US President James Madison:
The only adequate guarantee for the uniform and stable value of a paper currency is its convertibility into specie [gold]—the least fluctuating and the only universal currency.
Yesterday gold price reached 4’383 USD/ounce.
Funny anecdotes about gold buyers from Germany doing shopping tourism in Switzerland. I must add a timely reminder that money laundering only happens at barbershops and nowhere else.
Why do Germans come to Switzerland to buy or sell gold? One reason lies in the loose provisions that apply in Switzerland: up to a value of 15’000 francs, the precious metal can be purchased without proof of identification or origin. In Germany, the limit is much lower – at 2000 euros. In addition, gold can be transported across the border up to a value of 10’000 euros without obligation to declare – both to Switzerland and back to Germany. Customs treats gold like cash.
- Gold exported from Switzerland to non-EU countries is not subject to a mandatory declaration limit, but customs authorities may conduct random checks and require the exporter to provide information about the gold’s origin and ownership.
- If the gold is being exported from Switzerland to an EU country and its value exceeds €10,000, it must be declared to the relevant customs authorities upon export.
- The declaration requirement is based on the EU’s anti-money laundering and terrorist financing rules, not Swiss law, which does not impose a limit on the amount of gold that can be exported.
- Exporters should be prepared to provide documentation proving the gold’s authenticity, fineness, and legal acquisition, especially if the gold is in the form of bullion or investment-grade coins.
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Anyway, in recent times…
Bern, 7.11.2024 - The Office of the Attorney General of Switzerland (OAG) has filed an indictment with the Federal Criminal Court against two Swiss nationals for qualified money laundering. The OAG accuses the two men of having moved assets acquired by criminal means – namely EUR 34 million, CHF 1 million and around 830 kilograms of gold – across borders for at least four years as part of an internationally operating criminal network in breach of applicable declaration obligations.
I don’t see any event that could reverse this trajectory.
In fact, it’s only going to get worse from here.
Back to village news, AML being more relaxed in Switzerland compared to Germany (higher limits for unreported cash transactions) is a strong incentive.
The fun part of this story is that making 2 trips to Switzerland instead of 1 would have made everything compliant. The gas savings went up in smoke.
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A bit too deterministic for my taste (correlation ≠ causality) , but it raises good questions.
I’m intrigued by putting real estate, gold and bitcoin at the same level. But no prob, we may get the answer soon about this speculation. I hope not too soon.
Well, the discount to the Gold miners did lead to a huge upswing.
I sold my (small) silver holdings on these crazy prices and bought silver miners instead PAAS and WPM. Let’s see if the crazy prices hold.
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Good tip about the silver miners.
Silver price projection based on the 1979 trend:
I’ve learned recently that from 2026 China classify silver as dual use export item, so every transaction has to be first approved by gov. Now they can play interesting political games: not enough supply of Nvidia chips, fine no more silver to produce them
I thought with the massive spike in Silver prices, we must be at inflation adjusted all time highs, but according to the FT, we are not:
But gold is:
And relative to stocks, it is cheap, but could says more about stocks being expensive?
But if more people pour into gold/silver from stocks and money market funds, then prices for both could shoot up much more.
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It’s also a question of „How low can the Dollar go?“
To which one might be inclined to answer „Yes“.
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The narrative of bitcoin as new digital gold has been out there for several years.
Something happened yesterday to crypto, but i’m lazy to look for detailed info. So, I asked google AI to make a plot with gold/CHF and bitcoin/CHF. gemini indexed prices in CHF to 100.
Something happened last October. Legacy gold got even more popular while digital gold is taking a beating.
Last Thursday silver was at 120 USD/oz, today around 80. A nice ~30% drop. Gold down 15% from last Thursday.
Just wondering what happened. It seems people used the stop-loss button on the trading website, others may have abused leverage and faced a margin call. A 30% drop is not the end of the world if cash is used to but the actual metal, but it can send call options to zero. As grandpas tell, leverage is a thing of the devil.