When Does Gold Matter?

You could ask that question to a hundred different people and get as many answers.  Quite likely most would have no answer at at.  Still, this video suggests that it can come to matter very quickly in the right circumstances.  Can you think of any reason that someone a) might want to own gold, and b) might want to slip it from Italy to Switzerland?  (Hint: Cyprus just might be part of it!)


This reminds me of some famous quotes from the last few years.  Most apropo might be Charlie Munger's "Gold is a great thing to sew onto your garments if you're a Jewish family in Vienna in 1939 . . ."  Or, apparently, an Italian family in 2013.  We can all learn from Charlie in the video below.

Cyprus Confiscates Gold!

Mark Grant, writing for ZeroHedge, reports on a move that precious metals holders everywhere have long feared.

"Please note that until yesterday all depositors in Cypriot banks were insured up to the value of €100,000 with any one bank. Today that solemn governmental promise has been shown for what it is; a lie. Worse and actually far worse and quite scary in fact is that the European Union and the European Central Bank and the IMF has not just allowed violation of the deposit insurance but demanded it. One thing is certain here; if they can void deposit insurance in Cyprus then they can void it in any country in Europe. Further; if they can void deposit insurance then they can void bond covenants with the scratch of a pen on paper. Nothing now; Nothing is safe!"

What's that   You missed the part about gold confiscation?  So did I, and that's the point.  Cash in a bank is a remarkably easy target for politicians and bureaucrats eager for a fix.  To be clear, so are ETFs purporting to hold gold, and even mining shares.

When things get bad, really bad, the safest counter-party is no counter-party at all.  Parents, it's 10:00.  Do you know where your gold is?