RED ALERT: World's biggest gold storage company dumps US citizens … ViaMat, a Swiss logistics company that has been safeguarding precious metals since 1945, is literally the gold standard in secure storage. They have vaults from Switzerland to Hong Kong to Dubai, and they count among their clients some of the largest mining companies in the world. They know what they're doing. And now they're dumping US citizens. ViaMat does a great deal of business within the United States. As such, the company is heavily exposed to the insane US regulatory environment. As an example, the 2010 Foreign Account Tax Compliance Act turned into more than 500 pages of regulation! The costs and risks associated with compliance simply became too much for ViaMat to bear. – Simon Black, Sovereign Man
Dominant Social Theme: Who needs gold storage anyway?
Free-Market Analysis: Simon Black's Sovereign Man tells us that the top gold storage firm worldwide – ViaMat – is refusing to take US clients. He reproduces a memo explaining the decision and then comments, "This is huge. I can't possibly overstate the potential ramifications."
Here's how ViaMat explains it, according to Black:
"We are currently experiencing rapid and substantial changes in the general regulations within this business. The changes mainly relate to the tax structures and taxation systems of various countries. As a consequence of these changes VIA MAT INTERNATIONAL has taken the decision to stop offering this service at its vault [sic] outside of the US to private customers with potential US-tax liability."
Black points out that big gold depositories like Gold Money and Bullion Vault "ALL use ViaMat as a primary secure storage provider." As a result, ViaMat's decision will have an effect on the rest of the gold investing community, especially when it comes to US vendors.
Black believes he has a solution as well:
Now, if you're in the United States in particular, one of the most important (and cost effective) steps you can take in international diversification is to store precious metals overseas.
Gold remains the most effective 'anti-currency' out there, a bet against a corrupt financial system and debt-laden sovereign governments. But remember– governments have an unblemished track record of plundering their citizens' wealth. So if you store your gold in the US, you might as well ask Barack Obama to keep it under his mattress.
If history is any guide, storing gold abroad is critical. And it's one of those things that you won't be worse off for doing. The thing is, it's equally critical to work with a service provider that has no US exposure.
There are very few options out there. Again, most of the big boys use ViaMat, which has heavy US exposure. Or Brinks, which is a US company.
It is surely a good idea to work with a firm that does not have US exposure when storing gold, but there is a larger point that people should be aware – and that is a growing trend among regulatory democracies generally to insist that citizens constitute a state asset.
This is a kind of unstated dominant social theme but it is one worth examining and even internalizing as the world's currency chaos expands. Increasingly, US officials in particular are insisting that US laws and taxes are to be enforced everywhere in the world and are turning to foreign companies to generate compliance.
People interpret this as a US "grab for assets," but it is obviously something more. In a fiat environment, currency is not backed by assets but by a nation's citizens. If citizens are not compliant, then the nation's top officials are not in control of their "assets."
As the dollar reserve system itself becomes questionable and as fiat currencies themselves become ever-more competitive, those who run nation-states may feel obligated to assert additional citizen controls no matter where their citizens reside.
This seems to us to be a trend and one that is spreading throughout the West and even beyond to countries such as China. The antidote for now anyway is to try to be a citizen – or at least resident – of more than one country and to create life-style alternatives that provide maximum flexibility and privacy. Easier said than done.