Heeere we go!
What looks like a bank run-style exit by investors in SocGen in France and Intesa in Italy. There have been fairly massive outflows of money from Italy to Switzerland for a few days. Now it seems its the turn of the investors and Bond holders to run for the exits. They’ve been standing there like a great big milling herd of bug-eyed Wildebeasts at a river crossing for days. Seems like someone got pushed in and the rest thought he’d jumped and have decided to go for it.
So much for the ECB and the FED. We had the emergency ECB meeting and the ECB has been buying Italinan and Spanish bonds. We have had the warm words of more easy money from the FED and the DOW shot up in the closing hour of trade. Our leaders played the cards they had left …. and lost.
Intesa has had trading in its shares stopped repeatedly already. UniCredit will suffer the same I have no doubt. But the BIG news for the day, so far at least, is that it is now Societe Generale’s turn. They are down 17% on a rumour that they are about to go down.
If teh 17% or anything like it stays till the end of the day, then it iwll be a full on flashing red light and claxons panic in Paris.
Once one of “The Insolvent” groans and rolls then others will follow. I do not believe Bank of America will make it.
Has anyone reading this blog bought gold or silver? i've always been confused about that – how would one convert the metal if the means of exchange had gone down?
No. But I would have in case I had the means to start an investment.
Silver/Gold will be valuable in the future when treading for things necessary as you see fit . And food, perhaps.
Sadly no.
But as for the means of exchange – the reason to buy gold is that when paper money collapses gold and silver become the means of exchange.
Funnily enough an oz of silver arrived today. On the one side is a buffalo and the other side is an indian 😀 Be great if I can get some shades engraved onto his face. Get a silver testing acid and be prepared to cut into it if not sure as you can get forgeries like Canadian maple leaf ingots on ebay from China or buy from reputable dealer.
Be great to watch it spinning on music video.
Artists impression with foil May just glue them on if I can refine shade cut out. hehe it does look a bit like me.
Hi 24K,
I guess you had to pay VAT on it, which seen the trends you will recover no-probs. But my question is: when the time to sell comes, will you have to pay another 20% tax? I said 20%, but was it another figure?
Yes, via bullionbypost.co.uk Very simple. You DONT pay VAT on gold. Didnt go all out (only a 3rd of my modest savings). Not sure about recouping my 'gold vouchers' if it came to the crunch – who knows what barter system will be in place in two years time 🙂
People,
I am not an expert in this at all, so please forgive me if I am out of my depth here, but everything I read is that you have to be VERY sure you get actual metal NOT a voucher or a promise or a note telling you the metal is held for you by so and so. Everything I read is that the companies are selling promises of metal while not actually having the metal or the serious hope of getting it.
As I say, apologies if I am teaching my grandmother to suck eggs here. I just don't want to see anyone get done.
Hi Demon,
Depends how much you're talking about and to who. Ebay just charge you their fee based on the price if selling (10%+type of ad) and the rest is up to you.
Large amounts to a silver trader I don't know.
Guy on market would be the cash trade that never happened I would've thought.
If you did though the figure would be whatever VAT is. The buyer would pay it and you would declare it on your tax return.
Don't quote me on any of that mind 😀
But do buy real silver and hold it in your hand just like you would anything else. The three G's as Gerald Celente says, "Gold, Guns and a Getaway plan".
He has a good one about the riots too,
"When people have nothing else to lose. They lose it".
Thanks 24K! I like those 3Gs, but I prefer my version: "Gold, girls and a getaway plan". The gun might get useful soon, though, if things don't improve…
And thanks to Golem too. Always taking care of us… 🙂
Hi Martin, sorry, I missed your post at first scan.
Thanks for the tip. I am just considering the option of buying a small quantity (no banker here), but feeling extremely wary of rogue sellers out there.
I'll check that bullionbypost, but buying gold on the internet gives me the creeps…
It's been pointed out to me before, that once one gets to the point where gold is the only currency, then it isn't – cartridges are the currency.
What is going on here? You'll be hoarding tins next. Anyhow probably better off with silver. But a bank or two or three goes down it doesnt mean the currency is gone does it?
I recommend Chard in Blackpool for physical Gold or Silver coins. They are professional, reliable and quick.
More details on their (somewhat messy) website:
http://www.taxfreegold.co.uk/
P.S. This is not investment advice as such (although diversfying a proportion of one's savings out of paper might be deemed prudent under the circumstances!) it is merely a supplier recommendation 🙂
Wirplit
"But a bank or two or three goes down it doesnt mean the currency is gone does it?"
A while ago, Newsnight’s Paul Mason made a quite poignant analogy of the crisis. He likened it to the film Alien, where the spilt acid blood (i.e. toxic debt) burned through the first deck of the spaceship (banks), then threatened the hull (Sovereign).
In a way the sovereign debt problems do in fact become a currency problem. Reinhart & Rogoff “This time is different” lists the linkages between banking crises and currency collapse, and it makes sobering reading. Here is my estimate of the timeline for the UK:
1) Financial liberalisation: 1997-2000
2) Asset speculation: 1999-2008
3) Banking crisis: 2007/8
4) Currency crash: 2008/9
5) Rising inflation: 2010-2011
6) Sovereign Default: 2012?
7) High inflation / currency collapse: 2013?
As for how common currency collapse is, not only the R&R book is a good source but also Ralph Foster’s “Fiat Paper Money” where he claims the demise of more than 6,000 fiat paper currencies over the centuries.
In the medium to long term all fiat currencies die. So from a Bayesian prior probability point of view the prospects are not good!
See this article too:
http://golemxiv-credo.blogspot.com/2011/04/guest-post-by-hawkeye-wall-street.html
"They've been standing there like a great big milling herd of bug-eyed Wildebeasts at a river crissing for days."
LoL couldn't help but think of this
http://www.youtube.com/watch?v=wcMuTsBFQTE
Recent article on Gold, and how it can be used as an inflation / currency breakdown hedge:
http://www.zerohedge.com/news/germany%E2%80%99s-best-selling-tabloid-bilds-front-page-encourages-readers-buy-gold
Although Gvts in crisis do have form in confiscating precious metals! Maybe we're damned either which way?
When I said 'gold vouchers' it was my tongue in cheek way of referring to the rather small, but rather heavy lumps of metal that I have secreted somewhere 🙂
It's worth recalling a March 2010 article by precious metals expert Ned Naylor Leyland: http://www.stockopedia.co.uk/content/gold-could-the-last-person-to-get-their-coat-please-turn-the-lights-off-39203/ .
One point: "The fact that Gold is manipulated and managed by Banks is a matter (repeatedly) of public record."
Leyaland concludes, however: "Once the genie gets out of the bottle properly and people do the research into the Gold market and come to understand that (as JP Morgan said) “Gold is Money. That’s it.” – the inflation-adjusted high from 1980 of $7500/oz will be the next important target. If and when Central Banks also enter the open market (rather than just participating in off-market IMF sales) – to add to their reserve base (China is still lingering around 0.5% of overall F/X reserves) all bets will be off and the EXIT FIAT sign will be flashing. At that point if you still don’t own Gold, you can be the cloakroom attendant handing out the coats, just be sure to turn the lights out afterwards."
Max Keiser had an interview with Leyland recently on the new pan-Asian Gold Exchange (a very interesting development): http://maxkeiser.com/2011/07/31/on-the-edge-with-ned-naylor-leyland/ . The implications of this development could be extremely significant.
Sorry, guys, but I find this diversion into the protection of your savings on what I thought was a lefty blog unsavoury.
Anyway, forget gold and silver, buy land, they ain't making any more of it and it's a whole lot more useful than precious metals.
Mind you, when the time comes you may find we have to fight you for it.
Re the manipulation of the gold and silver futures market by the likes of JP Morgan, Goldman Sachs and HSBC, the name to google for is ANDREW MAGUIRE, a bullion trader who blew the whistle on the scam in 2010 and was injured in a hit-and-run accident in London the day after he was revealed as the source.
The story was more or less ignored by the mainstream media.
Is this a lefty blog?
I thought it was free of pardigm?
I thought it was more like this,
a. Not limited to or by established, traditional, orthodox, or authoritarian attitudes, views, or dogmas; free from bigotry.
b. Favoring proposals for reform, open to new ideas for progress, and tolerant of the ideas and behavior of others; broad-minded.
That's straight out of the dictionary under liberal.
"Hey wait a minute there's one guy holding up both puppets". Bill Hicks.
Demon with gold, girls and a gateaway plan you'll end up with no gold, no girls and no getaway plan and wishing you had a gun 🙂
If you buy online with paypal you're insured up to a couple of hundred quid. And they always sort it out.
Carol and 24K,
I am left wing. I am also Green. But I hope I have not allowed my personal politics to make this an uncomfortable place for those with different political and philosphical views.
As 24K says I hope this blog is a brroad church open to the considered views of all comers. Though I would have to say I do not consider myself a liberal no matter how wonderful it sounds in the dictionary. Living in America has given me an aversion to the word.
It is my feeling, and has been from the start, that while our leaders and bankers are not in this with us, the rest of us are all in this together. And this moment in history is, I think, so important that we have to step above our philosophical differences and seek a way forward broad enough that we can go there together and not fall apart in narrow disagreements before we have even begun. I do no wish to demand a philosphical purity or required set of beliefs as a test of membership.
I am vehemently opposed to any sort of part political name calling on the simple grounds that they are all, as far as I am concerned, all as squalidly corrupt (both legally and morally) and bereft of imagination and moral fibre as each other.
As for econimics as a field of study it is a filthy and debased cess pit of failed ideas and amazingly stupid assumptions for which I would not give you a stale fart.
I am also deeply against all temptations to lay the blame on this nation or that people. It is, again in my opinion, far more helpful and accurate to see it as a global financial class who have no loyalty or concern for others, against the people of all nations.
I hope this makes my persoanl position clear.
I have hoped from the start, and still do, that this blog might serve as a gathering place for lively and enquiring minds who do not accept the received wisdoms of our failing age and are not afraid to advance ideas and speak up, to admit when they have been mistaken and to be considerate when suggesting to others that they also also be mistaken.
I consider it important to be able to be polite to one another. And more important to listen to those you disagree with than to congratulate those with whom you already agree.
We are all in this together, left and right, those with savings and those without.
What we need above all are people who can think clearly and fearlessly in the face of those who would tell us we should be quiet and leave it to those who are more 'qualified'.
Hmm,
sorry about the rather preachy tone of the last comment. I hope both Carol and 24K will forgive me.
That last comment will be there for a very short while, I promise 🙂
When I was a little boy I hated Brussels sprouts so much that I used to use mashed potato to stick them to the underside of the benches we sat on at lunch.
So be very careful who you're calling a Brussels Sprout.
@Golem,
Good comment. I'm not left wing or right wing and I find this kind of labeling both irrelevant and a distraction from the real issues. A good example, I find Karl Denninger one of the best truth tellers on the web regarding our broken financial system, but I don't agree with much his politics.
It sounds very much like my "love" for broad beans when little.
So, our beloved PM is studying the possibility of curtailing social networks to prevent riots…
http://www.guardian.co.uk/uk/2011/aug/11/cameron-call-social-media-clampdown
Where have I heard that before? Tunisia? Egypt? Iran???
He's so good he can twist the untwistable with his tongue:
"David Cameron says cuts programme will free up frontline police officers".
Hahahahahaha, what a chap! he's perpetually in Red Nose Day! I'm sure he's planning to try the same strategy in schools, to 'free up a few front-line teachers'…
Going to puke, will be back in a minute…
It was a great tone G.
Words seem twisted in politics. Liberal doesn't seem to mean what it means does it. How a political system can work when the description of words is abused is beyond me.
I was at an anti cuts meeting a couple of nights ago and they find it hard to fathom the coming together of everybody to fight the main issue. I think they worry and rightly so about frontline cuts at their locality, their doorstep. I'm gonna keep trying till I get some sort of banning order. The unions would be good too as they have cash for promotion of 'The One'.
You know I have a marvellous way with words but I don't know how to articulate it.
I think this is what everybody should be thinking about. So the many become one voice, one message that transcends borders and continents. Be hard for mainstream media to ignore it if that's the only thing happening, the only news. A feedback loop.
Nothing to forgive dude.
By the way, please have a look at this one:
https://secure.avaaz.org/en/no_blood_for_oil/?fp
"For months, Syria's brutal President Assad has paid henchmen to wage war on his own people. Governments across the world have condemned these atrocities, but key European leaders could cut off the cash flow that finances this bloodbath.
Germany, France and Italy are the three main importers of Syrian oil. If they move to impose immediate EU sanctions, Assad's slaughter funds will dry up. Assad has ignored political appeals for him to rein in his assault, and EU leaders have discussed ramping up sanctions, but only a massive global outcry will push them to act urgently.
We have no time to lose — every day dozens of Syrians are shot, tortured or disappeared simply for calling for basic democratic rights. The EU can stop subsidising it now. Sign the petition to EU heads of state to immediately adopt oil sanctions on Syria."
forensicstatistician:
Re: your timeline… Why should there be a sovereign default in 2012 if the debt is in Sterling (and, uniquely, the BoE can create as much Sterling as it wants, if push comes to shove)?
And 2013: currency collapse. But against who? Pretty much every currency is in the same boat, so who exactly does Sterling collapse against?
I don't have the answers, BTW, just asking…?
@ Golem
I don't pretend to fully understand all the technical economics & banking system stuff, but I think I have learnt enough here from you & others to get by & to understand the gist of what's going on. I do however fully understand your deep moral outrage. That is the main reason I am here.