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Letter Re: Getting Physical with Silver Futures Contracts

Jim,
Congratulations on the continuing success of your blog site.

I think your readers would like some information regarding physical delivery of silver from futures contracts. I've never done this, or even known anyone who has, but it seems rational nowadays. One question I have is what type of mark or assay comes with, say, a 1,000 ounce delivery.

I also think many readers are interested in questions of how to plan "getting tangible" with their retirement accounts, by which I mean no paper. I know I have to think about this quite seriously. Felicitations, - Patrick (an American Ex-Pat in Asia)

JWR Replies: There are of course humorous apocryphal stories about a futures trader finding 100 "live lean hogs" left on his doorstep. But be advised that most futures and options markets are entirely "cash settled", so you can't take physical delivery even if you want to. Ask your broker if your particular market allows the alternative of physical delivery. Odds are that it doesn't.

As for "getting physical" with retirement accounts, if you don't want to take the tax and withdrawal penalty of cashing out, I strongly recommend rolling over IRA and 401(k) accounts into Gold American Eagle vault storage IRA accounts available through Swiss America Trading Corp. I have had one of these accounts since the early 1990s, starting when I first worked in the corporate world. At the time, my co-workers thought that I was crazy. But I had the last laugh, in the long run. In the Spring of 2000, when I worked as a technical writer for Oracle Corporation, I was buying one ounce Gold Eagles for my Gold IRA at around $290 per ounce. Meanwhile, many of my co-workers were enthusiastically buying Oracle stock at around $40 per share (split adjusted) through the employee stock purchase plan (ESPP). Oracle now sells for around $19.50 per share. But their loss is even worse when you consider inflation.

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