BullionVault

[renewable]

Re: BullionVault

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?

Speaking as someone who doesn't necessarily think that gold will be confiscated, but is concerned that people such as Marc Faber are mentioning the possibility:

1) See sites such as http://fourthcurrency.com/ - which I understand (please correct me if wrong) is related to itulip?

2) 'They' can make up any reason. Economic terrorism? edit: have you not read Wishes & Rainbows: http://www.bos.frb.org/education/pubs/wishes.htm - to ensure social security provision for the elderly?

3) Would still be a small fraction of the population. Pandering to the majority is not unusual for gubmints.

4) It's possible that wealthy gold holders hold actual physical and wouldn't care if the 'big scores' such as paper/digital/ETF hoards are seized, leaving individual deposit boxes alone.

[renewable]

Re: BullionVault

For any investment one must have an exit strategy. Unless you have 400oz, your only possible exit strategy from BV or goldmoney is a redemption in fiat money. In the event the governments mess up so badly that one is forced to exit, it is unlikely to be a good time to either hold fiat currency, or to attempt to convert it into physical precious metals.

[ThePythonicCow]

Re: BullionVault

For any investment one must have an exit strategy. Unless you have 400oz, your only possible exit strategy from BV or goldmoney is a redemption in fiat money. In the event the governments mess up so badly that one is forced to exit, it is unlikely to be a good time to either hold fiat currency, or to attempt to convert it into physical precious metals.

When I sell my BV gold, I might not care whether the dollars I get in return are a good asset to hold. I will only care that they can still be exchanged for whatever asset class I do choose to hold next.

[renewable]

Re: BullionVault

When I sell my BV gold, I might not care whether the dollars I get in return are a good asset to hold. I will only care that they can still be exchanged for whatever asset class I do choose to hold next.

My point is that if things get so bad you are forced into redemption through e.g. fear of confiscation, at that stage it would probably be extremely difficult/expensive, or impossible, to exchange the redeemed fiat for physical precious metals.

[ThePythonicCow]

Re: BullionVault

My point is that if things get so bad you are forced into redemption through e.g. fear of confiscation, at that stage it would probably be extremely difficult/expensive, or impossible, to exchange the redeemed fiat for physical precious metals.

I read your reply as stating that when I go to exchange gold for dollars, it will be hard to exchange dollars for gold. I suspect I missed your point ... sorry.

[renewable]

Re: BullionVault

I read your reply as stating that when I go to exchange gold for dollars, it will be hard to exchange dollars for gold. I suspect I missed your point ... sorry.

No need for apology - I'm just putting forward a worse case scenario for the OP who asked whether BV is safe. Have no idea whether it will happen. Since I moved out of goldmoney years ago, the spread for physical has increased considerably. My guess is the spread will continue to widen, dramatically so in times of deep crisis.

[ThePythonicCow]

Re: BullionVault

No need for apology - I'm just putting forward a worse case scenario for the OP who asked whether BV is safe. Have no idea whether it will happen. Since I moved out of goldmoney years ago, the spread for physical has increased considerably. My guess is the spread will continue to widen, dramatically so in times of deep crisis.

Ah - so you're considering the case where one might want to get out of BV gold into physical gold in ones possession. Yes, I agree, that could be a difficult exchange, particularly in times of deepest crisis. If physical gold is what one wants in a time of deep crisis, then yes physical gold is what one had better have in hand before the SHTF.

I was considering the case where one might want to get out of BV gold into either some unrelated asset class that one expected to rise in price, or into essentials of life such as food, clothing, shelter, energy, transportation or bribes.

For any of these scenarios, it depends on just what comes unglued and how in ones particular circumstance whether one is in the rough or on the (golf) green.

[rjwjr]

Re: BullionVault

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.

Excellent perspective, hayek.

Coincidentally, and for what it's worth, John William's of Shadow Stats fame has a subscriber piece out today that alerts subscribers to not worry about the recent Swiss troubles...at least as it relates to their currency. It is his contention that the currency is still a fine hedge against the likely (inevitable?) collapse of the US$.

I'd post a link, but I'm not familiar with copyright issues on a paid service like his. Here is but a small sampling in his words, "Underlying currency fundamentals for the Swiss franc not only outshine those of the United States, but also those of most of other major currencies. Accordingly, the Swiss franc continues to hold its relative top ranking versus the greenback, euro and pound sterling."

Getting back to the gold discussion of this thread, if TSHTF in a big way, owning gold will not be as important as being self-sufficient. Owning gold will be a nice way to survive a (hyper)inflation and political instability for a few years, but if all hell breaks loose with hyper-inflation, political chaos, social unrest, and unfettered crime, I'd give up all of my gold for a rural farm, with lots of guns & ammo, and some neighbors of like mind that I can trust. At some point, our perspective will need to change from "making money and protecting assets" to survival. Let's hope it never gets to that phase, at least in our "civilized" nations. Until then, the idea that makes a lot of sense to me is whichever of you smart guys or gals that said to diversify your holdings of gold, while increasing the percentage toward physical gold the worse that things got. That seems like a nice guideline to follow.

[Prazak]

Re: BullionVault

Excellent perspective, hayek.

Coincidentally, and for what it's worth, John William's of Shadow Stats fame has a subscriber piece out today that alerts subscribers to not worry about the recent Swiss troubles...at least as it relates to their currency. It is his contention that the currency is still a fine hedge against the likely (inevitable?) collapse of the US$.

I'd post a link, but I'm not familiar with copyright issues on a paid service like his. Here is but a small sampling in his words, "Underlying currency fundamentals for the Swiss franc not only outshine those of the United States, but also those of most of other major currencies. Accordingly, the Swiss franc continues to hold its relative top ranking versus the greenback, euro and pound sterling."

Anybody here holding NOK or assessing it as a place to hold cash?

[karim0028]

Re: BullionVault

Excellent perspective, hayek.

Coincidentally, and for what it's worth, John William's of Shadow Stats fame has a subscriber piece out today that alerts subscribers to not worry about the recent Swiss troubles...at least as it relates to their currency. It is his contention that the currency is still a fine hedge against the likely (inevitable?) collapse of the US$.

I'd post a link, but I'm not familiar with copyright issues on a paid service like his. Here is but a small sampling in his words, "Underlying currency fundamentals for the Swiss franc not only outshine those of the United States, but also those of most of other major currencies. Accordingly, the Swiss franc continues to hold its relative top ranking versus the greenback, euro and pound sterling."

Getting back to the gold discussion of this thread, if TSHTF in a big way, owning gold will not be as important as being self-sufficient. Owning gold will be a nice way to survive a (hyper)inflation and political instability for a few years, but if all hell breaks loose with hyper-inflation, political chaos, social unrest, and unfettered crime, I'd give up all of my gold for a rural farm, with lots of guns & ammo, and some neighbors of like mind that I can trust. At some point, our perspective will need to change from "making money and protecting assets" to survival. Let's hope it never gets to that phase, at least in our "civilized" nations. Until then, the idea that makes a lot of sense to me is whichever of you smart guys or gals that said to diversify your holdings of gold, while increasing the percentage toward physical gold the worse that things got. That seems like a nice guideline to follow.

I see alot more folks subscribing to mad max scenarios... I mean, i dont think it will get to the point of self destruction, at least i hope not....

We have models of countries that imploded to look to like iceland, argentina, etc... Life goes on, things will improve eventually, i doubt its gonna be anarchy....

For the love of god, i sure hope not. otherwise all the gold in the world wont be worth more than your life or the life of someone you love....

[hayekvindicated]

Re: BullionVault

Excellent perspective, hayek.

Coincidentally, and for what it's worth, John William's of Shadow Stats fame has a subscriber piece out today that alerts subscribers to not worry about the recent Swiss troubles...at least as it relates to their currency. It is his contention that the currency is still a fine hedge against the likely (inevitable?) collapse of the US$.

I'd post a link, but I'm not familiar with copyright issues on a paid service like his. Here is but a small sampling in his words, "Underlying currency fundamentals for the Swiss franc not only outshine those of the United States, but also those of most of other major currencies. Accordingly, the Swiss franc continues to hold its relative top ranking versus the greenback, euro and pound sterling."

Getting back to the gold discussion of this thread, if TSHTF in a big way, owning gold will not be as important as being self-sufficient. Owning gold will be a nice way to survive a (hyper)inflation and political instability for a few years, but if all hell breaks loose with hyper-inflation, political chaos, social unrest, and unfettered crime, I'd give up all of my gold for a rural farm, with lots of guns & ammo, and some neighbors of like mind that I can trust. At some point, our perspective will need to change from "making money and protecting assets" to survival. Let's hope it never gets to that phase, at least in our "civilized" nations. Until then, the idea that makes a lot of sense to me is whichever of you smart guys or gals that said to diversify your holdings of gold, while increasing the percentage toward physical gold the worse that things got. That seems like a nice guideline to follow.

The hyper-doomsday scenarios are I think overblown because even before those presented themselves Western governments would impose rationing and military rule.

People forget that whole nations stayed relatively orderly during WWII when there were cities being carpet bombed. Perhaps this time order may be harder to maintain in the ghettoes - but that's a wild card for people to think about. I don't foresee massive rioting in the middle class areas in Britain, for example.

[Guest]

Re: BullionVault

We live in a world of nearly limitless deception and fraud. Anything is possible. Govn't is a threat for sure down the line it seems.

I'm beginning to think that the best strategy may be riding it up but hopping off well before things reach the confiscation/bank failure/chaos/bailments not respected point. Then using the funds to buy other tangible assets. Or at least a diversified strategy (etfs, bullionvault, goldmoney, physical buried in the back yard, with an early exit with much of it to buy other tangible items in late stage before its confiscated.

After all, what happens when the employees of a failing vault company pull an inside job and the insurer is put out of business by it? Paranoia indeed. Do you have 3 years to wait while your claim is adjudicated by a bankrupt court system?

[ThePythonicCow]

Re: BullionVault

Then using the funds to buy other tangible assets. Or at least a diversified strategy (etfs, bullionvault, goldmoney, physical buried in the back yard, with an early exit with much of it to buy other tangible items in late stage before its confiscated

When you said "other tangible assets", I expected you to then list useful stuff, such as food, clothing, communications, tools, guns, energy and shelter, and the stuff to make more of the same, especially food.

Then you go and list efts and gold stash alternatives on me ... .

[ThePythonicCow]

Re: BullionVault

After all, what happens when the employees of a failing vault company pull an inside job and the insurer is put out of business by it? Paranoia indeed. Do you have 3 years to wait while your claim is adjudicated by a bankrupt court system?

That's why one diversifies. Everything has some risk, this way or that.

[renewable]

Re: BullionVault

I don't foresee massive rioting in the middle class areas in Britain, for example.

Let's wait and see what happens on April the 1st ;)

If you're a UK taxpayer, it's a bit nuts not to be taking full advantage of the CGT exemption for sovereigns & britannias.