The aim of this article is to explain the differences between investment solutions offering direct ownership (allocated) and mutualized (non-allocated) ownership of physical gold.
Risks tied to the actual financial context :
Two of the most important risks for investors in this financial crisis when investing in gold are :
- Counterparty risk : this is the risk investors face when they hold their investment through an intermediary instead of directly. They are [...]
For some time economists have been engaged in an arcane controversy about the significance of the imbalances in the joint settlement system used by eurozone central banks, called Target 2. In a series of contributions, Hans-Werner Sinn of the CESifo research group in Munich has drawn attention to the fact that central banks in the northern part of the eurozone were accumulating claims on central banks in the southern [...]
It seems that it is not just the Europeans that are USD cash starved heading into year-end as theSwiss and Japanese gorged themselves on two-week maturity FX swap lines during the last week. The total outstanding under the Federal Reserve’s USDollar Liquidity Swap Operations jumped from $62.599bn to $99.823bn – or more than 59% during the week ending 12/28. Admittedly, the size of the additional Swiss draw-down, $320mm more compared to $75mm the [...]
The Fed just released its ‘framework’ for thinking about planning to implement their proposals to take notice of the Dodd-Frank rules. There is little if any detail in here but the main points, via Bloomberg headlines from the 173 pages of admittedly well structured, but unclarifyingly disappointing prose are as follows:
*FED BOLSTERS TOOLS FOR AVERTING COLLAPSE OF BIG FINANCIAL FIRMS
*FED REGULATIONS FOCUS ON CAPITAL, LIQUIDITY, STRESS TESTS
*FED RULES TARGET [...]
The gold price took a hit yesterday, falling close to $1,700 before once again rebounding to $1,732 per troy ounce. Despite a Large Increase In Central Bank Demand And Investment Demand, both in Europe and in Asia, turbulence in precious metals does not come unexpectedly. MF Global’s bankruptcy has the potential to affect a large number of positions in commodities markets, once morehighlighting The Important Difference Between Paper Gold And Physical [...]
The initiative is supported by the World Gold Council, who recently submitted evidence to the Basel Committee for gold to be included in banks’ “Tier 1″ assets by European banking regulators, recognising gold’s growing relevance as a high quality liquid asset.
The “initiative” refers to the decision by LCH.Clearnet (London Clearing House) – the world’s largest clearing agency for fixed income securities – to accept [...]
Clearly a reckless federal government is good for gold – or more accurately, our collective can kickers in Washington, DC, are very bad for the dollar. Take a look at the very telling graph below.
Contrary to the disinformation campaign of Wall Street, and their Federal Reserve sponsored economists, gold is not a bubble. Central banks are now net buyers of gold, and not because of tradition, as Mr. Bernanke [...]
y Peter Tchir of TF Capital Markets
CDS for Doomers, Politicians, and the Media
About the only thing that the doom and gloom crowd, the politicians, and the media all agree on is that credit derivatives are evil, unnecessary, ‘financial weapons of mass destruction’. With the European Sovereign Debt crisis escalating, the CDS market has once again become a topic of conversation. Many of the issues related [...]
For those who care what the man whose corporate existence is intimately tied to the government’s bailout of the financial system, has to say, below we present Buffett’s 2010 letter to shareholders.
The only section that is relevant to us, and which continues to demonstrate why Berkshire is a walking moral hazard (contrary to his conedmnation of financial weapons of mass destruction), is the disclosure [...]