• Same story, different day...........year ie more of the same fiat floods the world
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Bullion Universe

Usury

Platinum Bling
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#1
So I don’t know if they’re technically a “dealer”, but this place claims they bought Bullion Directs trading platform and are about to open an online marketplace like Nucleo.

Bullionuniverse.com
 

the_shootist

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#2
Staying away from anything 'new' these days. The world is becoming too volatile!
 

arminius

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#3
And here I thot this thread would be about fondling those lovely .999 metalic surfaces, the glint, the sheen, the firmness, the weight, the density, the lovely sculpted reeded designs...

My bad!

:dog:
 

eggman

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#4
I signed up hoping there was finally something to replace Bullion Direct Nucleo which was very helpful in selling metals over the years. They have not answered my emails so now I think I will close that account until they are really up and running.
There needs to be good volume and inventory to make it worth it. And they need to respond to emails.
 

southfork

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#5
Wonder if everone was made whole by BD
Gold Bullion Dealer Unexpectedly "Suspends Operations" Due To "Significant Transactional Delays"


by Tyler Durden
Jul 3, 2015 4:40 PM
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What makes the current sovereign default episode different from previous ones is the uncanny stability and lack of buying of "fiat remote" assets such as gold and silver, and to a lesser extent, digital currency such as bitcoin. Indeed, all throughout the Greek pre-default escalation and ultimately, sovereign bankruptcy to the IMF, it seemed as if there was an absolute aversion to the peak of Exter's inverted pyramid.

What is even more surprising about the lack of any gold price upside is that it is not due to lack of demand. Quite the contrary, because as Bloomberg wrote last week, "European investors are increasing purchases of gold as Greece’s turmoil boosts the appeal for an alternative to the euro."



Demand from Greek customers for Sovereign gold coins was double the five-month average in June, the U.K. Royal Mint said in an e-mailed statement. CoinInvest.com, an online retailer, said sales on Saturday and Sunday were the highest since Cyprus limited cash withdrawals in 2013, driven by a jump in German, French and Greek buyers.



Investors are searching for a safe haven after Greece imposed capital controls, closed banks and stopped selling gold coins to the public until at least July 6. Chancellor Angela Merkel on Monday said Germany is still open to negotiations if Greece wants.



“Most of our common gold coins are sold out,” Daniel Marburger, a director of Frankfurt-based CoinInvest.com, said by phone. “When people learned that the Greek banks will be closed, they started to think that it may not be such a bad idea to have some money in gold.”

The bullion dealers themselves are enjoying a jump in sales to retail customers:



GoldCore Ltd., which buys and sells bullion, reported coin and bar demand rose “significantly” on Monday. Sales to U.K. and Ireland today are about three times the average for the past three Mondays, the Dublin-based firm said in an e-mailed statement.



The U.S. Mint has sold 61,500 ounces of American Eagle gold coins this month, the most since January.



BullionVault, which says it operates the largest online physical gold trading platform, reported a jump in sales during the first half of this year, a sign of a broader increase.

However, it is the "paper" gold market where things were most perplexing in recent months. Recall that, as Zero Hedge broke and first reported, in the first quarter of the year, or the same time the Syriza government took power, something very dramatic took place in the US derivatives market, where first JPM saw an absolute explosion of its commodity derivative holdings (a broad umbrella which is not broken down further):

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... coupled wih Citi's surge in "precious metals" derivatives which soared from $3.9 billion to $42 billion.



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But what is most confusing is how even as physical metal demand clearly rose across Europe in the past few months and the price of paper gold actually declined, perhaps facilitated by some "hedged" derivative positions on the short side of precious metals, some bullion dealers have actually found it impossible to survive, and in the last few days at least one major gold bullion dealer, Bullion Direct, greeted customers with the following notice on its website:



Bullion Direct has experienced significant transactional delays. To avoid further inconvenience or other adverse consequences to our customers, Bullion Direct is suspending its operations as it attempts to resolve those issues. We intend to keep you informed at this website. Thank you for your patience.





Just what are "significant transactional delays" and how bad is the physical gold supply-chain if it can put at least one dealer out of business. Another question: is this a solitary failure by gold vendor due to a one-off problem with working capital, or is something more systemic about to be revealed in the gold bullion sales industry?

We look forward to finding out, but in the meantime our advice to buyers of physical precious metals is the same as always: if you purchased it and you can't hold it in your hand, it isn't yours.
 

southfork

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#6
NO GOLD FOR YOU
Bullion Direct: Another Bullion Biz Bankrupt – Vault Virtually Empty
By
CoinWeek
-
July 29, 2015
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By Joshua Gibbons – About.Ag – for CoinWeek ….


As Much as $25M of Stored Metal ‘Not Actually Purchased’
As a bullion investor and webmaster of About.Ag, I understand well the risks that customers face when ordering precious metals, especially from out of state vendors or websites. I’ve seen firsthand the implosion of such companies and the havoc these business failures bring to investors – people like you and me who want to diversify their asset holdings and look to bullion as a way to do that. Last year, I had started warning people about The Tulving Company a few months before they shut down owing customers $17M, so I quickly noticed the red flags showing that this respectable 15-year-old company might have serious financial problems. So when, in June, a customer alerted me to problems at Bullion Direct, saying that he had waited several months without receiving metal he had purchased. I looked into it.

I sent an email to the company’s owner, and let him know my concerns. He quickly responded, and I gave him some information about how the Tulving fiasco unfolded and some general advice. The next day, Bullion Direct suspended operations.

Last week, Bullion Direct filed for Chapter 11 bankruptcy, stating they have as many as 6,000 total claimants and total debt “perhaps as great as $25 million.”

Calculations I have run suggest the debt may be significantly higher than that.

Yesterday, Bullion Direct filed a declaration that stated that “when a customer placed an order, the precious metal was not actually purchased unless the customer agreed to take actual delivery of the product.” In other words, they never bought the metal customers purchased if it was to be stored.



According to Bullion Direct’s statement, somewhere around 6,000 customers bought $25M of metal from Bullion Direct, and to store for them — but Bullion Direct did not actually purchase the metal.

Of course, Bullion Direct’s customers didn’t know this because when the company’s customers paid the company for bullion and storage, Bullion Direct would show the metal in their portfolios. Now we know that these holdings never existed.

What sets this sad situation apart from the failure of The Tulving Company is that people stored metal with Bullion Direct (or at least thought they did). So while Tulving customers lost metal from a single purchase, most Bullion Direct customers lost metal from many purchases, often over the course of years. Bullion Direct also held metal — paper, actually — in hundreds of IRA accounts. People were trusting Bullion Direct to safeguard their life savings. That trust was misplaced.

What We Know
Bullion Direct opened for business in 1999, and patented its unique process for connecting buyers and sellers of bullion. Customers could either buy directly from Bullion Direct, or through other sellers in the Nucleo Exchange. Bullion Direct offered free storage of metal (which we now know to be a warning sign), likely to entice people to later sell their metal on the Nucleo Exchange (where Bullion Direct would make a commission).

Going back at least as far as 2003, despite advertising the storage as “allocated” and “not pool metal”, the Bullion Direct terms of service stated that their storage was really an “undivided share of a fungible lot” and that Bullion Direct “may use or act as if it were the owner of the commodity held for Customer.”

To most people, that meant if you bought 2014 Eagles, they might have 2015 Eagles on hand, but the total ounces of metal was the same as customers had bought. We now know it meant something different to Bullion Direct.

In 2011, Bullion Direct created a subsidiary Nucleo Development Co. to handle the software platform, expand it to other markets, and license the patent. At times, Nucleo reportedly had over 30 employees.

What customers did not realize is that Bullion Direct “transferred funds to Nucleo for start-up expenses and continued funding Nucleo’s operations until shortly before the Chapter 11 filing.” Connecting the dots, it appears that Bullion Direct took money customers were sending in for metal and spent it on Nucleo’s operations, research, and development.

The Numbers
According to court documents, there are as many as 6,000 creditors (although, I believe that number is low, and closer to 8,000), and they are owed “perhaps as great as $25M.” A Joint Stipulation between Bullion Direct and the depository shows inventory that I calculate as being worth roughly $635,000. That’s about $.03 of real metal for every $1.00 of metal supposedly being stored.

The bankruptcy petition gives a range of $10M-$50M for the value of the assets, which presumably means that the intellectual property (mainly the patent and software) is believed to be worth at least $9M.

As shocking as it is to find out that almost none of the metal supposedly stored for customers ever actually existed. At least there is hope that creditors might be made whole, if the intellectual property has the value that Bullion Direct thinks that it does.

The Filing


What You Can Do
If you are not owed metal or money, consider yourself fortunate, and make sure to research bullion dealers each time you place an order. Even if you have had a positive shopping experience with a company, continue to do research before placing additional orders.

If you are owed metal or money by Bullion Direct, expect a long and drawn-out process. You may get some of your money back, but likely not all. Tulving customers have been waiting over a year without seeing any money yet.

If the Chapter 11 bankruptcy proceeds as intended, there should be no need for you to do anything. Your name will automatically appear in the list of creditors that will be filed in the bankruptcy schedules by Bullion Direct. If what you are owed is properly listed, you will have to wait for the legal proceedings to run their course before the court distributes moneys to the company’s creditors.

If you are not included on the list of creditors, or if the bankruptcy is converted to Chapter 7, you would need to file a Proof of Claim form. You can do so now even though it is not yet required, but know that this is a public document, and you are responsibly for paying the filing costs.

I will continue to keep readers abreast of the situation at my blog: http://about.ag/BullionDirect.htm. You can sign up on that page for regular updates. My friends at CoinWeek.com will also continue to follow the issue and provide updates whenever new information arises.
 

Usury

Platinum Bling
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#7
Fork AFAIK this new company has no association with BD. If anyone knows any different, please share sources. Clearly BD had problems long before they crashed completely.

However, I don't think posting a bunch of BD problems posts in a thread about a different company is fair to them.
 

southfork

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#8
If they are using the same business model it would be concerning, albeit the metals are no allocated, however I do see your point and the mods are free to delete the posts if they like. It seems odd to me though they would want to assume this business model from some one who pilfered their customers.


Fork AFAIK this new company has no association with BD. If anyone knows any different, please share sources. Clearly BD had problems long before they crashed completely.

However, I don't think posting a bunch of BD problems posts in a thread about a different company is fair to them.