Perspectives on the global economic meltdown- (Nov 28 2010)

[anmol]

Study: American Households Hit 43-Year Low In Net Worth

WASHINGTON (CBS DC) – The median net worth of American households has dropped to a 43-year low as the lower and middle classes appear poorer and less stable than they have been since 1969.

According to a recent study by New York University economics professor Edward N. Wolff, median net worth is at the decades-low figure of $57,000 (in 2010 dollars). And as the numbers in his study reflect, the situation only appears worse when all the statistics are taken as a whole.

According to Wolff, between 1983 and 2010, the percentage of households with less than $10,000 in assets (using constant 1995 dollars) rose from 29.7 percent to 37.1 percent. The “less than $10,000″ figure includes the numerous households that have no assets at all, or “negative assets,” which is otherwise known as “debt.”

Over that same period of time, the wealthiest 1 percent of American households increased their average wealth by 71 percent.

As noted by Daily Finance, from 1983 to 2010 the share of total wealth held by the richest 10 percent of American households increased from 68.2 percent to 76.7 percent. Meanwhile, all the rest of Americans lost financial ground.

An August Pew Research Center study found that many in the middle-class are divided on how they believe his gap widened.

Fully 85 percent of self-described middle-class adults say it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living. Of those who feel this way, 62 percent say “a lot” of the blame lies with Congress, while 54 percent say the same about banks and financial institutions, 47 percent about large corporations, 44 percent about the Bush administration, 39 percent about foreign competition and 34 percent about the Obama administration.

Just 8 percent put “a lot” of blame on the middle class itself.

“This downbeat take on their economic situation comes at the end of a decade in which, for the first time since the end of World War II, mean family incomes declined for Americans in all income tiers,” the Pew Report stated. “But the middle-income tier—defined in this Pew Research analysis as all adults whose annual household income is two-thirds to double the national median —is the only one that also shrunk in size, a trend that has continued over the past four decades.”

Wolff’s focus on total wealth not only measures how much money a household brings in, but also the amount it accumulates. This latter number is very significant — economically secure households are generally more comfortable spending their disposable income, and are less likely to become a drag on the social safety net.

[anmol]

The only US state to own its own depository bank today is North Dakota. North Dakota is also the only state to have escaped the 2008 banking crisis, sporting a sizable budget surplus every year since then. It has the lowest unemployment rate in the country, the lowest foreclosure rate, and the lowest default rate on credit card debt.

1. We should have govt owned banks serving a common, aam aadmi agenda. This is important.. Private banks will not set up a branch in Kargil or Arunachal Pradesh.
These days, I find, similarly, that Doordarshan, as opposed to the private TV channels gives excellent coverage of news, current events, in depth interviews. Most private news channels focus on breaking old news repeatedly in new bottles. The BBC in the UK, is another channel I love to watch, which is also govt. owned.

2. So a good balance of public private partnership is required. If the balance is closer to America...its cowboy...to hell with everyone else ..me first capitalism and individualism.
If Europe...then private and public in some ways. Slow and steady. India is similarly socialist.

What is happening in North Dakota is mostly because of the oil boom in the state.

Last year, crude oil production rose 35%. As of August, 2012, it was the second-largest oil producer in the country. This was due to the use of hydraulic fracturing in the state’s Bakken shale formation.

Read more: http://www.foxbusiness.com/government/2 ... z2Do3v64KI

[/quote]

[vishvak]

About downgrade of EFSF, what exactly does that mean?

Didn't India contribute 10 Billion$ to IMF fund in bailouts? India to rescue European nations, announces 10 billion USD help

I think it is time India sends a message across about downgrade of these funds that just because it is a aid to Stability Facility does not mean it can be not managed well and let credit ratings of stability funds fall. May be this will now be sighted to get even more funds from IMF.

[anmol]

French Socialist in Mittal Row: We're Just Doing What Obama Does
FRANCE, INVESTMENT, MONTEBOURG, HOLLANDE, OBAMA, OBAMA SOCIALIST, SOCIALISM
CNBC.com
| 30 Nov 2012 | 06:48 AM ET

The French politician who said Indian steel company ArcelorMittal should leave the country has told CNBC that his government is only acting like U.S. President Barack Obama.


Industry Minister Arnaud Montebourg, a member of the governing Socialist party, caused controversy last week when he said that the Indian company, which employs close to 20,000 people in France, should leave after it said it would have to close down a factory.

The French government announced on Thursday that it could nationalize the factory in question, with backing from an unnamed businessman.

The news raised the specter of the nationalizations of the early 1980s, which were instigated by Hollande’s predecessor Francois Mitterrand.

Montebourg told CNBC after a meeting with trade unions in Paris: “Barack Obama's nationalized. The Germans are nationalizing. All countries are nationalizing. I've also noticed the British nationalized 6 banks.”

Montebourg is believed to be referring to the takeover of struggling automakers by the U.S. government earlier in the financial crisis.

Lakshmi Mittal, the tycoon who leads ArcelorMittal, met with Montebourg’s boss, Socialist President Francois Hollande earlier in the week, but the men appeared to have failed to resolve the issue.

Montebourg brushed off comparisons with that era. He said: “It's a very good sign to send out (to investors). Nationalizing is a very modern step to take. Especially when you not only nationalize losses but profits as well, when you make public/private partnerships. This is our strategy.


“The strategy we're putting forward is extremely modern and adapted to the current times of crisis. It's a way of making the economy work in the interests of industry, more than just helping the financial sector,” he added.

He declined to answer a question about comments from Mayor of London Boris Johnson, who told Indian businessmen earlier this week to come to London instead of France.

Hollande, who is perceived as more to the right of the Socialist party than Montebourg, is currently trying to push through reforms to help reinvigorate growth and stimulate the labor market. He has so far proved to be less left-wing than many in the market feared, and there has been cautious welcome for a high-profile competitiveness report and better-than-expected economic growth. (Related: How to Attract Capital)

Still, policies such as a maximum 75 percent income tax rate have raised eyebrows among the country’s wealthy.

[Christopher Sidor]

About downgrade of EFSF, what exactly does that mean?

Didn't India contribute 10 Billion$ to IMF fund in bailouts? India to rescue European nations, announces 10 billion USD help

I think it is time India sends a message across about downgrade of these funds that just because it is a aid to Stability Facility does not mean it can be not managed well and let credit ratings of stability funds fall. May be this will now be sighted to get even more funds from IMF.

Well take an example of a hypothetical Sovereign Wealth Fund, like Norway's or China's or Singapore or any of the middle-eastern nation. Let us call this Sovereign Wealth fund as "X". Now according to the charter of "X" it is allowed to invest only in the AAA rated securities. If the security that "X" holds undergoes a downgrade then it might be expected to get rid of the downgraded security within a period of say 3-6 months or arrange for collateral. If EFSF/ESM are downgraded and consequently the bonds of EFSF/ESM are also downgraded than "X" cannot invest in these securities. This is true for many of the funds that PIMCO, Blackrock, Fidelity and other Pension Managers run.

Now EFSF/ESM having "AAA" rating implies two things
1) They can borrow money very cheaply from the private/quasi-government sources. This reduces the burden on the taxpayers of the EURO-zone countries.
2) The amount of collateral required to be set aside is also very low.

The EURO-Zone countries, including Germany, would go through a recession which is expected to last, at least till Q1-2013. So any help these funds can give in shouldering the burden of helping the PIIGS countries would be a relief. But with the downgrade the cost of rescue seems to be going up. "SEEMS" because there is a wild card in all of this, ECB. ECB has said that it will buy "unlimited" amount of bonds of those countries, which submit to the tough conditions set by the bailout authorities. This is the wild card because it is not possible to say that all of the PIIGS countries will submit willingly to the conditions similar to the ones imposed on Greece.

And India gave money to IMF and not ECB/EFSF/ESM. So we need not worry about that. Unless offcourse RBI or any of our PSU banks are holding securities issued by EFSF/ESM.

[vishvak]

Comments and questions in color

[quote
French Socialist in Mittal Row: We're Just Doing What Obama Does
FRANCE, INVESTMENT, MONTEBOURG, HOLLANDE, OBAMA, OBAMA SOCIALIST, SOCIALISM
CNBC.com
| 30 Nov 2012 | 06:48 AM ET

The French politician who said Indian steel company ArcelorMittal should leave the country has told CNBC that his government is only acting like U.S. President Barack Obama. (Is it really so?)

Industry Minister Arnaud Montebourg, a member of the governing Socialist party, caused controversy last week when he said that the Indian company, which employs close to 20,000 people in France, should leave after it said it would have to close down a factory. (Are there not protection clauses in agreements when foreign investments are welcomed in France?)

The French government announced on Thursday that it could nationalize the factory in question, with backing from an unnamed businessman. (How is that a strategy? Was this clarified as a European first world characteristic when investment was welcomed?)
..
Montebourg told CNBC after a meeting with trade unions in Paris: “Barack Obama's nationalized. The Germans are nationalizing. All countries are nationalizing. I've also noticed the British nationalized 6 banks.” (Nationalizing .. nationalizing banks .. - there is no clarity from first world citizen and Minister of Industry, France. Was this clarified earlier when investments were welcomed in Europe?)

Montebourg is believed(??) to be referring to the takeover of struggling automakers by the U.S. government earlier in the financial crisis. (following USA example for nationalizing Foreign investments? How does that map and how much is it incorrect?)
..
Montebourg brushed off comparisons with that era. He said: “It's a very good sign to send out (to investors). Nationalizing is a very modern step to take. Especially when you not only nationalize losses but profits as well, when you make public/private partnerships. This is our strategy. (Since when is this modern? Was this clarified when investments were welcomed in France and Europe?)

“The strategy we're putting forward is extremely modern and adapted to the current times of crisis. It's a way of making the economy work in the interests of industry, more than just helping the financial sector,” he added.

He declined to answer a question about comments from Mayor of London Boris Johnson, who told Indian businessmen earlier this week to come to London instead of France. (How does investing now in London and not France help in this situation? It does not when there are no such standards at all.)

Hollande, who is perceived as more to the right of the Socialist party than Montebourg, is currently trying to push through reforms to help reinvigorate growth and stimulate the labor market. He has so far proved to be less left-wing than many in the market feared, and there has been cautious welcome for a high-profile competitiveness report and better-than-expected economic growth. (Related: How to Attract Capital)

Still, policies such as a maximum 75 percent income tax rate have raised eyebrows among the country’s wealthy.(Does this also apply to foreign investors?)
quote]

Does our politician use their leverage to overcome such challenges to Indian investors or is it just one way leverage?

The way Europe has NATO for defense and ESSF for economy, does the Europe offer any Europe-wide mechanism to protect foreign investments?

What does it say about French and European trading practices?

[Hari Seldon]

^^^ The oiros are toast and they know it.

Fwance doesn't effing deserve a AA rating also and everybody knows it too. Just that it ain't good taste to say so just yet, especially if you're a rating agency. Just yet.

What can't be repaid won;t be. All that assterity notwithstanding. No effing big deal, so what, one may say. I agree too. Default is what has to happen for the world to move on and truly recover from this crisis.

Only minor detail is that in the coming default the ones to lose their shorts would be the creditor countries and within them the boomer generation. Their ass-ets are evaporated, their savings will soon be worthless, their promised entitlements will prove illusory as and when the bond haircuts start to bite and default becomes the default option.

Perhaps. Of course, twice bitten, ever shier. Hopefully that doomsday scenario will never materialize but then again, who knows...

[Chinmayanand]

Hari garu , the doomsday scenario will arrive when you give up hope on it.

[anmol]

[Satya_anveshi]

This will be quite historic...free riding on other nations will become no holds bar....not even a symbollic retrospection.

So, no more discussion about the cuts in entitlement let alone thinking about cuts in defense and defense related spending, which gobble up over 50% of tax revenues.

It is amazing how a country with expressed constitutional intent to be conservative on debt has got into an unlimited debt binge and for all practical purposes fallen into the debt trap and people harldy talk about it or in position to do anything about it.

What a role model of democracy, freedom and managing fiscal responsibility for the world!

Why Congress May Abandon the Debt Ceiling

[Singha]

I hear periodic attempts by worthies in media here to get indians to avoid buying gold and invest in gold etfs.

Needless to say that sounds like snake oil unless the physical gold backing these etfs is locked safely inside a rbi vault and not in nyc or zurich.....that paper is cheaper than toilet paper.

While i agree that such money could be put to more productive use, the only productive use right now seems to be bank fd or buying good property here. Atleast the goi wont default on bank fds one hopes.

[JwalaMukhi]

This will be quite historic...free riding on other nations will become no holds bar....not even a symbollic retrospection.

So, no more discussion about the cuts in entitlement let alone thinking about cuts in defense and defense related spending, which gobble up over 50% of tax revenues.

It is amazing how a country with expressed constitutional intent to be conservative on debt has got into an unlimited debt binge and for all practical purposes fallen into the debt trap and people harldy talk about it or in position to do anything about it.

What a role model of democracy, freedom and managing fiscal responsibility for the world!

Why Congress May Abandon the Debt Ceiling

Well, unkilland is built and based on debt. Inspite of all the myth making machinery about 'debt being a recent nuisance' that the unkillanders acquired in recent past. American history is replete with history of living beyond means, since the europeans took over. It has always been in debt and its citizens in general have had a proclivity to live beyond their means. pawn brokers and loan sharks have had thriving business since the europeans landed on american continent. Nothing new, other than the fact that the laxity to debt has increased of late.
"Financing the American Dream" by Lendol Calder accurately captures the myth making machinery.

[Virupaksha]

I hear periodic attempts by worthies in media here to get indians to avoid buying gold and invest in gold etfs.

Needless to say that sounds like snake oil unless the physical gold backing these etfs is locked safely inside a rbi vault and not in nyc or zurich.....that paper is cheaper than toilet paper.

While i agree that such money could be put to more productive use, the only productive use right now seems to be bank fd or buying good property here. Atleast the goi wont default on bank fds one hopes.

inflation is a type of default.

[vishvak]

This will be quite historic...free riding on other nations will become no holds bar....not even a symbollic retrospection.

So, no more discussion about the cuts in entitlement let alone thinking about cuts in defense and defense related spending, which gobble up over 50% of tax revenues.

It is amazing how a country with expressed constitutional intent to be conservative on debt has got into an unlimited debt binge and for all practical purposes fallen into the debt trap and people harldy talk about it or in position to do anything about it.

What a role model of democracy, freedom and managing fiscal responsibility for the world!

Why Congress May Abandon the Debt Ceiling

Well, unkilland is built and based on debt. Inspite of all the myth making machinery about 'debt being a recent nuisance' that the unkillanders acquired in recent past. American history is replete with history of living beyond means, since the europeans took over. It has always been in debt and its citizens in general have had a proclivity to live beyond their means. pawn brokers and loan sharks have had thriving business since the europeans landed on american continent. Nothing new, other than the fact that the laxity to debt has increased of late.
"Financing the American Dream" by Lendol Calder accurately captures the myth making machinery.

How is the American Dream financed is also part, or may be a major part, of the whole.

[RamaY]

I hear periodic attempts by worthies in media here to get indians to avoid buying gold and invest in gold etfs.

Needless to say that sounds like snake oil unless the physical gold backing these etfs is locked safely inside a rbi vault and not in nyc or zurich.....that paper is cheaper than toilet paper.

While i agree that such money could be put to more productive use, the only productive use right now seems to be bank fd or buying good property here. Atleast the goi wont default on bank fds one hopes.

GD,

There is a limit to what people can buy within Desh. They cannot inflate the RE prices to a point that is unsustainable. They also cannot invest in Indian stocks because it indirectly leads to inflation of "Indian" resources.

The optimal way would be to buy natural resources elsewhere using the stock market route. But we have very few MFs that do exclusively that.

Even if we can play something like that, such MFs will not have physical control over those natural resources outside Desh proper. In the event of underlying default, these MFs cannot enforce/acquire those resources for they are mainly financial institutions playing on financial instruments. Any possibility of underlying default means these MFs losing money instead of moving to take control over physical goods.

The only safe and easy bet is Gold, hence the trends IMHO.

The other option is for someone to setup a huge energy reservoir project (I remember a gentleman started a thread with such an idea couple of years ago) and go public exclusively for Indians (no IIFs) and we can see some traction there.

Given Indian non-existent foreign policy and national leadership there are very few alternatives

[ArmenT]

I hear periodic attempts by worthies in media here to get indians to avoid buying gold and invest in gold etfs.

Needless to say that sounds like snake oil unless the physical gold backing these etfs is locked safely inside a rbi vault and not in nyc or zurich.....that paper is cheaper than toilet paper.

With this volatility, is gold still a safe haven?

[Satya_anveshi]

There is a difference between the motives and implications of buying Gold by Indian junta in India vs buying Gold by US junta in US.

In India, interest rates on deposit are pretty decent (upwards of 9% - very high IMO), mutual funds and stocks may give better and real estate even better. Being an emerging economy with higher growth rates, the investment in gold is money taken out of potential investment that could grow our economy. Further, we expend our forex reserves in buying gold for an unproductive asset leaving less for the much desired ones and rainy day. All the gyan rehashed over and over here.

In US it is pretty fkd up - bank deposit rates are almost zero, real estate is down and most likely the money gets locked with hardly anything to show over 3-4 years, and imo, odds of making money in stock are worse than making money at gambling in Vegas. At least in Vegas, you may get some fun at slot machines and those interested can get some thorough mijjile paalish. Commodities have performed relative well and so the attraction. US's monetary and financial policies do not help at all.

Going back to the initial point about US free riding on other nations with their QEternity (as someone put it), I just hope we are taking measures at securing our interests in global economy. BRICS type arrangement is the way to go. Hope all the partners are equally serious in getting it working and mutually beneficial.

[Satya_anveshi]

The political nautanki that is on display in duplicity around fiscal cliff deal puts Hollywood to shame. Every day in and day out the ball/bill gets kicked around to set up the El Presidente as Santa Claus who brings gifts during Xmas. Yesterday El Presidente ran a twitter campaign called #My2K implying that sans this nautanki, typical middle class will pay $2K in additional taxes as "Bush era" tax cuts expire and higher tax rates take effect.

So, assuming that El Presidente's Santa Claus role is certainty, possibilities could only be
- Bush tax cuts are extended for all at least for this year
- Bush tax cuts are extended for middle class and not rich (those having house hold incomes > $250K) at least for this year

Repubs are unlikely to agree to the later without getting something in return. Their proposal included eliminating tax deductions on mortgage interest for homes valued > $xM dollars which might bring additional revenue without increasing income tax rates.

Further, it is indicated that US is just short of hitting the debt ceiling limit (less than $80B short), which was increased to ~$16T in Aug2011. If the limit is not extended during the fiscal cliff discussion itself, then they will likely continue this fiasco well in January by which time the limit would have been hit with some accounting shenanigans to rescue for another 4 weeks. Meanwhile, corporations are getting increasingly frustrated as this sends uncertain signals as to how the economy would fare in FY13 so they will cut back on investment. Each feeds the other.

It remains to be seen how and on what conditions repubs will agree to increase the limit one more time and by how much.

[anmol]

Apparently, Apple's shares have tumbled more than 6 per cent which happens to be their biggest single day loss in four years.. wiping out something like USD ~30-40 billion. And within last two months, stock have lost USD ~150 billion...

Dow, S&P end higher, but Apple's 20% fall sinks Nasdaq
Reuters / Thursday, December 6, 2012 11:16 IST

A volatile trading session ended with US stocks mostly higher on Wednesday, even as Apple, the most valuable company in the United States, suffered its worst day of losses in almost four years. In a strange occurrence, Apple accounted for the entirety of the Nasdaq 100's fall of 1.1%, while the Dow industrials — which do not include Apple as a component - enjoyed the best day since November 28.

With the drop, Apple shed nearly $35 billion in market capitalisation, its biggest one-day market-cap loss ever. The company's market value, or market capitalisation, now stands at $506.85 billion. "Today's move is because of index weightings, with the Nasdaq down because of Apple's decline," said Rex Macey, chief investment officer of Wilmington Trust in Atlanta.

"The S&P is up because Apple isn't as big a weight in that index, and the Dow is up even more because it isn't there at all." The broad market seesawed, with the S&P 500 dropping into negative territory before it rebounded off the 1,400 level, seen as a key support point over the past two weeks. Investors cited comments from President Barack Obama suggesting a potential near-term resolution to the "fiscal cliff" wrangling in Washington as a catalyst for the rebound.

Shares of The Travelers Cos Inc rose 4.9% to $74. The stock ranked as the Dow's top percentage gainer after the insurance company said it intended to resume stock buybacks it had temporarily suspended while it assessed its exposure to Superstorm Sandy. The company also said a preliminary estimate of net losses from Sandy was about $650 million after tax.

The Dow Jones industrial average rose 82.71 points, or 0.64%, to 13,034.49 at the close. The Standard & Poor's 500 Index gained 2.23 points, or 0.16%, to 1,409.28. But the Nasdaq Composite Index fell 22.99 points, or 0.77%, to end at 2,973.70. Apple, the largest US company by market capitalization and a big weight in both the S&P 500 and the Nasdaq, fell 6.4% to $538.79.

Apple is down more than 20% from an all-time high reached in late September, putting the stock into bear market territory. Banking shares were led higher by a 6.3% jump in Citigroup to $36.46 after the company said it would cut 4% of its workforce. The S&P financial sector index climbed 1.3%, and Bank of America hit a 52-week high of $10.55 before pulling back slightly. The stock, a Dow component, ended at $10.46, up 5.7% for the day. Still, Apple struggled throughout the session.

Market participants cited a host of reasons for the drop in the iPad maker's stock, including a consultant's report about the company losing share in the tablet market and reports that margin requirements had been raised by at least one clearing firm, as well as year-end tax selling ahead of a possible rise in capital-gains tax rates next year. On the Washington front, Obama told the Business Roundtable, a group of chief executives, on Wednesday that a fiscal cliff deal was possible "in about a week" if Republicans acknowledged the need to raise taxes on the wealthiest Americans.

Equities have struggled to gain ground recently because of concerns over the fiscal cliff - a series of mandatory spending cuts and tax increases effective in early January that could push the US economy into recession next year. Recently equities have moved on any whiffs of sentiment from Washington in headlines about negotiations.

"Obama's comments generated a lot of optimism, but to the extent the market believes them, that's how much we're setting ourselves up for a decline if that deadline passes with no progress," said Macey, who helps oversee about $20billion in assets. In an interview on CNBC after the market closed, US treasury secretary Tim Geithner said that uncertainty over the fiscal cliff was standing in the way of stronger economic growth, and that there was no prospect for an agreement if tax rates didn't rise on the wealthiest taxpayers.

The stock of Freeport-McMoRan Copper & Gold Inc fell 16% to $32.17 and ranked as the S&P 500's biggest percentage decliner. The company said it was acquiring Plains Exploration & Production Co and McMoRan Exploration Co in two separate deals for $9 billion in cash and stock in a major expansion into energy. McMoRan Exploration soared 87% to $15.82 and Plains surged 23.4% to $44.50. After the closing bell, Standard & Poor's said it cut Greece's sovereign long-term foreign curency rating to "selective default" from its already low "C" rating.

Last week, the country and its international lenders reached a deal to lower its debt burden through a debt buyback. About half of the stocks traded on the New York Stock Exchange closed in positive territory, while about 54% of Nasdaq-listed shares ended lower. Volume was higher than it has been in recent sessions, with about 7.01 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, above the daily average so far this year of about 6.48 billion shares.

[member_23686]

found on reddit



some of it is ours

[member_23686]

further

We've still got a few quid then! Bank of England's glittering stash of £156BILLION in gold bars stored in former canteen under London

By Emma Reynolds
UPDATED: 08:55 GMT, 3 February 2012

Comments (338)
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Cash-strapped British people will breathe a sigh of relief when they see these impressive treasure troves.

Despite the financial crisis, it seems the country still has some money left in the Bank of England's vault beneath London.

In fact, there are stacks of gold bars worth a whopping £156billion stored in an old canteen deep below the streets of the capital.
Treasure trove: The Bank of England's vault under central London contains 4,600 tons of the precious metal, worth an incredible £156billion

Treasure trove: The Bank of England's vault under central London contains 4,600 tons of the precious metal, worth an incredible £156billion

Rich pickings: The rows of simple shelves are stacked high with 28lb 24-carat gold bars

Rich pickings: The rows of simple shelves are stacked high with 28lb 24-carat gold bars

It seems Gordon Brown did not manage to completely strip the country of its assets when he sold off 400 tons of gold at rock-bottom price during his time as Chancellor.

The gold he got rid of when prices were at a 20-year low cost the country up to £11bn, it was estimated last April.


More...

Graffiti artist who took shares instead of cash for painting Facebook's first HQ seven years ago to make $200MILLION in stock market float

He made just £2.3billion on the precious metal he sold between 1999 and 2002.

So the 4,600 tons of the precious metal still stored in these concrete-lined vaults in the heart of London will be a welcome sight for those worried we have little left to fall back on.

The piles of 28lb 24-carat gold bars are stacked on simple blue shelves beneath strip lighting. One image alone shows around 15,000 bars or 210 tonnes of pure gold, with a value of approximately £3billion.
Worth a fortune: In this image alone there are around around 15,000 bars and 210 tonnes of pure gold, with a value of about £3billion

Worth a fortune: In this image alone there are around around 15,000 bars and 210 tonnes of pure gold, with a value of about £3billion

On the walls of one of the vaults, posters from the 1940s are still visible, from when the vast room was used as a canteen.

The walls must be literally bombproof as they were used by bank staff as air raid shelters during World War II.

The old-fashioned posters that hang around the room depict sunny climes, luxury cruises and happier times - which may be as welcome a sight as the valuables for many.

Three-foot long keys are needed to unlock to the doors that guard the rooms holding the gold - but sadly not all of it belongs to us.

Some is deposited by foreign governments as well as our own. Different shapes and marks distinguish the varying sources of the wealth.

Read more: http://www.dailymail.co.uk/news/article ... z2ERHwsoh0
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http://www.cmi-gold-silver.com/blog/15- ... nk-vaults/


15 Most Impenetrable Bank Vaults
2

Even Ethan Hunt couldn’t crack these…

Bank heists are extremely difficult to pull off, no matter what Hollywood might have us believe. Some vaults are so secure that robbers have heart attacks even thinking about breaking in.

With that in mind, check out these 15 Most Impenetrable Bank Vaults from recent history and see to what extremes countries (and some private companies) will go to keep the deposits and valuables of their clientele absolutely protected.
1. Fort Knox – The United States Bullion Depository

If a bank robber was somehow able to get through the solid granite wall perimeter and past the squadrons of machinegun wielding guards and armed military, the thief would still have to contend with a 22-ton vault door. That 22 ton blast door is held shut by a lock so intricate that it requires a 10 person team to unlock. Is it really any wonder that Fort Knox has never even had a published robbery attempt?

Source


2. The New York Federal Reserve Vault – World’s Biggest Gold Depository

Deep below the streets of Manhattan sits a vault so impenetrable that it’s entrusted with more U.S. gold bullion than the famous Fort Knox. Security is so tight that men aren’t allowed to enter the vault; pallets are moved around by a team of robots.

The bank’s security systems are so trusted that even foreign governments use it for gold storage. And – as if that wasn’t enough – a Jason Bourne level protection force watch the perimeter; their shooting range scores are so good they’re better than marksmen.

Source
3. The Bank of England Gold Vault

If Britain’s Prime Minister had a secret, he would want to keep it here. More than 4,600 tons of gold are safeguarded in what is the UK’s largest gold vault. A figure that’s second only to the Federal Reserve Vault mentioned above.

The vault walls are bombproof and so sturdy that bank staff used them for protection during WWII air raids. And when the vault doors do need to be opened, they can only be accessed by an elaborate system consisting of voice recognition, 3 foot keys and other unpublished security measures.

Source / Source
4. The London Silver Vaults

In 1957, the same type of vault used in the London Silver Vaults was used as part of U.S. nuclear testing in Nevada. The 37-kiloton nuke tore away steel reinforcement and loosened trim but didn’t bust the vault.

During WWII the bank around the vault was reduced to rubble due to a bomb strike, but the vault itself was undamaged. The vault itself is the very definition of the world “impenetrable.”

Source

5. Teikoku Bank, Hiroshima – Atomic Bomb-Proof!

Once the U.S. government learned how to control the finger of God, the first order of business was to wipe the city of Hiroshima off the face of the planet. Skin melted from charred flesh… buildings fell like towers of playing cards… grass was parched to dust… water evaporated immediately… and two Mosler bank vaults were undamaged.

How’s that for an advertisement? Good enough for the Mosler company to trumpet that their vaults could withstand an atomic bomb in their advertising for the next 10 years.

Source
6. The Gold Vault in Dubai

Dubai, known as the City of Gold, finished building a vault to hold all that metal in 2009. The vault is located in the Dubai Multi Commodities Center and incorporates the latest and greatest in security measures. Dubai is in the process of repatriating their gold from London now that they have one of the most secure facilities in the world.

Source / Source
7. The legendary Swiss Vaults

Crime thrillers usually have talk of a Swiss bank account. There’s a reason: Swiss banks are among the safest on the planet. The 3-key safety deposit box in particular has been used by the World’s most wealthy citizens for over 200 years. Interesting note: the first deposit box prototype was patented through the same office that employed a young Albert Einstein as a clerk.



Source / Source / Source
8. The Iranian Gold Reserveclip_image002- Location Unknown

What makes the vault holding Iran’s gold reserve impenetrable is that nobody can say for sure where it is. One could assume the vault is either in the Imperial Treasury location or the Iran Central Bank, but you know what they say about assumptions. Iran secretly flew gold into the country from Europe in order to dodge “financial pressure” from the US and UK. Now that the reserves are back within Iranian borders, the location of their holding vault is as elusive as Iraq’s WMDs.

Source / Source / Source
9. The Antwerp Diamond Center – World’s Most Secure Diamond Vault?

The Antwerp Diamond Center was swindled of $100 Million worth of inventory when a team of Italian thieves beat their “impregnable” defenses in February, 2003. The thieves got past body heat detectors, Doppler radars, magnetic fields, motion detectors and an incredibly advanced locking system. The police still can’t figure out how the team did it.

Source
10. The JPMorgan Chase New York Gold Vault

As the global economy suffers more people are plowing their money into gold to hedge against inflation. This spells opportunity for JPMorgan Chase, who swung open an underground vault in Manhattan. If that back of the vault door doesn’t intimidate you, the scowl on that man’s face should.

Source
11. The Federal Reserve Bank Vault of Cleveland

A bank in Cleveland, Ohio has the largest vault door on the face of the planet. Granted it isn’t just any bank, it’s the local Federal Reserve. Ohio isn’t the picture I get in my head when I think ‘bank heist.’ And for the record, the vault door weighs 91 tons… the equivalent of two humpback whales.

Source
12. Codename: Priscilla Bank Vault – Atomic Bomb-Proof Vault #2!

This picture captures the aftermath of atomic bomb testing under the codename Priscilla that occurred in June, 1957 in the Nevada desert. What you don’t see in the picture is the bank vault that withstood the blast… another Mosler engineered vault. The 37-kiloton triggered blast did this to concrete and steel, but left the (unbreakable?) vault intact.

Source
13. The Broker Restaurant Antique Bank Vault in Denver, CO.

The Broker Restaurant (Denver, Colorado) may be the safest restaurant in the country. In 1903 the building was the Denver National Bank. Today the building serves exquisitely prepared dishes in the very room where countless millions were counted and deposited back into safety deposit boxes.

Source / Source
14. The Dominion Bank Vault

At it’s heyday in 1914, the Dominion Bank Building in Toronto, Canada was considered the most secure bank vault in the entire world. Because it was constructed on bedrock and wrapped by surveillance passages, tunneling into it was a practical impossibility. Maybe an Ocean’s 12 style infiltration would work… but let’s not forget the 40-ton vault door. The door was so airtight that a single hairpin would keep it from closing. Good luck cracking this vault.

Source
15. The Hard Rock Vault

The Hard Rock Vault, first opened in 2001, is guardian to hundreds of priceless musical treasures from Jimmy Hendrix’s Flying V to John Lennon’s handwritten lyrics for “Instant Karma.” It’s situated below Hard Rock Cafe London in what used to be Coutts Bank. In terms of security, the vault once held the Queen’s treasury before Coutts Bank was converted.

Source

[vishvak]

found on reddit

CTtf5s2HFkA

some of it is ours

So why is Gold stored in vaults if gold-backed stuff is said to be worthless etc.

[abhishek_sharma]

Special Report: Amazon's billion-dollar tax shield

[pentaiah]

read this

http://www.ft.com/cms/s/0/c3c0b362-3ecf ... z2EfICwTYt

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email [email protected] to buy additional rights. http://www.ft.com/cms/s/0/c3c0b362-3ecf ... z2EfJV32MR


Working with Deutsche, investors – many of them Canadian pension funds in search of yield – sold insurance to the bank, posting a small amount of collateral. In return, they received a stream of income from Deutsche as an insurance premium. On a typical deal with a notional value of $1bn, the investors would post just $100m in collateral – a fraction of what would normally be posted by an investor writing an insurance contract.

The small amount of collateral did not matter, the product’s creators said. The chance of several safe companies, such as Dow Chemical or Walmart, all going bankrupt at the same time was infinitesimally small. It might require a nuclear war. The chance of the investors having to pay out on the insurance appeared impossibly remote. The chance of their collateral being used up was inconsequential.

Having bought protection from Canadian investors, Deutsche went out and sold protection to other investors in the US via the benchmark credit index known as CDX. It would earn a spread of a few basis points between the two positions, perhaps 0.03 per cent.

That does not sound like much. But as it amassed ever greater positions, eventually representing 65 per cent of all leveraged super senior trades, it accumulated a portfolio of $130bn in notional value. Over the seven-year life of the trade, the few basis points were worth about $270m.

There was a problem, though, which traders either did not foresee or did not care about when they booked hundreds of millions of dollars of upfront profits. A severe financial shock, well short of nuclear warfare, could also produce disastrous results.

In 2007, credit spreads widened as investors grew nervous about companies’ prospects and liquidity dried up. But spreads on super senior tranches of derivatives structures, representing the safest portion of the capital structure, did not just rise by two or three times – they exploded ...

[Christopher Sidor]

Now it seems that one of the reason's that Greece is in the EURO-Zone is because of the Chinese. That is, if one believes what Der Spiegel has to say

A Cold Heart for Europe: Merkel's Dispassionate Approach to the Euro Crisis --- Der Spiegel Dated 12-Dec-2012

From the article

For months, Merkel wavered over whether or not Greece should remain in the euro zone. As recently as summer, she couldn't decide whether to believe in the domino or the ballast theory, as she called the two alternatives. According to the first theory, a Greek bankruptcy could drag other threatened euro countries into the abyss. Proponents of the second theory, on the other hand, believe that Greece is the ballast that the euro zone has to jettison to recover.

It's difficult to say why Merkel eventually chose the domino theory. Perhaps it was partly the doing of Chinese fund managers who, during her visit to Beijing in the summer, bluntly described to her what they saw as the devastating consequences of ejecting Greece from the euro zone. If that happened, they said, China would no longer have any confidence in the euro and, as a result, would stop buying bonds issued by euro-zone member states.
.....
.....
Since becoming chancellor, Merkel has been to China six times. The only non-European country she has visited more often is the United States.

[ramana]

Japanese election results to have economic impact:

Japan's Shinzo Abe prepares to print money for whole world

Ignore the headline. Its fear mongering. When the US and Uk have been printing money its to save their banks. When Swiss do it, its to save the Euro. When Japan does it its baad.

What else to expect from the Brits!

[nachiket]

How and why have the Japanese managed to keep the value of the Yen so low, despite the large demand for it and the huge Japanese economy. When the Japanese were posting big Trade and Current account surpluses in the 80's, the Yen's value was even lower compared to the Dollar. What is so special about the Yen?

[Virupaksha]

How and why have the Japanese managed to keep the value of the Yen so low, despite the large demand for it and the huge Japanese economy. When the Japanese were posting big Trade and Current account surpluses in the 80's, the Yen's value was even lower compared to the Dollar. What is so special about the Yen?

What screwed the Japs royally was the US with the plaza accords. It was the forced devaluation of the dollar against the Yen. Imagine making the chinese instead of 7 =1$, making it 3.5 =1$.

Basically by this simple manipulation, US made japanese economy "shrink" by about 50% in two years.

http://www.businessinsider.com/the-plaza-accord-2010-9

As a result, the Japanese yen's value vis-a-vis the dollar doubled in only about two years, from 240 to 120 a dollar.

This was the start of the Chinese "miracle".

[shyam]

99.9% of gold owned by Reserve Bank of Australia is in Bank of England vaults.

[shyam]

Curb Your Gold Enthusiasm

How do you reduce the interest in gold? It’s simple. You make gold more attractive. That’s right. the Chief Economic Advisor of the Finance Ministry in India says “We are worried about gold imports.” Raghuram Rajan continued by saying “The way to curb holding of gold is to create more attractive financial instruments.”

.....

Please add the following Indian aspects to the cascade.

November 19th – In an effort to dissaude speculation, Reserve Bank of India banned Indian commercial banks from loaning money for gold speculation.

November 21 – Newspapers report that Indian government is preparing to issue Gold Bonds. These would be pieces of paper that represent gold, not pieces of gold that represent paper – also not to be confused with athelete’s foot powder.

November 25th – Reserve Bank of India’s Subir Gokran said there is a need to dematerialize gold like any other financial product to reduce its physical imports. Gokran’s described his plan as finding “ways to replicate the financial characteristics of gold without necessarily causing physical importing.” (again see Star Trek Transporter for dematerialization explanation: http://en.wikipedia.org/wiki/Transporte ... ar_Trek%29)

[svinayak]

My friend is planning to buy 1 KG of gold soon. What is the advice.

another friend has already bought 3 kg of gold and kept in safe lockers in banks
Another friend bought 1 kg of Gold in 2006 for $27000.00

Current price is $60k

[Chinmayanand]

GOLD may come down to 1550$ / ounce. Better buy it there or start buying in small quantities , say 100 gms or whatever he is ok with.

[RoyG]

As long as central banks continue to print money gold prices will continue to rise with minor fluctuations.

[pentaiah]

Gold will not come down much leave alone crash
As long as the US deficit is controlled which is long ways away

[Christopher Sidor]

Schäuble's Secret Austerity Plan for Germany --- Der Spiegel Dated 24-Dec-2012

Till now Germany has been adamant about Greece repaying back its fellow euro-zone countries in full. No write-downs. Interest may be waived. Interest may be paid over a longer duration. Interest rates might be decreased. But Greece will have to pay back in full. In other words what was done with the private sector debt, by the PSI program, will not be applied to the Euro-zone countries bailout money. Also germany has tended to take the entire Euro-zone countries and like minded EU countries along with IMF+ECB for Greece rescue. One question in all of this which was not asked was, why did not Germany do it all alone? Why did it have to take IMF+ECB+Eurozone countries along? A lot of these questions are answered in the above article

Following the most recent recession, government debt soared from 65 to nearly 83 percent of gross domestic product (GDP). Schäuble's (the finance minister of Germany) experts say that the country cannot withstand another similar increase in public debt and conclude that it's time to take appropriate countermeasures.

The most recession that the article is quoting is the 2008 financial crisis downturn. Basically it was always assumed that Euro-zone, including germany, would be in recession in Q4-2012 and Q1-2013. But some experts are now hinting that the double dip recession in Euro-zone countries will last till Q2-2013. With elections due in Germany and that too in a recession, the politicians are falling over each other to give sops to their german electorate. Also what makes german financial position slightly precarious is

The so-called debt brake, which calls for the German federal government to "maintain a nearly balanced budget" starting in 2016. The government will still be able to take out loans to some extent. In 2016, for instance, it will be allowed to borrow some €10 billion. However, Schäuble and his staff say that Germany should not completely exhaust this scope for borrowing. They want a safety buffer.
....
....
It's also possible that Berlin will have to absorb the costs of its bank bailouts. At the height of the financial crisis, the German government supported ailing financial institutions such as Hypo Real Estate, Commerzbank and WestLB with capital injections and guarantees amounting to nearly €180 billion. Large quantities of toxic assets were transferred to so-called "bad banks." But it's questionable whether these banks will ever be able to completely pay back this money. If that is the case, the federal government will have to waive its claims and permanently absorb the debt.

It is the second part that is most worrying. Basically what it is saying is that Germany might have zombie banks like Japan does. Banks which just sit there and take minuscule part in helping the real economy. But while they just sit there, they tie up massive amounts of Money on their balance sheets.

Some of the items that are being considered are

• Retirees who leave the workforce before they reach the statutory retirement age, i.e. 67, currently have to accept a 3.6 percent reduction in their pension payments for each year. In the future, this would be 6.7 percent.
• The retirement age will remain at 67, but the retirement benefit period will have "to be linked to life expectancy." In other words, the older Germans get, the longer they will have to work -- if need be, beyond the age of 67.
• Currently, the surviving spouse receives 55 percent of the deceased spouse's pension. The idea is to significantly reduce this level in the future. This initiative would annually save billions of euros for the state pension fund.
• Finance Ministry officials propose increasing the reduced VAT rate of 7 percent -- which currently applies to such items as food, books and streetcars tickets -- to the regular VAT rate of 19 percent.
• Germany's statutory insurers will require more money over the coming years as the population's life expectancy increases. This has led them to consider introducing a surcharge on income tax to support the system. The experts call this a "health solidarity tax."

Please note that all of this is dependent on any of following items from happening
1) Germany or Euro-zone undergoing a deep downturn comparable to the 2008-9 financial crisis.
2) Germany having to take on its books, the bad debt piled up by its Banks
AND/OR
A write-down of Greece Debt by a significant margin as demanded by IMF.

But there is a silver lining in all of this. Greece the troubled child of Euro-zone is slowly on the mend. It might have a balanced budget soon. And it might return to the market for borrowing also very soon. But the problem with all these silver linings is that they are going to happen with Euro-zone is in a double dip recession.

If things get worse, something will have to give. But the question is what will give? The Balanced-Budget pledge of Euro-zone countries? Greece? Or the worst scenario Germany?

[svinayak]

Japan's Shinzo Abe prepares to print money for the whole world
Japan’s incoming leader Shinzo Abe has vowed to ram through full-blown reflation policies to pull his country out of slump and drive down the yen, warning Japan's central bank not to defy the will of the people.

http://www.telegraph.co.uk/finance/econ ... world.html

[paramu]

Some propagandu....

India Must Tap Household, Temple Gold to Reduce Imports

Cash-for-Gold Loans Hide Shadow-Banking Risks in India

[abhishek_sharma]

STIMULUS OR STYMIED?: THE MACROECONOMICS OF RECESSIONS

[shyam]

Peter Schiff: Inflation Propaganda Exposed