BullionVault

[hayekvindicated]

Is Bullionvault safe?

I know that this site officially recommends it and it was on the basis of that recommendation that I opened an account with them and bought a lot of gold last year.

However, as this crisis gets worse and worse and worse, I keep getting the jitters about what may happen if the UK were to go bust. My Bullionvault gold is in Zurich so the UK Government cannot seize it straight away.

However, in the post-Madoff era, there are all kinds of fears one has and the only way to alleviate them is by talking to people. So any thoughts on BV here would be very gratefully received.

Thanks

[rjwjr]

Re: BullionVault

Everything I have read and heard, on this site and from other sources, concurs that they are safe. That being said, another lesson we have learned on this site is to diversify; not only types of assets , but their form and location too.

[LargoWinch]

Re: BullionVault

Hayekvindicated, for the best discussion about BullionVault on iTulip, which features Paul Tustain, BullionVault's CEO (also include great comments from Sapiens, GrapeJelly and Lukester) see here.

[plinko]

Re: BullionVault

following this, Is Goldmoney safe?

[renewable]

Re: BullionVault

In my opinion, unless you can phone up the company that stores your gold, go round the next day and have it placed in your hands before you walk out with it, you don't completely 'own' physical gold.

[gwynedd1]

Re: BullionVault

secure gold...




The answer to gold confiscation.

[petertribo]

Re: BullionVault

In Britain last year, the police raided a company devoted to renting safe deposit boxes, similiar to "storing" valuables. Here is the story:

http://www.thesun.co.uk/sol/homepage...cle1239179.ece

I did read after that the cops figured a lot of people would not show up for their valuables. Those who did show up, the news stories indicated would have a lot of trouble getting their stuff. Maybe someone in Britain is familiar with how this police action proceeded. If there were prosecutions, etc. Maybe there was some justification for it, but at the time it seemed to be outrageous intimidation of people holding assets outside of the official system. Interesting because a lot of people had been predicting this type of government action.

So, if THEY decide to have a beef with your storage or other company, well, at a minimum, you are in the middle.

[karim0028]

Re: BullionVault

I have money in BV and im also wondering the same thing, since they bank with Lloyds.... Glad to see im not the only one asking this question

[hayekvindicated]

Re: BullionVault

Thanks for all your replies guys. I read through Paul's very thoughtful response and I agree with everything he says.

Hoarding physical gold in a private vault in Britain is not an option for me. I could, of course, hoard it in India where my family lives (and in fact I do have a small stash there too). HOWEVER, I would not feel comfortable storing six or ten times as much in stashes there - its just too much risk. And there's also the problem of liquidity. How do you liquidate it instantly if you think the market is about to crash because its a bubble run amok? Or there may be other reasons to liquidate.

As Im a lawyer, I fully understand the distinction between a debtor/creditor relationship which exists between a bank and its depositor and a bailer/bailee relationship which exists in a custody arrangement. In the latter, I only lose my money and my gold in the event of fraud or theft (leaving confiscation by the Swiss Government aside for a second). Theft is covered by insurance so that leaves fraud. Fraud is a risk - if Paul Tustain and his company were to be fraudsters - but is this risk higher or lower than the risk of theft and other dangers in private vaults?

So I think for now Ill stick with BV. Thanks for all your responses. Being a gold owner is not easy! One only buys gold when no one else is buying because one fears things others haven't even thought about. Therefore, some degree of paranoia goes with the territory.

[Sharky]

Re: BullionVault

I've had an account with BV for well over a year, and have been very comfortable with them, until recently.

As I mentioned in another thread, with the changes happening in Switzerland, both with their economy and with Swiss bank stability and their inability to withstand pressures from the US, I'm no longer convinced that it's safe, and I closed my account.

[audrey_girl]

Re: BullionVault

agree with earlier post - the key thing here is to diversify, maybe:
physical, BV, Perth, Gold Money, CEF, and a handful of the miners

and if something blows in one of the gold vehicles, I think you will make it up in the other gold vehicles....

also remember that as things start spinning out of control a little bit of gold is going to go an awfully long way

regards -

ag

[Prazak]

Re: BullionVault

I've had an account with BV for well over a year, and have been very comfortable with them, until recently.

As I mentioned in another thread, with the changes happening in Switzerland, both with their economy and with Swiss bank stability and their inability to withstand pressures from the US, I'm no longer convinced that it's safe, and I closed my account.

Well put by Sharky and Hayek. As we read through predictions that Switzerland could be the next Iceland, and as we watch the Swiss CB intervene in the currency markets to drive the Swiss Franc down, one begins to question Tustain's premise that the Swiss are less likely to grab gold than the USG. To be sure, it would be an act of desperation, striking at the very heart of their national reputation and economic model as private bankers to the world. But such desperation is not out of the question.

It's definitely worth watching closely. And yes, diversifying out of Zurich or anywhere else is more than prudent.

[Sharky]

Re: BullionVault

Another issue with Switzerland is that many of the loans to Eastern Europe were made in Swiss Francs. As those countries crumble and are unable to repay, what will that do to the Swiss economy? Desperation could be putting it mildly.

They really did themselves and the rest of the world a huge disservice when they went off the gold standard. Quite a shame, really.

[Prazak]

Re: BullionVault

I'd like to find reassurance in Jim Sinclair's take, but the numbers and the contexts do not bode well.

If the private wealth does begin to flow out of Switzerland, where would it flow to? When you consider the alternatives, riding this thing out with the Swiss might seem the lowest-risk option.

[ricket]

Re: BullionVault

If the private wealth does begin to flow out of Switzerland, where would it flow to? When you consider the alternatives, riding this thing out with the Swiss might seem the lowest-risk option.

If they have succumbed to the cancer that is Fractional Reserve Banking, and have lent out enough of their own currency to more than cover all the gold they have left in their vaults, then yes, there will be a problem. I'm not very familiar with the Swiss banking model, do they participate in Fractional reserve lending, and what ratio of deposits are they required to keep? 10%?

Assuming a 10% default rate (not implausible in today's economic environment), with a 10% reserve ratio, that would wipe out their entire capital. How anyone could ever defend fractional reserve banking and the extreme leverage utilized is completely beyond me...at most it should at least be 50-75% reserve ratios to minimize against any losses incurred from making bad loans. And we all know they are just as susceptible to making bad investments as everyone else. They are no more adept at finances than the general American public.