| 07 October 2008
Well, I haven’t been blogging here for a few weeks, because as I explained
I was taking some well deserved rest and relaxation. But, I certainly came back
with a bang – right in to the middle of what already is the most serious
global financial crisis in generations, despite the US Treasury and others still
claiming that they are trying to “avert” a crisis.
Unsurprisingly, troubles with big banks in the USA have spread into the offshore
orbit, with UK taxpayers bailing out an Isle of Man bank (Bradford and Bingley)
and the Luxembourgers bailing out their local arm of Fortis, the former Banque
Generale du Luxembourg where I used to do international corporate business some
years ago.
Any illusion of free markets disappeared long ago. This might account for why
the dollar is stronger than it was a few months ago despite the Fed printing
seven hundred billion more of them! (Any rational person can see that this just
adds to the debt and cannot be good for the long term) The price of gold has
been topsy turvy lately and only risen marginally until now, despite an unprecedented
shortage which has means very
few people can actually get their hands on physical gold at the moment.
The fact that an unprecedented demand does not drive the price higher tells
us a lot about how these markets are being manipulated. Still, gold is the ultimate
‘safe haven’ store of wealth and I’m sure the price is set
to go a lot higher – at least in dollar terms.
On the subject of gold, I am advising clients more than ever to buy real, physical
gold – if they can! Gold ETFs, which have become very popular in the last
year or two, are not a substitute for the real thing. What if the bank or fund
manager goes out of business? What if trading in the shares is suspended, as
for example short selling was just suddenly banned? What if the whole exchange
is suspended as has happened in the past? Shares can be subject to massive manipulation
and liquidity problems. I believe we will see dual gold prices from now on –
one ‘official’ spot price which ETFs will try to track, and another
price for physical dictated by pure supply and demand. This will be the real
free market price at which you can actually buy and sell real gold in the real
world.
So how does one go about buying real gold? There’s no easy answer to
that. I asked one of my bankers about buying gold just last week, and the response
was that the storage, transport and audit fees would be very expensive, but
that it was possible, but that ETFs or Perth Mint Certificates would be much
better. When I finally got across the message that I wanted to receive several
hundred thousand euro’s worth of gold in my hands and walk out of the
bank with it, I was told that the compliance department would never countenance
it. So apparently they were quite happy to sell me a product, but not for me
to actually take possession of it! That might sound bizarre to most people who
are used to buying and selling most kind of goods, but it does not surprise
me in the least. That is just typical of today’s financial system!
If you would like to know where you can really buy gold and receive it, there
are some links
on this page which I will also be updating and adding to shortly as time permits.
Watch this space for more!
P.S. I have set up a page on Twitter, at which you can see my tweets –
very short commentaries of 150 characters or less. Check http://www.twitter.com/qwealth
Peter Macfarlane is joint editor of The Q Wealth Report an established
newsletter dedicated to informing readers about creating, protecting and growing
wealth in a secure offshore environment. It also covers international living,
banking, retiring and investing. Visit www.QWealthReport.com
to see more.
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The Q Wealth Report
Peter Macfarlane of The Q Wealth Report blogs on Freedom, Wealth and Privacy
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