Back when Roosevelt confiscated all gold, it was kind of a joke anyway. Very few people came forward. Back then lots of people kept physical gold, even if it was a small amount particularly because of the US minted gold coins. 1's and 0's in computers are *way* easier to confiscate.
Customer Accounts in brokerage accounts are not subject to siezure by the brokerage firms. This guy is blowing smoke, pimping for Kitco.
FUD, Fear, Uncertainty, and Doubt is what sells gold. The gold buggy people have been spreading butt loads of FUD for decades... who can listen to them repeat it? So far we have not seen a link to any real source for the idea that money is at risk of confiscation in brokerages from the new legislation... so far it's an internet rumor as far as I can tell... I don't have subscriptions to the WSJ or FT times, I'm a cheapskate but... I would do better to pay for those and read ET less possibly.. decisions, decisions..
Whilst I question the motives and veracity of the information coming from those with an interest in people buying Gold or gold advisort services, it seems some Hedge Funds in Asia may have their funds tied up in LEH Bankruptcy. Also Refco laywers posited that customer Funds held with the non CFTC entities were Refco funds - the legal technicality being that they had accepted higher interest in return for Refco investing funds in money market tyep assets. Don't know ho they justify this as a license to steal customer funs. Secondly, funds with a CFTC broker are NO safe - if the broker has a deficit caused by a large customer going under all other funds held by the broker can be used to pay off the defecit. Brokerage owners personal assets are safe it seems. The "protection" clause is worded to suggest that you are protectd when you are NOT. Just another example of Chicago seat holders making sure they are never the ones who lose. Lehman factor imperils hedge funds By Jame DiBiasio | 18 September 2008 Prime broking contracts stipulate that Lehman can treat hedge-fund clients' assets as its own, putting an untold amount of fund assets at risk; but Japanese regulators move to ensure an orderly unwinding. advertisement Hedge funds may be jeopardised by the collapse of Lehman Brothers. Lehmanâs prime broking operation, whilst not at the magnitude of Morgan Stanley and Goldman Sachs, had a presence in Asia, especially in Japan. Their customers want to know what will happen next. It appears at this early stage that fully paid securities held in client names are safe. However, assets pledged by a hedge fund as original and variation margin for a loan will go into the pot of the individual Lehman unit, with the hedge fund becoming an unsecured creditor. If the assets were pledged, they have been re-hypothecated and lent out to somebody else. The prime brokerage has the right to take ownership of these assets, regardless of the hedge fund's own liabilities. "If the prime brokerage is liquidated, there will be an argument about the status of clients' funds held by Lehman," says a Hong Kong-based lawyer. He says it may be legally possible for Lehman to re-hypothecate assets [that is, transfer them to their own name], but the firm has so far kept them segregated from its own account. That could change if Lehman's own assets prove insufficient to meet the claims of secured creditors. Cash balances are also endangered, but the situation here is subject to many nuances. If a hedge fund kept its cash at LB International Europe, the UK entity, they may have elected for client money protection under the FSA rules, which would sweep cash into a UK bank nightly. The same, however, does not apply to clients whose prime broking relationship is with Lehman Brothersâ US entity, and where money may not be segregated. If a hedge fund didnât use Lehman as a prime broker but had another kind of trading relationship, say, an ISDA in place, then that derivatives agreement also results in them being a general creditor or debtor of the firm, depending on the marked-to-market positions of the swaps trades. It is common practice in the prime broking industry for the PBs to claim the right to deal with hedge fund assets as their own. Hedge funds can, of course, insist this power extend solely to assets held as collateral against funds' own obligations, but this must be put down in writing when accounts are first opened, and prime brokers will insist on getting paid a much higher fee. One lawyer says that hardly anyone in the hedge-fund world, when drawing up contracts with a prime broker of the size of Lehman Brothers, ever really thought they'd see their counterpart go bankrupt. So it is likely that very few hedge funds are so protected, at least in many Asian jurisdictions. Will this change? Impossible to say, but lawyers do expect their hedge-fund clients to review all of their counterparty documentation, and see to what extent their funds are exposed. "You can no longer point to any single financial institution and say it is 100% safe," says a lawyer. That said, he does not know if this will herald an entirely new approach to hedge funds' counterparty relationships, such as whether prime brokers will still be able to command higher fees in order to legally segregate client assets from their own. Japan has served as Lehman's regional hub and most of its client assets are held at Japanese financial institutions. The Financial Supervisory Agency yesterday announced Lehman's failure could not lead to damaging Japanese creditors and investors through the outflow of money from Lehman's assets to overseas affiliated companies. According to the FSA, Lehman has to retain certain assets within Japan equivalent to all liabilities, including guarantees, to domestically based investors and creditors. The firm has been ordered to tally the precise claims of Japanese investors and their assets held at the firm, ensure these assets are available in Japan, and communicate this with investors. Industry executives speculate that Japanese authorities are spooked by the notion of more domestic assets exposed directly or indirectly to US subprime mortgages and other toxic securities will vanish. The concept of allowing a large financial counterpart to simply go bust is alien to their experience. But the move was a prudent one by the FSA to ensure domestic market claims are worked out systematically, argues Christopher Wells, partner at White & Case in Tokyo. The announcement was probably made as a warning, not to Lehman, but to other financial institutions not to conspire in the hasty transfer of assets. Overseas hedge funds that booked contracts with Lehman in Tokyo will have to appeal for their return in Japan. And in Japan, it should be standard for client assets to be booked in their own name. Simon Osborne contributed to this story. Copyright AsianInvestor.net, a subsidiary of Haymarket
Looks like a couple of genuises here refute what I say. I didn't say it, the FT and WSJ did. Just passing the info along because the general public needs to know that the new clause allows brokerages to raid personal accounts for liquidity problems and if the firm goes bankrupt, your assets would be seized as well as the firms. This is potential legalized theft of your IRA, stock account, etc and it is info that should be known. The fact that it was on a Gold site is irrelevant, it was on the WSJ and FT first. I am a Gold Bug when it's proper(will be for a long time now). And when Gold isn't needed, then I trade something else. However it's going to be needed for a long time, for all the World's FIAT currencies are about to go through the biggest currency dilution in history. The flight to safety into Gold and Silver will be historic and I suggest that since treasury notes and money market funds are no longer safe, that Gold and Silver will be the only safe place to park your worth. Paper money will go through massive devaulation, Gold and Silver will rise to new heights.
Yes. The Kitco site is the same place you can read about Bush actually being an alien sent to destroy the Human race. I believe nothing I see at Kitco.
That is fine and dandy, Ivanovich, like I said, the proof is in the FT and WSJ articles, not at Kitco. If you desire go look it up. Most people's account I feel will be safe. However, I do feel that some accounts are at risk at certain firms. This is potential theft and one should know about it. As far as Kitco, yes some of the info is dubious and biased at best. On the other hand, some of the best and most informative macro economic articles I have seen have been on the site. No matter where you go, you must be able to read news and information with an objective point of view. We know that half of the junk on MarketWatch and AP is lies and halftruths at best. Reading between the lines is important if you wish to trade successfully. Do not count out Kitco, they are considered a very viable source and as far as I am concerned more valid than many mainstrean media sources. You trust AP, Reuters? I am sure they said Bush wasn't human as well. Seems maybe they where all right.
post the link to bush is an alien. this is another dubious and irresponsible remark from someone who should know better? even if true it does not disqualify kitco as a source of useful information.
The newest twist... Fed Board Approves Goldman, Morgan Stanley Bid to Become Banks http://www.bloomberg.com/apps/news?pid=20601087&sid=aXxh6ZNwLUV4&refer=home Soooo, now you can have your investment accounts, bank accounts, credit cards, maybe even a non-USD denominated CD product all linked... don't even think about not paying your taxes, your mortgage, your credit cards, your auto loan. Big Bro owns your ass! Careful what you wish for. Osorico