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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

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


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!


Primitive Skills Classes - Bowmaking Workshops

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

Hanoi Hilton..first thing that comes to mind are french tits, prisons and thing that comes to mind is thing that comes to mind is thing that comes to mind is landlord... lords, 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.

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


NO Dong Bernanke, bitchz.

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

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..


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 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

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



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

Wed, 04/11/2012 - 17:44 | 2336054 transaccountin
transaccountin's picture

Curious but how much do they exactly pay? Thx

Wed, 04/11/2012 - 17:48 | 2336069 The Alarmist
The Alarmist's picture

So, turns out we won the war after all.

Wed, 04/11/2012 - 17:47 | 2336072 Chupacabra-322
Chupacabra-322's picture

Off Topic:

National Level Exercise 2012 Will Focus on Cyber Attacks Against Critical Infrastructure

Public Intelligence

Rather than combating natural disasters or a nuclear detonation in a major U.S. city, this year’s National Level Exercise will focus on cyber threats to critical infrastructure and the “real world” implications for government and law enforcement of large-scale cyber attacks. National Level Exercise 2012 (NLE 2012) is scheduled to take place in June and will involve emergency response personnel from at least thirteen states, four countries, nearly every major governmental department as well as a number of private companies, non-governmental organizations, institutions of higher education and local fusion centers. The exercise will span four FEMA regions and will include scenarios affecting the National Capital Region.

Past NLEs have focused primarily on threats related to terrorism or catastrophic natural disasters. NLE 2010 focused on the hypothetical detonation of an improvised nuclear device (IND) in Las Vegas. NLE 2011 concerned a massive earthquake occurring in the New Madrid Seismic Zone. NLE 2012 will be the first exercise in the series to concern itself primarily with cyber threats. A private sector participant guide released by FEMA states that NLE 2012 “will address cyber and physical response coordination, including resource allocation . . . emergency assistance and disaster relief resources, relative to a cyber event with physical effects.” Another presentation from FEMA adds that the exercise will evaluate government “roles and responsibilities in coordinating national cyber response efforts and their nexus with physical response efforts.”

While the exact scenario for NLE 2012 is not known, the “high level” goals include simulating a situation where there is an “ambiguous threat landscape with multiple adversary types” that produces “physical impacts resulting from cyber attack and cascading effects” that threaten “critical commercial logistics and data, industrial control systems, and associated operations.” NLE 2012 will be unique in that there “will be an emphasis on the shared responsibility among the Federal Government; state, local, tribal nations, and territories; the private sector; and international partners to manage risk in cyberspace and respond together to a cyber event with national consequences.” Due to the “sensitivity of the exercise scenario and the related private sector concerns in terms of media exposure” FEMA has made it clear that the names of private sector participants will not be publicly released.

The exercise will occur amidst a growing climate of panic in Washington regarding the state of U.S. cybersecurity. The FBI’s top cybersecurity official recently resigned stating that the U.S. is fighting a losing war against hackers: “I don’t see how we ever come out of this without changes in technology or changes in behavior, because with the status quo, it’s an unsustainable model. Unsustainable in that you never get ahead, never become secure, never have a reasonable expectation of privacy or security.” Former government officials are advocating U.S. Customs “inspect what enters and exits the United States in cyberspace” and calling for prompt action on multiple pieces of cybersecurity legislation passing through the House and Senate.

NLE 2012?s goal of examining physical effects of cyber attacks underscores a comment recently made by the director of the FBI that the “cyber threat” will soon replace terrorism as the country’s highest national security priority. In March, a multi-agency exercise that included the FBI and NSA simulated a cyber attack capable of crippling the New York power grid during a summer heat wave. Last September, the Department of Homeland Security issued a warning to members of the “critical infrastructure community” that the hacktivist group Anonymous had expressed interest in industrial control systems. Computer security researchers have also recently demonstrated a number of techniques for attacking computer systems used in critical infrastructure that reportedly resemble the Stuxnet virus responsible for disrupting Iran’s nuclear program in 2010.

My take,

nice opportunity for an inter-net False Flag don't you think?

Wed, 04/11/2012 - 21:57 | 2336661 Milestones
Milestones's picture

All this from a government that can't write a budget for 3 years running? Surely you jest!!          Milestones

Wed, 04/11/2012 - 17:50 | 2336075 EmileLargo
EmileLargo's picture

Strange. In countries where the fiat currency is being debased very rapidly and where gold prices are rising exponentially (in that fiat currency), you usually struggle get bank lockers where you can store your gold because there is a massive queue of people trying to get lockers and their supply is limited usually (at least in the short term). What this article describes is very weird. It can't be that the average Vietnamese doesn't "get" the fact that this is how you save your money. 

Wed, 04/11/2012 - 18:11 | 2336138 Ghordius
Ghordius's picture

Not in a country where gold is the traditional unit of account for important assets like land. In fact, for the Vietnamese it's fiat inflation as usual and slightly falling land prices.

Wed, 04/11/2012 - 17:51 | 2336077 Fix It Again Timmy
Fix It Again Timmy's picture

Send me your gold.  I will safeguard it and pay you 10% a year!

Wed, 04/11/2012 - 17:56 | 2336101 Larry Dallas
Larry Dallas's picture

Sounds like the Bank of Nicoli! Ha!!! Is this what our world banking systems have become?

Wed, 04/11/2012 - 17:53 | 2336087 navy62802
navy62802's picture

Cool story about the old goldsmiths and the original bankers.

Wed, 04/11/2012 - 17:55 | 2336094 silvertrain
silvertrain's picture

I will let them hold a paper claim on my metals if they would like..

Wed, 04/11/2012 - 22:03 | 2336674 Milestones
Milestones's picture

Where do you think fiat money comes from.? People would use those receipts for gold to barrow upon in trades etc.       Milestones

Wed, 04/11/2012 - 17:56 | 2336098 quartshort
quartshort's picture

My thoughts too!

"We should all be so wise". Wise? As in let the banks hold our gold for us? Wise. Really? Really, really?

Go right a head and let them "hold" yours for you. The strong box covered in rubble idea above sounds much more wise on my end.

Epic Fail.

Wed, 04/11/2012 - 17:58 | 2336104 vegas
vegas's picture

Warren Buffet would be a big fat loser if not for crony capitalism. The guy is a vulture, just like his buddy George One-Good-Trade-In-My-Life Soros. Without the protection of government and sweetheart deals these guys couldn't find their ass with both hands if they had a roadmap.

5,000 years of civilisation and only one thing remains constant - gold baby; the rest is all bullshit.

Wed, 04/11/2012 - 18:06 | 2336105 Yen Cross
Yen Cross's picture

Open Google Earth, lock into the South China Sea/ Indian Ocean!  There aren't any defended/defined borders. They are all YELLOW/Pending resource discovery!/ sarc

 Hell, Myanmar is still Burma!

Thu, 04/12/2012 - 01:48 | 2336937 Non Passaran
Non Passaran's picture

YC half of your comments are good, half are total crap.
This one is of course crap. I feel sorry for you.

Wed, 04/11/2012 - 17:58 | 2336106 xPat
xPat's picture

Simon/Tim are such retards. Tim is referring to an unallocated account. Of course they are willing to pay interest - you give them gold, and deposit it on a fractional reserve basis. You would have to be a complete moron to actually do this, as it subverts the whole purpose of owning physical bullion on the first place. Oh yeah, forgot, complete morons are Simon's principal audience. Never mind...


Wed, 04/11/2012 - 18:10 | 2336133 Dr Benway
Dr Benway's picture

Yeah this article is very weird.


Haven't seen too many other articles on ZH arguing how "wise" it is to open an unallocated paper gold account with a Vietnamese bank. LOL!


or maybe it is some kind of joke

Wed, 04/11/2012 - 19:54 | 2336427 Tyler Durden
Tyler Durden's picture

Article is not telling anyone to give their physical to a bank. It is merely showing how, like in the case of Turkey recently, when stripped of propaganda, gold does in fact, pay a "dividend"... if one were so inclined.

Wed, 04/11/2012 - 20:17 | 2336476 Dr Benway
Dr Benway's picture

Fair enough. But unallocated gold accounts everywhere already pay interest, in the form of subsidized storage fees.

Wed, 04/11/2012 - 20:18 | 2336478 Tom of the Missouri
Tom of the Missouri's picture

Good point Tyler.  I subscribe to the free version of Simon's letter just for ideas and kicks.  He is not completely looney tunes. Not sure about his sidekick that wrote this though.  I agree with your point though. The article does makes a good point about the value of gold.  For it to work though one would have to assume there is a trustworthy banker in a country with the rule of law and not ruled by a bunch of thieving murderouis Vietcoms who at any second can nationalize all gold holding institutions and grab your gold.  An analogy would be like having a deposit in an interest bearing commodity trading account controlled by John Corzine and overseen by the CFTC with the legal system ran by Eric Holder, but only worse.  Someone said possession is 9/10ths of the law.  Jamie Dimon understands that point well just like a good loyal Vietcom party member.

Wed, 04/11/2012 - 21:53 | 2336649 CrazyCooter
CrazyCooter's picture

Well stated good sir! I bothered to log in just to say so.

I have a friend in VN, so I know first hand about the inflation and what people are doing to protect themselves. My impression is this; most people understand they need to get out of fiat, but they don't understand what money is or how it works. Banks pay high interest rates, so some keep it in dong. Banks also have this gold set up, so some people pile into this (not thinking). I advised to buy small jewelry trinkets of gold (e.g. rings, link necklaces, etc) and put them in a safe deposit box. I then had to explain, to my amazement what a safe deposit box is and then convince them that they do exist. I was proven right (they do exist), but I was surprised no one knew about them (I have used them for tax documents, etc for years).

Oh, and if anyone wants a cheap vacation, might I suggest Vietnam. Da Lat (highlands - cooler temperatures - old colonial town) or Phan Tiet (beach resort). A good quality room at a nice tourist hotel will run you 50 USD a night and a good meal is maybe 5 to 7 USD. If you can afford the tickets, its very cost effective given the exchange rate.



Wed, 04/11/2012 - 21:31 | 2336605 xPat
xPat's picture

No Tyler, you're wrong. Gold does NOT pay a dividend anywhere on the planet. What you are mistaking for a dividend is the fact that fools who deposit physical bullion on an unallocated basis are paid a very small stipend to encourage their continuing stupidity. The reason it should not be viewed as a dividend or "return" on the investment is that the principal value of the investment is markedly reduced when the investor's stake in physical bullion is replaced with a dubious credit claim backed by a vietnamese counterparty.


Wed, 04/11/2012 - 21:49 | 2336643 Dr Benway
Dr Benway's picture

A gold producer can offer a small dividend on unallocated storage because it derives benefit from gold as working capital. Whether this is a foolish proposition or not depends on the producer. What seems to be happening here is fractional reserve banking with gold.


Depositing gold in fractional reserve banking is equivalent to getting a savings account and an at-the-money call option for gold with the bank. You no longer hold gold in any real sense, you hold a savings account and an option.

Wed, 04/11/2012 - 21:42 | 2336627 xPat
xPat's picture

p.s. Tyler, because you're special, I'm pleased to offer YOU an even better deal. Heck, why not... I'll even extend it to ALL ZH readers.

So here's the deal - I will personally pay you TWICE the rate the Vietnamese are offering to store your gold in my super-safe certified vault. Send it to: xPat Depository Services, c/o Fourth National Bank of Nigeria. Be sure to include your return address, and a cashier's check will be promptly mailed to you with your reverse storage fee credit. I promise. Really. If you act before midnight tonight, you will also receive a special Commemorative coin with pictures of the GATA principals etched in Platinum. Seriously.


Thu, 04/12/2012 - 01:34 | 2336928 SilverIsKing
SilverIsKing's picture

Is this one of those scams you hear about on the teevee?

Wed, 04/11/2012 - 21:43 | 2336633 Augustus
Augustus's picture

"Gold" does not and cannot pay a dividend.

If someone is allowed to steal your gold for a little while, that someone MAY give it back with a little extra.

Allowing yourself to be exposed the sucker deal is what yields the compensation.

There has never been Spawning Gold.

Wed, 04/11/2012 - 17:59 | 2336108 xela2200
xela2200's picture

In other words, we'll give you money to keep your gold where we can see it. That way , we now where to take it when we need to.

Sorry, I keep on loosing mine in boating accidents.

Wed, 04/11/2012 - 18:01 | 2336111 MGA_1
MGA_1's picture

Umm.. who can pay you to store something - looks to me like they are loaning it out.  You could be the holder of a ticket if not careful.

Wed, 04/11/2012 - 18:02 | 2336115 Pancho Villa
Pancho Villa's picture

It is rather deceptive for the bank to say the gold is stored in a safe-deposit box when in fact they are loaning it out. Since the Vietnamese government is trying to discourage gold use, good luck if your bank goes under or if your banker decides to leave town with the loot.

The fundamental business model of banking (borrowing short and lending long) is flawed. It works in prosperous times, but sooner or later anyone who does this will run into problems. And if the government isn't willing to bail them out, depositors will lose their money.

I would never trust anyone to loan out my gold. It simply isn't worth the risk.

Wed, 04/11/2012 - 18:06 | 2336123 Clint Liquor
Clint Liquor's picture

Gold is Money.

Many of you are too young to remember, but back in the old days Banks used to pay people interest for money on deposit. Seems rather silly now when they can just borrow it from the FED for 0.25%.

Wed, 04/11/2012 - 20:56 | 2336548 SHEEPFUKKER

Good point good sir.....shows you have far we have come, or not come.  You now get no interest for your cash deposits and in many cases get charged fees, or worst case, you money just vanishes into thin air. Now, they want to keep your gold for you(how nice of them!!) in exchange for a few debt notes that is probably your fiat anyway.  

Wed, 04/11/2012 - 18:08 | 2336128 FranSix
FranSix's picture

Simon might get his wish if central banks wanted to up the ante on their competetive devaluation practises, and starting heavily diversifying their foreign exchange holdings into gold.  They might have to if they absolutely insist that negative nominal rates are completely out of the question.

Wed, 04/11/2012 - 18:11 | 2336132 Hobbleknee
Hobbleknee's picture

So long, guys.  I'm off to Vietnam.  And I won't be going by boat this time!

Wed, 04/11/2012 - 18:12 | 2336135 Danielvr
Danielvr's picture

They're not paying you for the privilege of storing your gold. They're paying you for the privilege of leasing and potentially squandering your gold to speculators.

Wed, 04/11/2012 - 19:31 | 2336348 el Gallinazo
el Gallinazo's picture

"Banks in Vietnam will actually pay YOU to store your gold in one of their safe deposit boxes."


Sometimes I think Simon Black learned English in the same country that King George the Elder did.  They don't pay you to store your gold in their safety deposit boxes in any sense that "your safety deposit box" is defined in American English.  They pay you to store your gold in their vaults and it won't reside there for long.  They have to pay interest because any idiot would know that it is much safer to bury it in the back 40 on a moonless night.

Wed, 04/11/2012 - 18:17 | 2336150 Vlad Tepid
Vlad Tepid's picture

Vietnam will get my gold when they pry it from my cold, dead hands.  Just like everyone else who wants to get my gold.  Before the boating accident that is.

Wed, 04/11/2012 - 18:21 | 2336153 davinci7_gis
davinci7_gis's picture

Dongs suck and that's a fact jack!

Wed, 04/11/2012 - 18:23 | 2336162 Seasmoke
Seasmoke's picture

in 2012....if its not in your hands , you no longer OWN it

Wed, 04/11/2012 - 18:28 | 2336170 Yen Cross
Wed, 04/11/2012 - 18:32 | 2336174 EvlTheCat
EvlTheCat's picture

Anyone who allows their physical investment to be stored anywhere but in their possession is "poor, backward, and undeveloped".  This is a bullshit article as per Simon Black.

Make sure to take possession of your physical, and then arrange a "boat accident", for your own peace of mind!


Wed, 04/11/2012 - 18:29 | 2336176 Caviar Emptor
Caviar Emptor's picture

Vietnamese strategy is a good one: attract more gold deposits and watch the Dong rise and rise

Wed, 04/11/2012 - 18:36 | 2336199 EvlTheCat
EvlTheCat's picture

Normally, I love your posts. However, you really have to explain why this is a good idea, above and beyond a rising fiat currency?  No man may be an island, but a government/bank should never be trusted with ones own self interest.  They are mutually exclusive as far as I am concerned!

Wed, 04/11/2012 - 18:38 | 2336204 Caviar Emptor
Caviar Emptor's picture

Dunno bout you, if I were a Vietnamese I'd love to watch my Dong rise and rise. And thnx for the compliment :-)

Wed, 04/11/2012 - 18:41 | 2336214 EvlTheCat
EvlTheCat's picture

hahahahaha ok, ok I got it..  Now I know why I should not drink and rationalize!

Wed, 04/11/2012 - 18:52 | 2336242 slewie the pi-rat
slewie the pi-rat's picture

you buy saigon tea?

Wed, 04/11/2012 - 19:02 | 2336274 EvlTheCat
EvlTheCat's picture

Come on slewie, I make my own.  Buying booze is for chumps when you can amp the alcohol level with the right yeast.

You better be the real slewie or I am going to cry!

Wed, 04/11/2012 - 22:00 | 2336668 slewie the pi-rat
slewie the pi-rat's picture

well, good

yep, c'est moi  L0L!

Wed, 04/11/2012 - 18:33 | 2336183 hannah
hannah's picture

send me all your gold...i will store it for fucking free....! free....!

what a load of crap....the fed will store your gold for you also.....


Wed, 04/11/2012 - 19:01 | 2336269 Not Too Important
Not Too Important's picture

Sounds to me like Vietnamese rehypothication. Saves them from running the tunnels looking for it.


Wed, 04/11/2012 - 18:36 | 2336196 Caviar Emptor
Caviar Emptor's picture

Vitenamese trader says: when you can't eat gold, you can eat your Dong

Wed, 04/11/2012 - 18:47 | 2336231 slewie the pi-rat
slewie the pi-rat's picture


here's to:

  • the mightyMekong
  • canTho and the internationalHotel
  • airAmerica
  • peace
Wed, 04/11/2012 - 18:52 | 2336239 uno
uno's picture

went to Saigon a few years ago, loved it (no paying for lov ee lov ee).  Great food - fruit, seafood, coffee; fun experience going around town at night when locals go to cafes, ice cream shops.  People were great, they treated American's very well, even the Vietnam military folks.  Early in the morning people were playing badminton at the park, jogging; such as lively city compared to most US metro's. 

Wed, 04/11/2012 - 18:56 | 2336249 slewie the pi-rat
slewie the pi-rat's picture

i always loved the zoo

any reports from there?

and the parkLane factory;  best place in the country to pick up a duffel bag of thai weed

Wed, 04/11/2012 - 19:27 | 2336338 Kapital Xposure
Kapital Xposure's picture

Currently in vietnam, business and pleasure.

Silver here is sold everywhere, and the majority of it is fake and of such low quality, they dont treat it as a currency. People here i know that are manufacturing goods with silver, that are then sold overseas, have to import it.

Gold here is being restricted, i cant remember how many ounces, but the customs has import restrictions limitation, quite severe if your producing in that commodity. They also seem to have a corrupt customs department, you can have all paperwork in place and they still wont release the goods, so your left to pay a fee that they set.

The french and viet govt put aside huge dollars for some infrastructure. At hoi an. These pipes were sent mid last year and still sit awaiting clearance, the govermment in hanoi cant afford the nasty fees they are demanding, so the goods remain frozen.. The government is broke, so its hard for them to pay up.

Most here want gold, its a nice commodity to use to shift huge values of money out of the country and avoid taxes. Its small, compct and brilliant to cross borders with, like all over the world, its the currency of choice for those wanting to export wealth to safer places.

Great people here. They can do anything. High achievers and very resourceful.

Wed, 04/11/2012 - 19:27 | 2336339 uno
uno's picture

no zoo, also went to Nha Trang, they built the road and resorts up from Cam Ranh airport (heavly used US military airport back in the  day) to Nha Trang.  Hopefully more westerners will go there, in the winter a lot of Russians go on vacation.  I did not get a suit made there, back in 2010 it was around $70 US to get a custom made suit, later I went to Beijing and got 2 made for about $200, very good quality.  I could of got it cheaper but just got tired of haggling.

Wed, 04/11/2012 - 21:52 | 2336648 slewie the pi-rat
slewie the pi-rat's picture

nhaTrang has the nicest beaches i've ever seen;  vast expanses of hot sand

i was in a typhoon once there

i was visiting and they gave me a hooch on the beach;  abt a mile from the ocean;  huge beaches; two bunks

i wake up the next morning and the water is up to the botom of the top bunk i'm in from the storm surge

my gear was on the other top bunk

didn't hafta go far to pee

then the tide went out and we all lived happily ever after

Wed, 04/11/2012 - 21:42 | 2336630 ljag
ljag's picture

Screw the duffle bag..........take me back to Cong Li street! (you had to be there to get this)

Thu, 04/12/2012 - 00:42 | 2336878 Crassus
Crassus's picture

Thunderbird Club!


Wed, 04/11/2012 - 19:16 | 2336305 Common_Cents22
Common_Cents22's picture

she no ronger ruv dong rong time.  

Wed, 04/11/2012 - 19:24 | 2336327 fuu
fuu's picture

Robert Brusca writes as Simon now?

Wed, 04/11/2012 - 19:38 | 2336366 valkyrie99
valkyrie99's picture

I’m afraid this article has its monetary history backwards.  In the original full-reserve banking systems banks (or temples or goldsmiths or knight’s templar or whoever had the societal power to act as a bank at the time) charged fees for storage of money.  Typically you would deposit gold and receive a standardized representation that the gold was yours and could be redeemed up to a certain date.  At that date one could either redeem their gold by taking it into their possession or pay an additional fee to continue storage – or in the meantime the banks could have got a different small fee for transferring the gold to someone else’s accounts as checks are processed today – or it could have been changed into other predominate assets or foreign currencies of the times for another small fee. Bankers made decent but not extravagant livings off these fees. At some times banks also offered fractional reserve banking – where they would loan out most of your gold.  Occasionally this was done honestly and with knowledge of the depositor; lending the bank gold and getting interest was one of the earliest forms of approximating modern stock purchases, dating to ancient Greece. Often this was done without depositor knowledge and was a crime that resulted in many beheadings when it was discovered that banks had failed (something that’s only possible if the bank doesn’t have all deposits in its’ reserves). What you have in Vietnam is simply fractional reserve banking in gold, no different then how banks pay interest to store your dollars here – this is the only way that an institution could afford to pay interest instead of needing to be paid storage fees for storing gold. Since they are offering this interest on safe deposit boxes the citizens are led to believe hold 100% of their gold safely, they are just doing fractional reserve banking in the dishonest way, without depositor knowledge, a crime also dating back to the ancient Greeks on a few occasions but popularized by the Venetians during the silver famines of the appx. 14th century (although still severely punished) and later codified into law as the banking system became closer intertwined with the catholic church and at times they would make the previously illegal loans from deposits to their home nations who needed financing, usually to continue wars.


Wed, 04/11/2012 - 20:15 | 2336473 Clint Liquor
Clint Liquor's picture

"Often this was done without depositor knowledge and was a crime that resulted in many beheadings"

Oh, how we long for days gone by.

Wed, 04/11/2012 - 20:57 | 2336549 Dr Benway
Dr Benway's picture

Nice post. A couple of points though:


1) For a bank to be able to offer an interest rate on gold, the bank would have to utilize fractional reserve banking. This is not the case for the gold mints offering subsidized storage fee unallocated accounts as they derive utility from access to gold as working capital. They can offer an (albeit low) interest rate on gold, without having to use fractional banking. 


2) It is not certain that the bank is misleading customers with the wording on "storing in safety deposit boxes", this misleading wording could have been introduced by the article author Simon Black.

Wed, 04/11/2012 - 22:35 | 2336719 valkyrie99
valkyrie99's picture

1) You're right that a mint coining gold at slight overvaluation to weight price to cover production costs and a small profit margin may be able to fit in a little interest.  Also mints coining highly overvalued gold backed by a state or institution to add fiat value to the coin (ie: Archaic Greece, classic Rome) could probably pay plenty of interest and still receive plenty of profit. Mints have provided banking services many times so your addendum is correct, but I don't think Vietnmese banks are coining gold so that's not how they're paying interest.

2) You are also right that the author could be inacurratly representing what's happening. But if he is right and institutions are giving the society false confidence in a currency through mechanism of safe deposit boxes, this would fit in with how fractional reserve banking typically starts in a society and bodes poorly for all parties involved. 

Wed, 04/11/2012 - 19:47 | 2336393 Racer
Racer's picture

The UK gov  have given some benefits inflation (official  ROFL ) linked increases of around 5%.

so if the pretend figures are this bad why put your money in a bank because in reality you are paying them so they can pimp you out at massive rates to the desperate kerb crawlers who can't get it anywhere else???

Don't give these pimps your money.. spent it on a real prostitute and enjoy yourself instead!


Wed, 04/11/2012 - 19:48 | 2336410 worbsid
worbsid's picture

Wasn't that the deal Gerald Celente had with MF Global?  Hold my gold please.  I'll pick it up in December.  

Wed, 04/11/2012 - 20:02 | 2336444 akak
akak's picture

Vietnamese gold regulations stiffen, use of gold in exchange grows harder, gold bank accounts become engorged, official pronouncements against gold become turgid, and the erection of barriers discouraging the monetary use of gold in Vietnam continue to swell as the dong sags.

Wed, 04/11/2012 - 23:00 | 2336748 Sathington Willougby
Sathington Willougby's picture

Plunging the flaccid dong market over and over is futile.  It's impossible to resurect even though a firm dong is in the best interest of all parties concerned.  Elasticity in the dong can only be restored by emasculating the golden shower currently inundating the contracting dong market.

Wed, 04/11/2012 - 20:33 | 2336509 YouThePeople
YouThePeople's picture

My dong is comes with age. I will happily participate in a dong strenghtening program. 

Wed, 04/11/2012 - 20:35 | 2336513 dark pools of soros
dark pools of soros's picture

that's alotta dong for a dollar - there's a happy meal joke in there somewhere

Wed, 04/11/2012 - 20:47 | 2336533 BlackholeDivestment
BlackholeDivestment's picture

...commies turned to gold and GI Joe's get zero interest. LMAO. The few, the proud, the paaaathetic.

Wed, 04/11/2012 - 21:10 | 2336577 Papasmurf
Papasmurf's picture

Photo above seems to depict a boating accident.  Don't put your gold on that yacht.

Wed, 04/11/2012 - 22:55 | 2336735 Sathington Willougby
Sathington Willougby's picture

I'm going to have to stop using it for an anchor then forgetting to tie it off.  Dammit, why can't I get that right?

Wed, 04/11/2012 - 21:35 | 2336618 Augustus
Augustus's picture

So, they don't really store the gold at all.

That is simply so Madoff that it causes Lots of Laughimg.

And it is considered safe enough to be Headline News.

That is simply so Geo Wash that it causes another bout of Lots of Laughing.

Wed, 04/11/2012 - 22:53 | 2336731 Sathington Willougby
Sathington Willougby's picture


Tonight I'm going to plunge the dong, multiple times.  

Thu, 04/12/2012 - 00:29 | 2336868 newengland
newengland's picture

Vietnam, and the rest of Asia: slaves, pretty pets of anyone who buys them.

They like their slavery, and it is our psychopathic money masters and political pets who want to bring it here.

Fuck off with that bullshit. Keep it in your own slave nation Federal Reserve Board globalist central bank cartel old world new feudalist jerk off serfs. 

Tyler Durden now reveals his self: a money whore of the eastern serfs.

Thu, 04/12/2012 - 02:11 | 2336952 Nukular Freedum
Nukular Freedum's picture

"the dong has plunged even further."

Hmm... your right it is an unfortunate name!

Thu, 04/12/2012 - 03:35 | 2337018 piceridu
piceridu's picture

I rather have the Vietnamese banks hold my dong than my gold...........sorry,had to

Thu, 04/12/2012 - 04:59 | 2337046 Shazam342
Shazam342's picture

So now the gold bar is really a big Dong, eh?

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