Clients Denied Gold at Major Banks as Shortage Intensifies
mrearlygold
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Clients Denied Gold at Major Banks as Shortage Intensifies
by Egon von Greyerz
Matterhorn Asset Management AG / Gold Switzerland
“This week I want to talk about what we are seeing in the physical gold market, and why there is a disconnect in that market. We transfer a lot of gold from Swiss banks and other banks into private vaults for investors.
More often now, than ever, we are encountering incidents when the banks are putting up all kinds of obstacles for these transfers. Signs of potential shortage of physical gold started with ABN AMRO in March (when they) declaring that they would renege on their commitment to redeem gold accounts in physical gold….
“Instead they would redeem in cash. The custodian for ABN AMRO, for the gold, is UBS, and UBS decides to what extent they hedge the ABN paper gold position and where in the world they hold it in storage.
So as there is no more physical redemption of the ABN AMRO gold accounts, it seems therefor that these accounts are no longer backed by physical gold. It’s just backed by paper, and this is of course typical for the paper market, Eric. this paper market, which is 100 times bigger than the physical market, probably has zero percent backing of physical. This is why ABN stopped redeeming in gold.
Then, last week we had an investor being refused to take his physical gold out of a major Swiss bank. They told him that the regulatory authority prevented the bank from giving the client his physical gold. That is of course total nonsense, and eventually we helped the client to get his gold out of the bank.
Another of our clients was told by a major Swiss bank that he can only take out 100,000 Swiss francs of physical gold every six months. They blamed money laundering and terrorist activity for this decision. Yet another client was again told by a major Swiss bank that his storage fees would be going up substantially. When he complained he was told that he should convert to paper gold
And finally, Eric, another big bank, which has an ETF, told a client who wanted to transfer gold out it that he would have to wait at least two weeks for the transfer. You just wonder why a major bank that is supposed to hold substantial amounts of physical gold needs two weeks of more to transfer gold to a client.
So all of this, Eric, points to the fact that there is a major shortage of physical gold in the banks. These banks obviously don’t want to lose customers, but their behavior and the reluctance to deliver also points to a real shortage in the physical market.
So the disconnect between the paper and the physical market (for gold) is continuing. Refiners still have major production delays and demand continues to be very high, ‘No matter how much they produce,’ as one refiner told me today. And premiums are still high also.”
Click HERE to listen to the same full KWN Interview on this subject 20 May, 2013
Reprinted from Matterhorn Asset Management AG / Gold Switzerland.
LINKIFIED
by Egon von Greyerz
Matterhorn Asset Management AG / Gold Switzerland
“This week I want to talk about what we are seeing in the physical gold market, and why there is a disconnect in that market. We transfer a lot of gold from Swiss banks and other banks into private vaults for investors.
More often now, than ever, we are encountering incidents when the banks are putting up all kinds of obstacles for these transfers. Signs of potential shortage of physical gold started with ABN AMRO in March (when they) declaring that they would renege on their commitment to redeem gold accounts in physical gold….
“Instead they would redeem in cash. The custodian for ABN AMRO, for the gold, is UBS, and UBS decides to what extent they hedge the ABN paper gold position and where in the world they hold it in storage.
So as there is no more physical redemption of the ABN AMRO gold accounts, it seems therefor that these accounts are no longer backed by physical gold. It’s just backed by paper, and this is of course typical for the paper market, Eric. this paper market, which is 100 times bigger than the physical market, probably has zero percent backing of physical. This is why ABN stopped redeeming in gold.
Then, last week we had an investor being refused to take his physical gold out of a major Swiss bank. They told him that the regulatory authority prevented the bank from giving the client his physical gold. That is of course total nonsense, and eventually we helped the client to get his gold out of the bank.
Another of our clients was told by a major Swiss bank that he can only take out 100,000 Swiss francs of physical gold every six months. They blamed money laundering and terrorist activity for this decision. Yet another client was again told by a major Swiss bank that his storage fees would be going up substantially. When he complained he was told that he should convert to paper gold
And finally, Eric, another big bank, which has an ETF, told a client who wanted to transfer gold out it that he would have to wait at least two weeks for the transfer. You just wonder why a major bank that is supposed to hold substantial amounts of physical gold needs two weeks of more to transfer gold to a client.
So all of this, Eric, points to the fact that there is a major shortage of physical gold in the banks. These banks obviously don’t want to lose customers, but their behavior and the reluctance to deliver also points to a real shortage in the physical market.
So the disconnect between the paper and the physical market (for gold) is continuing. Refiners still have major production delays and demand continues to be very high, ‘No matter how much they produce,’ as one refiner told me today. And premiums are still high also.”
Click HERE to listen to the same full KWN Interview on this subject 20 May, 2013
Reprinted from Matterhorn Asset Management AG / Gold Switzerland.
LINKIFIED
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Comments
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>Interesting.... if this continues, gold will make another run up.....glad I have the physical. Cheers, RickO >>
you and a few others rick
<< <i>Interesting.... if this continues, gold will make another run up.....glad I have the physical. Cheers, RickO >>
to some extend, I bet you could say the same about silver. Look what happened a few weeks ago when the price dropped and everyone tried to buy creating one huge waiting list!
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Knowledge is the enemy of fear
Could the threat to price fixing have been reason to take Hong Kong down?
Maybe all eastern metal futures exchanges are on the endangered list.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>An awful lot of people think they own gold, but all they own is paper. >>
But paper is easier and more convenient to trade and store.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>
<< <i>An awful lot of people think they own gold, but all they own is paper. >>
But paper is easier and more convenient to trade and store.
And it can be used to wipe your tush if necessary!
<< <i>
<< <i>
<< <i>An awful lot of people think they own gold, but all they own is paper. >>
But paper is easier and more convenient to trade and store.
And it can be used to wipe your tush if necessary! >>
Just like Federal Reserve Notes.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
3 men were arrested in Hong Kong and in their possession were $500 million worth of “fraudulent” letters of credit, letters of guarantee and proof of funds; these were supposedly issued by HSBC and Standard Charter. A 4th man arrested was not named, only that he is 55 years old. Which coincidentally is the same age as Barry Cheung who sits (sat until his resignations this past week) on the boards of several government agencies, he was chairman of HKMEX and has very close ties to the CEO of Hong Kong, Mr. CY Leung. The investigation and arrests are tied to the HKMEX (metals exchange) that closed a week ago Friday and claimed that all open contracts would be settled in cash…not metal.
I knew it would happen.
also believe,
If a tree falls in the forest but no one is there to hear it, it doesn't make a sound.