First thing yesterday morning our office received a call from England inquiring about purchasing 1600 ounces of gold per week (approximately US$2.5M) for a client of theirs in Italy. For AFE this is not a problem; however, as the call progressed, our representative soon discovered that their client wanted to make the purchases with cash and not send a bankwire transfer! These types of transactions have a substantial risk of money laundering; therefore, our representative was immediately cautious, politely declined and hung up the phone.
With the ongoing crisis in Europe involving Greece at the forefront of today’s media, we are already hearing over the last few months various reports regarding Spain, Ireland, and Italy. Capital-type controls are being put in place either by banks or governments when it comes to their own citizens’ wealth and money.
Man with €2m of gold crossing border has his gold confiscated: Confiscated Gold
This is not unusual if one simply has a scope on history and then reflects them onto current global and geopolitical events as a repetitive cycle. Human beings as a group always responds to certain situations the same way, so the probability of the same things happening repeat over and over again.
Such capital controls are found throughout history. We see it in recent history, for example, with countries such as Germany, USA, Australia, Argentina, Kosovo, Serbia, Croatia, Portugal, South Africa, Greece, Spain, Italy, UK, Iran, Vietnam, and Korea just to name some off the top of my head.
The smart money people never leave their financial affairs until it’s too late! They stay in front of corporate, institutional, and capital controlling entities. International diversification here is key to their personal affairs.
The process unfolds as follows when things are not looking too good on the national horizon: First the smart money begins to sell down locally-held investments and properties and then repurchases assets outside of the country. As trouble starts to become more evident, it’s time to begin moving personal savings out into safe haven or trustee internationally-held entities or institutions.
All of the above are for added protection of one’s family’s hard earned wealth. However, unlike our caller’s client today who has left things probably too late and is now forced into looking at colorful ways of trying to shift wealth which has the potential to put one at risk of authority backlash, timing is of the essence.
I am reminded of one of the wise old King Solomon’s quotes to paraphrase, "For the prudent foresee evil in the land; however, the foolish continue on in their way and suffer for it." Or as we say around the offices of AFE, "It's better to be a year early than a day late."
Source: Anglo Far East