Chris Blasi - La Salle University
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President & CEO, Neptune Global Holdings,
An interview with Chris Blasi, President & CEO, Neptune Global Holdings
In our special interview on Triple Digit Silver with Chris Blasi, President of Neptune Global Holdings, Executive Global takes an exclusive look behind the operation of a unique firm delivering unparalleled diversification, transparency and liquidity, to retail investors, wealth managers, broker dealers and institutional investors worldwide. We gain a critical insight into the future explosive potential of silver bullion for investment and industrial application, as we profile the Wall Street insider and creator of the patented PMC Ounce™ to talk about allocation into precious metals investments as a measure of hedging against geopolitical and fiat currency risk, against the backdrop of global bond monetisation.
Chris Blasi CV
New Jersey, United States
La Salle University
1986 Lead internal operations auditor
for Fortune 100 Company
1990 Investment manager with international broker dealer and Boutique M&A Firm
1997 Software and data processing sales executive
1999 Information and data management
systems global sales executive
2005 Chairman Neptune Global Holdings LLC
2008 President of Neptune-GBX
Created and awarded a patent for a new financial product
Received a patent for the development of a financial technology
Developed an industry leading platform for trading, account management, and reporting
Awarded by leading international technology firm for financial services solution sales
Founded Neptune Global Holdings, LLC
Neptune Global Holdings
Business cycles and the slack periods a
Neptune Global is a full service precious metals dealer serving individual investors, the wealth management industry, broker dealers and institutional investors.
The firm’s platform of investment bullion includes all forms of traditional physical precious metals in conjunction with innovative physical precious metal investment assets which provide unparalleled diversification, transparency and liquidity.
Neptune Global’s leadership in the market is documented with such official designations as being the recipient of a US Patent for the PMC Ounce (Precious Metals Composite). While dynamic offerings such as the PMC Ounce provide investors with many of the conveniences and benefits generally associated with mutual funds and ETF’s, all of Neptune Global’s product offerings remain true to the firm’s core convictions related to the time tested value ascribed to physical precious metals ownership.
Triple Digit Silver
EG: Whereas gold has always been the mark of wealth, silver has grown to become an essential part of almost every industry. Will we be seeing more demand for it, given the advancement of technology?
Chris Blasi: Gold is essentially a monetary metal however, silver is both a monetary metal and industrial metal. Silver’s unparalleled attributes in electrical and thermal conductivity, in conjunction with its antimicrobial and non-toxic qualities, make this precious metal an indispensable component for a wide range of industrial and consumer products. Additionally, the industries, products, and applications whereby silver is a critical component are those with strong rates of growth and therefore I believe that the demand for silver will continue to expand well into the future.
EG: So silver is a nearly indispensable material, thus it is being depleted more and more. How will it affect the productivity of mining companies and consequently the metal's trade in the foreseeable future?
CB: The steady growth in the industrial application of physical silver is now attributed to more than 50% of [its?] annual demand. Additionally, there are no viable substitutes for physical silver when it is used as a critical industrial input in the production of the world’s most dynamic and
in-demand products. Simultaneously, while demand for silver is robust and expanding, an annual supply/demand imbalance for physical silver recorded its fifth consecutive annual deficit in 2017. Contrary to conventional logic, and frustrating many silver investors, five consecutive years of physical supply deficits running in parallel with increasing demand have not led to a commensurate rise in the silver price.
At the start of silver’s recent annual physical deficit streak in 2013, this precious metal was being had for just over $30 per ounce. At the time of this writing, silver is trading around $16.30 per ounce.Silver’s ongoing price depression, especially in comparison to its more heady years such as 2011 when it fetched over $40 an ounce, has been responsible for the shuttering of numerous mining operations which are not able to realise profitability with a sub $25 per ounce market price. Giving hope to silver investors is the rationale that at some point on-going physical deficits in a world of strong demand will force silver prices higher. Furthermore, a modest rise in the silver price will not automatically spin-up mining capacity and thereby threatens to possibly flood the market with supply.
Prices must not only get to a point of profitability for currently shuttered operations to resume, but they must demonstrate that pricing power can and will remain elevated. Additionally, resuming operations is not akin to just flipping a switch. Bringing a mine back on-line requires substantial capital and effort, among other factors. Silver’s chronic supply/demand imbalance in conjunction with the costs, operational and logistical barriers, and assurances of sustainable profitability needed before new supply would come into the market, are why prospects for an inevitable and rapid rise in the silver price is banked on by bullion investors. The continuous and dramatic cycles in the silver market have cemented silver’s historic reputation for violent and explosive price moves to both the upside and downside.
EG: In the same context, will it positively affect the profitability of trading in silver?
CB: Investors taking a long position in silver at current prices will be positioned for outsized gains when the inflection point in the physical silver market is reached.
EG: How many years are we looking at for the change to take place,
if it isn’t already in motion?
CB: Actually, silver’s price reflation resumed in 2016 following a low around $13.58 per ounce in January of that year. This positive trend change has not put silver on most investors’ radar because the overall gains since then have been modest and the price action has been choppy.
EG: As blockchain technology carves out its place in the global economy, are there any implications of this new development for the precious metals market?
CB: Blockchain has captured the attention and affection of most investors, analysts and pundits. Blockchain is a dynamic and early stage technology that will ultimately revolutionise most business-related processes. Fascination with the technology has unleashed a herculean effort to apply blockchain’s capabilities and promise to every conceivable process requiring some form of record-keeping. As with all booms, promoters in every segment of enterprise will seek to leverage the public’s eager willingness to invest in an idea that somehow employs or is associated with the item of adoration.
In regard to physical precious metals investing and ownership, adding incremental value to tangible bullion by layering blockchain atop the asset is marginal at best. As to the domain of physical precious metals trading and ownership, what blockchain realistically offers so far is the creation of a reconstituted warehouse receipt in digital form. Also, digitising physical precious metals in the cryptocurrency sense and casting them into cyberspace will in turn generate genuine challenges such as the invoicing and payment for vault storage without having to devalue the asset for payment of insured custodial fees, like an ETF.
EG: With the ratio of silver to gold being out of proportion right now, should we expect it to even out soon?
CB: For traders of precious metals the gold-to-silver price ratio has been a long-time indicator and guide for entering or exiting the market. While there is no hard number for what the ratio should be in relation to gold and silver, being at a place of price equilibrium, a widely espoused metric is around 35 to 1, meaning it would take thirty-five ounces of silver to buy one ounce of gold. For some time now, the ratio has been quite extreme with readings around 80-to-1.
Currently, the ratio is moderated a bit and stands around 75-to-1. The anticipated reversion to a tighter ratio that is more in-line with historic price spreads in conjunction with the burgeoning supply/demand imbalance has buoyed investors faith that silver will outperform gold in the next big precious metals market up-leg and that the hour of truth is in sight.
EG: Considering the current state of fiat currency and its potential downfall, should we be gearing up for precious metals to reclaim their place as the conduit of wealth in the world?
CB: To paraphrase a timeless axiom, do not listen to what they say, do what they do. In the context of precious metals, it has not been the practice for the vast majority of wealth advisors and other “mainstream” financial pundits to recommend investors take a meaningful position in physical precious metals. Yet, we see many sovereign powers, such as China and Russia, stockpiling gold over the last several years in what appears to be preparation for a new financial order or global financial disruption. Additionally, other foreign powers, including Germany and Turkey, have been repatriating their nationally owned gold from its long term storage in the US. These actions, which came after several decades of indifference regarding gold ownership and possession, would seem to indicate a coming shift in the status and function of precious metals.
EG: Moreover, should we also look into obtaining the shares of mining companies?
CB: Physical ownership of precious metals is distinctly different from investing in mining companies. The fundamental difference between physical precious metals and mining shares is that unencumbered physical bullion ownership is free of counterparty risk whereas a mining company is an operating business with all the normal associated risks along with the counterparty risk associated with an exchange traded product.
This is not to say that adding mining shares to one’s portfolio does not present an opportunity for financial benefit, just that the research and due diligence required to best allocate investment resources to the mining sector is materially different than taking a position in precious metals as a means of wealth preservation.
EG: Exter’s Pyramid lists gold at the bottom as the most reliable asset. Would it be right to assume that silver also fits into that base?
CB: While silver has not been a reserve asset for central banks and has commonly been referred to as “poor man’s gold,” silver would definitely be positioned close to gold within Exter’s Pyramid if it was included in that classic visual organisation of the major asset classes.
EG: What implications would a shift from fiat currency to precious metals have on the economy and sectors such as real estate, for example?
CB: I do not see fiat currencies vanishing from the scene to be replaced by metallic money, though some may disappear only to be replaced by a new fiat currency, possibly including digital currencies. That said, the probability of a more accelerated debasement of the world’s fiat currencies vis-à-vis precious metals is basically assured, as history will attest.Also, in the midst of the global currency and trade wars manifesting themselves presently, the wildcard of a major sovereign power introducing a gold backed currency is not too far-fetched. In either scenario, economies would be ravaged by inflation when calibrated against the pure fiat currencies and the associated across-the-board financial dislocations would take place.
Interestingly, if Central Bank policies deviate from the expected and they allow deflation to take root, general asset values would collapse and the gold price would also fall. But the decline in the gold price in relation to the collapsing prices of other assets would be less and gold would actually gain purchasing power. The notion of gold benefiting in deflation, when measured in increased purchasing power and not the decrease in the nominal price, is not understood by many.
The bottom line is that in either a hyperinflationary or deflationary environment, the exclusive and time-tested attributes of physical precious metals as an unparalleled store of wealth will be of paramount value to their holders and position the precious metals investor with the resources necessary to capitalise handsomely after the financial maelstrom.
EG: Tell us about your patented PMC Ounce™ investment asset?
CB: The PMC Ounce™ was architected to incorporate the best attributes of both physical precious metals investing along with the efficiencies and ease-of-trade associated with the exchange type products investors have come to value and appreciate. Specifically, several of the key attributes, differentiators, and objectives which define the PMC Ounce include; a logically weighted allocation across the four primary precious metals, mitigation of volatility via diversification, real-time pricing and trading, 100% backing by LBMA approved bullion, and the assignment of ownership at the depository level. To sum it up, the PMC Ounce delivers a fully turn-key diversified physical precious metals portfolio within each PMC Ounce along with the insured vaulting and accountability astute investors value. It was thru bridging the gap between the securitised world of precious metals, whose products are often referred to as “paper gold,” and the realm of physical ownership that categorised the PMC Ounce as a true innovation. By marrying the most beneficial attributes from both sides of the investment spectrum and making the end product available in a scalable and tradable asset, the PMC Ounce was awarded a patent in 2013. Since that time, this dynamic investment product has been widely accepted and continues to gain favour among investors and with numerous well respected advisors and analysts. EG
Genuine growth is constrained by the headwinds of overcapacity.
Resist the temptation to make decisions that do not support and benefit both the client and enterprise strategically.
Business cycles and the slack periods associated with times of reinventing one’s core offering will always be an ongoing challenge.
Chris is a veteran of the financial and investment world with over 25 years experience. Starting as an internal auditor with a Fortune 100 firm, Chris expanded and refined his expertise with both major Wall Street investment houses and boutique M&A/merchant banking firms.
To find out more about Chris Blasi, please visit www.neptuneglobal.com