Will dealers buy as much PMs as someone is willing to sell?

Do you really think a grocery store only has collateral the value of the groceries, and the bank loans them 100% of that value?

How this would work would be that to get 10 million in borrowing for inventory, you would have to prove its value is 18 million minimum, you would have to have good credit, and also pledge a few more million of other assets into the loan. Additionally, you have terms with the vendors which helps you manage your cash flow better.

I have either done, or been responsible for such borrowings for over 20 years now. I know all about them. No one gives terms on gold, since its fungible. For a borrowing base situation like this for gold, I believe the bank would require excellent credit and half the value in other assets, or normal credit and equal amounts of other assets as borrowed. Way too risky.

If anyone is a commercial banker I would be interested in your take.

 

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My local PM dealer, has several large safes
and major $$$$$ to make purchases with
he not only uses his customer base but
refiners to sell those not so perfect
pieces to.

 

back in 88 i needed $$$ to buy a house on 7 acres in new hampshire for 59,000, so at the time had been "stacking" silver for 4 years up to then (though we did not call it "stacking then, just investing" i had 4 100 oz bars, over 120 small 1 oz bars, 15 or so 10 oz bars, and over 240 morgan/peace dollars fronm f-12 to au-58 i sold the lot to an owner of a flea market i used to rent space from, he paid cash, no record..and i bought my house..i believe it was like 12.50-14.oo oz around then, and he paid me 35 cents under spot..(no prremium)...

 

also you need to remember, every piece he brings in is another dollar in his pocket
as he for sure will sell it at a premium, kind of like a used car dealer he brings in
used inventory and marks it up, but he needs a constant rotation to keep the money
flow going.

 

If it was that high then lucky you sold. I remember distinctly I was buying junk at 3 times face in the early 90s. Dealers paid 2.8 times face, sold for 3.2-3.4, so I offered 3.0 to people who wanted to sell I knew. Circulated Morgans went for 5-6 a piece, with "rip-off" dealers charging $8 each.