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Gold To Protect As Bank ‘Holidays’, ATM and Deposit Withdrawal Restrictions and Capital Controls Loom
Gold rose $11.40 or 0.71% yesterday in New York and closed at $1,611.60/oz. Gold started out trading sideways in Asia and then edged up in early European trading.
Chart shows huge period of consolidation in all currencies since record highs in late August. Such long periods of consolidation can often be followed by sharp moves to the upside and fundamentals suggest this likely
Gold edged up again today as Spain’s 10 year bond yield’s hit a euro-area high nearing the 7% level, which led investors to question Madrid’s access to the bond markets. Italy’s bond sale is scheduled for Thursday.
While the gold price has not surged as expected and appears to be consolidating near the $1,600/oz level (€1,300/oz and £1,000/oz), there has been a definite increase in demand in recent days , particularly this week and this morning, as the crisis is again leading to safe haven demand – particularly from European buyers.
There is a slow but creeping realisation that this crisis is soon to escalate and that financial contagion with risks to bank deposits (often guaranteed by insolvent states) and payment systems. Indeed, the entire modern financial system is at risk.
There are silent runs on banks in Spain, Greece and Italy. The Bank of Italy authorized the suspension of payments by Bank Network Investments Spa (BNI) without communicating anything to depositors. The BNI, a large Italian bank, suspended operations and clients with bank accounts could not write checks, pay bills, make mortgage payments, use ATMs or debit and credit cards.
The European Union is making preparations to contain the effects of panic if Greece was to exit from the Euro. Among the measures they are considering imposing are a limit on the amount of money that can be withdrawn from cashpoints or ATMS, imposing border checks and introducing currency controls to stop a flight of capital from countries.
As well as limiting cash withdrawals and imposing capital controls, they have discussed suspending the Schengen Agreement, which allows for visa-free travel among 26 countries, including most of the EU, though not Britain and Ireland.

Currency Ranked Returns – (Bloomberg)
EU officials are examining whether there is a legal basis for such extreme measures.
While EU officials may manage to patch things up and delay having to implement such extreme measures they seem inevitable in the long term. Especially, as Japan, the UK and US are set to suffer their own debt crisis in the coming months.
These are risks that we have long warned of and it gives us no pleasure to see them come to pass.
However, people who own physical bullion in their possession and in safe storage internationally remain positioned and prepared for these looming real threats.
These real risks have huge implications for us all and ramifications that most have yet to fully consider and comprehend.
The silly debate as to whether gold is a safe haven or not or a bubble or not will be seen for what it is very soon.
Those who have continuously suggested gold is a “barbaric relic”, is a bubble and is not a safe haven will have some explaining to do. As will those who have said that spam is a better hedge against inflation than gold.
They will no doubt engage in some furious back pedalling and claim that “nobody saw this coming” when indeed many of us have and have been warning about exactly these risks for years.

Cross Currency Table – (Bloomberg)
Markets await with trepidation the Greek elections over the weekend and the Fed’s policy meeting next week. Today US retail sales figures are released at 1230 GMT.
Rather than sitting nervously and passively and awaiting the coming financial ‘dislocations,’ investors and savers need to be prepared for the uncertain financial scenarios that seem increasingly likely.
Hoping for the best but preparing for less benign scenarios remains prudent.
OTHER NEWS
(Bloomberg) -- Cash Bullion, Gold Futures in Shanghai Advance
Gold for December delivery climbed as much as 0.9 percent to 331.33 yuan a gram on the Shanghai Futures Exchange, tracking overnight gains in international markets. It traded at 331 yuan a gram at 9 a.m. Singapore time. Cash bullion of 99.99 percent purity advanced as much as 2 percent to 333 yuan a gram on the Shanghai Gold Exchange, and last traded at 329.50 yuan a gram.
For breaking news and commentary on financial markets and gold, follow us on Twitter.
NEWS
Gold stays above $1,600/oz, Spain woes support - Reuters
Kazakhstan's central bank to have 20% of currency reserves in gold - Reuters
Kazakhstan Buying 24.5 Metric Tons Of Gold This Year - Bloomberg
Demand for gold stays strong; closes above $1,600 – Business Week
COMMENTARY
Investors Would Do Well to Accumulate Physical Gold and Silver as Alternatives to Paper Currency – International Business Times
Do Asian central banks hold enough gold? - Reuters
Next Stage Of Financial Disaster Will Glorify Monetary Metals – King World News
On Debt Ceilings, Fiscal Cliffs, And Krugman's Deficit Debacle – Zero Hedge
Silver Investors Ambush CFTC Chairman In C-SPAN Interview – Silver Doctors
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Legal basis for capital controls and travel restrictions?
What country is following laws anymore?
It's like the plastic surgery industry explaining why you need a facelift.
No, more like a paramedic explaining the benefits of avoiding the need for reconstructive surgery to a potential burn victim.
Many of these countries have only two options: 1. default or 2. inflate away their currency.
History shows most choose the latter. Inflation, like high blood pressure, is silent for most people.
Beats raising interest rates which is about as in your face as possible.
History has proven time after time that rapidly escalating governmental debt only, and always, eventually ends up in collapsing the value of the (fiat) currency.
Anyone expecting that this time is going to be different, and that the price of gold will fall as a result of the debt-fueled mass financial insanity of our leaders, is a fool who has willingly swallowed the pro-bankster, pro-fiat deflationary propaganda of the our current sociopathic financial and political elites, which of course has been expressly designed and propagated to scare the masses away from the financial lifeboats of hard assets in general, and from gold in particular.
That's not the point, though. The point is that they will also find a way to screw over anyone trying to maintain wealth using metals. There is no escape hatch.
While I am sure that the government will in fact try, there is effectively NOTHING they can do to "confiscate" privately-held gold. As I stated in another comment, just hold onto it, keep your mouth shut about it, and wait out the final statist insanity and ensuing financial and monetary collapse. This ain't going to be another Rooseveltian-initiated leasurely 40-year monetary decline.
Actually this is the outcome of that era. What's happening now is all those promises are being "fulfilled" exactly as planned.
TPTB screwed my parents with lies and the inflated sense of entitlement regarding their pension, so far that promise hasn't worked out that well. The COLA adjustments are laughable in comparisons to cost. My poor Mother still has a twisted belief that there are heroes in the government to fix this problem. Sadly my parents will never understand the math to see the lie because smart men from the govenrment say it's okay.
I know EXACTLY how you feel! I have had to literally browbeat my 82 year-old mother into taking SOME sensible precautions with her savings, precautions that would be considered "radical" and even "extremist" by most "mainstream" financial advisers. Of course, those same mainstream financial advisers never saw this whole financial shitstorm coming, either.
Akak - my problem with PM's is they are not easily exchanged for goods, they are il-liquid with a huge bottleneck regards exchanging their value limited to very few small PM dealers
i stack but i prefer cash, mainly foreign currencies i deem to be safe and stable if and when the Euro, Sterling and US Dollar implodes
i look forward to the day my daily shop will take Gold or Silbver coins but really my stack is an ultimate back-stop position
So how does holding gold save us if the US government, per Roosevelt, can just confiscate it at less than true value?
I've wondered the same thing myself. I suppose .gov could pass another order restricting the private holdings of gold/silver. Who's to say they wouldn't come after jewelery or numistatics this time? However, the percentage of people who own physical gold/silver is incredibly small compared to those who own stocks in a company. It may not be worth their while to come after such a small populace. It makes more sense (at least to me) that they would go after bank accounts and retirement accounts which are digital and easy to steal. Let's say for the sake of argument that .gov finds it reasonable to ban private holdings of gold/silver. How do they locate the people who are holding it? Most holders (at least on this site) are very quiet about their stashes. If they don't know you have it, how can it be confiscated? Let's say for the sake of argument they locate people holding physical gold/silver. Those who hold the precious metals generally hold some sort of protection against those who would seek to rob them. Make no mistake, confiscation is theft. Going door to door confiscating private stashes of metals would be financially costly and dangerous for .gov workers making it unlikely to me that they would pursue that course of action. Therefore, one would have to willingly give up their holdings to .gov for an order like that to be successful. Personally, I think some sort of high tax on gold/silver transactions is more probable, but what do I know?
How then, in a confiscation scenario, do you make use of the metals you've accumulated? Black markets/barter systems would quickly emerge. Think of Prohibition in the 20's and marijuana today. Those who have things of value (food/guns/ammo/gasoline/booze) could trade with others who have things of value (gold/silver). Since the system would be one of barter, there would be no sales tax. As long as the dealings were kept quiet, .gov could be kept out of the loop with little to no fear of interference.
There is certainly a lot more to it than this, but I believe it's enough for a basic answer. I also ask fellow ZHers to freely add if I've left anything out. Hope this was helpful.
History doesn't repeat, it rhymes. Nobody is going to confiscate gold this time around, they will find a way to make it hard to convert, however.
Shovel...
No government, least of all that of the USA, has EVER "confiscated" gold --- they have merely made ownership of it illegal at worst. To my knowledge, there have never been door-to-door searches by armed government thugs (but I repeat myself) tearing down walls and digging up yards in the quest for illegally held gold.
Just shut your mouth, hold onto your gold, and wait out the statist insanity of any attempted gold illegalization. Or do what hundreds of millions have done in the last century of rampant statist economic coercion: go to the black market, which is merely just the free market slandered by the government.
Keep Stackin!
...cash
much more liquid and legal tender
I like Santelli's idea. Germany should FORCE Spain Italy Greece Portugal and Cyprus to put the 3,250+ tons of gold (6.5mm+ ounces worth $10bbn+) as well as the proceeds from a new 10% VAT to fund securitized gold and VAT backed bonds. You could probably securitize over $1 trillion of new debt this way.
But instead they will default and keep their gold, and avoid their taxes, and thats why we are due for SEVERE deflation.
What makes you think that whatever gold they hold isn't already promised 100X over?
rehypothicated adnauseam.
spruced it up for you.
"EU officials" examine many things...but do nothing to solve the problems at hand. They do seem to be creating "permanent bailout mechanisms" quite well however...yet unless and until those interest rates get under control the obvious risk is still one of outright default. There are other ways to not pay one's debts btw. Default is probably the worst way...ala Latin America in the 80's. "Restructurings are harsh" as Brazil would tell you. You could have "dollar bonds" (Geithner bonds?) that would pool the "totality of Europe's needs" and sell that to the market.
Clash of the Titans in the metals pits today. All out attempt to keep silver below 29/gold 1625.
Isn't it about time for Sprott to order a few million more ounces and stand for delivery?
at the last KWN ramping as i remember Sprott had been cleared to spend $1bn on Silver
...it tanked as history goes
..and it's been tanking as long as GoldCore here has been telling us how much Gold the CB's are buying
seems Big Buyers = Big Drop
it's a funny old world
I wonder if the U.S.A's treasury dept manipulates the price of gold via the ESF (exchange stabilization fund).
This fund answers to NO ONE ,except the PPT who manages the fund and is ALLOWED to deal in Gold.
Fuck YOU's Little Weasel Timmy and Benny.
IMHO. They need to be buggered not fucked.
Hoooooocodanode /sarc/lol
uh ?
That chart shows to me one thing particularly, Yen is valuless.