GoldCore's blog

Outflows of gold from ETF's amounted to 24.3 million ounces, nearly 700 metric tonnes, in 2013. Imports from Hong Kong to China totaled 26.6 million ounces or 754 metric tonnes through September alone. It is unknown where gold would come from to replenish these ETF holdings, if there was a sudden surge in demand in the West in the event of a new sovereign debt crisis or a Lehman Brothers style contagion event. 

There are only a few UK and U.S. banks on the list of global safe banks. This should give pause for thought. Notice that many of the safest banks in the world are in Switzerland and Germany.

Given this lack of warning, depositors need to plan in advance for the day when ATMs do not work and they cannot access cash in their bank accounts. Customers could only withdraw a maximum of €300 per day from branches and ATMs, and could only carry a maximum of €3,000 while travelling out of the country

Given this lack of warning, depositors need to plan in advance for the day when ATMs do not work and they cannot access cash in their bank accounts. Customers could only withdraw a maximum of €300 per day from branches and ATMs, and could only carry a maximum of €3,000 while travelling out of the country. 

The Bank of England's Tucker, who has worked with U.S regulators on the cross-border hurdles to taking down an international firm said that "U.S authorities could do it today--and I mean today". The FDIC official in charge of planning for resolutions, confirmed that the U.S system is ready to handle a big-bank collapse.  

Emergency resolutions and legislation would be likely in many countries in the event of another Lehman Brothers collapse and another global credit and financial crisis. 

Particularly vulnerable banks in each country are....

The FSB's first chairman was Mario Draghi, current President of the European Central Bank, while its current chairman is Mark Carney, Governor of the Bank of England. The inclusion of Financial Market Infrastructures means that large parts of the global financial system is susceptible to bail-in and could potentially be bailed-in including exchange traded funds.

Below some leading economists and financial commentators give their perspective regarding the risks of bail-ins or deposit confiscation. If you manage money in any way, your own or others,it will be prudent to heed their warnings. 

It is important that one owns physical gold and not paper or electronic gold which could be subject to bail-ins. Owning a form of paper gold and derivative gold such as an exchange traded fund (ETF) in which one is an unsecured creditor of a large number of custodians, who are banks which potential could be bailed in, defeats the purpose of owning gold. 

Physical Gold, held in secure conferring outright legal ownership through bailment remains the safest way to own gold. 

The era of bondholder bailouts is ending and that of depositor bail-ins is coming.

In that context a move to increased allocation of savings including a prudent allocation of some 5% to 10% to precious metals, is a sensible policy.

Michael Noonan, Irish Finance Minister confirmed yesterday that bail-ins or deposit confiscation will be used in the EU. The era of bondholder bailouts is ending and that of depositor bail-ins is coming.

Preparations have been or are being put in place by the international monetary and financial authorities for bail-ins. The majority of the public are unaware of these developments, the risks and the ramifications.

People internationally are opting to store gold in allocated accounts in Switzerland due to their tradition of respecting private property and the fact that their economy is very sound. Therefore it is a good place to diversify assets in order to protect wealth. 

There was more irregular price action in trading yesterday between 1800 and 1830 GMT. Gold had trended slightly higher in the afternoon and was trading at $1,244/oz prior to a sharp but very brief spike to $1,254/oz and then sharp concentrated selling saw gold fall by more than $20 to $1,231/oz before bouncing higher and recovering to the $1,245/oz level again. 

The trading was unusual as foreign exhange markets saw no price movements of note, nor did the silver, platinum and palladium markets.

An important question is what exactly is Goldman's motivation for the peculiar gold deal? Does it wish to have access to Venezuela's gold reserves? There area many other innovative ways that Goldman could help Venezuela with its current economic travails that do not involve gold. Were Venezuela to default on the bonds would Goldman become the beneficial owner of Venezuela's gold reserves?

It would likely also deal another blow to the U.S property market and the fragile U.S economy. JP Morgan, Bank of America and Wells Fargo appear to be most exposed - meaning that either taxpayers will again be asked to bail out banks or more likely the coming bail-in regime will confiscate cash from depositors. 

IN CHINA, THE GOLD RUSH CONTINUES as Chinese people buy jewellery, coins and bars as a store of wealth protection from inflation. The worlds largest jewellery group, Chow Tai Fook Jewellery Group Ltd., established in 1929, saw sales jump 49% during the first half of 2013.