Viet Cong Puttting Pressure on their Dongs! Vietnam Suspends Gold Imports
Long Duk Dong: No more yankie my wankie. The Donger need food.
From the FT today: Vietnam suspends gold imports
By Amy Kazmin in Bangkok and Javier Blas in London
Published: June 23 2008
“Vietnam’s communist authorities have temporarily suspended all gold imports in a bid to tackle the country’s spiralling trade deficit and help support the depreciating local currency, the dong.
With Vietnamese investors rushing into gold as a hedge against skyrocketing inflation, Hanoi – which sets an annual quota for gold imports – has withdrawn licences for further imports, traders said on Monday.
The decision comes as record imports of gold bars have made Vietnam the world’s biggest market for gold bullion, surpassing India and China and helping to deepen Vietnam’s trade deficit.
The state-controlled Lao Dong newspaper reported that the trade deficit for the first half of the year had tripled to nearly $17bn, up from $5.2bn in the same period of 2007. Vietnam’s trade deficit for the whole of 2007 was $12.4bn.
The rising trade deficit has put pressure on the dong, which was effectively devalued by 2 per cent on June 11 as part of a readjustment in the official exchange rate. Despite the devaluation, the dong trades at a further discount on the black market.
Hanoi has regulated gold imports for years. But the recent collapse of the local equity and property markets, inflation which hit 25 per cent in May and concern about the weakness of both the US dollar and the dong have spurred a big increase in local demand for gold.”
The rest of the story and photo are here: http://www.ft.com/cms/s/0/5541c9a6-4151-11dd-9661-0000779fd2ac.html?nclick_check=1
MY COMMENT: I saw this in the Financial Times, and I wanted to write about it. However, Mish Shedlock beat me to it here.
I think Mish nails it, but I might add a little.
I have visited many third world countries. I lived in a “second world” country for three years. The US trusts and respects its government far more then most countries. Many countries people do not leave much money in banks, they do not trust the banks or the government. Many do not trust their national currency. They will swap it out for EUROs, dollars, pounds whenever, possible. Many will buy real estate or start a business as soon as they have the funds. If they get additional money they will re-invest in their own business or expand or improve their home. Stocks? If you don’t trust the currency, do you really trust the stock market? Not in many cases, although the view of stocks has changed recently in many countries.
When I was looking for an Apartment, overseas, the apartments were far more fortified then US houses. Cement walls, strong window shutters, doors that four way locked into the floor and walls, car garages with security gates and security guards and cameras. AND EVERY HOUSE HAD ATLEAST ONE hidden wall SAFE. Always a wall safe….
I have not been to Vietnam. I have read Vietnam has a homogeneous, literate and hard working people. The people are not stupid, but victims of bad government. They fought out the Japanese, French, Americans, and Chinese. They understand a war economy, inflation and paper money. They buy and hold PHYSICAL gold. There is an extremely valuable lesson there, you do not want to learn by incident.
One way a government can tax its people is by inflation or devaluing its currency.
Citizens can opt out by buying and holding gold at HOME. Militaries and governments are not above robbing banks and people.
Cannot happen in the US?
Read and heed:
The Roosevelt Gold Confiscation Order Of April 3 1933. The End of Dollar Hegemony
It all ended on August 15, 1971, when Nixon closed the gold window and refused to pay out any of our remaining 280 million ounces of gold. Central Bankers Against Gold - The Demonitisation Of Gold 1933-1980.
On August 15, 1971, Mr Nixon closed the "Gold Window". The last link between Gold and the Dollar was gone. Nixon Ends Bretton Woods International Monetary System
What about London? Again Mish Shedlock has a great post: Minyan Mailbag: How Safe Is My Gold?
Safe Deposit Boxes Raided
The article to which "SC" is referring is Safety deposit box raids yield £1bn of drugs, cash and guns. Police have seized a potential £1 billion “treasure trove” of cash, drugs and guns in an unprecedented raid on concrete vaults holding 7,000 safety deposit boxes.
More than 300 officers and staff were involved in simultaneous raids at three depots in London’s Park Lane, Hampstead and Edgware. Officers have secured the concrete and steel vaults and will take several weeks to remove each box, using angle grinders, to a secret location where they will be prized open with diamond-tipped drills.
Shocking Raid In California
The raid in California that James Turk referred to is quite shocking. Let's take a closer look at Not-So-Safe-Deposit Boxes: States Seize Citizens' Property to Balance Their Budgets.
MORE TO READ HERE:
Mish offers Final Thoughts:
I am highly suspicious of the claim that terrorists are hiding out in gold. It is not that easy to move around, controls are amazingly tight, and with every government nosing around in it, it would seem to me to be the one of the last places terrorists would attempt to hold money.
Regardless, make no mistake about this: Gold Is Money. Proof is easy to find. Gold acts like money, it is money. And governments sure are treating gold as if it was money, aren’t they? Actions speak louder than words.
Mike "Mish" Shedlock
I think a portion of your portfolio should include some physical wealth and foreign currencies. I think you should have a couple of hiding spots for it. The US is involved in a dangerous situation in Iraq. If Israel attacks Iran. Iran could eventually overwhelm the US forces in Iraq. Baghdad is only 70 miles away from Iran's border. Guess what happens to the dollar in this circumstance?
I hope I am very, very wrong on this thought.
Lets let Long Duk Dong take it from here: