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Fiat Gold Implosion 2010, EverBank Deletes the (Now) Infamous Section 6.3.7.3

Commodities / Gold and Silver 2010 Apr 06, 2010 - 12:45 AM GMT

By: Gordon_Gekko

Commodities

Best Financial Markets Analysis ArticleApparently, yours truly’s last post generated quite a ruckus subsequent to which EverBank has decided to delete the offending Section 6.3.7.3 in their Terms and Conditions for “Non-FDIC Insured Metals Select Accounts”, where it now simply says “RESERVED”.


Somebody posted this comment on my blog on the 16th of March, 2010, which I have since removed as it contained personally identifying information. Given the content therein, I was waiting for someone from EverBank to perhaps send me a formal email, but I haven’t received anything so far and therefore have decided to just go with this. Here is the comment I received (with the personally identifying information redacted):

   From:

    Subject: RE: Website inquiry - World Markets

    Date: Tuesday, March 16, 2010 1:40 PM


    We have been made aware of the storm of blogs/emails regarding our recent change to the Metals Terms and Conditions. Unfortunately the language was inserted without proper review, and has since been pulled. Here is the response our President, Frank Trotter has sent to the authors of this blog/newsletter:

    "We have noticed some blog and newsletter comments concerning the new Terms and Conditions for our EverBank Metals Select accounts. As part of our periodic review of these contracts we recently standardized and consolidated the Terms and Conditions for all EverBank accounts and products. In connection with this process, we have included the new language in Section 6.3.7.3 of the Terms and Conditions that has been quoted in some commentary.

    This language was not intended to allow EverBank to close your Metals Account arbitrarily or without good reason. This technical contract language was added to clarify EverBank's rights in the event that unforeseen circumstances necessitated a change in EverBank's ability to act as custodian for precious metals purchased by you through EverBank. Given the concerns that have been posted and the fact that we do not foresee any likely circumstance that would affect our ability to continue to serve as custodian for your precious metals, we are in the process of deleting Section 6.3.7.3 from the EverBank Terms and Conditions in its entirety and notifying customers.

    As a reminder you can request that metals held in any EverBank Metals Select account be shipped to you (in the case of allocated accounts) or converted to a specific physical form and shipped to you (in the case of non-IRA pooled accounts) at any time.

    I hope that this clarifies the matter and invite those with further questions to contact the World Markets desk directly.

    Thank you -

    Frank Trotter, President, EverBank Direct"


    Again I appreciate you bringing this to our attention, and am happy to report that the language has been removed from our T&Cs. EverBank is very stable and does not 'short' gold. We purchase every ounce which is sold to our customers.


    Thank you,


    EverBank World Markets
    8300 Eager Rd, Ste 700
    St. Louis, MO 63144
    Phone: 800-926-4922
    Fax: 888-882-0073

    -----Original Message-----

    From: xxxxxxxxxxxxxx@hotmail.com [mailto: xxxxxxxxxxxxxx @hotmail.com]

    Sent: Tuesday, March 16, 2010 12:32 PM

    To: Everbank World Markets

    Subject: Website inquiry - World Markets


    Email Subject: Website inquiry - World Markets

    Requestor Name: xxx xxxxxxxx

    Requestor Email: xxxxxxxxxxxxxx @hotmail.com

    Email Message:

  <<<<<<<<<<

Please comment on this article:

    http://www.marketoracle.co.uk/Article17865.html

    >>>>>>>>>

Web Sever timestamp: 3/16/2010 1:31:52 PM
    User IP Address: xx.xxx.15.4
    User Browser Info: Mozilla/5.0 (Windows; U; Windows NT 5.1; en-US;
    rv:1.9.2) Gecko/20100115 Firefox/3.6 GTB6 (.NET CLR 3.5.30729)
    User OS: WinXP
    Executing Website File:http://www.everbank.com:80/forms/general/000MailForm.aspx?type=wldmkt&;
    Executing Website IP : xx.x.3.46
    Executing Website MachineName :XXXXXXXXX


Lets’ take this apart piece by piece.

    We have been made aware of the storm of blogs/emails regarding our recent change to the Metals Terms and Conditions.

To tell you the truth, yours truly wasn’t expecting such widespread coverage of his post, but in any case it just goes to show these companies/banks that they can’t just stealthily change their Terms and Conditions whenever they feel like it, hiding under legalese, steal from their customers and hope nobody will notice.

Unfortunately the language was inserted without proper review…

I bet.

    Here is the response our President, Frank Trotter has sent to the authors of this blog/newsletter

I didn’t receive anything, except a message from some anonymous commenter.

    This language was not intended to allow EverBank to close your Metals Account arbitrarily or without good reason. This technical contract language was added to clarify EverBank's rights in the event that unforeseen circumstances necessitated a change in EverBank's ability to act as custodian for precious metals purchased by you through EverBank.

Well, first you say it was “inserted without proper review” and then you proceed to defend it. What is it folks? Either it was a mistake or it wasn’t. There is no in-between. And I’m pretty sure a bank your size does not move even a stapler without “proper review”. Let’s revisit what this “language” was:

    Section 6.3.7. General Terms: We have added language clarifying our right to close your account. We may close your Metals Select Account at anytime upon reasonable notice to you. If we believe that it is necessary to close your account immediately in order to limit losses by you or us, we may close your account prior to providing notice to you. Notice from us to one of you is notice to all of you. If we close your account, we reserve the right to convert your Precious Metals to U.S. dollars and tender the balance to you by mail.

Seems pretty arbitrary to me, especially when you say that you can even close the account prior to providing notice to your customers and that notice to one of your customers is notice to all of them. And what would that “good reason”/ “unforeseen circumstance” be? Could it be something related to the recent revelations in the CFTC meeting on position limits in the metals markets that the LBMA/COMEX [paper] Gold market today is basically a Ponzi Scheme with more than 100 ounces of paper Gold having been sold for every ounce of the physical metal? I think it is pretty clear that these guys are aware of the various shenanigans occurring in the Gold market as well as the possibly nasty intentions of the U.S. Government as exemplified by this statement in the Section 6.3.7.5. and are trying to indemnify themselves against any SHTF scenario – the exact scenario in which you will need physical Gold:  

We may close your EverBank Metals Select Account(s) or to convert Precious Metals to U.S. dollars at anytime, if we deem such action prudent, necessary or appropriate, in our sole discretion, in response to acts of God, government restrictions (including, without limitation, the denial or cancellation of any export or other necessary license), wars, insurrections and/or any other cause beyond the reasonable control of us. If we do close your EverBank Metals Select Account(s) or convert the Precious Metals in such account(s) to U.S. dollars as described above, we will not have any liability to you resulting from changes in the value of those Precious Metals resulting from the timing of our closing the account or converting the Precious Metals to U.S. dollars.e of those Precious Metals resulting from the timing of our closing the account or converting the Precious Metals to U.S. dollars.

With the U.S. now moving towards enforcing capital controls, I don’t think those Government restrictions (such as outright stealing your Gold) are such a far-fetched possibility. Plus if there is ever a run in the Gold market i.e. a run on physical Gold – not such an unlikely scenario considering the GATA/CFTC revelations -  rest assured, the timing [of closing the account or converting the Precious Metals to U.S. dollars] will be of ultimate importance and it most definitely won’t be in your favor.

Given the concerns that have been posted and the fact that we do not foresee any likely circumstance that would affect our ability to continue to serve as custodian for your precious metals, we are in the process of deleting Section 6.3.7.3 from the EverBank Terms and Conditions in its entirety and notifying customers.

A-ha! So now you don’t “foresee” the s**t hitting the fan? Phew! What a relief! But you got your bases covered in Section 6.3.7.5, didn’t you? Given the sorry state of the [paper] Gold market, and the U.S. “markets” in general alongwith the increasing heavy handedness of the US. Government, I don’t blame you.

As a reminder you can request that metals held in any EverBank Metals Select account be shipped to you (in the case of allocated accounts) or converted to a specific physical form and shipped to you (in the case of non-IRA pooled accounts) at any time.

Yes please – I would like to get ‘em out YESTERDAY.

I hope that this clarifies the matter and invite those with further questions to contact the World Markets desk directly.

Yes, it most definitely does “clarify” the matter. Fool me once shame on you, fool me twice shame on me.

Frankly, I don’t think it is fair to pick on poor EverBank when the language in the much larger $40 billion GLD ETF’s prospectus essentially declares it to be complete and total outright fraud. If, for example, one fine day it was found that GLD was holding Iron bars instead of Gold bars, the GLD prospectus covers that scenario i.e. they have “disclosed” that risk to you and there is nothing you can do about it.

I have said it before and I’m saying it again – personal possession of the physical metal will be the only thing that will count. Paper Gold promises such as ETF’s, Gold “funds”, Unallocated/pooled accounts are practically worthless in my opinion. As far as third party physical storage is concerned, any place that the “authorities” (especially in the US/UK) know about or can find out about easily is NOT safe.

As Rob Kirby likes to say:

Got real physical Gold yet?

By Gordon Gekko

http://gordongekkosblog.blogspot.com

© 2010 Copyright Gordon Gekko - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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