Tuesday, November 25, 2008

Real money at the Free Lakota Bank

Another interesting silver story to look at this week is the Free Lakota Bank. While the U.S. has thousands of banks, the Free Lakota Banks uses a business model based on Real Money (gold and silver) making it unique from all the other banks I've ever heard of.

Highlights of the bank

1. Savings are in silver and gold offering protection from inflation and devaluation of fiat currency

2. No fractional banking so the bank is liquid at all times and you may withdraw your savings in real minted rounds on demand

3. You pay to store and protect your savings wealth, rather than loaning your capital to a normal bank so they risk as they see fit

4. You may assign any portion of your savings you want to a GIF (general investment fund), from which standard and micro loans are made, current rate of return on the GIF is 7.24%

5. Good loan criteria

6. They have damn pretty rounds

One of the best things I like about this bank is their take on loans applications. This is from their site.

Do you have the moral integrity and character of a person that deserves a loan from the Free Lakota Bank? If so, we may have a loan for you. Our first priority with the Free Lakota Bank General Investment Fund is to enhance the profitable development of exports from within the Nation of Lakota. We will consider any and all proposals to establish free enterprise within our territory above all other requests for loans. Please read the list of benefits of conducting business from within our Nation.

The Free Lakota Bank issues loans based not on need, but instead on merit. During application, explain the value we will receive by lending money to you. Inform us as to why investing in you is in our best interest. What have you done in the past to create value for yourself and shareholders? What commitment will you make to ensure the success of our investment?

Apparently I want a big screen or I want to go to on vacation will not be a valid loan rational (about bloody time) It looks like they are limiting loans to things with will generate real wealth and opportunity for the community rather than fanning consumption like normal banks. I like it!

I’m a huge fan of the good work done by Micro credit organizations like the Grameen bank that seek to empower third world women by letting them escape loan sharks and other exploitive financing arrangements. Micro loans also allow them to gain a greater level of Independence.

The Lakota coins will also be real currency redeemable at various AOCS tribes or merchants. AOCS stands for American Open Currency Standard a loose grouping of alternative currencies including the Liberty dollar the Government raided and closed this year in what was probably an illegal action.

I hope the Free Lakota Bank can have similar success in stoking job creation and local economic autonomy in the Lakota lands and I also hope that once they get this up and going they will mentor other native groups in “real money” finances.

Now I don’t know these people and I’ve not seen their books so I cannot endorse the Free Lakota Bank but I certainly approve of this kind of business model and hope it flourishes. I do recommend you check them out but do your own due diligence.

Damn pretty rounds!


Only a couple days left to vote for the Canadian silver bug as the best Canadian blog in its category

Sunday, November 23, 2008

One miner gets it right by selling their own silver bars

I think I mentioned in a earlier post that First Majestic Silver was going to allocate some of its silver production to a mint in order to bring their own branded rounds and bars to the market and capitalize on the discrepancy between paper and physical prices. Now I admit I was not paying very good attention and apparently the product and site was launched some time ago without me noticing, ooops;)

As you can see from the pictures above they are offering a selection of quite attractive proof rounds in 1, 2, 5, and 10 ounce sizes as well as a lower quality "business strike" rounds all made by Northwest Territorial Mint.

At this time the prices are based on $14 dollar silver with $1-3/oz premium on the proof pieces but at least they do have the 1, 2 and 5 ounce sizes in stock Unfortunately I missed out when they hit the market because I probably would have bought the minimum 20 round tube of the business rounds, which are currently sold out. I also think the display set of the 4 sizes of proof rounds would have been worth buying just cause it's pretty.

For the average investor the important products are those marked coming soon, a 5oz, 10oz and 1kilo ingot bar which are popular sizes that are nearly impossible to find. The other plus is they appear to be selling only product they actually have in hand and are not taking orders they will not be able to fill for months, hence the sold out status of several products. This is the kind of honest business practice and I expect from all dealers.

I applaud First Majestic for doing something that everyone else should be jumping on and I hope this prompts others to do the same. Of course current mint capacity may not be up to it but maybe the increased demand will drive some expansion. Even better why not get a bunch of mid tier companies together and creating a minting cooperative. Or why doesn't Silver Wheaton do something value added to the discount silver they buy?

I should note that Pan American has sold rounds and bars at Northwest Territorial Mint for a long time slightly closer to spot prices that these products, however due to market conditions you must wait months for delivery. So it's up to you, how much will you pay to get what you want now, vs. paying for it now and waiting months for delivery. With the instability in the markets I don't like leaving my money with anyone for months at a time with promise of delivery later. The current premium asked on these products is quite fair considering some of the prices I've seen on eBay I would definately buy these.

I hope this is useful to anyone eager enough to pay the premium. If any of my friends or family are reading this, anything offered by Majestic will do just fine for Christmas. One once of silver is worth infinitely more than more sweat shop clothing or a gift card from a company verging on bankruptcy. Of course a grain mill, column still or hobby farm will be accepted willingly as well.

Now that the business rounds are back in stock I've just made a modest purchase, I hope to report a trouble free transaction and delivery. You might also note the 5,10, kilo bars are also available

Shameless Canadian Silver Bug plug

As you can see from the sidebar I was the second place winner in the 2007 Canadian Blog awards in the now defunct Best Business/Finance Blog category. Unfortunately they did away with this category and I apparently have to run in the best Professional/Career Blog this year against teachers, lawyers and a theoretical plethora of plumbers and used car salesmen.

Despite this category not being a good fit for a non professional, non career centered silver, gold, finance, economics, world collapse blog I have been nominated and if you read, learn from and enjoy the Canadian Silver Bug's banal gibberings I would appreciate the vote.

I know my hits, revenue and comments are up this year so I hope you actually like what you see and will vote. Each person is allowed one vote in both the first round of voting up to the 29th and again in the second round after the field has been narrowed.

I will repost the link next and plea next week should I move on to the second round. Stayed tuned I do have a real post coming later today that might find you some silver to purchase. If you don't vote for me I won't tell you who has silver, bwahahahahahaha! ;)