Money: Going Tactical
March 30th, 2007WARNING: This is not a recommendation to buy sell or hold any financial instrument.
UPDATE 6 April 2007: Bank of America Delays BullionValut Deposits
In the post below, I discussed how I wanted to immediately move some of our money into gold using the BullionVault system. I did, indeed, try to move some money to BullionVault. I used the electronic payment option for customers with U.S. bank accounts and followed BullionValut’s instructions exactly. Since I haven’t used BullionVault before, I decided to try it out by moving a small amount of money at first.
I’m a Bank of America customer and BullionVault uses Bank of America to receive funds from clients with U.S. bank accounts. If you were to use BofA’s system to pay anyone, a slow payment would take four days. I’ve never had it take longer than that. It has been a week since I made the payment to BullionVault, and Bank of America finally said that it was complete on April 3rd.
The money STILL hasn’t shown up in BullionVault.
I emailed BullionVault:
I should be showing a deposit of US$ to BullionVault user account [DELETED]. Do you know what the story is with this?
I sent this payment several days ago, and my bank only indicated that it was delivered to BullionVault’s Bank of America account on 3 April.
Transaction Description: BANK OF AMERICA, N.A. Bill Payment
Date: 04/03/2007
Reference Number: [DELETED]
Amount: $[DELETED]I’m a Bank of America customer so I didn’t expect delays like this.
Thanks,
Kevin Flaherty
BullionVault promptly wrote back:
Dear Mr Flaherty,
Thank you for your email.
I can see your deposit pending on our Bank of America system – it should clear in the afternoon of the next working day (this will now be Tuesday 10th April, as we have Easter bank holiday Friday and Monday).
We have complained to BOA about these delays, but it seems they process these particular payments manually. We are currently looking into ways to improve this system.
Let me know if you have any questions, or if I can help in any way.
Regards
I must say, even I wasn’t paranoid enough on this. I expected the transaction to simply be noted in some Homeland Security database. Obviously, it’s all being archived in some crypt, forever. But held up and an inspected for manual processing? Again, even I wasn’t paranoid enough.
There is obviously a national security component to this type of transaction. While Bank of America processes millions of transactions per day in an automated manner, moving a few hundred dollars into a physical gold trading account requires manual processing… If you are inside the U.S., or have assets there, this type of nonsense represents a clear and present danger to you and your money. Only criminal regimes behave like this.
If this is happening now, what will be your chances of getting money out of that thing in the wake of a crisis? It’s like someone said it a comment on the post, “Zürich seems like a long swim to get your assets.”
Before even mentioning BullionVault, I warned people to TAKE PHYSICAL POSSESSION OF THE STUFF. Pay cash for it at a coin shop. The only reason I didn’t take my own advice is because New Zealand has less than a thriving precious metals market. However, that wasn’t a good enough excuse to break my own rule.
I honestly feel that BullionVault is a first class operation and that they are sincerely doing their best. I cannot, however, recommend this service for U.S. bank account holders, unless you are prepared to physically travel to your Brinks vault of choice to recover your gold in the event that the U.S. government bans gold ownership again, (BullionVault explicitly allows this in case the regime in your banking country turns overtly criminal). The U.S. has gone too far down the path of fascism for a service like this to be viable for Americans. I questioned Paul Tustain, the Director of Bullion Vault, about this and I am satisfied with his response. I am a Bullion Vault customer, and I have been pleased with the service so far.
– – – End Update – – –
The situation in the Persian Gulf could become a crisis for “life as we know it” at any moment. Personally, after the Zbigniew Brzezinski Senate drama, I didn’t think it was going to come to this. But here we are.
The situation hasn’t blown up yet, but Becky and I are now planning as if it will.
It seems sick to be thinking about money at a time like this, but money provides options during a crisis.
If the U.S. engages Iran in a military conflict, all of us, everywhere, are probably in VERY deep shit.
Becky and I don’t have much money saved, but we’re looking at this situation and all we see are bubbles. Real estate bubbles. Currency bubbles. Equity bubbles. The situation with Iran might be the thing that throws gasoline on the already smoldering real estate situation.
I know of no reliable way to save “money” in a time of crisis. Even cash savings are bets on fiat national currencies. Most of what little we have is in New Zealand dollars. The rest is in U.S. dollars. If this strategy had a name, it would be, “Dumb and Dumber.”
Besides just going to town and spending our meager savings on tools, sacks of grain, etc. what other options are out there for people once their strategic requirements are met? <--- This isn't a rhetorical question that I plan on answering. I'm asking you because I don't have any good answers. Nobody wants to admit this less than me, but I may need to revisit gold here, as a hedge against the "bet" Becky and I have made by holding New Zealand dollars. This would represent the biggest plate of crow I've ever had to eat on Cryptogon. My official position on gold, stated several times, is that it can't be trusted because it's traded in leveraged fiat currencies. Gold's price is not actually determined by supply and demand. I've written about this over and over again, but if you want more detail, see this comment.
How about FOREX? A small amount of capital could be used to hedge via currency trading. Hint: Very wealthy people pay professionals to do this for them. But what if there are network problems? Liquidity problems? Exchange problems?
This feels like a situation where there’s no good choice on how to proceed. As an analyst, I hate it when that happens. But if this thing goes down with Iran, I think it’s going to affect all of us.
Is gambling the only option? If not, what are the non-gambling options for wealth preservation? If gambling is the only option, which gambles have the best odds?
Becky and I are looking at shifting about 10% of our cash into gold immediately via BullionVault, with vaulting in Zürich. This seems like the least bad option.
If you have a plan, consider sharing some information in a comment. Maybe we can all come up with some ideas.
[…] If you’re a gambling person, this might be good bet. (Hint: We’re all gamblers now, whether we like it or not.) […]
[…] PLEASE NOTE: Bullion Vault is also mentioned heavily on Money: Going Tactical. […]
I have a GoldMoney account. I think this is a good way to hold gold. You don’t have to worry about money transfers from banks. You can buy gold grams from Kitco in Montreal, and send them a check in US dollars. Then Kitco will transfer the gold from their GoldMoney account to yours. You don’t have to buy gold directly from GoldMoney, and Kitco’s price is about $10 per ounce cheaper than GoldMoney. GoldMoney now has cash holdings in Euro, USD, CAD, and Pounds. When you sell gold, the cash will be held in an account at a bank in the Channel Islands, until you send it back to your home bank. If there are problems, you can open an offshore bank account and wire the funds there. You can have as many bank accounts linked to GoldMoney as you want, as long as they’re in the same name as your GoldMoney account. GoldMoney will be offering vaulting in Zurich in September. Switzerland has never confiscated anyone’s assets.