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Greeks Can’t Tap Cash, Gold, Silver In Bank Safety Deposit Boxes
Greeks Can’t Tap Cash, Gold, Silver In Bank Safety Deposit Boxes
- Greek capital controls also prevent access to contents of safe deposit boxes
- Restrictions on safe deposit access doesn’t protect banking system unless contents confiscated
- Readers should heed warnings by Marc Faber and Ian Spreadbury of Fidelity
- Important to own assets outside banking system and not in bank safe deposit boxes
- Own physical bullion in private safety deposit boxes and the safest private vaults
Capital controls have been in place in Greece since the start of the month to protect the banks from mass withdrawals by nervous Greeks. They have rightly been concerned about their savings, the collapse of the banking system and the loss of their savings in deposit confiscations or bail-ins.
Many Greeks were also withdrawing their cash because they fear the country might be forced back onto the drachma. However a little known fact is that, Greeks who had prepared for bank runs by withdrawing cash and buying gold and silver bullion and then lodging that bullion and indeed cash into safety deposit boxes have also been caught up in the draconian capital controls.
We have warned about this for many years and warned as recently as April this year that people should avoid using safety deposit boxes in banks.
“Greeks cannot withdraw cash left in safe deposit boxes at Greek banks as long as capital restrictions remain in place”, Nadia Valavani, a Deputy Finance Minister in Greece told local television station according to a Reuters report.
The report (Greeks cannot tap cash in safe deposit boxes under capital controls) was little noticed at it was published on the less trafficked ‘Bonds’ section of Reuters.com on Sunday July 5th at 1:58 pm EDT or 6:58 pm GMT. Sunday afternoon and evening is a time when traders, investors and even eagle eyed news junkies are likely to be taking a well earned break.
The notion that safe deposit boxes – facilities that are used by many precious metals investors and others seeking to safeguard their wealth and valuables – need to come under capital controls to protect against bank runs is a dubious one.
This cash is not in the banking system – its withdrawal would have no negative impact on the system. Its availability to its owner might bring cash into circulation which would benefit the wider community.
The only reason to put access to safe deposit boxes under capital controls – measures which were agreed between the government and the banks – is because the banks and governments wish to retain the option of confiscating the contents of those boxes should the crisis deepen.
The low level war on cash and gold looks set to intensify, and governments look likely to wish to prevent savers and investors taking their cash out of the bank and putting them in safe deposit boxes.
This draconian move may be part of an endeavour to do that.
Safety deposit boxes are a convenient facility to store a small quantity of precious metals. However – as the Greek situation demonstrates – the convenience of ease of access to a local safe deposit box can be offset by the fact that governments and banks can lay claim to their contents at the stroke of a pen.
It would be unwise to view Greece as an exceptional case.
Such complacency is not shared by respected economic historian Marc Faber who recently warned Bloomberg viewers that “Greece is coming to your neighbourhood very soon” because “the world is over-indebted”.
This view has been echoed by many well placed observers from HSBC, Goldman Sachs and Fidelity in recent months. Most recently Fidelity’s Ian Spreadbury made the highly unorthodox recommendation that savers should keep some precious metals and cash “under the mattress”.
What happens next in Greece will determine the fate of the deposit box holders and indeed all citizens in Greece and indeed the wider Eurozone.
The ECB, reneging on its duty of lender of last resort, has put Syriza in an untenable position. It should be remembered that Mario Draghi came to the ECB from Goldman Sachs despite the fact that Goldman were found to have aided the previous Greek government in order to cook the books in order to borrow €1 billion that it could not afford in 2008 and indeed to join the monetary union. Indeed it is alleged the Draghi himself helped cook the books but he denies this and says Goldman did this prior to his joining.
The Telegraph’s AEP writes, “The Greek banks are on the verge of collapse. There is not enough cash left to cover ATM withdrawals of €60 billion each day through this week, or to cover weekly payments of €120 to pensioners and the unemployed – that is the to say, the tiny fraction of the jobless who receive anything at all.”
In the run up to the referendum former Finance Minister Varoufakis had made assurances that the EU had no legal power to expel Greece from the euro – a statement which likely encouraged the electorate to vote “No”. True though this may be, the EU institutions have instead created the conditions whereby Greece either capitulates completely or is forced to leave the euro of its own accord.
The “deal” which Tsipras must now get through parliament in Athens may save the banking system for now – or not, depending on the reaction of the public to the deal – but at great cost to Greece.
Pensions will will be slashed, Value Added Tax (VAT) or sales tax will be imposed on goods and services.
Vital elements of Greece’s infrastructure will be sold off to businesses with close links to the financial institutions who played a key role in creating the crisis – and yet have only benefitted from the repercussions – following the typical IMF template for debt colonialism.
Whatever the outcome with regards to the contents of safe deposit boxes in Greece – while not forgetting that there are far more pressing issues at stake for the people of Greece and Greek society – there is a clear lesson from recent events.
As we consistently warn gold, silver and cash stored within the financial and banking system is in no way secure in the event of a crisis.
Investors should hold some physical gold and silver outside of the banking system in secure and private safe deposit box facilities. Precious metals should also be held in jurisdictions with a reputation for respecting private property such as Switzerland, Hong Kong and Singapore.
Must-read Guide: 7 Key Gold Must Haves
MARKET UPDATE
Today’s AM LBMA Gold Price was USD 1,153.20, EUR 1,046.89 and GBP 745.27 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,154.95, EUR 1,043.13 and GBP 741.59 per ounce.
Silver in USD – 5 Years
Gold fell $5.10 or 0.44 percent yesterday to $1,157.90 an ounce. Silver slipped $0.08 or 0.51 percent to $15.50 an ounce.
Gold in Singapore for immediate delivery ticked lower and gold in Switzerland also weakened despite considerable uncertainty regarding the Greek “deal”.
Gold prices are down for a second day after ending yesterday down half a percent in dollar terms but 1% higher in euro terms as the euro fell on international markets. Support is at $1,155 and that level is holding for now.
Asian shares were mixed and future contracts tracking China’s key stock indexes fell sharply, suggesting a three-day rebound may be losing momentum.
European stocks are lower today on concerns that Tsipras may not be able to get the debt deal over the line in the Greek parliament. Even if he does, his government may not last long thereafter and a subsequent Greek government may elect to honour the will of the Greek people and rip up what most fair minded people see as a very unfair and completely impractical “bail out”.
Euro zone finance ministers will hold a telephone conference to discuss Greek bridge financing tomorrow, Austria’s finance minister said on today. It does not necessarily need a euro group summit to agree on bridge financing, Hans Joerg Schelling said. “If a reasonable proposal comes up, the euro zone finance ministers probably can decide about it in a conference call,” Schelling said.
The world’s largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, rise 1.5 tonnes on Monday, its first inflow since June 25.
Silver’s underperforming, down 1%, putting it on track for a fourth straight week of losses – if it ends this week in the red, it will have fallen in eight out of the last nine weeks.
Platinum and palladium are also marginally weaker, after both bucked the falling trend in gold and silver yesterday to rise 0.3% and 1.2% respectively.
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So I'm a smart ass professor. I'd say I retired "from working" or from "the rat race." As long as there is something filled in on their forms, most of these Nazi types tend to shake their heads and keep breathing through their mouths.
on my last trip to the local coin shop, the girl there said I need to sign the receipt with my own name. no more scrooge mc duck, or thomas jefferson. I resent having to identify myself, when I'm making a PURCHASE.
Why are you signing a receipt in the first place? Are you using plastic to purchase your coins? If you want to avoid all that mess, simply pay in cash. I've never paid for any PMs with credit. Unfortunately, any metals I did acquire are long-since lost to the tragic whims of water-going craft and their occasional propensity to rapidly lose bouyancy.
Unfortunately, making false or misleading statements to an employee of an FDIC-insured bank is a federal crime, punishable by a $250,000 fine, and/or up to five years imprisonment.
Just kidding, guys. That law hasn't been enacted yet.
How would we ever know?
Anyone have an explanation why metals keep dropping?
1) TPTB need metals to remain low. A sudden rise will spook the markets, like it started to do a few years back. They nipped that in the bud, by using paper. It worked, at the time. Any time metals seem poised to rise, paper will be dumped until the price quiets down. This will continue as long as it works.
2) Public perception has not yet caught on. Most average folks out there do NOT have any historical understanding of PMs, and their place in an economy. For now, they are going along with the conventional wisdom, and still prefer fiat-based forms of wealth. This will continue as long as that average guy trusts the fiat.
Well, it sure won't work forever, nor will that average guy continue to trust the fiat forever. It's just a matter of when the critical mass will be reached, the event horizon crossed. But once it is, things unwind very quickly.
So, in answer to your question, don't worry about it. It doesn't matter why, it only matters that as long as they DO, you can keep stacking. Don't look a gift horse in the mouth.
Actually, JMO, metals falling too because Chinese own metals, China's maket's crap currently, so margin calls?
They're metals. It is what they do. Didn't you take the re-education courses they've insisting on for the last 3 years? Stoxx rule! BTFD! BTFATH! All hail Mr. Yellen!
Oh Yeah. I forgot.
supply & demand: demand is not yet enough to completely exhaust physical supply - when physical supply is gone, price will rise - its just that simple - until the physical shortages begin the paper markets will rule
We've had the various retail fads come and go. Coffee kiosks, check cashing everywhere before only the fittest survived, etc, etc and yet PRIVATE vaults are almost impossible to find.
I know of only one and I've been around. The private vaults don't report anything to any government agency. So in essence government does NOT know that you are renting space. Uncle Fraud can subpoena private vaults but without knowing WHERE your stuff is, you can't throw a subpoena into the air and hope it takes root.
Seems like Private vaults would be a booming business but entry into that enterprise is a bit steep, unless you buy an existing bank that went belly up somewhere on the cheap. Those type of banks are always in small town USA, no one wants to live any more places. People still want easy access to their stuff when TSHTF and not have to fly and drive to get to it.
BTW, I would estimate that maybe 1/10 of 1% of Americans believe that the above sort of scenario could happen here. And I'm sort of in that camp as well because Uncle Fraud would rather kill us with inflation. Its the path of least resistance for all corrupt and fraudulent governments that refuse to control their currency/debt. Greece didn't have the option to hyperinflate.
I particularly dislike those private vaults which charge a percentage of the value of the PMs you store with them. IMHO a private vault should never have any knowledge of your box's contents.
There's a lot to be said for using dirty paint cans, in the basement.
trust me, I'm with the government... https://www.youtube.com/watch?feature=player_detailpage&v=ep7W89I_V_g
It amazes me that the Greek people have had over a year to prepare themselves to exit the banking system and yet some still have their cash and gold in safe deposit boxes. I beg everyone to start a plan of action to make yourself independent of the banking system. Start by encouraging your employer to give the option of being paid in gold and silver coins. As long as the gold and silver is reported to the taxing authorities at market value there are no laws broken. As long as there is proper tax withholding, no laws are broken. This will start giving people the opportunity to exit the system.
Prolly same thing will happen here.
Elderly that are too 'entrenched' in old beliefs or just too confused.
And then those that still don't realize that the media in your local does not tell you what is going down.
"Start by encouraging your employer to give the option of being paid in gold and silver coins."
I can picture your boss laughing loudly. We are not there yet. Precious is headed for the black markets next to the weed dealers and stolen electronics fencers. The .gov wants total control over money transactions which is why the push for a cashless society. I am still unclear what good my stack will do when the SHTF, AU/AG goes thru the roof in value and everyone is selling...to whom? I was getting a divorce some 30 yrs ago. Went to sell my 1 oz 24k wedding band at the near peak of $300/oz and no one was buying. I did wangle a deal for some weed so barter works.
According to Alan Greenspan....gold represents the ultimate form of liquidity. Buying scrap (old jewellery) gold is very profitable. It has also become highly competitive so you should have no problem realizing a minimum of 75% of melt value. Coins and small bars should realize 95-100+ % of melt value assuming the buyer also sells such at retail.
Most of the larger refiners in North America deal direct with a mint or other end user and are thus market makers. Those who say that they won't be able to convert specie to currency when the poop hits the fan are either disingenuous or just plain idiots.
I know this because I have been trading physical metal professionally for almost fifteen years now.
Whether we see deflation or inflation, as confidence in the system or currency falls; demand for specie increases. I wonder how many transactions in Greece are being settled in sovereigns or other specie? You sure as heck won't hear about that from the mainstream media.
Gold and silver coins?? Try getting a paper check. LOL
It's actually illegal to pay workers in cash in Canada. The govt doesn't like it when the boss puts the cash down on a table in front of the employee and then takes away the govts cut.
My observation in life is that nothing is illegal until one is caught, and then if one has enough connections and resources, it was just a simple misunderstanding.
The Honorable John Corzine????????
When paper assumes it's tradional value in the world of finance, $0, someone with two fields but no silver or gold will gladly sacrifice one field for a handful of coins. Carpet baggers will also be rewarded handsomely, acquiring quality property when debtors can't pay back their loans next year.
Stoopid is as stoopid does.
Deep, prescient commenting. Thank you.
Repeat after me....... If you don't hold it you don't own it.
If you haven't already heeded the warnings all these past years, well.... I don't know what to tell ya. Like those poor unconcerned greeks and cypriots before confiscation, governments are NOT, and will NOT, be your friends...