Cyprus bailout = money shift to tangible assets (gold, silver, etc...)

While interesting, and useful, I would not attempt to replicate that quote. For one, it has no place for PM, and I am a big believer in PM in the asset mix for everyone.

Ignoring PM and counting collectible coins as "art", I am actually probably around 50/30/20 myself, but that is due primarily to major investments like 401k only allowed in markets and not any other asset types. The third/third/third rule may not be bad if you predicated it with saying that is of your investments besides PM. I think everyone should have 10-15% in PM, (though I know many on this board would not believe that).

 

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Thanks for the insight. My first thought when reading about this was why would the money "taxed" not be changed into bank ownership positions. It sounds like that is what they did. Doesn't make it "right", but I feel better about it that they just didn't take the money, but rather was a forced cash investment into their banking system.

Would I be happy if this were done to me? Oh heck no, but I would be a lot less happy if they just took the money, than if it were basically a forced investment.

Actually in this structure such a thing seems more likely in the US. Think about it. If they can force a farmer in the middle of North Dakota to have to buy health insurance whether he likes it or not, why can't they force bank depositors to be shareholders whether they like it or not. We are not so different than this story at this point in our history.

 

Didn't the Spanish banks offer a similar equity-share scheme in THEIR bank holiday of 2011? Shares went to zero!

Or was there a different share scheme (with bank deposits) elsewhere?

 

Are we comparing to historical fiat currencies, in which case for this time to be different the currency would have to survive?

Are we comparing boom bust cycles in stocks, in which case for this time to be different we would have to sustain an eternal boom?

Are we comparing precious metals to previous bull markets that had completely different dynamics?

Depending on the time span selected some of these could be the same while others are different.

 

The Cypriot banks are not opening until Thursday now and their government has put this problem on hold for further debate.
The Cypriot public are blaming the Germans.:rollling:
Great Britain has a 3000 strong garrison plus civilians who bank on the island and our government has vowed that they will not lose money, if it is taken then the amount will be replaced into their UK bank.
I believe something similar happened in Brazil in the early 90`s and folks were given bonds or shares and they got their money back.

 

Most countries in the EU have direct transfer bank accounts were one can instantly transfer funds from one person or bank to another.
I might offer my services and allow them to transfer their money to my bank account and hold it for them :devil:
Seriously though if I was a Cypriot I would transfer my deposits instantly to Paypal and let them hold it until it dies down

 

The part in bold is incorrect. Executive Order 6102 allowed exemptions for gold used in industry, profession or art and, more importantly, allowed each person to retain $100 face value in gold coin and/or gold certificates. Additionally, gold coinage with numismatic value was also exempt. The US government exempted enough gold to allow all gold coinage produced in the history of the country to be kept in private hands and traded.

 

If it exempted enough to allow all gold coins in history to be kept in private hands, why is almost all Ft Knox gold from melted gold coins, and most of the US gold coins people now own, (at least from 1880-1933), had to be imported in from Europe after the ban was lifted? Ft Knox gold reserve was created nearly singularly from melted US gold coins the US confiscated. They didn't even bother to purify it, just keeping it in coin gold form.

Yes, they exempted art, industrial usage, and a small amout per person, but the regulations effectively shut down the payment system in gold specie in this country. Such regulations have large chilling effects. As late as the 60's many coin dealers refused to buy or sell gold coins believing ownership of them was illegal.

 

Virtually all of the talking heads on CNBC and Bloomberg are saying that if they had money in a Spanish, Greek or Italian bank, they would be making a run...now. Look out below!

 

What makes the bank account scenario more of a concern than the possibility of banning private ownership of PM is just how easy it is for a government to essentially steal money from bank accounts. Nobody even has to leave their office. It's all electronic. Tappity, tap, click, done!

If they want to tax or confiscate my PM, as it has been pointed out before, they'll have to come and take it. If they do that, they'll be getting my lead first. And I own a WHOLE lot more lead than silver and gold.

Here's another question: Is it right to impose such a tax against monies held in bank accounts and not tax other deposits of wealth simply because it's easy to take money from banks? Is it really fair that people who have kept their faith in fiat currency and the banking system to pay such a tax while people sitting on piles of bullion don't? Of course we'd need to ignore other aspects of ethics to consider the alternatives. Governments could require everyone to register all forms of wealth held outside of banks: Stocks, bonds, real estate, precious metals, jewelry, fine art, collectible coins, baseball cards, comics, etc. But that wouldn't include everything, so what's next? Total asset registration? Would it apply to just durable goods, or to consumables too? Because people could argue that their stockpiles of ammo are "consumable", and not "investments".

More than anything, I think this whole scenario erodes confidence in banks and fiat currency. Most people trust banks with their money nowdays. They know they aren't getting much of a return on the money stored there, but at least it's safe from theft. Unless of course the government comes in the back door and snatches it. Sure, it's only +/- 10% in Cyprus right now. But what happens there or elsewhere when people see how easy it is? It could very well become 10% annually. If they're taking 10% annually from bank accounts, but not taking anything else from other stores of wealth, what do you suppose that would do to the banking system?

 

Illinois is now requiring a license to buy and sell gold.

 

I don't disagree Blaubart. Same could be said of stocks and bonds now that physical documents are now never used, its all electronic. What is to stop the powers that be to decide one day 10% of all stocks, or bonds, or 401k's should be converted "for the national good", or "investments" or "fairness" or whatever terms they want to use for theft that day.

I was simply pointing out that they have DONE this in the past already, there is court precedence, in this country for gold confiscation. They don't NEED to take your gold, they simply pass a law making it illegal for you to keep it. What good is it then? Who is going to risk Ft Leavenworth to trade for your gold? Yes, you could keep it buried, but how much protection is it giving you as long as its illegal to use?

I was just saying THIS form of confiscation is as likely as any other, so I just don't understand how PM will save us from governments out of control. I simply to prefer to spread it around hoping that if they do due something they will not wipe out all savings at once. Someone 100% into PM is taking a pretty large risk IF they ever did this again, right? Just like in this day and age I would never have 100% in land, stocks, bonds, or a savings account, I would never have it 100% in PM either.

Just my opinion.

 

Pension payments to 60,000 Britons living in Cyprus are being suspended amid growing uncertainty on the island due to an unprecedented raid on bank accounts.
The payments will not be made until the country's parliament votes on the controversial levy on bank deposits, proposed as part of a £8.6billion bailout by the European Union and IMF.

UK Treasury Minister said payments had been frozen today to ensure money from the Government reaches its intended recipient

 

Why the heck are there 60,000 Britons living in Cyprus. I mean, I guess its a ncie country, but doesn't that seem like a lot on a small island? Are ya'll trying to take the place over?

 

The up to $100 face value exemption was a huge sum of money for most folks, so of course the great majority of the population could not have taken advantage of this to save this sum in gold. After all, these folks did not have $100 total liquidity to their name. Executive Order 6102 also required that all banks that received gold or gold certificates to forward these coins or notes to the Federal Reserve. Therefore, any gold coinage or gold certificates used in commerce and eventually deposited in banks were siphoned off the system and sent up the chain to the Federal Reserve and, eventually, Fort Knox.

The fact that many gold coins and gold certificates were removed from circulation and melted or destroyed does not mean that the general public could not have saved these pieces if they wanted and could afford to do so.

 

Ther have retired out there same as many do to Australia, Spain, northern France and Florida,sunshine and no heating bills they still get their UK state pension though.

 

I get it, but it has never been so easy as it is today for governments to take your money from banks. If they want to get paid, which is the entire purpose of this money grab, it's much easier for them to steal money electonically from bank accounts than to physically grab PM from people's homes. Plus, there's a whole lot more money in banks than there is PM in homes.

The 1930's was a different time. When the average citizen was nervous about their future, they hoarded gold. Today, the average person does not hoard gold. In uncertain economic times they spend less money and let their bank account grow. Of course I'm not saying it's right, but it's only logical that governments use a tax on bank account balances to accomplish much the same thing that the gold siezures of the 1930's did. But as wrong as both are, I think the bank account tax is worse because I think it could have very dire consequences for the banking industry, and confidence in fiat currency, which are both vital to the economic health of any nation today.

So, when the banks and fiat currencies fail, then maybe we'll see another gold ban/siezure...

 

I like it, but I suspect the EU won't take kindly to one of its members trying to circumvent their authoritay.

 

The money before being handed over to the recipients (pensioners) belongs to the British Treasury and as we are not in the Euro, it should not be used to prop up an ailing currency.
We have already bailed out Ireland to the tune of £7 billion.
We pay £40 million per day into the EU coffers and get very little in return.
Its about time the UK got out of the EU and let the Euro collapse.

 

I always thought that it was very wise of the Brits to keep their own currency. Joining the EU...not so much.