|
Dear Subscriber
The year 2015 has been an industrious and successful year. The broad acceptance of our secured peer to peer lending program is particularly encouraging as it now offers storage borrowers a reliable and efficient option to receive low interest loans from their lending peers whenever needed.
We are also pleased to announced that we added the Euro as a payment currency and that by mid- January you will have the option to pay sums below 10,000 USD directly via an online credit card facility.
In December silver and gold bullion supplies have also improved markedly and, given the good in-stock availabilities, we are running a number of year end specials. If you already store bullion with us you can easily use P2P loans to take advantage of the low prices and premiums. Furthermore orders submmited by December 31st receive three months of free storage.
If you have bullion at home or stored at vaults or banks you can also take advantage of our 50% discount on physically transferring your bullion to us where it will be authenticated and stored as your segregated property.
Our article this month focuses on why bullion nationalization happened in the past, why we might see a repeat during a systemic crisis and, most importantly, how you can reliably protect yourself and sleep well at night. Having spent a lot of time analysing jurisdictional reach, I hope that the article will be understandable and enlightening.
The SB and TSG teams are all wishing you a happy festive season and a great start into the new year.
| Jurisdictional Risk |
Protect yourself from Escheatings, Nationalizations and Confiscations
It has happened before. On April 5th 1933 US President Franklin Roosevelt issued Executive Order 6102 requiring all privately owned gold to be delivered to the government within 25 days. Gold owners would receive 20.67 USD for each troy ounce of gold.
By May 1st anybody caught in possession of gold would be committing a felony and could face a ten year prison sentence. Thus, under US jurisdiction, gold had become a liability which could cause the owner to be fined twice the value of the gold held and possibly result in prison sentences.
Because at the time the USD was still redeemable for physical gold the government's ability to print money in excess of governmental gold reserves was severely constrained. So the rationale for the law was that if gold could not be legally owned by the public, then it could not be legally redeemed. If it could not be legally redeemed, then it could not constrain the Federal Reserve's ability to print money.
Despite its huge implications, and likely unconstitutionality, this order became law without approval or debate by the US Senate and occurred so suddenly that it was near impossible to move gold out of the United States without being subject to nationalization (before May 1st) or confiscation (after May 1st).
The law applied to nearly all gold within US jurisdictional control, even those owned by non-citizens. Mr. Josefowitz, a Swiss-Lithuanian businessman, had 10,000 ounces of gold confiscated from his safe deposit boxes in New York and faced fines of nearly twice the value of the gold.
It was not until 1971 that gold ownership became legal again when the USD officially abandoned any pretence of being backed by gold.
|
Excutive Order 6102, in 1933 banning gold ownership allowed for currency debasement and easier money printing
|
|
Could it happen again?
In 1933 the US nationalized and then devalued gold to allow for un-restrained money printing and debt creation. Ironically debasements through excessive money printing and unsustainable debts are often the very reason why trust in a currency is eventually lost causing it to be discarded and resulting in hyperinflation as had occurred in 1922 Germany.
In such a hypothetical scenario gold and silver could be nationalized to create a new gold/silver backed currency to replace the old fiat USD and create acceptance for the new currency. Such an event would also be a way to de-facto default on the massive US debt as the old fiat USD and accumulated USD debts would essentially become worthless. Note that the US has defaulted in the past, see the Continental currency default of 1779 for example.
In 1933 moving or holding your gold with a foreign custodian or bank would likely have placed your gold outside of US jurisdiction where its ownership would have been legal until the US ban is lifted.
Today, US jurisdictional reach has become almost universal. Financial institutions globally are effectively under US jurisdiction as they are terrified to be fined, sometimes billions of dollars, if they violate US policy or some obscure regulation.
These fears have led to the meteoric rise of compliance departments which seem intent to make formerly routine banking transactions into lengthy bureaucratic ordeals that delay and complicate many financial services.
The vast majority of financial institutions outside the US have even chosen to deny and terminate services to US customers altogether in a quest to reduce the potential for US fines. Consequently, this ‘denial of service’ locks US citizen even tighter into US jurisdictional control at a time when their country is on a clear path to fiscal insolvency and the risk of systemic crises is rising sharply.
US jurisdictional exposure is not limited to US citizens either. Any interaction with a financial institution or company with substantial US exposure causes the assets in question to become de-facto subject to US jurisdiction, regardless of your citizenship, residency or knowledge.
I learned the global extend of US jurisdictional power first-hand. It began when I opened a trading account with an online brokerage house in Hong Kong to buy Canadian equities. Note that I was a German citizen residing in Singapore, not a US person, and I had no relationship, status or business in the US.
However on December 6th 2014, I received a bizarre email from my broker stating that my account holdings will be “escheated to the state of Connecticut” unless I log into my account very soon to demonstrate that my account is still active.
It seemed ridiculous that my HK account holdings could be taken by to the state of Connecticut. I was about to delete the message, believing it to be malware, when I noticed that my account number ending was correct and the sender was indeed my broker.
Read more... |
| The Year In Review |
The Year In Review, Key Events and Milestones
|
 |
Secured Peer to Peer Loans, launched successfully
145 loans have been made between customers since launch in August.
Average loan amount of 35,000 SGD (25,000 USD).
Rates between 3% pa to 6.5% pa as determined by lenders and borrowers.
Find out how you can lend or borrow
|
| |
Safe Deposit Box storage crosses 500,000 oz
Private DIY storage option, exclusive customer access
Numbered box seals and keys, optional Insurance
High capacity boxes, up to 203 kg (6500 oz) capacity.
Compare safe deposit boxes with segregated ownership (S.T.A.R.)
|
| |
Bullion to Malaysia
We brought over lower premiums, Ringgit payments and liquidity
Insured shipping throughout Malaysia
Bullion pickup and testing location in Johor
View Malaysian retail options
|
| |
New Website UI and Reports
New Simplified User Interfaces
Powerful holdings reports with drilldowns to view the history of each parcel owned
Improved Secured Messaging, to avoid the use of unsecured emails
|
| |
Awards & Transparency
Storage parcels now audited by both Bureau Veritas and PwC.
The Safe House received ISO 9001 certification
We were appointed as SBMA Auditor, received SME 100 Award
|
| Year End Specials |
Year End Silver Specials, until December 31st
|
|
|
Nadir 100 oz Silver Bars
as low as: 0.99 USD premium per oz - discount tier 5.
|
|
|
2015 Silver Vienna Philharmonic Coins
as low as: 1.99 USD premium per coin - discount tier 5.
|
| |
Also enjoy three months of free storage for S.T.A.R. storage orders
and 50% off on Transfer-In & Authentication orders until December 31st. |
|
