Owning a gold bar or sovereign actually in your hands is one thing - holding a piece of paper saying you are the owner of some gold being kept by somebody else is an entirely different thing.
Instead of owning gold, you can also invest in the index of gold values. This is under the ticker GLD on one of the American exchanges. Advantages - you can buy or sell "gold" in a few clicks. You can quickly dispose of it should you need to. You can follow the price on a daily basis. It offers the liquidity of a stock or fund, but follows the gold price more or less accurately. If you transfer money to $, you won't feel tempted to dip into your fund. Of course, you are still taking a risk on the value of the $ vs the £, but if gold is always priced in $ (maybe it isn't, in the UK) this wouldn't make much difference. You won't have to put your ingot under the mattress where it might be stolen, or in a safe deposit box.
But that is speculative zero sum gambling. In the event of a crash whoever is left holding the parcel risks losing it all because there is no physical asset.
And dont forget the mansion tax, if that ever comes in how long before more and more of us find our homes are included in some new band ? Detached house tax, London House Tax, 5 bedroom house tax, Half Acre Garden tax etc etc.
Tough at the top eh Sure all those who find Iceland expensive for food will have lots of sympathy for the million pound home owners of London.
So the Government are securing all Civil Servants and Military Personnel accounts in Cyprus. Does that mean we, The Taxpayer, will be funding what gets taken out of their accounts?
I wasn't sure if the Uk Government can stop the funds getting removed, or will reimburse the acc holders.
Well, if I worked for a corporation, that sent me to Cyprus, and I ended up with a Cypriot bank account, yes, I would expect the company to reimburse me the 7% that was taken off my bank balance. It's the cost of doing business, isn't it? So why should that be different with government workers? On the other hand, if I decided off my own bat to retire to a country where it was sunnier, it rather seems that I have to deal with any personal risks that throws up. All seems quite clear to me.
If you worked for a corporation, went to Cyprus and you put your life savings in a Cypriot bank would you still expect the same ?
Well, possibly. But does that mean you are against any derivatives at all? It's not a leveraged fund. You can buy shares in all sorts of funds based on market indices or foreign exchange. I'm not against people investing in these vehicles. They are still quite comprehensible, not like Collatorised Debt Default Swaps or whatever the things were which your average investor (or average banker??) doesn't understand. At a sweep it seems that you are against the options market as well - although once again, these can be useful hedging vehicles (although obviously also vehicles for rampant speculation). Or am I reading too much into your comment?
No. But it would vary from case to case, i.e., had I been a loyal corporate servant in Cyprus for decades, or had I only been there a year or two on a short term contract and decided that it would maybe make a good place to retire to in the future and moved all my assets there.
I am not against it at all, my point being that people should understand what it is they are investing in.
British government personnel, such as those in or attached to the armed forces stationed in Germany, Cyprus or elsewhere, have long been protected financially against currency fluctuations, bank charges for currency conversions, property taxes on quarters, and local vehicle taxes among other things. Such losses are claimed back from the MOD. This is all fair enough. However Brits overseas who chose to invest in local property, businesses, etc have always been on their own. They have simply had to pay whatever taxes and duties may be imposed, and sustain whatever losses they may have incurred. My view would be that if a British serviceman in Cyprus were to sustain banking losses on handling this month's salary, they should be reimbursed by the MOD as per usual. But if the same soldier has chosen to keep his life savings in Cyprus instead of in UK, and has benefited from recent windfall gains and high interest payments, he should not be reimbursed for the new tax. Another point: If he is to keep the windfalls and interest and be reimbursed the new tax, does he also get to keep the bank shares which are due to be issued? Should they not be handed over to the MOD?
It amazes me that the Euro seems to be defying gravity and will surely come unstuck one of these years. The sticking plaster repairs seem to keep the markets ticking along nicely but when will reality strike? I could see this Cyprus situation causing some massive turmoil as the ordinary investor in PIGS+ starts to reduce their possible exposure to the same medicine being applied to them in a few months. So is it time to sell? And where will the smart money be going? Maybe classic Ducatis? :wink:
yes the smart money is going into tangible assets one thing is certain, if this ridculous plan does go ahead there will be runs on banks in other countries as people look to mitigate possible losses maybe when its time to bail the other pigs countries out they could tax all the eu bank acounts rather than just the country concened
I can see this as a distinct possibility. Depositors already are uneasy about large cash investments/bank accounts and probably part the reason for so many buy to let properties, its harder to take away bricks and mortar IMO.
Suppose Osborne introduces in his budget statement a mandatory 10% levy on all UK bank accounts in order to help with the deficit. I wonder what the reaction would be. AL
