Are Banks Raiding 'Allocated' Gold Accounts?
by George Washington
ZeroHedge
In 2007, Morgan
Stanley paid out $4.4 million to settle a class-action lawsuit by
its clients after Morgan Stanley charged them to buy and "store"
precious metals for them, but neither
bought or stored the metals.
(Similarly,
a 2011 class-action lawsuit filed in federal court in New York accused
UBS Financial Services of misleading silver investors and harging
them storage fees for metal that was never actually purchased,
segregated, and stored for them.)
Avery Goodman
points out that Morgan Stanley has once again just launched
a similar scam, offering "allocated" metals, but gaming
the definition so that the holdings are not really allocated.
On May 21st,
Matterhorn Asset Management's Egon von Greyerz alleged
that Swiss banks are trading physical gold bullion which is being
held in special "allocated" accounts for its customers:
We are stressing
to investors to take their gold out of the banking system, not
only because there are runs on banks that will continue, but the
risk of being in the banking system is major. So you should take
the additional step of not just owning physical gold, but also
owning it outside of the banking system.
We (just)
had an example of a client moving a substantial amount (of gold)
from a Swiss bank to our vaults, and we found out the bank didn't
have the gold. This was supposed to be allocated gold, but the
bank didn't have it. We didn't understand why there was a delay
(in our vaults receiving the gold), but eventually we found out
why there was a delay (the bank didn't have the gold). It's absolutely
amazing, but not surprising.
This confirms
what I've always thought. Not only should you not have gold in
banks or even unallocated gold, but even allocated gold. It seems
that some banks don't even possess that. So the risk of having
gold in the banking system is major.”
On May 23rd,
John Embry - Chief Investment Strategist of Sprott Asset Management,
with $10
billion under management - added:
When the
customer finally got his gold, it was 2011 minted bars. This made
no sense because he had been holding the allocated gold for years.
That's just another example that even the allocated gold
in the banking system has probably been loaned out. Many
of these customers will wake up one day and realize they entrusted
their gold to the wrong people.”
Jim Willie
claims
that :
Swiss face
hundreds of $million lawsuits, for refusal to deliver Allocated
gold.
Similar reports
have come
from Canada and other countries.
Indeed, Jim
Willie alleges
today:
Allocated
Gold accounts across the Western world have been confiscated,
sold, and replaced with shabby paper gold certificates illegally....
The account raid practice has been widespread in Europe, London,
and United States.
Given the numerous
reports of supposedly "allocated" gold not being there,
it should not be entirely surprising that wealthy investors are
taking matters into their own hands ... literally.
Kirby Analytics
notes:
We are hearing
anecdotal accounts that beneficial owners of "allocated"
gold bullion in London and other European centers have showing
up at bullion banks and demanding their physical metal be a] viewed
and assayed, and then b] withdrawn from the vaults of banks.
And as we pointed
out in 2010:
Omnis' Jim
Rickards, GATA's Adrian
Douglas and others have demonstrated that the big bullion
dealers and ETFs don't have nearly as much as physical bullion
as they claim.
Should a
substantial portion of investors in these vehicles demand physical
delivery at the same time, it could cause a panic in the gold
market which would cause a huge run up in gold prices.
Does this mean
you shouldn't own gold?
No ... It just
means that you should only buy physical gold, and store it somewhere
you can actually get your hands on it.
Reprinted
with permission from ZeroHedge.
July
12, 2012
George
Washington blogs at Washington's
Blog.
Copyright
© 2012 ZeroHedge
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