Don't think Safe Deposit Boxes are safe

Thieves and Tax authorities are a threat to Safe Deoposit Boxes, whether they are in your home or in a bank - not sure which one is worse!
Greek Authorities To Launch Mass Confiscation Of Safe Deposit Boxes, Securities, Homes In Tax-Evasion Crackdown

Is The World's Largest Bitcoin Exchange Headed For Collapse?

Exotic but risky! Remember that  Bitcoin consists of nothing but bits on some distant computer! While the same can be said of most other assets (Bank deposits, Bonds, most Shares) this is less regulated - and if it is we would like to learn about this from the promoters or fans!
Is The World's Largest Bitcoin Exchange Headed For A Mt. Gox-Style Collapse

Credit Suisse Offices Raided In Multiple Tax Probes: Gold Bars, Paintings, Jewelry Seized

Be careful where you do your Banking business! Nothing is safe these days!
Credit Suisse Offices Raided In Multiple Tax Probes: Gold Bars, Paintings, Jewelry Seized

Bitcoin Hype: is it Digital Gold? Caveat Emptor!

Bitcoins compared to Gold? While Gold may not be the ultimate store of value (problems with fake gold, confiscation, safekeeping) it is still better than some digits in unknown/unsecure computers that can wiped by savy hackers or the friendly government. Remember Tulipmania in the 1600s!
Digital Gold - For Now Caveat Emptor

What happens if your Financial Adviser goes bust?

The Credit Crisis and ensuing market crash might already be a distant memory. But one of the key lessons that could be learned was the fact that even financial firms with a century-old pedigree could go under. So investors are well-advised to check their financial arrangements and ask themselves if they are protected in the case their financial advisory firm goes out of business.

Safe Deposit Boxes are not 'safe'

Most ordinary and law-abiding citizens have no idea how much an unaccountable clique of professional politicians has already undermined all notions of justice and freedom. So just consider a few facts about a raid on safe deposit boxes that took place in London in 2008. Given that Britain is still a country whose legal system is held in high regard you may just imagine how your assets may be treated in other countries.

Aside from those three dozen or so people found guilty, the vast majority of the 3,500-plus box owners have turned out to be innocent. Yet their money was confiscated, and in many cases is still being held, by the Metropolitan Police or the Inland Revenue. The owners have spent nearly three years and thousands of pounds in uncompensated legal fees having to justify why they kept their personal belongings in safety deposit boxes and how they came by them in the first place. Worse still, when people have had their belongings returned, in some cases cash and jewellery has been missing. (London Evening Standard)

So readers should be careful about where they keep their wealth. We always advise to diversify holdings as much as possible with respect to geographical location and custodian.

Swiss Banks client Gold to allocated accounts

The banks are reported (Financial Times) to suggest to clients to move their physical gold holdings to allocated accounts. These gold holdings then are no longer part of the bank's balance sheet and do not require costly equity capital to back it up. To a certain extent this increases the safety of the client's gold holdings as any bankruptcy of the bank would no longer have any detrimental impact on the client's claim to ownership of the gold (assuming the physical gold is segregated properly - which is not always the case as several recent cases in the UK demonstrated where client holdings of various assets were not properly segregated). Investors should be aware, however, that banks (and other custodian institutions) might at any moment be prevented from giving access to gold that is in their custody if the governments/regulators order them to do so.

Who really owns your Gold?

Many investors may think that by holding physical gold in their portfolios they are to a certain extent hedged against the loss of purchasing power that is experienced by all major currencies. But make no mistake, only physical gold that you hold in a vault that is controlled by you or in some other safe place is really gold that you can count on when the proverbial s**t hits the fan. Unallocated gold or pieces of paper that represent a claim on gold ('Structured' products, derivatives or ETF's) are nothing else but some bank's or fund manager's obligation and as such only as good as the standing of that institution. If they are insolvent you are left with nothing else than a piece of paper and have to join the queue of creditors.

Another Warning about the safety of your assets

Most investors are unaware of the arcane details of bankruptcy law and related aspects of investor protection. But this warning illustrates that politicians and regulators seem to be less concerned with the well-being of investors and have decided to focus on the interests of the finance lobby.

Even arbitration no protection for investors

This case demonstrates that investors should not rely on securities arbitration for his protection as providers of financial services use every legal option to delay or void such an award. The reader can form his own judgement about the morality of such conduct.

Are your assets in safe hands?

Most financial assets are these days represented by bits on some faraway computer. In addition, the owner relies on some third party - a bank or fund manager in most instances - for the safekeeping of his 'bits' (wealth). When new court judgements make this remote control even less secure it represents an extra layer of risk that all investors have to guard against.

How safe is your money?

Bankruptcies of major financial firms Lehman and MF Global have left a sour taste in the mouth as supposedly segregated customer/client money was exposed to grave risks or even lost. Banks may have difficulty keeping track of a myriad of transactions that routinely cross their busy desks but investors should be aware that securities they think they own are nothing else but electronic digits in some distant computer.

Who protects the investors?

When reading that the justice authorities in the Swiss canton of Ticino have completed their investigation into the bankruptcy of Sogevalor, a financial advisory firm that went out of business in 2004 (!) one has to ask who - if anyone - is really protecting investors from fraud and malpractice. Those responsible for Sogevalor's demise - and the alleged fraud that cost investors up to Sfr 130 million - have not even been charged and may well escape any formal prosecution. Even under most optimistic assumptions a court case could be a protracted procedure - especially when a lengthy appeal process is adopted. By that time quite a few of the investors - and maybe even those eventually found responsible - may no longer be in this world. The lesson from this and similar cases should be: BUYER BEWARE! Investors should only part with their money after careful investigation. A clear separation of the safekeepking (custodial) function and the investment advisory role would be the optimal solution we recommend.

How safe is your Fund?

The regulation of investment funds is contained in voluminous tomes in most countries. In addition supranational entities like the EU add their own regulations. So should the investor assume that any fund issued by a regulated investment firm is safe from fraud and malpractice? We have repeatedly warned that even investment funds domiciled in 'developed' countries like member states of the EU are not automatically fail-safe. Apart from the question how small countries like Luxembourg, Ireland or Malta could afford to reimburse investors for substantial losses it is by no means clear that the wording of the regulations is such that the rights of the investors are defined in a sufficiently clear way. As ongoing court cases in Luxembourg demonstrate, rubber paragraphs allow to drag on court cases for lengthy times and fund providers try every legal trick to wear down the hapless investors who try to reclaim their savings.

How safe is your money?

We are here not talking about how your investments do but whether or not your investments, your money, are still safe in an account where they are supposed to be. Very few readers will store their fungible wealth at home, in a safe or buried in the back garden. While property should be reasonably safe - at least until governments confiscate it or tax it away - most other assets are nothing else but book entries in some computer and linked to an account with a bank, insurance company, investment fund or asset manager. News that one of the major exchanges did not detect that the regulations about segregation of customer assets were not followed by MF Global is a warning sign. Investors must not be seduced by posh offices, glossy marketing brochures or gregarious personalities into neglecting the more boring - but essential - aspects of money management.

Are you protected against fraudulent investment advisers?

A report about the loss of Sfr 20 million that has been uncovered in the private banking department at UBS highlights the need to carefully select and monitor investment advisers. In this particular case a senior adviser to very high net Spanish clients had caused the misappropriation and the bank had to reimburse them. So one could say that it pays to entrust only very large and financially strong institutions with the management of one's investments. But there is another way and it means that independent or smaller money managers can well be entrusted with the direction of the investment but that the safekeeping of the securities and funds should be handled at arms-length by an independent and secure custodian.

And you thought you owned that Silver?

A new court case in the USA highlights the risks of leaving your holdings of physical precious metals such as Silver or Gold with a bank. That the belief that one owns 'hard' assets is naive to say the least is proven by the fact that often all that you really own is a claim on a bank. Should that institution get into trouble you are only the owner of a claim on that bank and have to joins the queue of creditors. In all likelihood you would at best receive a fraction of the worth of your holdings in the eventual settlement of the bankruptcy.