Thursday, April 04, 2013

The Run on Italy's Banks Has Officially Begun

The CEO of UniCredit, Italy's largest bank, says that Cypriot-style "haircuts" on bank deposits are "acceptable". Oh, and that said practice should become a model for salvaging banking executives' seven-figure bonus payments. You know, the same bankers whose investments have literally destroyed the balance sheets of countless financial institutions.

And how have Italians reacted?

Curious why so little has been said about cash flowing out of Italy's banks, especially when even UniCredit's CEO today proudly warned everyone he is all for confiscating uninsured deposits as long as "everyone else is doing it" - and no, he is not kidding, so when it does happen, nobody will be able to say they weren't warned ... Maybe it is because Italian cash is actually not leaving the country at all. Instead, real "wealth" is departing the boot-shaped nation, quietly and under the radar, as fast as it can in another form: gold...

As we can see illustrated in this example of capital flight.

Italian finance police had a lucky find on Easter Sunday during a routine check of a family car crossing into Switzerland: they discovered gold ingots worth about €4.5 million (CHF5.5 million) concealed in false compartments... The car was driven by a 53-year-old Italian resident of the Swiss canton of Ticino, described by the police as the legal representative of a Swiss company.

He was travelling with his wife and three children, apparently going for an Easter trip.

The police decided to examine the car more thoroughly when they saw how nervous the family looked. They found 12 gold bars wrapped up in newspaper hidden under the seats.

The driver “was unable to provide an explanation or to show a legitimate source for this large quantity of precious metal”, the police in Ponte Chiasso said. He and his wife gave “evasive answers”.

The man was immediately charged with money laundering. The ingots and the car were seized. Investigations are continuing into the source and destination of the gold.

There has been an upsurge in the smuggling of gold from Italy to Switzerland in the past few months since the Italian authorities launched a campaign against tax evasion and money laundering.

Truly portable wealth comes in very few forms. Gold has served in that role since the beginning of recorded history. And it has the added benefit of escaping the banksters' clutching fingers, seeing as they're admitting that QE-Infinity has about as much chance of succeeding as Obamacare.

Tyler Durden summarizes with the rhetorical question, "did we mention the confiscated product was gold: not euros, not Cypriot euros, not dollars, not palladium, not bitcoin... gold?"


4 comments:

Doom said...

I do believe the reason gold has... appreciated so much... isn't just demand by investors. It is also a two-pronged attack on wealth held by little people. Even silver is in on the act this time.

The high price drives the little guy out of an opportunity to secure his wealth in some minor way, and does it unofficially. So far, no one has been barred from buying gold (though in Cyprus, the difficulty is getting money out of the country to the seller, making sales at least difficult, added to the 300 euro daily withdrawal limit). Further, it is another bubble. Getting in now would be quite foolish, on a purely speculative basis. At least understand you will be trading a great deal of wealth for liquidity, and the value of the loss is being controlled by the very people who created the rest of the economic problems.

Just an opinion, a suspicion.

Anonymous said...

I humbly submit that this is not a bubble going on with gold. it is a hedge against what an anxious alarmed ever widening ever growing segment of the population of the world sees as one tangible real world way to save/ensure wealth after TEOTWAWKI. if this house of cards falls down lt will be worse than the 30's. people are waking up and realizing that the wealth they have saved over a lifetime is on the table for the appetite of the parasite class at the top and the bottom of society.

Doom said...

hehe

We'll See rumcrook. I think, when the big players want or need cash, they are going to dump tons of it, literally, by the dozens, slamming the price down so fast most "investors" are going to cry.

It'll always be worth something. Right now it is quadruple what it generally runs. But right now? Sure, the rich have inflated it, and are using it as a hedge. But when something, anything, better comes along, or they simply need to cash in on the liquidity, most gold owners are going to be wiped out (more so those who "own" on paper, what a larf there). If you buy gold, now, just understand that it is not if, but when, that will happen. Silver too, really, at this point.

I guess with silver, they wanted to screw the little guy out of even pocket change. Believe as you like. It's coming.

K-Bob said...

Holy crap!

But the good news is, it'll stop right there, right?

Okay, maybe only Ireland or Spain. But then, *then*, that's all, okay?

Just a bunch of foreigners who aren't lucky enough to have a lightbringer, "not resting until" ...something or other is done.

We'll be fine.