Australia’s Perth Mint, the largest refinery in Australia and one of the largest in the world, said that demand has jumped to the highest level since the Lehman crisis in 2008. Demand has been robust due to currency devaluation concerns and then the 15% price fall led to a massive surge in demand as store of wealth buyers leapt at the chance to acquire physical bullion at much cheaper prices. This led to the Perth Mint which refines nearly all of the nation’s bullion, having to stay open over the weekend to meet orders. There’s been strong interest, including from the U.S., with buyers confident that the metal will rebound from the decline, Ron Currie, sales and marketing director, told Bloomberg in a phone interview from Perth. “We haven’t seen levels like this since the 2008 global financial crisis,” Currie said yesterday. “Compared to March sales, April sales have doubled or tripled,” he said. “We worked all weekend to keep the factory running to make more stock and that was only to fill orders,” Currie said from the facility founded in 1899. “We’re being inundated with people buying products.”
Instead of frightening people away from gold and silver, the takedown of paper gold seems to have had just the opposite effect. People just can't seem to get enough. The crash of the price of paper gold on Monday has unleashed an unprecedented global frenzy to buy physical gold and silver. All over the planet, people are recognizing that this is a unique opportunity to be able to acquire large amounts of gold and silver at a bargain price. Will this massive run on physical gold and silver soon lead to widespread shortages of those metals? Premiums over spot prices are rising everywhere already. And once reports of physical shortages of gold and silver become widespread, it is going to absolutely rock the financial world. But this is what happens when you manipulate free markets - it often has unintended consequences far beyond anything that you ever imagined. The following are 10 signs that the takedown of paper gold has unleashed an unprecedented global run on physical gold and silver...
As Cyprus has shown us, when push comes to shove, rule of law goes out the window. I fully expect that when things get really bad in the financial system the money grabs will come fast and furious. Foreign accounts, including possibly even Gold held aboard, will come under attack. Heck, the US got Switzerland to throw its 300-year-old banking secrecy out the window…
Think only Cyprus is where the government goes after "evil", tax-evading oligarchs? Think again. Overnight news broke that the Italian police have seized a record $1.7 billion in cash and property from a single person, a Sicilian "alternative energy" entrepreneur alleged to have close ties to the Mafia. As Bloomberg reports, Italy's anti-Mafia investigators said in a statement today that Vito Nicastri, a 57-year-old native of Alcamo, near Trapani, was placed under surveillance and must remain in Alcamo for three years. He is accused of declaring for tax purposes a fraction of the value of his businesses. Italian media have dubbed Nicastri the "king of alternative energy" for his vast holdings in wind farms and photovoltaic cell companies. Police said the seizures include 43 companies; 98 pieces of real estate including buildings, homes, stores and land; 66 bank accounts, credit cards and investment funds. And so, in two brief weeks, cash-strapped European nations have declared war on both Russian billionaire oligarchs and the Sicilian mafia. One wonders how long until Swiss authorities follow suit and "impair" Triad and Yakuza savings in Zurich and Geneva, and sets off a global "us versus them" scorched earth war?
It was only yesterday that we wrote about comparable problems to those which Russian depositors may (or may not be?) suffering in Cyprus right, this time impacting wealthy Americans and their Swiss bank accounts, where as a result of unprecedented DOJ pressure the local banks will soon breach all client confidentiality and expose all US citizens who still have cash in the former tax haven under the assumption that they are all tax evaders and violators. And in the continuum of creeping wealth taxes which first started in Switzerland, then Cyprus, and soon who knows where else, there was just one question: "The question then is: how many of the oligarchs, Russian or otherwise, who avoided a complete wipe out and total capital controls in Cyprus, will wait to find out if the same fate will befall them in Switzerland? Or Luxembourg? Or Lichtenstein? Or Singapore?" Today we got the answer, and yes it was one of the abovementioned usual suspects. The winner is.... Lichtenstein.
The Cyprus deposit scramble contagion spreads as Reuters reports that "Swiss banks would be required to "motivate" remaining U.S. clients to come clean to U.S. tax officials. If they failed to do so, confidential bank data would be forwarded to U.S. officials. The initial shipment of data from those banks would not include client names but, based on the data, U.S. officials would be able to submit a judicial aid requests to get the names of alleged tax evaders."
Only an idiot would have more than E100k in a Euro bank.
While it will be no surprise to any ZeroHedge reader, academic research from ETH Zurich shows that not only are "commodity markets becoming very financialized and computerized... and more susceptible to minor shocks," but "at least 60-70% of price changes are now due to self-generated activities rather than novel information." In other words, only about a third of commodity price moves are caused by real fundamental news now (as opposed to 75% pre-HFT).
Cyprus Parliament To Delay "Rescue" Vote Due To Lack Of Support, Despite ECB Pressure For Pre-Trade Open DecisionSubmitted by Tyler Durden on 03/17/2013 09:19 -0400
The painfully shortsighted Cyprus bail-out, pardon bail-in (also known as wealth tax to those who are actually doing the in-bailing), plan is going from bad to worse. Because in addition to all the previously discussed macro-implications, all of which are adverse and have the full potential of destabilizing the Eurozone once more and lead to bank runs across not only the periphery but the core as well, especially by offshore (read Russian) depositors, there is now a risk that the entire hurriedly-cobbled together "plan" may be on the verge of failure as it may not get a majority vote in domestic ratification. Today, at 4pm local (2pm GMT) the Cypriot parliament was scheduled to meet to vote through and ratify the tax levy plan, presented as a fait accompli at least by the Eurozone FinMins. A few hours ago, this meeting was delayed until 4 pm local on Monday "after signs lawmakers could block the surprise move.... If [parliament fails to ratify the bail-in], President Nicos Anastasiades has warned, Cyprus's two largest banks will collapse." And so the late hour scramble to procure enough vote to pass the depositor impairment begins as the alternative is simply "or else."
Think of a rhino that puts its head down, and just charges through the bushes. Everything gets trampled in the process.
With the entire world, and certainly GETCO's ES and EURUSD algos, focused on every single update out of the Italian Senate race, which now appears certain to not bring the necessary 158 seats to the Bersani-Monti coalition leading to a chaotic revote in the coming months, here is some tangential news of the "who could have ever seen this coming variety." Following last week's Heinz insider trading probe, which implicated a Goldman Sachs account in Zurich belonging to some private wealth client, who was so anonymous not even Goldman knows who it belonged to, we now learn that yet another Goldman employee has just left the company in a totally separate insider trading probe.
Federal Reserve Bank of New York, Lexington Partners; Tudor Investment, Brevan Howard, Goldman Sachs, UBS, Bank of Korea; BNP Paribas, Fidelity Investments, Deutsche Bank,, Freeman and Co., Bank America, National Bureau of Economic Research, FDIC, Interamerican Development Bank; 4 hedge funds, BTG Pactual, Gavea Investimentos; Reserve Bank of Australia, Federal Reserve Bank of San Francisco, Einaudi Institute, Bank of Italy; Swiss National Bank; Pension Real Estate Association; Goodwin Proctor, Penn State University, Villanova University, Shroeder’s Investment Management, Premiere, Inc, Muira Global, Bidvest, NRUCF, BTG Asset Management, Futures Industry Association, ACLI, Handelsbanken, National Business Travel Association, Urban Land Institute, Deloitte, CME Group; Barclays Capiital, Treasury Mangement Association, International Monetary Fund; Kairos Investments, Deloitte and Touche, Instituto para el Desarrollo Empreserial de lat Argentina, Handelsbanken, Danske Capital, WIPRO, University of Calgary, Pictet & Cie, Zurich Insurance Company, Central Bank of Chile, and many, many more.
The saga of the Heinz call option insider trade, first profiled here, and the Goldman trail, also first observed here ("Does GS stand for Goldman Sachs one wonders"), just got even more fun as revelations that it was none other than a client of Goldman's Private Wealth group out of Zurich that hit the buy key on those thousands in call options one day ahead of the announcement. From Reuters: "A Goldman Sachs private wealth client is the holder of the Swiss account at the center of an investigation into insider trading in H.J. Heinz Co options, regulators said in a court filing late Wednesday." Alas, and as before, the question of who leaked the inside information to this Goldman client still remains unanswered.
- Here comes the replay of 2011 as China starts the counter-reflation moves: China Central Bank Reverses Cash Pump (WSJ)
- Security group suspects Chinese military is behind hacking attacks (Reuters)
- Iceland Foreshadows Death of Currencies Lost in Crisis (BBG)
- China Allows More Firms to Sell Mutual Funds to Bolster Market (BBG)
- Uncertainty looms for Italians (FT)
- Forget the big comeback; Detroit focuses on what can be saved (Reuters)
- SAC’s Cohen May Face SEC Suit as Deposition Hurts Case (BBG)
- Hollande wrestles with austerity demands (FT)
- Obama Golf With Woods in Florida Risks Muddling Messsage (BBG)
- Simpson and Bowles to Offer Up Deficit (WSJ)
- Aso Says Japanese Government Not Planning Foreign Bond Buys (BBG) - ... until it changes its tune once more
- Abe to Decide on Bank of Japan Governor Nomination Next Week (BBG)