BullionVault

[serge_oc]

Re: BullionVault

I agree with AG that diversifying into various vehicles (perth, bv, etf etc) is a way to go with gold investment.

GoldMoney serves as a payment vehicle as well (whilst BV is trading gold only), so it's probably more vulnerable to government meddling.

Regarding discussion on BV, has anyone actually confirmed with ViaMat that they truly hold the gold on behalf of BV's clients?

I can see audit statement daily on BV's site, but has anyone actually confirmed this with ViaMat? Who is the independent auditor of BV and ViaMat?

[occdude]

Re: BullionVault

The shakier things get, the closer PHYSICALLY to your gold you want to be.

The way I see it is GLD ETF-unallocated bullion deposit/bullion vault, gold money-allocated bullion-safe deposit box-your back yard-your suitcase as you flee. All those can be options in different allocative percentages according to risk factors at the time. Important thing though is to diversify. If you get caught for some reason and cant buy gold, buy the gold miners ETF GDX which will really climb if gold bullion is on the move.

[LargoWinch]

Re: BullionVault

Another way to diversify - an perhaps the best - is to literally bury your physical gold on your property and keeping your mouth shut (like babies, its better done at night).

Lastly, there is the option of legal tender non-confiscable (new word!) gold US coins, but these command a hefty premium over spot. Some of these coins are called "St. Gaudens" and have been minted prior to 1933, when gold was confiscated in the US.

[hayekvindicated]

Re: BullionVault

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.

The world's most corrupt politicians generally hoard their loot in Switzerland. The rulers (and other powerful people) of places like China and Russia will have a LOT to lose if Switzerland were to go under.

Bailing out countries is always a political decision. And those are always taken by politicians.

[renewable]

Re: BullionVault

leaving confiscation by the Swiss Government aside for a second

I used to discount that possibility, too. At least until I read the following from the Swiss economist Marc Faber's Gloom Boom & Doom report:

The other concern I have about owning physical gold (and as I just said, I am holding on to my physical gold) is that things will get one day so bad in the world that governments will expropriate gold, as the US did in 1933. This is unlikely to happen this year but it is a concern I have for the long term, especially if gold rallies to several thousand dollars per ounce as a result of money printing by all central banks or because of wars! As Voltaire remarked, “it is dangerous to be right when the government is wrong.”

In this situation the safest would be to hold gold in countries with a strong gold tradition such as Canada, Australia, France, the Middle East, India, and most Asian countries. As for Switzerland, where I am holding my gold now, I am afraid that the Swiss have now shown twice that they are bending to demands from the US on the slightest pressure. Moreover, the totally incompetent Swiss National Bank (they have very good company among other central bankers) having sold part of its gold reserves below $300 will be only too happy to replenish its reserves by taking gold away from individuals who store their gold in Swiss banks. As I said, I do not expect this to happen soon, but it is a concern of mine – this especially since physical gold is held by a very small minority of the population.

[hayekvindicated]

Re: BullionVault

I used to discount that possibility, too. At least until I read the following from the Swiss economist Marc Faber's Gloom Boom & Doom report:

I subscribe to his report and read that too.

One factor in my favour is that I am not an American and have no connection with the US. Ive never even been to America. So US tax authorities have no jurisdiction over my property anywhere in the world (I own no US property). A counter argument would be that the US still grabs your gold because it can. But since the US has military bases all over the world, then theoretically no place on earth is safe.

I have no doubt that the US government will go after the money that its citizens have as the country turns into a banana republic. This has been evident for some time - the leviathan must be fed constantly and existing sources of feed are drying up. So more must be found. And since the people are broke, you don't get any sympathy in the court of public opinion for being solvent.

So the question is: where do you keep your gold? If you're American, Singapore (Faber's favoured destination) is too far. And if you hoard it in a private vault, what is to stop the Feds from barging in, taking your gold by force and killing your family if you try to stop them (or worse still, sticking you in a godforsaken American prison - with characteristics not fit for discussion on a family forum such as this)? When the government gets that bad, its probably far more dangerous to own gold "on shore" in the US or the UK than offshore in Switzerland or Jersey.

Of course, Singapore is the best option of all but its not easily accessible for me at the moment. Ideally of course, that's where I'd keep it.

[renewable]

Re: BullionVault

Faber isn't American either, yet he's still worried. I would imagine that someone like Faber has his own stored physical gold - not through a third party such as BV.

I'm also of the opinion that 1 big company vault, such as BV, is a much more attractive and easier target for an acquisitive government than individual safety deposits.

Don't know where is the safest place to keep gold, but in my view BV and goldmoney add additional unnecessary layer(s) of risk.

[jimmygu3]

Re: BullionVault

One factor in my favour is that I am not an American and have no connection with the US. Ive never even been to America.
.....
So the question is: where do you keep your gold? If you're American, Singapore (Faber's favoured destination) is too far. And if you hoard it in a private vault, what is to stop the Feds from barging in, taking your gold by force and killing your family if you try to stop them (or worse still, sticking you in a godforsaken American prison - with characteristics not fit for discussion on a family forum such as this)? When the government gets that bad, its probably far more dangerous to own gold "on shore" in the US or the UK than offshore in Switzerland or Jersey.

Hayek,

I think your first statement says it all- you have never been to America and therefore know as much about it as I do about India. Your later statement about Federal agents murdering families to get their gold is absurd. Clearly you are more intelligent than that. Perhaps anti-American sentiment in your country, in the media and on the web has created an incorrect impression of my country in your mind.

Gold was confiscated in the US in 1933, as this was the only way to devalue the dollar and remain on some form of the gold standard. This was done by requiring all US citizens to exchange their bulliion for cash. Safe deposit boxes had to be opened in the presence of an IRS agent- no roving SWAT teams gunning down citizens. For the most part it involved voluntary cooperation to obey the law and support the national interest.

The US no longer needs to confiscate gold to devalue the dollar. Foreign debts are not indexed to gold. They are denominated in infinitely printable dollars. If gold spikes to $2500 as EJ predicts, the US will collect a hefty tax on those gains, even at current rates. If they want a bigger piece of the pie, the "collectibles" tax rate could be raised. No family killing necessary.

Jimmy

[hayekvindicated]

Re: BullionVault

Faber isn't American either, yet he's still worried. I would imagine that someone like Faber has his own stored physical gold - not through a third party such as BV.

I'm also of the opinion that 1 big company vault, such as BV, is a much more attractive and easier target for an acquisitive government than individual safety deposits.

Don't know where is the safest place to keep gold, but in my view BV and goldmoney add additional unnecessary layer(s) of risk.

Faber has a lot of American clients.

[renewable]

Re: BullionVault

Perhaps anti-American sentiment in your country, in the media and on the web has created an incorrect impression of my country in your mind.

Not really arguing either way, but the suspension of Habeas Corpus for many years at places like Guantanamo, torture, and the coyly named 'extraordinary rendition' have altered many people in the world's view of US justice.

It is to Obama's great credit that he is ending these practices.

[hayekvindicated]

Re: BullionVault

Hayek,

I think your first statement says it all- you have never been to America and therefore know as much about it as I do about India. Your later statement about Federal agents murdering families to get their gold is absurd. Clearly you are more intelligent than that. Perhaps anti-American sentiment in your country, in the media and on the web has created an incorrect impression of my country in your mind.

Gold was confiscated in the US in 1933, as this was the only way to devalue the dollar and remain on some form of the gold standard. This was done by requiring all US citizens to exchange their bulliion for cash. Safe deposit boxes had to be opened in the presence of an IRS agent- no roving SWAT teams gunning down citizens. For the most part it involved voluntary cooperation to obey the law and support the national interest.

The US no longer needs to confiscate gold to devalue the dollar. Foreign debts are not indexed to gold. They are denominated in infinitely printable dollars. If gold spikes to $2500 as EJ predicts, the US will collect a hefty tax on those gains, even at current rates. If they want a bigger piece of the pie, the "collectibles" tax rate could be raised. No family killing necessary.

Jimmy

I apologise if I offended you and I agree it was an over the top statement. And no this isn't due to anti-Americanism in India. Perhaps Ive read too many Americans critiquing their own government.

However, the odds of the US government massively hiking taxes and then forcing people to pay them is eminently possible. And people who refuse to pay will wind up in prison.

I may not have ever been to America but I've read more about the country's history than most Americans have.

Lastly, the one thing that has been a common theme in American history especially after the Great Depression is the expansion in the power of the state. The things the state does today, it never did those things in the past. Also, this crisis is unique in the sense that the US was never faced with a fundamental question of national insolvency as it does now. So things have changed. There were panics in the past and there were depressions but there was never a question of the US government becoming insolvent and only being able to pay debts by printing money. This crisis stands out for that reason alone.

[hayekvindicated]

Re: BullionVault

Not really arguing either way, but the suspension of Habeas Corpus for many years at places like Guantanamo, torture, and the coyly named 'extraordinary rendition' have altered many people in the world's view of US justice.

It is to Obama's great credit that he is ending these practices.

This is an excellent book on the subject (although it preceded Guantanamo Bay).

[BuckarooBanzai]

Re: BullionVault

Not really arguing either way, but the suspension of Habeas Corpus for many years at places like Guantanamo, torture, and the coyly named 'extraordinary rendition' have altered many people in the world's view of US justice.

It is to Obama's great credit that he is ending these practices.

Allow me to make a minor correction to your assertion.

It WILL BE to Obama's great credit ONCE HE HAS ENDED these practices.

Consider me cynical... but after 2 months I haven't seen even the merest hint of "change" from this administration.

[renewable]

Re: BullionVault

Allow me to make a minor correction to your assertion.

It WILL BE to Obama's great credit ONCE HE HAS ENDED these practices.

Consider me cynical... but after 2 months I haven't seen even the merest hint of "change" from this administration.

My apologies. I stand corrected.

Damn that media spin :rolleyes:

[raja]

Re: BullionVault

The US no longer needs to confiscate gold to devalue the dollar. Foreign debts are not indexed to gold. They are denominated in infinitely printable dollars. If gold spikes to $2500 as EJ predicts, the US will collect a hefty tax on those gains, even at current rates. If they want a bigger piece of the pie, the "collectibles" tax rate could be raised. No family killing necessary.

Jimmy

I have some questions for those who think that gold will be confiscated:

1) What exactly would the government gain from confiscating gold?

2) What would be the rationale given to the public for confiscation?

3) If gold selling were to go into a mania phase, as many are predicting, gold would be owned by large numbers of people. Would the government be able to confiscate gold if large numbers opposed it?

4) Many gold owners are wealthy, intelligent, capable people, who would be able to mount an organized campaign against confiscation. (They are also aware that there are not a lot, if any, good places outside the US to hold gold, so may not seek to offshore it.) Given this, do you think the government would fear to launch a confiscation action?