Precious Metals Forum

Go Back   Precious Metals Forum > Precious Metals and Economic News > PM Bug

Reply
 
LinkBack Thread Tools
Old 03-25-2020, 07:58 AM   #1
Golden Cockroach
 
PMBug's Avatar
 
Join Date: Oct 2011
Location: In Scrooge McDuck's vault
Posts: 7,299
Liked: 2502 times
When unallocated accounts go poof

Quote :
ABN AMRO leaves gold investors empty-handed, as the bank closes all weight accounts for gold, silver and platinum. Approximately 2,000 customers who have precious metals in their weight account at the bank have to sell them before April 1. If they fail to do so, ABN AMRO will sell their positions at the current market price. The bank cannot guarantee that they will sell the precious metal at a favorable price.

This decision comes at a particularly unfavorable time for gold investors. At the same time the bank is forcing its customers to sell, a run on physical gold has started. Investors who thought they were well positioned with their precious metals at the ABN AMRO can now join the long queue of people who want to buy gold now.

Back in 2013, the weight accounts at ABN AMRO were transferred to another custodian back. The Swiss bank UBS took over Deutsche Bank’s role as custodian of the gold. ABN AMRO customers were informed of this by letter. ...

Customers who held physical precious metals in custody on an ABN AMRO weight account had already been warned. With the switch to a new custodian, it was no longer possible to physically deliver the precious metals. The precious metal would be handled in a ‘different way’, a second warning for the attentive investor.
...
Back in 2013, gold market analyst Jaco Schipper warned about the consequences of this change. On his blog he wrote that customers may be left empty-handed. He asked himself what customers actually own with this weight account and drew the right conclusion:
Quote :
“What do precious metals investors at ABN Amro really buy? Obviously, it is not an equivalent of physical ownership. It is a “paper only” account and even that is not a proper description because an account is never a one-way street. Despite ABN Amro denominates this account in terms of weight that is valued in euro, clients can never withdraw precious metals, so this denomination is entirely meaningless.

Also, it cannot be considered a quasi ETF-certificate because at most, it is an “un-unallocated” claim: the invested funds may be anywhere and likewise the gold. And since physical delivery has been postponed all together, it cannot be regarded as a quasi futures contract or an option on that either.

Given these new conditions, this precious metals investment has become some sort of twisted commodity swap whereby investors swap their money to invest in any upside price potential of precious metals and whereby they take on all sorts of financial counterparty risks without hedging anything at all.

Investors always face a price risk, but if one “buys” precious metals with ABN Amro, then one also faces a forced sell-off risk, a (discounted) cash-settlement risk, and last but not least, an outright default risk. And here’s the gist of it: nobody can be held liable if these risks materialize. In other words, investors bet their money on a horse that might or might not exist and for which they can know upfront, this horse will never cross the finish line.”
...
https://geotrendlines.com/abn-amro-a...old-investors/

__________________
The journey of a thousand miles begins with a single step. - Lao Tzu

Important stuff: PMBug 101 * Forum Guidelines * Support PMBug
PMBug is online now   Reply With Quote
Reply

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Similar Threads
Thread Thread Starter Forum Replies Last Post
Americans are hoarding money in checking accounts 11C1P BSTS 14 12-23-2019 11:45 AM
Scottrade moving customer cash into FDIC bank accounts PMBug Fiat Ponzi 0 05-17-2013 06:28 AM
Swiss banks now offer allocated gold silver accounts swissaustrian PM Bug 11 02-01-2013 07:39 AM
People Without Facebook Accounts Are 'Suspicious.' Shelby-villian STS 36 11-24-2012 02:06 PM
CME Raises Margins for Non-Hedged Accounts to Meet CFTC Rule PMBug PM Bug 3 05-08-2012 06:30 PM


All times are GMT -5. The time now is 11:35 PM.


Powered by vBulletin® from Jelsoft Enterprises Ltd.
Content Relevant URLs by vBSEO 3.6.0 PL2 ©2011, Crawlability, Inc.
Content of PMBug.com copyright © 2011 - 2020 Measuring Up. All Rights Reserved.