Where Dong Is Weak, Gold Rules - In Vietnam They Will Pay You To Store Your Gold

Tyler Durden's picture




 

Submitted by Simon Black of Sovereign Man

They Will Actually Pay You To Store Your Gold

Here’s something you don’t see every day: Banks in Vietnam will actually pay YOU to store your gold in one of their safe deposit boxes. I was pretty surprised to find this out for myself; neither Simon nor I have seen it anywhere else in the world except here.

This is actually how banking used to be. The original bankers were goldsmiths– big burly guys who worked with gold on a daily basis. They had the security systems already established, and, for a fee, they were willing to let you park your gold in their safes.

Eventually, goldsmiths got into the moneylending business; instead of charging a security fee, they would pay depositors a rate of interest for the right to loan out the gold at a higher rate of interest.

Goldsmiths’ reputations lived and died based on the quality of their loan portfolios, and their consistency of paying back depositor savings.

Today that’s all but a footnote in history. Except in Vietnam.

Vietnam’s economy enjoyed a strong boom in the mid-2000s thanks to economic liberalization and foreign capital inflows. Within a few years, the economy overheated and inflation became rampant.  Then came the global financial crisis.

The Vietnamese government’s response, as it has been with governments all over the world, was to print more money.  This further exacerbated the inflation problem and undermined confidence in the currency.

The unfortunately named Vietnamese dong has been devalued to the point where it now has an absurd number of zeros.  Over the past 3 years it has lost some 30% of its value against the US dollar– it now takes about 21,000 dong to buy just one US dollar.

Against stronger currencies such as the Aussie dollar and Canadian dollar, the dong has plunged even further.

As such, it comes as no surprise that the Vietnamese people don’t trust their government’s paper money.  They prefer to earn dollars and keep their savings in gold. Banks have jumped on board, encouraging gold deposits by offering attractive interest rates.

Property prices are frequently quoted in gold as well. It’s cultural– the average guy on the street is very aware of gold and probably knows the price.

The government doesn’t like this at all because it can’t print dollars or gold.  So, it is discouraging their use, forcing non-tourist business owners to exclusively use the dong.

The government has also introduced regulations to discourage gold hoarding.  Technically, it’s not permissible now for Vietnamese banks to pay interest on gold deposits anymore, but it still happens in practice.

So much for Warren Buffet’s assertion that gold is just a silly cube that doesn’t pay any yield.

It’s ironic that places like Vietnam are considered poor, backward, and undeveloped by the West… and yet it’s precisely these same people who are smart enough to culturally reject worthless government-issued paper currency in favor of something that is naturally scarce and lacks counterparty risk.

We should all be so wise…

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Wed, 04/11/2012 - 17:37 | 2336030 Squid Vicious
Squid Vicious's picture

Long Dong Silver, bitchez!

Wed, 04/11/2012 - 17:41 | 2336044 I think I need ...
I think I need to buy a gun's picture

the dong has been devalued to 21000 to 1 dollar

 

maybe the dollar has been devalued that much too its just the exchange rates that has held it firm against other currencies maybe after all is said and done it will be 21000 dong for 21000 dollars

Wed, 04/11/2012 - 17:43 | 2336053 SHEEPFUKKER
SHEEPFUKKER's picture

Hanoi Hilton....your gold can check in but it won't check out.

Wed, 04/11/2012 - 17:47 | 2336067 12ToothAssassin
12ToothAssassin's picture

Where Dong is weak, banksters employ the little blue pill.

Wed, 04/11/2012 - 18:00 | 2336112 Deo vindice
Deo vindice's picture

Fox guarding the henhouse. What a deal for the fox!

Wed, 04/11/2012 - 18:07 | 2336124 Dr Benway
Dr Benway's picture

Yeah.. I don't get it?

 

If they loan out your gold, they are not really "storing" it in your safety deposit box, are they?

Wed, 04/11/2012 - 19:57 | 2336435 AldousHuxley
AldousHuxley's picture

In Asia, one who has lots of dong makes the rules.

 

Poor North Korea has no dongs, so they have to make nukes to blackmail for food.

 

Their nuclear missiles are appropriately called: NO Dong #1, and NO Dong #2

 

http://www.missilethreat.com/missilesoftheworld/id.82/missile_detail.asp

 

http://www.missilethreat.com/missilesoftheworld/id.82/missile_detail.asp

 

They are working on their latest and largest nuke: Taepo Dong  where Tae means "large"

Wed, 04/11/2012 - 20:24 | 2336493 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

I once worked with a lady who fled Vietnam after the commies took over. She would describe how the average citizens would wear their value in jewelery since the fiat was worthless. Especially in gold.

Thu, 04/12/2012 - 00:57 | 2336899 Crassus
Crassus's picture

Bhat chains. Guessing she fled before the commies took over.

Wed, 04/11/2012 - 20:42 | 2336525 A Dutch on Meth
A Dutch on Meth's picture

Just like your aircraft carriers?

Wed, 04/11/2012 - 19:53 | 2336420 tmosley
tmosley's picture

Then you wake up in your bed and believe whatever you want to believe.

Wed, 04/11/2012 - 22:39 | 2336722 bankruptcylawyer
bankruptcylawyer's picture

what might that be? blue puppet democracy?

Thu, 04/12/2012 - 02:14 | 2336957 Nukular Freedum
Nukular Freedum's picture

Blue pill, red pill, whats the difference? theyre all the same once theyve been in your mouth...

Wed, 04/11/2012 - 18:19 | 2336152 johnu1978
johnu1978's picture

That's for sure!

 

-John
Primitive Skills Classes - Bowmaking Workshops
http://www.heartrootnatureconnection.com

Wed, 04/11/2012 - 20:09 | 2336441 Harbanger
Harbanger's picture

Hanoi Hilton..first thing that comes to mind are french tits, prisons and hotels....hotels...next thing that comes to mind is property...property...next thing that comes to mind is land...land...next thing that comes to mind is landlord... lords, lords...next thing that comes to mind is who's your daddy.  The land owner, same as it ever was.

Wed, 04/11/2012 - 18:28 | 2336169 Muddy1
Muddy1's picture

Interesting that Zimbabwe, Viet Nam, Turkey, these back asswards countries have the people with the brains to value the barbaric relic.  Zimbabwe wants payments in gold, Turkey and Viet Nam don't want people hoarding, holding, or otherwise having gold.  Americans don't get "it", but they know who is doing well on dancing with stars and American Idol.

Wed, 04/11/2012 - 19:43 | 2336385 jcrockett870
jcrockett870's picture

Oddly enough, Americans are rushing to cash for gold to sell their gold.

Wed, 04/11/2012 - 20:05 | 2336457 AldousHuxley
AldousHuxley's picture

in backassward countries, you don't survive no less proper if you are an idiot. you are forced to be resourceful, street smart, diligent.

 

That's why westerners have "survivor" shows in locations where "uncivilized" natives have been surviving for generations. sad thing is not only few contestants survive, fatties sitting at home watch the show for entertainment because they are too fat to even become a contestant.

 

 

http://nbnl.globalwhelming.com/wp-content/uploads/2011/02/tribe-1-450x32...

Wed, 04/11/2012 - 21:32 | 2336608 Harbanger
Harbanger's picture

All the Americans I know are rock hard, arse kicking patriots.  I'm certain the  "uncivilized" fatties, as you say, will soon be motivated by world circumstance.  Don't believe anything you hear about the US in the MSM.  America is NOT just another country.  Our citizens have been escaping tyranny since our inception, we are survivors.  We are comprised of people from across the world with the courage and faith to leave their homeland and strive for something better.  Our Constitution made us different from all other countries, this needs to be understood again.   America is NOT just another country.

Wed, 04/11/2012 - 22:33 | 2336716 monoloco
monoloco's picture

Ha, the US constitution is just a doormat in DC.

Thu, 04/12/2012 - 00:31 | 2336877 stacking12321
stacking12321's picture

MDB, is that you?

Wed, 04/11/2012 - 21:17 | 2336589 killallthefiat
killallthefiat's picture

It was 14k dong in 1998 for a dollar.  I passed out D50k to every little kid who asked...nicely.  The VC are printing more than the BC (Bernanke Companions)

Wed, 04/11/2012 - 17:44 | 2336056 tmosley
tmosley's picture

Short Dong Bernanke, bitchz.

Wed, 04/11/2012 - 18:21 | 2336157 Vlad Tepid
Vlad Tepid's picture

If they get to call their currency the Dong, I suggest that, as Red Blooded, NASCAR-loving Americans, we demand that when Timmy and Benny succeed in trashing our current currency, we replace it with a unit called the Phallus, just to one-up the rest of the world. Of course, the Brits with their "pound" will always trump the world in currency double entendre...

Wed, 04/11/2012 - 21:33 | 2336611 bigkahuna
bigkahuna's picture

The time has come for the US to invade England.

Thu, 04/12/2012 - 11:49 | 2336754 GoinFawr
GoinFawr's picture

Well don't screw it up like the Germans did then: go North FIRST. Judging by the visages on the fiat there's still lotsa 'Royalists' left up there with minds to liberate, from their skulls; and you can use all the raw materials they're hoarding to finish the job 'way over there'.

Thu, 04/12/2012 - 02:22 | 2336959 Nukular Freedum
Nukular Freedum's picture

Pounding the Bart.

Wed, 04/11/2012 - 22:54 | 2336734 wee-weed up
wee-weed up's picture

Try...

NO Dong Bernanke, bitchz.

Wed, 04/11/2012 - 18:24 | 2336146 THECOMINGDEPRESSION
THECOMINGDEPRESSION's picture

Not a hope in HELL would I allow a former enemy keep my Gold or Silver. Can you imagine? (Even though it was entirely the U.S.'s fault)

OK so we get you back, we keep gold, you go to hell. MOW..MOW..

KARMA..

Wed, 04/11/2012 - 20:59 | 2336552 Freddie
Freddie's picture

I would be lerry letting anyone hold it.  This lending stuff is another ponzi rehypoth scam.

Thu, 04/12/2012 - 00:30 | 2336876 Hangfire
Hangfire's picture

Maybe just let them hold the gold dipped tungsten bars, "just to see how it feels".    

Wed, 04/11/2012 - 18:27 | 2336164 Caviar Emptor
Caviar Emptor's picture

I proudly announce that I'm initiating a new position: Long Dong Straddle with Butterfly Spread. 

Wed, 04/11/2012 - 21:33 | 2336609 ihedgemyhedges
ihedgemyhedges's picture

Who are your advisors?  Lexington Steele and Sasha Gray???????????????

Wed, 04/11/2012 - 20:01 | 2336443 krispkritter
krispkritter's picture

Weak Dong? Buy Vietnagra...you love us long time!

Wed, 04/11/2012 - 17:37 | 2336031 dildo o flaherty
dildo o flaherty's picture

Vietnamese gold bitchez

Wed, 04/11/2012 - 19:47 | 2336400 AgShaman
AgShaman's picture

Gold...."Be at my knees" Bitchez!

There....fixed it for ya

Wed, 04/11/2012 - 17:39 | 2336034 Sudden Debt
Sudden Debt's picture

No thank you. I store it in a shureguard box under a pile of ruble :)

Wed, 04/11/2012 - 18:22 | 2336159 Vlad Tepid
Vlad Tepid's picture

Yes, Vlad says store all money under many piles of ruble.  Is good for Soviet Russia, no?

Wed, 04/11/2012 - 17:40 | 2336036 blunderdog
blunderdog's picture

  instead of charging a security fee, they would pay depositors a rate of interest for the right to loan out the gold at a higher rate of interest.

That's not quite how it happened.  What happened is that the goldsmiths realized (to their SURPRISE!) that they could issue notes for more gold than they actually held, and the notes were treated by the people around them as money.

Something for nothing.  Alchemy.

Wed, 04/11/2012 - 17:45 | 2336037 malikai
malikai's picture

I don't want interest on my metal. I want to know it's safe.

Wed, 04/11/2012 - 19:01 | 2336268 lemonobrien
lemonobrien's picture

pocession is 9 tenths of the law.

Wed, 04/11/2012 - 20:40 | 2336521 ForTheWorld
ForTheWorld's picture

So is possession ;)

Wed, 04/11/2012 - 17:43 | 2336042 HamyWanger
HamyWanger's picture

"It’s ironic that places like Vietnam are considered poor, backward, and undeveloped by the West…"

That may be because Vietnam is a shithole, and the West the apex of civilization? 

Just sayin'...

Wed, 04/11/2012 - 17:46 | 2336062 EINSILVERGUY
EINSILVERGUY's picture

Tends to be what happens when you bomb a country back to the Stone Age.  Vietnam was once a beautiful country before  Ho, the Vietmihn,  French and Americans used it as an artillery range

Wed, 04/11/2012 - 17:50 | 2336079 jimmyjames
jimmyjames's picture

That may be because Vietnam is a shithole, and the West the apex of civilization?

**************

Funny then-that they had the tools/people and know how to boot our defeated sorry asses out-

Wed, 04/11/2012 - 20:26 | 2336498 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Hamy, you say lots of really stupid things most of the time, but I give you credit this time.

Wed, 04/11/2012 - 21:20 | 2336592 killallthefiat
killallthefiat's picture

Vietnam is a shithole.  Apex, NC is the Apex

Thu, 04/12/2012 - 00:27 | 2336871 prains
prains's picture

hamy

 

you are the apogee of western civilization, too bad all that's left is the shit stain of your life on the down side. you're gonna make a mess.

Wed, 04/11/2012 - 17:42 | 2336046 AnarchoCapitalist
AnarchoCapitalist's picture

Why would you EVER trust a bank to lend out your gold? If SHTF, you want it close.

Wed, 04/11/2012 - 17:43 | 2336050 bingo was his name
bingo was his name's picture

Gold leasing for the common man

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