think it's tremendously valuable to the gold and silver community
Daniel Vigario: Rob, thank you very much.
Robert Kientz: You're welcome. So if you'll give us just a couple of minutes on what you saw last year to catch everybody up to date. So this will cover our previous videos in summary form and then we'll break down what you're finding in the new financials.
Daniel Vigario: Sure. So let me just share my screen quickly. And I will just quickly high level go through what went through last couple of series. I'm assuming you can see my screen now. Okay, so at a very high level, we took the 2020 financial status of the person and this is the 2021 accounts we're looking at. Yep, so we took these financials. And we, as you said, created a I created a trial balance, which is just simply taking the balance sheet, the P&L, stacking it on top of each other, so that you can see all the data in one nice, neat column. And then you can analyze it month on month, year on year, which we did over time. So for the viewers that are new to the channel, don't get too frightened when you look at the spreadsheet. But essentially what we're looking at here, again, is just the balance sheet descriptions or the balance sheet classifications are sitting over here. And then we've got current assets, which part of the balance sheet, we then have liabilities down here, I also installed that with the balance sheet, we have equity and then that beneath here we have the profit and loss which is the income statement and then all of that needs to turn to zero, which is down here. So all the accounting terms debits and credits, all the all the items on the financial statements need to power down to zero and then you know that it's correct it seems that what you've constructed in the trial balance
Robert Kientz: Okay, so stopping before we go further, for those of you who don't have an accounting background, essentially what he's doing is he's taking the published financial statements where they write it in long form paragraph form with data tables, and he's rebuilding what should be their trial balance sheet from that. So he's basically reverse engineering it from the data that's in that published financial publish an audited financial report for Perth Mint, as well as the notes and the notes are very key because the notes we saw last time, the notes weren't fully explanatory of what's going on and you're going to show us where some of these notes have changed and provide us even more updated information from what you had last year. Okay, so I'll let you go and tell people you know basically what you found for from the 2020 and then we'll get into the 2021.
Daniel Vigario: So in summary, we try to answer three questions in the last couple of series, the question number one is, is the Perth Mint running at net short and allocated precious metals program. So what that means is, if I take a look at this row, the valuation which is this is 2020, this column appears 2020 so the value of the customer accounts plus the value of the leased metal so 1.7 plus 4.6 total 6.3. Is that greater than or less than or equal to the value of the precious metal stock in Entry being an allocated personnels in the vaults, so which is this number over here being 5.4? So ask that question for the scroll down to the summary. We had 1.7 plus 4.6 is 6.3. In the actual volts for unallocated middle equipment has 5.4 so the net short the tune of almost a billion Aussie dollars that was question one answered there are definitely running a fractional reserve system as of June 2020. There will short 1 billion Aussie dollars metal in the vault versus obligations to customers and these
Robert Kientz: So these guys have last year they had more borrowings and they had metals to the tune of about looks like about 17% because they were loge 1.17. Yes, they had 17% sure what went on to 929 million Australian (AU$), right?
Daniel Vigario: Correct. Yeah, that's correct. That's question one. Question two was is that so that speaks to the fact that the Perth Mint customers and allocated customers are exposed to a situation with everyone wanted the metal delivered to them. So it converted from unallocated to allocate and delivered, it would be a short of a billion Aussie dollars. That's if the customers plus the less or so the bullion banks that had lent the Perth Mint metal. If they all wanted the middle back at the same time, it would have been a billion Aussie dollars short. And that speaks to the fact that customers are not exposed to a delivery risk of physical precious metals.
Robert Kientz: So Daniel to ask, you know, another question to clarify one of the points you made in our previous videos. This wasn't always the case with Perth Mint a few years ago, they had it you know, borrow more than they had or they weren't net short. And they've only done that within the last couple of years. Is that correct?
Daniel Vigario: So in 2017, over here, you can see the position was positive all the way through from 2017 to 2013. And after 2017sSo 18'-19' and 20'. They were growing the significant net short position. So unallocated metal, no fault. This is the obligations to customers and metal they sold
Robert Kientz: Nice. Daniel, may I ask you to increase the size of that just a wee bit so that we can get those numbers nice and big for people to see. Okay, thank you.
Daniel Vigario: So the next question is, that's risk one that the customer facing that they're unaware of. So Perth Mint customers unallocated customers are not aware of this risk, we've made that quite clear as at June 2020, that their risk is there and it should be aware of the second thing the second question is, is the Perth Mint liquid? In other words, so customers have the currency with the Perth Mint, they've invested in precious metals, we understand the risk of short position, but is there a risk that the person could go bust? Now we know the Perth Mint is backed by the Western Australian government. So in theory, they can never go bust because they backed by the government. However, it's important to know whether the entity that you're dealing with that you're trusting with your metal is actually liquid. So what does liquidity mean? It means is the current assets greater than the current liabilities on any company. And if that number is positive, that means they are liquid if the numbers negative means they are illiquid, or they're running in the liquid position on their balance sheet, meaning that they could go bust if cash becomes constrained.
Robert Kientz: Okay, and you're talking about now not just the metals, but all of their financial accounting, right?
Daniel Vigario: Correct. Well, that the entire balance sheet and current liabilities, current assets, so you stay with these numbers over here that 929, so almost a billion dollars net short, then we look at their cash on balance sheet of 120.7 million, the current assets of 901 million, almost a billion and then the current liabilities of 244 million. So the total value of all of their current assets and current liabilities excluding the short position is 783 million positive. And the addition of 783 plus the negative 99 million gives you an illiquid position of 1.6 million, and that illiquid position was sitting in 2020. There it is there. It was in 2019. There it is there and prompts that they never ever had an illiquid position no always positive assets, current assets exceeded current liabilities.
Robert Kientz: So for their fiscal year 2019 and 2020. They went illiquid, meaning they had more overall liabilities and they had assets
Daniel Vigario: Current liabilities and current assets correct, and then the final question was with the equipment was in some way involved in the manipulation or suppression of precious metals pricing, and that came through by looking at the receivable on their balance sheet if the value the reason why they've got the short position is because the person will look at it a bit later, actually sold precious metals to a S&P credit rating Counterparty Richard Hayes mentioned in one of his videos and because they sold that metal being Customer that'll be created the short position and that material loss on the balance sheet and this value over here which are not adding together because I was able to split it up a little bit later of eight for 2 million so they had a large receivable on the balance sheet of 842 million Aussie dollars and neck the net short position and in precious metals addresses customer accounts because they actually sold it now we discussed them on the on the prior shows that this is this is a genuine receivable payable in the future it's metal that's gone live the Perth Mint is sitting with an SAP recruiter edit Counterparty. And that suggests that they are involved in in some way and in the suppression what he's involved in, in manipulating in a way that the precious metals market somehow because their counterparties are very big kind of it but we will touch on this a bit later
Robert Kientz: And to bring everybody up to date if you're new to the series or you forgotten since we last did one of these I believe it was the CEO of the company which came out in interviewing Kitco and said that that receivable belong to an S&P rated entity, an S&P rated that means you're a big entity, it's not a family office, we're talking about like a major global corporate and metals exchange somebody along those lines. correct?
Daniel Vigario: Correct, that is correct
Robert Kientz: And that and that's how we made today is that that when you know to a party like that, and it wasn't a bunch of small, it wasn't a bunch of small transactions, it was probably a big transaction to a big entity which would have some sort of interest in trading that commodity and we think maybe bailing out when the exchanges are being used to facilitate liquidity in the market to suppress the prices of metals. That's kind of how we came to that conclusion. Okay, go ahead Daniel.
Daniel Vigario: And then just on the final points on that we also discussed how that receivable attracted revenue interest so an interest income to the Perth Mint, they were actually charging interest on that receivable, which supported the fact that that is by definition, running a fractional reserve system you've got metals in the vault which is lower than your liabilities your customers and the levels at which material is lost because they sold it to an S&P credit accredited Counterparty, they earned interest on that, on that on net receivable, which you prove throughout for three or four years. And that is how banks work. Banks take customer accounts, and they use it and they earn interest on it. And, and the customers are not aware of this.
Robert Kientz: So that's why they weren't just a depository, they weren't just a place people can store the precious metals, they became a gold bank
Daniel Vigario: In a small way, obviously, in a very small way. But that's what that's what happened. And because we just want to prove that the customer aware of this, and we try to bring it to them. Okay, so where we are today is that they have not issued their 2021 June report. Okay. And obviously, any comments that I make today is purely based on the information in this report, and any prior work that we've done and prior comments that are made by Richard Hayes and others, so I'm not using any other information. It's just this report. And what I would say is that what I'm what I've seen in this in this report is the Perth Mint is a microcosm of, of what's happening in the world. And I use that term quite broadly, there's a lot of things going on right now in the world that are hugely worrying and concerning. And it boils down to, to ethics and doing what's right. That's what it boils down to. And the Perth Mint is a microcosm of how in my view based on their financials, that's not happening, what's happening is that the wrong decisions are being made these unethical things that are happening. And I think that what's happened in this year has is it has elaborated on that regarding the personas which are highlighted in this presentation. So I wanted to start off by reading an extract from Richard Hayes, his report in in, in the city of Nashville. So if I just go down to page 14, this is this is Richard Hayes, the CEO. I just want to highlight just the first paragraph here. And as I go through this presentation, unpacking what we've discovered, I just want you to bear these words in mind. And we'll come back to this report later. So he says, our values are at the heart of our organization and drive, how we deal with each other, how we make decisions, and with whom we will And importantly, will not do business are focused in 2020 2021 has been on approving our approach to environmental governance matters and introducing sustainability across our businesses embodied in a single phrase, our desire to do the right. This is Richard Hayes. So I have now taken the financials, the Perth Mint for the year in 2021. I'll just quickly share with them o'clock. So I'm not making this up, we just scroll down all the ways the financials, and you'll see they all report was there. And then there'll be here, income statement, balance sheet. That's basically it. And then there's some notes as well towards the back, right? So I've constructed now the 2021. Let's readdress these, these three or four questions that we that we that we highlighted at the beginning of the show, right? So number one, is the Perth Mint running a net short and allocated precious metals position, ie a fractional reserve system as at June 2021. If I go to the financials, you'll see here the customer accounts have grown from 4.6 billion to 5.1 billion, so more customers have deposits via currency with the Perth Mint. At the same time, the Perth Mint has paid on or redeemed some of their precious metals borrowings from bullion banks. It was previously at 1.7 billion Aussie dollars is now down to 724 billion so that paid back or redeemed a million Aussie dollars worth of precious asset a billion dollars with the precious metals. So we looking at the total of that number plus that number versus what happened the bolt and elegantly bolted 5.5 a bit onto the bottom just to show you that last needs analysis. Here there's two numbers over here being customer account money 5.1 billion, and the 724 million of interest bearing borrowings from bullion bank totals 5.9 5.9 plus 5.5 billion and they are still a short 328 million Aussie dollars in metal.
Robert Kientz: Okay, so you're still sure a third of a billion, although they did improve it by about 600 million
Daniel Vigario: Correct, okay, so how did they do that? They did that by as anticipated. Back on our last show, they liquidated a good portion of the receiver, what is the value? Their Counterparty repaid the receivable? And by doing that, what did they then do? They repaid a good portion of their all liability to the to the bullion banks. And they asked us some of the new customer money to repay some of that liability to so I'm making it very clear you can see this movement from the $1 billion of net short last year to this year. 900 less 326 is spot 600. And I'll show you just now that is almost the entire sale of the receivable at fair value. It was redeemed was the S&P credit liquid or any Counterparty repaid that receivable and that cash then was used to pay down the liabilities to the bullion banks which then produced this natural position ever anticipated. That's exactly what they were doing that did that. But technically there are still net short now the person who argue they are not net short, because they have another asset on the balance sheet, which we'll discuss a bit later. But technically, speaking makeup involves money. What else not on a Montserrat's not under the ground in the volt, you're still short 328 million Aussie dollars. So if everyone ran on equipment, all caps with one and all the metal back, as well as the bullion banks, that would be short, if you're on 28 and the bolts.
Robert Kientz: Okay, so you broke up for just a second. So I'm going to restate what you said. He basically said just taking metal in the balls, they're not short, it's not taking into account any metal that may be coming from the mind so on and so forth, right and receivable something coming to them, what's in the vault versus what they should have. It's less in the vault than what they should have
Daniel Vigario: created and reduced because as I said, they redeemed the SB critter its Counterparty paid back 500 almost 550 million Aussie dollars from that receivable from Austria that we discussed earlier. Okay, great. Right, this question is the Perth Mint illiquid. So again, 328 is the short position, you take the cash on balance sheets of non 191 million current assets of 400 million current liabilities of 239 million, you get a 320 5 million aggregates of cash and current assets current liabilities and 325 plus the negative 320 8 million actually gets you to positive 24 million.
Robert Kientz: Sorry, 352 positive, you said 325 352. Positive 328 negative gives you a net positive of 24 820 million 24 million. Yeah, so now they're not illiquid, they actually have more current assets and current liabilities.
Daniel Vigario: That happened because they liquidated the ETF. So you can see the move from a negative 140 6 million to a positive 24 million is almost the same value as the net position of the ETF remember from last year The ETF they seeded the Perth Mint seeded 106 million Aussie dollars worth of metal into the ETF, if you remember, yes, they've got external investment of, of 345345 lists about one four, which is the total value of the metal and the pigments that are sitting in the ETF gives you a seeding value of 169 million is sold the ETF in 2021. And by selling it, and putting that metal back into stock, it caused this positive liquidity positions now that they're all square.
Robert Kientz: So they sold the ETF to Goldman Sachs, I believe and I think if I recall correctly, the announcement on major financial media was at Goldman Sachs, then suspended in some ways redemption of the metal through the ETF so that those who now currently have a position in the ETF may not be able to get their metal that was sold off to Goldman Sachs, that permit no longer owns, but you're saying the sale of that helped to bring the Perth Mint to a liquid position in terms of current assets over current liabilities?
Daniel Vigario: Correct. Okay, now we need to turn our attention back to this received we'll say that it was remember that's what caused the short position last year. And that's what we need to deal with this year. So just to refresh our memories. If I showed you this file from last time we spoke Rob, you would remember there's only one line that I had here for receivables, it's fair value only had one row, yes, you know, but I had one because they didn't disclose last year, at a more granular level what this balance was made up of. So if I add these two numbers together, you remember, it's 842 million. So 29, three plus 549 is 824. Eight and 842 million, which was the value of the receivable on the balance sheet if you recall. So if I show you the Word documents, which is an extract from the financials of 2020, you'll see this note no 10 is the 840 2 million receivables say that remember
Robert Kientz: Before you go forward, just to explain we're looking at you took in 2020 and 2021. You took note 10, which explained current assets trade and other receivables, pasted it into a Word document and then highlighted things and you're showing the difference between the two. And the note 10 is a as I mentioned beginning the video for those who are not accountants note 10 we'll break down an individual line item on the report and tell you what it is and give you notes as to what they're doing with it essentially.
Daniel Vigario: So if you recall this a 42 million devalue receivable value that's what caused the short position right between vaulted metal versus obligations to customers Yes, that's why that's why we have the difference so quickly reading this note again, remember it said this 842 million is receivables and advances to customers FBA barely contains amount owing for metal delivered to and accepted by our customers on a deferred settlement terms ie the Perth Mint sold metal customer metal and allocated metal to the value of 842 million to a counterparty and the counterparty does not pay for them on a very long deferred civil in terms okay let's say he was in the settlement wonder the customer can choose when to fix the metal price until this point in time receivable or advances therefore exposed multi process and that's why it's valued at fair value because that receivable moves up and down because there's no spot process onto it because the customer that the customer who was sold to is going to pay at any point in time the future there's no there's no defined period
Robert Kientz: While they buy it if the gold price goes down, they have to pay less back right?
Daniel Vigario: Correct.
Robert Kientz: So that creative price risk to the balance sheet of Perth Mint
Daniel Vigario: And to the customers and the customers that pigment was sold. They sold their metal right once the consolidated entity holds receivables an objective to collect contractual cash flows. In other words, based on this disclosure, we came to the conclusion that that entire 840.2 million was sold at the valuation of precious metals sold to a third party Sep S&P rated credit rated third party, third party third Counterparty so there was no other breakdown of the 840.2 million we just basis exposure it was just precious metals sold to a Counterparty who was S&P credit rating, right. I'm gonna leave this but it has not important answers to the commodity prospects associated with these receivables is managed as author number 28 which is derivatives. The consolidated entity generally transfers the credit risk to third parties. In such arrangements This is gained through to contract to protect themselves against the fluctuation in the receivable. Except when the board approves the decision to consolidate entity earns finance revenue through providing these facilities to its customers we discussed last time. This is receivable on the balance sheet if sold minutes SP Peter is counterparty and they charge their Counterparty interest on that sell of metal right so it's not a broker it's not a consignment stock it's not anything to do with minors it's purely selling it to a counterparty and they're charging interest right now watch this this year the Auditor General following our videos I'm convinced of it because they changed the disclosure
Robert Kientz: They've made 10 well analysts manual they printed a note from the Auditor General on their website right after you did your analysis and we published it now like that but they went on Kitco and tried to deny you know what we're talking about so we know from the videos that we posted CEO goes on Kitco Auditor General makes a note Perth Mint makes a note trying to explain away these things.
Daniel Vigario: Yeah, stores general is done the wrong thing here and they have actually improved the disclosure in row 10 which tells us a lot of we didn't know about 2020 show highlight just now so there's no trade anyone yes the 345 million people fair value remember this is the same value is added together for 5 million right so it's the same thing and she looked at it you can see it's obviously decreased we discussed that already is decreased because this Counterparty repaid the receivable so pay the person back the punishment then paid off some of the liabilities to the bullion banks and that's what then decrease the short position that we just discussed earlier. Right now watch this let's look at the comparison now. Now they say receivables advances to customers they barely contain advances made to modern customers on a delivery of precious metals for refining Oh, where should Hayes said that in this in this video. So now we know that these receivables contain advances in other words, the Perth Mint is sending cash to the miners so cash decreases or the business balance sheets and you create a receivables you sending money to the miners and you selling it to the miners in payment in lieu of metal from the miners for refining. Decision mining customers may contractually entitled to the advance payment in ounces on the metal accounts of the consultants in steeping president has taken physical possession of the underlying precious metals that promptly conspired to institute the president receiving title to their precious metal at the ATM. This is very weird. So the Perth Mint, which is not uncommon, has paid a minor in advance for the acquisition of precious metal was the acquisition of the Dory bars unrefined that miners create Dory bonds, which is an unrefined product that miners refine Okay. In this instance, the Perth Mint has paid a lump of cash to a miner and they're gonna receive the metal latest so when you do that on the bench, the Perth Mint, you create a receivable because credit cash, cash decreases and receivable your asset goes up because you've paid for something in advance. Okay, then the miner then transfers the Dory bar to you at some point in the future. And this rig gets weird. The reason why it's receivable is because the Perth Mint somehow takes possession of the Dory bar, but not title. So if that's a task of the Dory bar, then it could go into stock, it could be listed on the balance sheet of stock, right? But it's not as listed on the balance sheet is receivable, because not only has the person been given cash in advance, but they don't actually have the stock in the bolts don't even have the door bar. Oh, you know, on the premises.
Robert Kientz: We noticed the working stock was it wasn't the working stock? No, it didn't go into stock. It's a receivable.
Daniel Vigario: Yeah, correct. Because those Dory balls are sitting either in transit or they're sitting on a mining site or wherever they're sitting but they're not sitting on the personal premises, henceforth says here clearly prior to the consolidated entity receiving title of the precious metal at the outer so it's not stock, even if it was stock is still dory bar format, it's not an precious metals, unallocated vaulted format. So you still got an allocated short position risk anyway. But this put that to one side.
Robert Kientz: Yeah, because there's a customer demand and they're going to say well wait a minute. Let's get it to a refiner in Switzerland. Bring it down. There's a problem right?
Daniel Vigario: Yeah, correct. And especially in these businesses the ounces advance is recorded as receivable as I've just stated, because they don't have title until inventory is recognized at the altar. Watch this. These advances represented. Here we go 329 million in 2021 and 293 million in 2020. So what does that mean about one Dallas's I'm now able to split out that a 42 million at 2020 inches components or less components 290 3 million belongs to advances to minors here's your S&P credit rated sale of 549 million categorically now it's undisputed whereas before we knew it was the bulk of it was to this Counterparty but now we know factually that forefather and fully non Malaysian was the value of the sale of metal to an S&P SME critter as a Counterparty we know that that's you know, okay. Which is really, really, interesting because the Auditor General is not monitored and done proper disclosure. You with me?
Robert Kientz: Yeah. And they would not have done proper disclosure if it were not for one Daniel Vigario. Because Okay, we're gonna buy without disclosing this at all. And to you did analysis and hypothesized that it went somewhere in the market and then Richard Hayes went on Kitco after you hypothesize and we talked about that, and he said, it's an S&P party. The reason he says an SMP Counterparty he was trying to tell Kitco that don't worry about S&P Counterparty low credit risk, but in divulging it was an SMP Counterparty we said Ah, it's got to be one of the mints or bullion banks or somebody like that.
Daniel Vigario: You helping someone Yeah, no, no, this is interesting. Right? So now we know category with the splitters. I don't know what the splits is and priors but you can see that if you if you apply the same ratio to the month so you kept it about 200, 200 you're getting to about a 300-400 million Ozzie dollar sale of metal to credit rated Counterparty so this was happening from 18, 19 and 20. Then what happened in 2021 going back to the most you can see they've told us in 2021 the value of the metal to start off cash to miners is three to be nonce that leads to 24 million so you can see here that their agendas and that's and that's what I said earlier on by redeeming that receivable otherwise the counterparty repaying the pavement that enabled the equipment to pay back their the souls which then created as we've discussed already the reduction of the short position so your next question I'm sure is well then when did they do that? When did the When did they get that amount redeemed? Well I went and looked at the interest receivable remember so now they're charging interest on this and I can work out based on the amount of interest revenue which is 4.3 million I can backtrack and work out approximately what month that was redeemed as approximately redeemed and March, April 2021. That's when it was redeemed. So now we know the redemption date of this S&P credit rated receivable happened before interviews but it didn't happen in March April. What happened around that time? We'll have to go back and look at it but I do know when it happened then okay. Okay, so if you look just to close off the loop, all the remaining disclosure in this new note is exactly the same as this disclosure you had the prior night so all they've done for us Conde is just given us that split between S&P credit account upon the receivable and miners. Okay, which is really an interesting because it tells us exactly what happened. Right now, this is where we go back to Richard Hayes's comments on his exact report right so what does that mean but who won in this whole thing? Okay, well, the Christmas is poor running a short position However, they would argue that indoor ball format they got 3.9 million suddenly vanishes receivable. So therefore 329 plus the short position or 322 actually positive they would argue it's all fun is no short position because you've got this Dory bar, you know, receivables sitting out there that's coming back to us, actually, we could be fine. They're all they're all liquid, which we know why because of the sale of the ETF. So what does that mean? It means this, when you look at the dividends on the financials, you'll notice that their dividends increased from 5.9 million to 23. Point 4 million in 2021. They paid the highest evidence that the government in 2021 so what does that mean? It means that they put the customers at risk for three, four years, unknowingly. They then got involved in ETF and essentially enrich the government.
Robert Kientz: So this goes back to my final point to enrich the government. So let's say if you have a government auditor, who may be looking at these financials, and there is an interest for the government, perhaps that auditor you know, decides not to ask too many questions.
Daniel Vigario: Well, it goes further than that. Rob, why do we own precious metals? as an investor? Like, why do we hold precious metals? We hold precious metals, because governments are stealing our wealth through the hidden tax inflation through feared currency. Right now you've got, you've got a situation here where the very institution being the equipment is, quote, unquote, protecting your wealth, via the enablement to own precious metals. But the ultimate benefactor of that is the Western Australian government. So, so watch this. So if I go now back to his report, this is what I wanted to say, early on. In Australia, and others can make up their own minds. Let's just read this last part. Yeah, from what he says here. Significantly, as the state only profit, government trading business, we have paid 23 232 million in dividends and taxes to the state governments over the past 10 years. Gold Corp, which owns the equipment constantly returns at 2.5% percent of pre tax profit in the state to the benefit not just of the people of Western Australia, but indirectly of all Australia, how can them so they, they put their own customers at risk, if there was ever an event, or stress that in the physical market for precious metals, we spoke about that last time. But ultimately, who's in control here? control, you know, and if you can invest in precious metals, for the very purpose of your freedom, and your liberty, you actually put it in the hands of the Western Australian Governments. That's what he said.
Robert Kientz: So conclusion here, when you have a government entity operating a private enterprise, they're not necessarily going to protect the interests of either shareholders, or in this case, the metals holders, they may use that to facilitate their own interest, putting their customers at risk. And that's essentially what we think has happened here with the person we know has happened.
Daniel Vigario: Yeah. I think we know considered we know. Yeah. And you know, whether these execs have benefited, I know what, judging by the salaries doesn't appear that they have. So I don't know how they'd benefit from all of this. Because the increase in wages and salaries, they had an increase in the headcount, it all ties up so I'm not so sure. I don't know how these execs have benefited from this entire three or four years scheme of a fractional reserve systems and interest on receivables and all these things because doesn't appear to be paid anymore.
Robert Kientz: Maybe it could be not wages and salaries, but other financial interests, right?
Daniel Vigario: It could be it could be potentially, the exact I can't prove this because I don't have the information. But these dividends, are the dividends disclosed to the shareholder, the owner of the equipment, was the owner of gold Corp, which is the Western Australian government. Remember that the gold Corp owns the subsidiary being equipment, and there's a potential to know that there could be some dividend distribution to the execs who are the executives of the underlying subsidiary? I don't know, I can't prove it. I'm just saying, This is the biggest hole that the government has ever had from the basement. Going back all these years, you can see it, sorry, see that we have it's the hostage in the head. So I'm just saying based on what I've read over here, this sort of ethical, divisive drafting, and who's actually benefiting from all of this at the expense of customers? It's very clear he's been. And my closing point on this point would be, you know, if I'm a precious metals investor, which I am, I'd want to hold it with counterparties, who have no time whatsoever to any governments is my my view. So I'll just stop sharing.
Robert Kientz: Yeah. So what they did overextending themselves made some interest income, pay dividends back to the government. The government essentially owns and is a state owned enterprise in a way. And so the government put all their customers at risk while they were doing the scheme. And in there, they were facilitating a large S&P accredited agency, which used it for something we don't know what was it to provide liquidity to the market to stabilize some of the derivative markets that come under pressure, or for other reasons, we don't know. That's the piece we don't really know because once it leaves, you know, the person that we don't see the other side necessarily have that accounting, so we don't know. But helping out buddies in some way, making some money along the way government profits, that's that appears to be what happened, all putting their customer holdings at risk, essentially to do this. And so if you hold gold and silver With the Perth Mint, do you now trust them going forward to put your interest first before interest of whoever their S&P Counterparty is their commercial interest or the interest of the government. And I would say no, definitively not based upon your analysis of the financial statement. So, again, this goes to not only department but it goes to any depository where you may be storing your metal, especially those ones that are private, and we don't have the books and can peer into and figure out you know, put all the puzzle pieces together and figure out what's going on. There can be a lot of risk here and you don't know. And you and you may have no idea whatsoever, you cannot necessarily just trust that the third party that you're storing metals with is really doing what's best for you.
Daniel Vigario: Yep, look, as I said to you privately on sort of this video, my heart absolutely breaks Australian amounts, I think you're going through it very, very, and also globally, the whole world's going through a very difficult and I'd say very evil time right now. And I don't think Australians particularly care about what we're discussing here, because compared to what they're going through, this is small, however, it's our duty to, to, to report on what we see, and we hopefully will make a difference in some people's lives that hold their wealth with institutions that are essentially owned well owned by the government and benefiting the government.
Robert Kientz: And you know, Daniel, what we're doing basically is just reporting on what we see for the for the benefit of people to see you know, the truth, this is just general you know, General reporting that that is a hallmark of the western democratic system reporting what we see calling into question things that don't necessarily look completely ethical or on the up and up, especially if there was some jawboning or cover up or whatever the right word is lack of disclosure, if you will, lack of transparency into it. And we have to call into question, you know, do the officials of this organization and the government really have the best interests of people at heart? And if you expand that out, you all, it's a hallmark of the American system? Certainly, it's a hallmark to always question any sort of authority and say, are they doing what's in the best interest of their customers, shareholders or their constituents in the case, you know, politically, and, and that's all we're doing, we're just exercising, you know, our freedom of speech to do that. And we are not trying to we don't have any sort of Grindr grudge against the Perth Mint. But what we do want people to know is that you have to, you know, trust, but verify if you will, and in some cases, I'd say in this environment, the risk that we have verified before you trust and don't necessarily think that the people are always doing what's best for you. And that extends to the whole of the gold market. And the other day, I don't think what we're trying to do is to call into question the integrity of the gold market, what we're trying to do is say that there is risk here and if you're going to own gold and silver, be careful how you own it. And one more point watch the flows the finance knew it follow the money to see who's benefiting from the gold trade, we know that benefit in the derivative markets, it looks like some people have benefited, you know, be the Perth Mint. That that's the kind of stuff people should know, you know, this might not be quite as big as the Lehman moment. But it is big for gold investors, it's a big story for them to be aware of. Because now the Eagle Eye needs to go on all these parties, especially the commercial parties and the government parties in the golden silver trade. I mean, keep an eye on them, to make sure that they're being honest, because at the end of the day, the highest quality asset on the balance sheets of the sovereigns and individuals ultimately is going to be gold and silver, it's not going to be the Fiat system. So we need to as much as possible maintain an eye on the metal system to keep that integrity because the less integrity that metal system has, the less integrity the entire system running on top of it has and that House of Cards could fall faster and I think that's kind of the biggest point that I get from all this. Yeah, I agree. It's Rob. All right. Well, super excellent work Daniel, thank you so much for doing that. You know I appreciate you. You know doing this for our channel and doing this for the people that that support us and you know, it's a credit to you for doing this and thank you and you know, this is what we'd like to bring you would like to bring in this kind of research to help you you're not going to get this everywhere you're not going to get you know, numbers guys like us diving down into the financials but I do think it is of high value and hopefully you know, our viewers are benefiting from this.
Daniel Vigario: Thank you Rob.
Robert Kientz: Any last thoughts Daniel, before we sign off
Daniel Vigario: Just I think a message to everyone watching this show and others out there. And I say this to you probably again, Rob is just get your life right spiritually with your maker Jesus makes sure that you're getting out of high priced overpriced assets and debts and into precious metals. Get water, food, a roof over your head be mobile, because things are going to get worse before they get better. I can tell you that that that's, I guess a positive in terms of get prepared. Yeah. Thank you, Rob.
Robert Kientz: Thank you so much, Daniel, we appreciate it.
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