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UK Citizens Look To Withdraw Funds From EU Countries After Cypriot Decision

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The decision in Cyprus to rob depositors was always going to have a negative outcome. The following story from ZeroHedge should come as no surprise that worried UK expats are looking to move their funds away from countries that have perceived banking weaknesses. We clearly have entered a new era which can only have a positive outcome for precious metals as a way to preserve your wealth from confiscation.

UK’s deVere advisory group reports, “more and more expats in Spain, Italy, Portugal and Greece are now not unreasonably worried for their deposits in these countries,” and are seeing a “surge” in the number of British expats seeking advice about moving funds out of eurozone’s most troubled economies. As EUBusiness reports, “Whether the institutions like it and accept it or not, there is a real risk of a major deposit flight from these countries as people feel their accounts could be plundered next.” It is hardly surprising obviously (as we noted earlier the bid in German bunds) but we fear this escalation in cash exodus from the periphery will increase the need for a broader EU capital control scheme sooner rather than later.

 

Via EUBusiness,

Independent financial advisory company deVere Group on Tuesday reported a “surge” in the number of British expats seeking advice about moving funds out of some of the eurozone’s most troubled economies following the Cyprus bailout deal.

According to deVere Group chief executive Nigel Green, “more and more expats in Spain, Italy, Portugal and Greece are now not unreasonably worried for their deposits in these countries.”

He added: “Over the last week, since the messy deal to bailout Cypriot banks began, our financial advisers in these areas have reported a significant surge in enquiries from expats who are looking to safeguard their funds in other jurisdictions which are perceived to be safer.

Whether the institutions like it and accept it or not, there is a real risk of a major deposit flight from these countries as people feel their accounts could be plundered next.”

Jeroen Dijsselbloem, who heads the Eurogroup of finance ministers, said the costs of bank recapitalisations should not fall on tax payers, but on bondholders, shareholders and, if necessary, uninsured deposit holders.

Source: ZeroHedge

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NY Fed Does Not Have Germany’s Gold

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According to the Bundesbank press release 16th Jan 2013, the Bundesbank is planning a phased relocation of 300 tonnes of gold from New York to Frankfurt as well as an additional 374 tonnes from Paris to Frankfurt by 2020. James Turk asks why take 7 years for Germany to get its gold back from New York when it should be able to get it back in 7 weeks, unless it was never there.

The Bundesbank made another suspicious statement when it claimed that it would leave its remaining gold reserves in New York untouched because it is a major trading centre, but this clearly in not true. Most of the trading is done through London and Zürich.

Today James Turk told King World News that the German gold is being held hostage by the Fed.  Turk also believes that one portion of the Bundesbank’s press release was particularly misleading.  Turk reveals the reality of what is taking place with Germany’s gold, and it’s not what the mainstream media and the Bundesbank are telling people.

 Here is what Turk had to say in this extraordinary interview:  “It’s quite clear that the German gold is being held hostage.  They are not getting what they want.  They are getting what the Federal Reserve is telling them they can have.  The fact that they are doing it over 7 years rather than 7 weeks, is just an indication that gold probably isn’t in the Federal Reserve, and the Federal Reserve doesn’t want to have to go out and buy it overnight to fulfill the German demand.  They are trying to stretch it out as long as possible in order to keep gold prices controlled.”

“I mean you can do 5 tons at a time on an airplane shipment.  A few hundred shipments and you can have that (1,536 tons of) gold back (in Germany) in a matter of weeks.  The only possible conclusion you can make is the gold isn’t there. 

You can do what France did back in the 1960s….

“You send over a couple of ships and bring the gold back to your country that way. 

When Charles de Gaulle asked for his gold out of the Federal Reserve, it didn’t take 7 years.  He got it right away.  But back then the gold was in the Federal Reserve because it wasn’t going out in the leasing and lending program that governments have been using in recent years in order to keep the gold price suppressed.

Recently, the Audit Committee of the Bundestag (their parliament),  has been requesting that the Bundesbank actually audit the gold because it has never been audited, and presumably is never going to be audited.  So the Bundesbank is in a tough spot.  The gold is not there, but they have the pressure to audit it and bring it back home. 

The fact that they (Fed) are not sending the gold back right away, to me is just a clear sign the German gold is being held hostage.  It’s potentially a powder keg here in terms of how the gold market is positioned at the moment because there is so much paper (claims on gold) out there, relative to so little physical, that a lot of paper gold is going to be defaulted upon.

 It will be interesting to see whether this leads to other central banks also asking for their physical gold.  And more importantly, since there are so many paper (claims on gold) in the various gold ETFs around the world, it will be interesting to see whether the institutional investors are starting to recognize what the central banks are doing, and take some of that GLD and all of the other ETF paper and start saying, ‘Look, I don’t want shares, I actually want ounces.  Deliver me the physical metal.’

There is another point here, Eric, that needs to be considered.  The Bundesbank made this announcement, but I think they were just trying to put it out in the best possible light.  I believe they were trying to stretch for reasons in order to explain why they are still leaving physical gold in New York.

They said, for example, that New York is a trading center for physical gold.  That’s not true.  It’s not been a trading center for physical gold ever since 1933, when the gold was confiscated by Roosevelt and all of the physical gold trading went to Europe.

That’s why in the physical market you talk about London or Zurich.  You never talk about New York because there is no physical gold trading in New York.  It’s just a bogus excuse you see in this announcement.  It’s just more evidence to me the gold isn’t there.  It’s been taken out of the vault and used surreptitiously in order to try to cap the gold price.”

Source: King World News

2013: Let The Currency Wars Truely Begin

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Up until now the G20 countries were shafting each other quietly through various means of currency devaluation. Many new terms for printing money were added to the lexicon. Lately the rhetoric has begun to get more aggressive. ZeroHedge writes of the Russia’s Central Bank Chief’s warning that “the world is on the brink of a fresh currency war”. Along with gold repatriation stories, 2013 is shaping up to be a tough year ahead for Central Bankers.

It will not come as a surprise to anyone who has spent more than a few cursory minutes reading ZeroHedge over the past few years (back in 2009, then 2010, and most recently here, and here) but the rolling ‘beggar thy neighbor’ currency strategies of world central banks are gathering pace. To wit, Bloomberg reports that energy-bound Russia’s central bank chief appears to have broken ranks warning that “the world is on the brink of a fresh ‘currency war’.” With Japan openly (and actively) verbally intervening to depress the JPY and now Juncker’s “dangerously high” comments on the EUR yesterday, it appears 2013 will be the year when the G-20 finance ministers (who agreed to ‘refrain from competitive devaluation of currencies’ in 2009) tear up their promises and get active. Rhetoric is on the rise with the Bank of Korea threatening “an active response”, Russia now suggesting reciprocal devaluations will occur (and hurt the global economy) as RBA Governor noted that there is “a degree of disquiet in the global policy-making community.” Critically BoE Governor Mervyn King has suggested what only conspiracists have offered before: “we’ll see the growth of actively managed exchange rates,” and sure enough where FX rates go so stocks will nominally follow (see JPY vs TOPIX and CHF vs SMI recently).

Via Bloomberg:

The world is on the brink of a fresh “currency war,” Russia warned, as European policy makers joined Japan in bemoaning the economic cost of rising exchange rates.

Japan is weakening the yen and other countries may follow,”

 …

 The push for weaker currencies is being driven by a need to find new sources of economic growth as monetary and fiscal policies run out of room. The risk is as each country tries to boost exports, it hurts the competitiveness of other economies and provokes retaliation.

 Yesterday “will go down as the first day European policy makers fired a shot in the 2013 currency war,” said Chris Turner, head of foreign-exchange strategy at ING Groep NV in London.

 …

 The skirmish may lead to a clash of G-20 finance ministers and central banks when they meet next month in Moscow, three months after reiterating their 2009 pledge to “refrain from competitive devaluation of currencies.”

 While emerging markets have repeatedly complained about strong currencies as a result of easy monetary policies in the west, the engagement of richer nations is adding a new dimension to what Brazilian Finance Minister Guido Mantega first dubbed a currency war in 2010.

Source: ZeroHedge

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