LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Wealth Accumulation Is Becoming Impossible
By: Keith Weiner, Monetary Metals

Gold Market Reaction: Tactics For Exhilaration
By: Stewart Thomson

Yes, Gold “Just Sits There” and That’s Quite a Feat
By: Clint Siegner

Precious Metals Update Video: Gold is stuck in a sideways market
By: Ira Epstein

Effect of QE4 on the Stockmarket and Gold...
By: Clive Maund

SWOT Analysis: The Dutch National Bank Is Bullish on Gold
By: Frank Holmes, US Funds

Quick Recap of the Fed’s Foundering Follies and Our Descent into Economic Madness
By: David Haggith

The Gold Stock Correction and What Lay Ahead
By: Gary Tanashian, NFTRH

Precious Metals Update Video: Gold strong support below
By: Ira Epstein

Dollar Update (video)
By: Gary Savage

 
Search

GoldSeek Web

 
Gold Confiscation, a Reality? Part III



-- Posted Friday, 20 January 2012 | | Disqus

 

Gold and Liquidity

http://news.goldseek.com/GoldForecaster/images/specialreport.jpg

The issues facing the developed world’s financial systems are ones of liquidity and solvency, among others. The assumptions of liquidity levels proved horribly incorrect! The request of the IMF to lift their resources from $380 billion to $980 billion and the currency swaps between the U.S. and Eurozone confirm that (these may still prove inadequate). Many markets, which reserve managers had considered to be deep and liquid, proved to be the exact opposite with assets-selling only at a large discount. This was even true of some AAA-rated assets, showing that credit ratings offered no effective guide to liquidity. Many central banks had to rely on bi-lateral currency agreements with other central banks, principally the US Federal Reserve.

 

The situation is heading for even stormier waters on both sides of the Atlantic. But true to history, the gold market remained liquid throughout the financial crisis. This was the case even at the height of liquidity strains in other markets –a reflection of the size, low market concentration, and flight to quality tendencies of gold. As we said earlier: the Swedish Riksbank used its gold reserves at the height of the crisis to finance temporary liquidity assistance.

 

A look at what we have said so far in this series answers the question that gold confiscation can really happen, but the question of when and under what specific conditions remain. We look at this now…

 

Confiscation of Citizen’s Gold

To get the issue in perspective, gold as a financial asset –providing liquidity as cash should do but doing so globally—is strongly on the rise, irrespective of its price. A look forward into 2012 points to deeper and more confidence-destructive financial crises, if not worse than we have seen in 2011. With the problems being structural and so far inadequately addressed, expect to see some deep damage done to the developed world’s financial system and most likely its banking system. Gold as a financial asset may provide a safety net as well as the means to repair national currencies. All the world’s currencies are interlinked, and banking systems are telling us that gold has already swung into action to provide financial relief. But it will need to see a very large expansion of this role if it is to defer or rectify these crises.

 

In a crisis the price of gold becomes irrelevant, it is the number of ounces you have that counts!

 

That’s why the surplus earning worlds central banks are buying gold at the expense of currencies, particularly the U.S. dollar. We would go so far as to say that all the world’s central banks are very aware of the need to continue to use gold in the monetary system and more pertinently, that that role is growing, much as they hate that prospect.

 

Should the crises continue to grow this way, we have no doubt whatsoever that governments will consider confiscating their citizen’s gold. There’s a point in a decline in currency confidence where this is inevitable! Expect that developed world, central bankers have laid down contingency plans for just such an event.

 

Should they do so, it will likely be done at a weekend when markets are closed and when their citizens will not have time to take action to prevent such a confiscation. It will be overnight, and gold will be gone. As in 1933, the penalties for not handing over personally owned gold will be draconian. Gold held within a nation confiscating their citizen’s gold in the country’s banks will be handed over without reference to the clients themselves first.

 

(After more than a year’s delay, we’re informed that there is now an entity whose objective is to counter any attempt to confiscate citizen’s gold. We will be informing Subscribers about this.)

 

Member’s only:

Is Confiscation Immanent?

Get the rest of the report. Subscribe @

www.GoldForecaster.com / www.SilverForecaster.com

 

Legal Notice / Disclaimer

This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.  Gold Forecaster - Global Watch / Julian D. W. Phillips / Peter Spina, have based this document on information obtained from sources it believes to be reliable but which it has not independently verified; Gold Forecaster - Global Watch / Julian D. W. Phillips / Peter Spina make no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Gold Forecaster - Global Watch / Julian D. W. Phillips / Peter Spina only and are subject to change without notice. Gold Forecaster - Global Watch / Julian D. W. Phillips / Peter Spina assume no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, we assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information, provided within this Report.


-- Posted Friday, 20 January 2012 | Digg This Article | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.