Defaulting banks - where will it stop?

[Damien Lloyd]

Actually price correction was the wrong phrase, Price Manipulation is what I suspect will soon happen. Push the price a little higher to squeeze some more profit, then encourage another nation to dump a few tonnes onto the market to force a lower price reminding people that investing in gold is a silly idea in a crisis because it's no longer considered money (by anyone except the sane).

[Peter Lemkin]

"Damien, was it "physical metal" you bought or paper gold like gold bullion ETF's? I understand that it is virtually impossible to get delivery of physical metal, even coins like Krugerrands, and most buyers end up owning paper instead. Only the truly wealthy can afford physical metal and they are piling into it in droves as the expectation of defaults of the US dollar and even feasibly Sterling in the next few months are seriously being talked about. This obviously is pushing the price up and up.

Just nosey is all... "


I owned the gold, but never saw it. www.bullionvault.com I can assure you I was extremely unsure about this site at first. But did a little research and gave it a go, I'd also recommend it to anyone. Of course as a british based company I have no idea what would happen if the British government tried to steal the gold the way the federal reserve did. I've been told that keeping it in a zurich vault would protect it but I have no idea if it's true. I'm waiting for a price correction before jumping back in. Have a look at the site and tell me what you think.

Personally, I think you'd have to be crazy in the world today to 'own' precious anything and not have physical possession of it! Trust NO ONE!

[David Guyatt]

www.bullionvault.com[/url] I can assure you I was extremely unsure about this site at first. But did a little research and gave it a go, I'd also recommend it to anyone. Of course as a british based company I have no idea what would happen if the British government tried to steal the gold the way the federal reserve did. I've been told that keeping it in a zurich vault would protect it but I have no idea if it's true. I'm waiting for a price correction before jumping back in. Have a look at the site and tell me what you think.

Frankly, I'd be cautious. Demand for physical metal outstrips mining/lifting annually by several multiples and has done so for many years (over a decade I think). Almost every ounce of metal goes to India and Middle Eastern Souks for the jewelry trade -- apart from that quantity that is required for the medical trade and defence etc.

My concern here is that they may own some physical metal but are possibly (probably even?) leveraging it many times over. That's why you don't take physical delivery under their system -- there's many more owners than metal. What you might consider doing is trying to buy some coins like Krugerrands or Brittiania's (free of VAT). The latter come in various sizes ike the ounce coin, half ounce, quarter and tenth. They all sell at a premium, but you can take physical delivery and stash them under your bed...

[Jan Klimkowski]

Ambrose Evans-Pritchard is a very spooky character, and I always read his columns with this foremost in my mind. However, ignoring the anti-Euro bias, his insider sources have provided him with some intriguing information about IMF Shock Therapy tactics in the former Soviet bloc, and a secret and entirely unsustainable ECB stealth bail-out for the likes of Spanish, Italian & Irish debt.

Monetary union has left half of Europe trapped in depression


By Ambrose Evans-Pritchard
Last Updated: 6:52PM GMT 17 Jan 2009

Events are moving fast in Europe. The worst riots since the fall of Communism have swept the Baltics and the south Balkans. An incipient crisis is taking shape in the Club Med bond markets. S&P has cut Greek debt to near junk. Spanish, Portuguese, and Irish bonds are on negative watch.

Dublin has nationalised Anglo Irish Bank with its half-built folly on North Wall Quay and €73bn (£65bn) of liabilities, moving a step nearer the line where markets probe the solvency of the Irish state.

A great ring of EU states stretching from Eastern Europe down across Mare Nostrum to the Celtic fringe are either in a 1930s depression already or soon will be. Greece's social fabric is unravelling before the pain begins, which bodes ill.

Each is a victim of ill-judged economic policies foisted upon them by elites in thrall to Europe's monetary project – either in EMU or preparing to join – and each is trapped.

As UKIP leader Nigel Farage put it in a rare voice of dissent at the euro's 10th birthday triumph in Strasbourg, EMU-land has become a Völker-Kerker – a "prison of nations", to borrow from the Austro-Hungarian Empire.

This week, Riga's cobbled streets became a war zone. Protesters armed with blocks of ice smashed up Latvia's finance ministry. Hundreds tried to force their way into the legislature, enraged by austerity cuts.

"Trust in the state's authority and officials has fallen catastrophically," said President Valdis Zatlers,
who called for the dissolution of parliament.

In Lithuania, riot police fired rubber-bullets on a trade union march. Dogs chased stragglers into the Vilnia river. A demonstration outside Bulgaria's parliament in Sofia turned violent on Wednesday.

These three states are all members of the Exchange Rate Mechanism (ERM2), the euro's pre-detention cell. They must join. It is written into their EU contracts.

The result of subjecting ex-Soviet catch-up economies to the monetary regime of the leaden West has been massive overheating. Latvia's current account deficit hit 26pc of GDP. Riga property prices surpassed Berlin.

The inevitable bust is proving epic. Latvia's property group Balsts says Riga flat prices have fallen 56pc since mid-2007. The economy contracted 18pc annualised over the last six months.

Leaked documents reveal – despite a blizzard of lies by EU and Latvian officials – that the International Monetary Fund called for devaluation as part of a €7.5bn joint rescue for Latvia. Such adjustments are crucial in IMF deals. They allow countries to claw their way back to health without suffering perma-slump.

This was blocked by Brussels – purportedly because mortgage debt in euros and Swiss francs precluded that option. IMF documents dispute this. A society is being sacrificed on the altar of the EMU project.

Latvians have company. Dublin expects Ireland's economy to contract 4pc this year. The deficit will reach 12pc of GDP by 2010 on current policies. "This is not sustainable," said the treasury. Hence the draconian wage deflation now threatened by the Taoiseach.

The Celtic Tiger has faced the test bravely. No government in Europe has been so honest. It is a tragedy that sterling's crash should have compounded their woes at this moment. To cap it all, Dell is decamping to Poland with 4pc of GDP. Irish wages crept too high during
the heady years when Euroland interest rates of 2pc so beguiled the nation.

Spain lost a million jobs in 2008. Madrid is bracing for 16pc unemployment by year's end.

Private economists fear 25pc before it is over. Spain's wage inflation has priced the workforce out of Europe's markets. EMU logic is wage deflation for year after year. With Spain's high debt levels, this is impossible.

Either Mr Zapatero stops the madness, or Spanish democracy will stop him. The left wing of his PSOE party is already peeling off, just as the French left is peeling off to fight "l'euro dictature capitaliste".

Italy's treasury awaits each bond auction with dread, wondering if can offload €200bn of debt this year. Spreads reached a fresh post-EMU high of 149 last week. The debt compound noose is tightening around Rome's throat. Italian journalists have begun to talk of Europe's "Tequila Crisis" – a new twist.

They mean that capital flight from Club Med could set off an unstoppable process.

Mexico's Tequila drama in 1994 was triggered by a combination of the Chiapas uprising, a current account haemorrhage, and bond jitters. The dollar-peso peg snapped when elites began moving money to US banks. The game was up within days.

Fixed exchange systems – and EMU is just a glorified version – rupture suddenly. Things can seem eerily calm for a long time. Politicians swear by the parity. Remember John Major's "soft-option" defiance days before the ERM blew apart in 1992? Or Philip Snowden's defence of sterling before a Royal Navy mutiny forced Britain off the Gold Standard in 1931.

Don't expect tremors before an earthquake – and there is no fault line of greater historic violence than the crunching plates where Latin Europe meets Teutonia.

Greece no longer dares sell long bonds to fund its debt. It sold €2.5bn last week at short rates, mostly 3-months and 6-months. This is a dangerous game. It stores up "roll-over risk" for later in the year. Hedge funds are circling.

Traders suspect that investors are dumping their Club Med and Irish debt immediately on the European Central Bank in "repo" actions.

In other words, the ECB is already providing a stealth bail-out for Europe's governments – though secrecy veils all.

An EU debt union is being created, in breach of EU law. Liabilities are being shifted quietly on to German taxpayers. What happens when Germany's hard-working citizens find out?

http://www.telegraph.co.uk/finance/comme...ssion.html

[Damien Lloyd]

www.bullionvault.com[/url] I can assure you I was extremely unsure about this site at first. But did a little research and gave it a go, I'd also recommend it to anyone. Of course as a british based company I have no idea what would happen if the British government tried to steal the gold the way the federal reserve did. I've been told that keeping it in a zurich vault would protect it but I have no idea if it's true. I'm waiting for a price correction before jumping back in. Have a look at the site and tell me what you think.

Frankly, I'd be cautious. Demand for physical metal outstrips mining/lifting annually by several multiples and has done so for many years (over a decade I think). Almost every ounce of metal goes to India and Middle Eastern Souks for the jewelry trade -- apart from that quantity that is required for the medical trade and defence etc.

My concern here is that they may own some physical metal but are possibly (probably even?) leveraging it many times over. That's why you don't take physical delivery under their system -- there's many more owners than metal. What you might consider doing is trying to buy some coins like Krugerrands or Brittiania's (free of VAT). The latter come in various sizes ike the ounce coin, half ounce, quarter and tenth. They all sell at a premium, but you can take physical delivery and stash them under your bed...

I understand the reluctance, believe me I do. It took me about 4 weeks of reading everything I could about this company before I decided to trust them and bought a little gold (just a few grammes at first, they even gave me a free gramme). The reason you don't take physical delivery is because you may purchase 1 or 2 grammes, but those grammes may be part of a 9 ounce London Good Deliver Bar. Once you own a bar you can arrange for it to be delivered to you, but then the bar is obviously no longer "Good" and may be harder to sell, I think you can also arrange for delivery of smaller amounts. They have the gold in 3 vaults London Zurich and New York run by a company called Via Mat. Every gramme of gold is accounted for at the end of every day with a report from Via Mat that you can access that shows you who owns what inside each of the vaults. They claim they have a finite amount of physical gold, and if none is for sale, then you won't be able to buy it unless you up your price until someone sells.
These guys think like me, and I'm guessing (but feel a little presumptious) like many of you. Here are there strategic objectives:


BullionVault's objective is to create the world's most cost-effective, secure and accessible market in professional grade gold bullion.

We want to do this because :-

• We believe there is a deficit of financial responsibility in many modern governments and financial institutions.
  
• We believe that modern currencies and other paper based value systems will inhibit savers from retaining their domestic and worldwide purchasing power.
  
• We believe that using gold to provide protection from this problem is a strategy which has become inaccessible to individuals.
  
• We believe that we are uniquely well qualified to re-build that accessibility and to manage the service in a way which maximises security, accessibility and value for our customers.
  

http://www.bullionvault.com/help/index.d...nance.html

I do have a really pretty 1997 half ounce Britannia, but I only got to look and and remind myself thats where (I hoped) my money was. I trust this company, I was extremely dubious at first but they "feel" right.

I should point out that if you look at thier site you will notice that you can make money from refering people to the site. Please understand I am not, to do so I would have had to have given you the web address www.bullionvault.com and then added my username which I have not done.
The benefit of this site over having posession of the gold is the speed at which you can sell it, you set a sell price and sit back hoping the price meets yours like selling shares but a little easier. If the price shot up to £800 per ounce, then fell to £600 per ounce the next day. I'm guessing most people who owned physical gold would not be able to sell in time (because of being at work etc).

Off the topic of gold however (and because I really need to rant about this) I received a letter from my bank today which says that because I went over my agreed overdraft limit (by £6) on December 24th, and didn't put any money into my account until December 29th (Monday after Xmas) they are charging me £123.06.... B******ds. I spent 2 hours arguing with them on the phone but they won't budge. So I told them I was enacting my right to subject access under the Data Protection Act 1998, and wanted copies of all of my statements for the last 6 years. I'm getting in line, taking them to court and joining everybody else who is fighting against their punative charges that only exist to bleed money from the people who have the least amount of it.

[Magda Hassan]

Off the topic of gold however (and because I really need to rant about this) I received a letter from my bank today which says that because I went over my agreed overdraft limit (by £6) on December 24th, and didn't put any money into my account until December 29th (Monday after Xmas) they are charging me £123.06.... B******ds. I spent 2 hours arguing with them on the phone but they won't budge. So I told them I was enacting my right to subject access under the Data Protection Act 1998, and wanted copies of all of my statements for the last 6 years. I'm getting in line, taking them to court and joining everybody else who is fighting against their punative charges that only exist to bleed money from the people who have the least amount of it.

Good for you Damien. What bastards! 123.06 pounds is pure extortion. I'm sure the mafia don't charge that much. We have a 'People Before Profit' board here if you want to keep us updated on your adventure in keeping your money from the greedy grasping claws of the bank black hole.

[David Guyatt]

deleted because it was superfluous

[David Guyatt]

Ambrose Evans-Pritchard is a very spooky character, and I always read his columns with this foremost in my mind. However, ignoring the anti-Euro bias, his insider sources have provided him with some intriguing information about IMF Shock Therapy tactics in the former Soviet bloc, and a secret and entirely unsustainable ECB stealth bail-out for the likes of Spanish, Italian & Irish debt.

Ho, ho, ho. Evans-Bitchard is following the Establishment right-wing and Conservative Party script of trashing Europe (so Britland can continue to be groped and pawed by the US) to pressure Brown not to go down the Euro path, which if Sterling continues and the dollar crumbles as a reserve currency may become an even more attractive and viable solution for the woes of our Leader.

That's my take on his piece anyway.

[Jan Klimkowski]

Ho, ho, ho. Evans-Bitchard is following the Establishment right-wing and Conservative Party script of trashing Europe (so Britland can continue to be groped and pawed by the US) to pressure Brown not to go down the Euro path, which if Sterling continues and the dollar crumbles as a reserve currency may become an even more attractive and viable solution for the woes of our Leader.

That's my take on his piece anyway.

Indeed.

The Euro may be trash. But I'm sure the currency speculating scumbags (aka forex dealers) are betting on the Pound Sterling joining the Icelandic krona in WCs around the globe before the Euro....

[David Guyatt]

I can see that you have done your homework Damien, and credit to you that you have.

But "trust" a financial institution? Gosh. 20-year old virgins and all that, eh? :bootyshake:

The fact is that todays fractional reserve banking system was developed by the gold market (the London Rothschilds to be precise -- unless I am conflating things with the Templar Knights because of a failing memory -- but I don't think I am).

They reasoned that gold was heavy and expensive to deliver and thereafter expensive and hard to keep safely so as to avoid robbery etc. And so they instituted a system whereby they gave a buyer paper receipts for their gold holdings instead of delivering the metal. This became popular because the Rothschilds name was trusted (God alone knows why).

With this system operating well, they went out and sold the metal they held in trust for their other customers to other buyers. And on and on and on. They were confidant that no more than a few owners would ever demand delivery of the metal at any one time and so they would be safe selling the same gold over and over again. And they were right.

It is only when a properly functioning banks/markets break down that people understandably demand delivery of their deposits, otherwise known as a "run" on a bank. BCCI being one example, where thousands of depositors lost their entire wealth and savings to a crooked bank. Northern Rock almost became another had it not been for the government stepping in (and now the government is financially very fragile and shaky as a result of NR and the others).

The fact is that we are no longer in a properly functioning banking system. So my advise to anyone who buys gold is to take delivery. If they can. And then hold that gold for the next couple of years - and don't blink once. This is for a peace of mind investment rather than profit.

If you want to invest in gold, i.e., play the markets for profit, use paper gold. That's it's only purpose. But physical is for that rainy day when the world balances on the edge of a crevice. Rather like today for example.

Having that gold in a bank in Zurich or London (and thinking its not also owned by a couple of dozen other so called "owners" too) won't be of any use in an emergency, especially if the banking system fails you when you really need it. As it usually does.

That'll be $1000.00 please, payable to the "Guyatt Survival Fund 2009".

www.bullionvault.com[/url] I can assure you I was extremely unsure about this site at first. But did a little research and gave it a go, I'd also recommend it to anyone. Of course as a british based company I have no idea what would happen if the British government tried to steal the gold the way the federal reserve did. I've been told that keeping it in a zurich vault would protect it but I have no idea if it's true. I'm waiting for a price correction before jumping back in. Have a look at the site and tell me what you think.

Frankly, I'd be cautious. Demand for physical metal outstrips mining/lifting annually by several multiples and has done so for many years (over a decade I think). Almost every ounce of metal goes to India and Middle Eastern Souks for the jewelry trade -- apart from that quantity that is required for the medical trade and defence etc.

My concern here is that they may own some physical metal but are possibly (probably even?) leveraging it many times over. That's why you don't take physical delivery under their system -- there's many more owners than metal. What you might consider doing is trying to buy some coins like Krugerrands or Brittiania's (free of VAT). The latter come in various sizes ike the ounce coin, half ounce, quarter and tenth. They all sell at a premium, but you can take physical delivery and stash them under your bed...

I understand the reluctance, believe me I do. It took me about 4 weeks of reading everything I could about this company before I decided to trust them and bought a little gold (just a few grammes at first, they even gave me a free gramme). The reason you don't take physical delivery is because you may purchase 1 or 2 grammes, but those grammes may be part of a 9 ounce London Good Deliver Bar. Once you own a bar you can arrange for it to be delivered to you, but then the bar is obviously no longer "Good" and may be harder to sell, I think you can also arrange for delivery of smaller amounts. They have the gold in 3 vaults London Zurich and New York run by a company called Via Mat. Every gramme of gold is accounted for at the end of every day with a report from Via Mat that you can access that shows you who owns what inside each of the vaults. They claim they have a finite amount of physical gold, and if none is for sale, then you won't be able to buy it unless you up your price until someone sells.
These guys think like me, and I'm guessing (but feel a little presumptious) like many of you. Here are there strategic objectives:


BullionVault's objective is to create the world's most cost-effective, secure and accessible market in professional grade gold bullion.

We want to do this because :-

• We believe there is a deficit of financial responsibility in many modern governments and financial institutions.
  
• We believe that modern currencies and other paper based value systems will inhibit savers from retaining their domestic and worldwide purchasing power.
  
• We believe that using gold to provide protection from this problem is a strategy which has become inaccessible to individuals.
  
• We believe that we are uniquely well qualified to re-build that accessibility and to manage the service in a way which maximises security, accessibility and value for our customers.
  

http://www.bullionvault.com/help/index.d...nance.html

I do have a really pretty 1997 half ounce Britannia, but I only got to look and and remind myself thats where (I hoped) my money was. I trust this company, I was extremely dubious at first but they "feel" right.

I should point out that if you look at thier site you will notice that you can make money from refering people to the site. Please understand I am not, to do so I would have had to have given you the web address www.bullionvault.com and then added my username which I have not done.
The benefit of this site over having posession of the gold is the speed at which you can sell it, you set a sell price and sit back hoping the price meets yours like selling shares but a little easier. If the price shot up to £800 per ounce, then fell to £600 per ounce the next day. I'm guessing most people who owned physical gold would not be able to sell in time (because of being at work etc).

Off the topic of gold however (and because I really need to rant about this) I received a letter from my bank today which says that because I went over my agreed overdraft limit (by £6) on December 24th, and didn't put any money into my account until December 29th (Monday after Xmas) they are charging me £123.06.... B******ds. I spent 2 hours arguing with them on the phone but they won't budge. So I told them I was enacting my right to subject access under the Data Protection Act 1998, and wanted copies of all of my statements for the last 6 years. I'm getting in line, taking them to court and joining everybody else who is fighting against their punative charges that only exist to bleed money from the people who have the least amount of it.