Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
UK Population Growth - Latest ONS Immigration Statistics and Consequences - 24th Mar 19
The Fed Follows Trump's Tweets, And Does The Right Thing - 24th Mar 19
Yield Curves, 2yr Yield, SPX Stocks and a Crack Up Boom? - 24th Mar 19
Risk/Reward in Silver Favors Buying Now, Not Waiting for Big Moves - 23rd Mar 19
Similarities Between Stock Market Today and Previous Bull Market Tops - 23rd Mar 19
Stock Market DOW Seasonal Trend Analysis - 23rd Mar 19
US Dollar Breakdown on Fed Was Much Worse Than It Looks - 23rd Mar 19
Gold Mid-Tier GDXJ Stocks Fundamentals - 23rd Mar 19
Which Currency Pairs Stand to Benefit from Prevailing Risk Aversion? - 23rd Mar 19
If You Get These 3 Things Right, You’ll Never Have to Worry About Money - 22nd Mar 19
March 2019 Cryptocurrency Technical Analysis - 22nd Mar 19
Turkey Tourist Fakes Market Bargains Haggling Top Tips - 22nd Mar 19
Next Recession: Finding A 48% Yield Amid The Ruins - 22nd Mar 19
Your Future Stock Returns Might Unpleasantly Surprise You - 22nd Mar 19
Fed Acknowledges “Recession Risks”. Run for the Hills! - 22nd Mar 19
Will Bridging Loans Grow in Demand and Usage in 2019? - 22nd Mar 19
Does Fed Know Something Gold Investors Do Not Know? - 21st Mar 19
Gold …Some Confirmations to Watch For - 21st Mar 19
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

Government and Gold confiscation: Tips to protect your assets

Commodities / Gold and Silver 2012 Sep 21, 2012 - 05:21 AM GMT

By: GoldSilverWorlds

Commodities

Best Financial Markets Analysis ArticleMy advice to everyone is simple and clear: “Get out of the current financial system,  avoid paper money and the banking system in general and move into physical precious metals.” David Stockman has put it this way: “ABCD – Anything Bernanke Cannot Destroy!”


Confiscation is already here. I am not talking about outright confiscation of assets, but the confiscation of the buying power by inflating the money supply. If you keep your money in a bank account or “invest” it in bonds, you are actually losing money in real terms (i.e. after inflation). The decrease of  your wealth basically results in an increase of the wealth of governments and banks, hence fulfilling the definition of confiscation.

John Maynard Keynes, British economist who lived from 1883 till 1946, once said:

By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

If you believe that the only confiscation will be through inflation and that the current system will still exist for the next 10 or even 20 years, then you can easily invest in assets that use paper solutions with claim status such as funds, ETFs, certificates, claim accounts etc. However you should consider that these solutions all depend on a functioning financial system. Furthermore, most of those instruments contain a “cash settlement clause”, which gives the issuer the right to suspend all redemptions and services in the case of “unusual market conditions” and the like.

However I am personally convinced that our current paper money system will collapse in the coming years. This is not a loose hunch I have, but history has shown that paper money systems only last a few years or maybe a few decades at most. However, eventually they all collapse. The world went through more than 50 hyperinflations in the 20th century alone. If a new hyperinflation would occur, paper solutions will collapse! A lot of paper solutions hedge their risk using the CME; should this central clearing house default, then most paper solutions will not be worth the paper they are printed on.

“Desperate times call for drastic measures.” That will be the argument of governments worldwide when hyperinflation hits. Private property rights will be suspended and the phase of outright confiscation will start. Governments in desperate need of financing will start to nationalize corporations, homes, farm land … and they will probably confiscate precious metals as well.

How can you protect your assets in case of a random confiscation?

The following are some the key topics everyone should address in order to protect from confiscation.

Tip: Storage outside of the banking system

Most importantly take your assets out of the banking system! The ordeal over MF Global has shown that even segregated storage may not offer the basic security one would expect.  We have also seen instances in the US where client advisors in banks had to open their clients’ safe deposit boxes in orderto confiscate their gold on behalf of the government. Due to the tight link between banks and governments, confiscation of assets usually starts in the banking system, by freezing all assets. Furthermore safe deposit boxes are not insured against theft or fire; it might be possible that access to your safe deposit box is forbidden for a longer period of time if the bank goes bust or in case a bank holiday is declared.

Tip: Diversification across safe jurisdictions

Keep assets outside of the country you live in and in a safe jurisdiction where property rights are respected and the power of politicians is limited. In my view, the most secure place today is still Switzerland. Swiss politicians are only marginally better than others, but Switzerland has some key advantages:

-          it has a strong federal structure limiting the power of central government

-          it is the last remaining direct democracy left on this planet, the power of politicians is therefore limited.

Nothwithstanding the above, we at Global Gold also believe it doesn’t make sense to put all eggs in one basket. Therefore we recently started offering storage in Hong Kong and Singapore as reasonable alternatives. The main argument for these two locations is the fact that China and the city state of Singapore have imposed the fewest impediments in the past decade and that China openly talks about their objective to make the Remimbi the world’s new reserve currency by 2015.

Tip: Avoid countries which have confiscated gold in the past

Avoid storage locations in countries which have already experienced government confiscation in the past such as the USA, Germany, Italy and Russia. Although the British government so far never confiscated precious metals, I would be extremely cautious storing it over there. The reason is that the UK lost its independency since they gave up the Empire after WWII (they became the junior partner of the USA).

Tip: Find out under which law your broker or storage partner is operating

If you are storing gold or silver with a company which is operating under the jurisdiction of one of the above mentioned countries, it could turn out to be a disadvantage when the government decides to freeze assets on a global basis of a company.

Tip: Find out how can you communicate with your precious metals partner during a harsh crisis

Check the possibilities on how to execute transactions. Is it only possible online and what is the alternative if the internet is down or blocked? Is it possible to communicate via fax, by postal mail or can you organize everything in a small period of time personally on the spot? Try to find out how the account is set up. If it is through a bank (which is most likely the case), then it could take a tremendous amount of time to unwind the assets especially if you believe that the next crisis will involve the financial / banking system again.

Checklist: 10 criteria to consider when deciding on how to invest in precious metals

  • It must be a non-banking solution
  • Metals must be stored under your direct and unencumbered ownership
  • The program must be free of small-print cash settlement clauses
  • Metals should be stored at privately owned high security storage
  • Make sure your metals are insured and audited by an independent 3rd party
  • Make sure the metals are physically stored in the format of your choice (bullion coins & bars)
  • Choose a partner that is buying metals from LBMA-Refineries and the most famous Mints (to assure the highest finess and quality)
  • Make sure you can get your metals delivered or picked-up at any time without delay  (if you have to wait for several weeks, you can be sure that the metals are not stored in the form you have chosen and purchased)
  • Check the risk profile in terms of jurisdiction the company is operating under

Download and read the white paper about holding physical gold, which was created by Global Gold and GoldSilverWorlds.

www.scribd.com/doc/102065884/Physical-Gold-antidote-against-the-ongoing-global-debt-crisis

This article brings the point of view of Claudio Grass from Global Gold in Switzerland (September 2012). If you have any further question please do not hesitate to contact him

Source - http://goldsilverworlds.com/gold-silver-insights/government-and-gold-confiscation-tips-to-protect-your-assets/

© 2012 Copyright goldsilverworlds - 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.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules