It’s very early Monday, and I’m “up and at em’” because I feel so passionate about today’s topic. The day’s just started, but despite the 153rd “Sunday Night Sentiment” raid (actually, a mere “capping” this time), and 681st “2:15 AM” EST attack of the past 784 trading days, gold is back over $1,340/oz, and silver again challenging the Cartel’s maniacal “line in the sand” at $20/oz. As it should, as per yesterday’s “gold panic-selling” article, last week – particularly, Friday afternoon – was one of the most egregious Cartel manipulations I have seen. Let alone, as the weekend’s only “news” was that Japan’s 2Q GDP was a much lower than expected 0.0% – just like in Animal House, LOL. And FYI, care of history’s most insanely stupid monetary policy, the Bank of Japan, which is already a top 10 holder of more than three-quarters of the Nikkei’s 225 stocks, is projected to be the top holder of a quarter of the Nikkei’s stocks by the end of next year – at one fell swoop, exposing the “myth of QE to Infinity” and launching Japan’s “end game of communism.”
Of course, the Cartel’s motivation- aside from its relentless long-term goal of averting the inevitable collapse of history’s largest, most destructive fiat Ponzi scheme – is simple. I.e., its short-term desperation to prevent its record high naked short positions from blowing sky high; in silver’s case, above the massive, three-year resistance level of its 50-month moving average of $20.45/oz; and in gold’s case, the powerful “downtrend line” created by hideous, blatantly orchestrated “named storm,” attacks like September 2011’s “Operation PM Annihilation I,” December 2011’s “Operation PM Annihilation II,” February 2012’s “Leap Day Violation,” and April 2013’s “Alternative Currency Destruction.” Inevitably, these resistance levels will be blown out of the water by an unprecedented global buying surge. Which, given the expanding collapse of the world’s political, economic, social, and monetary order, is becoming more imminent each day.
Which brings me to today’s extremely important topic – of not just the importance of properly storing physical Precious Metals, but all of one’s monetary assets. Not that I haven’t discussed this topic at length before, in countless articles and podcasts. However, as the dangers to of theft; confiscation; and now, “bail-ins”; have become so acute, I thought it was the perfect time to publish a “treatise on money storage” – with suggesting an immediate call to action.
The catalysts for this article were threefold; but frankly, so many ominous events are occurring, I could have cited a dozen others. First, last month’s Bank Monte Paschi “bailout” announcement – which frankly, is nothing of the sort, as the dying bank, Italy’s third largest, must sell €9 billion of bad loans, and raise €5 billion of new equity by year-end, before even qualifying for the government guarantees constituting said “bail-out.” Which, I might add, starkly conflicts with the Eurozone’s official policy, as of January 2016, of bailing in depositors, Cyprus-style. Which frankly, is what I ultimately anticipate will occur at Monte Paschi – as unless the ECB breaks its own rules, by covertly buying the bad loans and BMP’s new equity, it strains credibility to believe such demands will be met.
Secondly, was last week’s news that a German bank will officially charge a negative 0.4% interest rate on deposits above €100,000, in response to the ECB’s horrifyingly destructive NIRP policy. And last but not least, last week’s hack of the largest Bitcoin exchange, Bitfinex, of roughly $60 million worth of Bitcoin. While the hack not even close to the $450 million of Bitcoin siphoned from the now defunct Mt. Gox exchange 2½ years ago, it was a major blow to the Bitcoin community – particularly given Bitfinex’s’ arbitrary decision to “socialize” the losses, by commandeering 36% of all accounts’ values, in the first-ever Bitcoin bail-in.
Ironically, the principal reason the hack occurred is because Bitfinex was the only exchange to offer margin trading, as well as the ability to “borrow” others’ Bitcoin for the purpose of short-selling. Consequently, the CFTC, or Commodities and Futures Trading Commission – you know, the criminals that refuse to acknowledge Precious Metal manipulation – said Bitfinex could not “cold store” customers’ Bitcoin if it offered margin trading. Subsequently, due to a combination of the vulnerability of “hot” (i.e, online) Bitcoin storage, and outright fraud, the hack occurred. I’ll speak more on that in a moment; but suffice to say, the subsequent article I read, titled “the latest Bitcoin hack should make you worried about your money” – not just Bitcoin, but all money – was a major catalyst for this article.
Generally speaking, the storage of one’s “money” – be it fiat currency, Precious Metals, or Bitcoin – is becoming as hot of a topic as the type of money one holds. In the case of fiat currency, which I very, very loosely call “money,” as it barely qualifies under money’s classical definition, the risks of holding it at all are rising each day, as Central banks, and financial markets, are destroying their purchasing power at an accelerating – and in many cases, parabolic – rate.
Notwithstanding, the risk of holding fiat currency at any financial institution is equally acute, given the rising risk of bail-ins and negative interest rates. In the latter case, the aforementioned German example should serve as a warning of what’s to come in much – if not most – of the Western world. As for the former, keep in mind that “bail-ins” are now the official policy of Europe, as well as other Western nations. Which in my view, will be wielded sooner rather than later, on the grandest of scales – particularly in basket cases like Greece, per this weekend’s ominous news that Greeks must immediately declare every asset they own, in preparation for an upcoming “wealth tax.”
Heck, before the ground-breaking Cypriot bail-in of March 2013, the U.S. FDIC, or Federal Deposit Insurance Corporation, published a joint “white paper” with the Bank of England, recommending a similar policy of bail-ins as a template for what should occur here. This, in yet another example of how rapidly governments react to danger as it occurs, such as the late 2008 House of Representative discussions regarding the potential commandeering of privately-held IRAs amidst the heart of the Great Financial Crisis. Which, in my view, will be back “front and center” when the next crisis hits; likely, utilizing the “MyRA” program launched in early 2014, as characterized by this Sovereign Man article. In other words, the faster things fall apart, the more rapidly – and draconianly – governments will react.
As for Bitcoin, the problem stems more from the industry’s immaturity than anything else, in my view. This is why exchanges are still run by private individuals with little experience in such ventures – much less, exchanges experiencing parabolic growth. This is why I have personally moved my Bitcoin “offline” – to an amazing flash-dive-like device called a Trezor – which for $99, protects you entirely from hacks like Mt. Gox and Bitfinex. And more importantly, gets your Bitcoin “out of the system,” in the same manner of holding Precious Metals at home, or in Miles Franklin’s segregated storage programs with Brink’s Canada. To that end, I cannot recommend my friend Adam Meister more emphatically. Adam, known in his free, daily podcasts as the “BitcoinMeister,” is an expert on all things Crypto-Currency, and reminds me a lot of myself. He recently helped me move my Coinbase-purchased Bitcoin to a Trezor; and for anyone interested in doing so themselves, I highly recommend his consulting services – as discussed here – which I assure you, will be worth his fee of 0.2 Bitcoin.
As for Precious Metals, no company in our industry – and I don’t believe I’m exaggerating – has spent more time, effort, and expense toward the cause of creating the best possible storage solutions for its clients. To that end, Miles Franklin can refer storage options in the U.S., Switzerland, Hong Kong, and Singapore, with the world’s most reputed storage operators. However, it is our proprietary program with Brink’s Canada that makes us stand out – given that not only is it fully segregated, but charged not via the industry standard of percentage of bullion value, but by the ounce. In this podcast with Andy Schectman, Miles Franklin’s President and Co-Founder, we discuss all relevant aspects of the program – what at the time was only in Montreal, but today is in Vancouver as well.
Generally speaking, the best storage “solution” is to keep it at home, secured by a combination of safes, alarms, guns, dogs, and most importantly, common sense. Which includes, above all, keeping it a secret, amongst only yourself and those who “need to know” – particularly, those that will inherit it. This is how the vast majority of the world’s PM owners store their metal – and by the way, if you give Miles Franklin a call, our brokers can share many useful tips regarding safe, secure home storage.
However, for those for whom home storage doesn’t make sense – for example, renters, expatriates, people who plan to move often, “high-profile” owners, or those who simply have too much to comfortably and safely secure, third party storage makes sense. Which not only includes how you store your metal, but where. At Miles Franklin, we offer the aforementioned options in a variety of countries – but on a personal basis, the company’s principals, myself included, utilize Brink’s Canada. Not only for all the aforementioned reasons, but because Miles Franklin officers are mandated to attend the audits. Which I might add, are administered by Inspectorate, the global leader in vault auditing services.
Hopefully, today’s “treatise on money storage” will open your eyes to the risks immediately ahead of you, whether you own cash – in any currency; Bitcoin; or physical Precious Metals. To me, the decision of how and where to hold my “money” is as important as what form it’s in – which in my case, is roughly 90% PMs; 1%, Bitcoin; and 9% U.S. dollars, held in non-marginable brokerage accounts at Schwab and Fidelity. Given how rapidly the world’s political, economic, and monetary order is breaking down, hopefully you too, will realize how important it is to make such decisions promptly, and decidedly.
To that end, I’ll conclude with a “teaser” of what’s to come – as in the next month or so, Miles Franklin plans to add to its industry-leading offering of unique, valued-added storage solutions. I look forward to announcing them ASAP; as in both cases, they will be unequivocally ground-breaking!