Nervy investors spur rush at Swiss gold refiners

By Arnd Wiegmann and Lisa Jucca

 http://www.reuters.com/article/marketsNews/idUSLI46181820081217?sp=true

MENDRISIO/ZURICH, Switzerland, Dec 17 (Reuters) - Sealed off by grey concrete walls and barbed wire, the workmen in protective glasses and steel-toed boots at this smelter cannot work fast enough to meet demand from the nervous rich for gold.

This refinery near Lake Lugano in the Alps is running day and night as people worried about recession rush to switch their assets into something that may hold its value.

“I have been in the gold business for 30 years and I have never experienced anything like this,” said Bernhard Schnellmann, director for precious metal services at the refiner Argor-Heraeus, one of the world’s three largest.

“Production has dramatically increased since the middle of the year. We cannot cope with demand,” said Schnellman, wearing a gold watch on his wrist.

Spot gold hit a record $1,030.80 an

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Austria is justifiably famous for its banking system—particularly for its bank secrecy law, which has the same legal status as the Austrian Constitution. But while Austrians take their financial privacy very seriously, there’s another aspect of Austria that doesn’t get as much attention: residence. With its world-class opera, museums, and galleries, Austria is truly one of the world’s most civilized countries. Vienna, its capital, is a cultural treasure. Indeed, Mercer’s, a major human resources consultancy ranks Vienna as the second most desirable city to live in the world (behind Zurich)—and Vienna is much more affordable. And within an hour’s drive of Vienna, you can visit three different countries: the Czech Republic, Hungary, and Slovakia. Austria is also a popular haven for English-speaking expatriates. While you won’t find the concentrations of U.S. expatriates that you would in places like Costa Rica, Panama, or London, you’ll find a high quality of life and reasonable ...

Unless you’re a turkey, Thanksgiving is usually a happy holiday. But Bill Bonner says the crumbling economy leaves all of us fearing the axe this year. The global credit crisis has taken us into unchartered territory. And government bailouts will only draw out the inevitable correction.

This from The Daily Reckoning:

“Until today or tomorrow, the typical turkey enjoyed a fairly decent life…” commented our friend Nassim Taleb, in Zurich yesterday.

Yesterday [Wednesday], the stock market was quiet. The Dow ended up 36 points. Oil held at $50. Gold too…it stayed right where it was, at $820 an ounce.

But the slaughterhouses and gold mints worked overtime.

“You can understand how fraudulent most economic analysis is,” Nassim explained, “just by looking the life of the turkey. The animal is fed for 1000 days…and then it is killed. So, if you plotted out the turkey’s life on a chart, it would look

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Forget talk of a slump in gold, says Justice Litle. The precious metal is still on a long-term uptrend that started in 2001. And the “reflate at all costs” strategy of the Fed will eventually send gold soaring again as the world wakes up awash with dollars that it doesn’t want.

This from Taipan Daily:

Take a look at this long-term gold futures chart.

Stepping out to a longer-term chart is a bit like seeing the world from a higher altitude. As you head further out, the drama begins to recede. (From a far enough distance, the world is little more than a pale blue dot – as Carl Sagan liked to point out.)

So, too, with gold. There has been a lot of yellow metal angst in light of the recent credit implosion. But if we look back to

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The top for the gold price, in early morning Far East trading on Tuesday, was shortly after midnight last night…Eastern time…which is lunch time in Hong Kong. From there, it followed its usual path from upper left to lower right…with the low being at the close of regular business on the Comex in New York yesterday.

Silver was an entirely different animal, with a mind all its own. It took off right from the Globex open in the Far East on Tuesday. Its top was in at the Hong Kong open…which is 8:30 a.m. over there. Then, it too, was taken down…particularly at the Comex open. But then it rallied smartly, and the price had to be restrained a couple of times, as it went either parabolic…or vertical…on more than one occasion. However, it was not allowed to close on its highs. Volume was mediocre in both metals yesterday…but a little

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by Edward Hugh: Barcelona"The Kazakh government is ready to step in,'' Kazakhstan's Prime Minister Karim Masimov said this morning in a telephone interview with Bloomberg "The Kazakh banking system with the support of the government and central bank will fulfill all obligations to international investors.....We have our own specific plan to survive without any external support....I don't think we need support from the International Monetary Fund or overseas.'' Well that is good news, so at least we know that one of the CIS and CEE economies won't be looking to the IMF for bail-out support in this crisis which is presently growing by the day. So Kazakstan, that country which is reputedly host to reserves of approximately 95% of the elements in the periodic table, with a population of around 15 million housed on a surface area greater than the whole of Western Europe, is going to be able to look after itself. But hang on a minute, just where is Kazakhstan, and just what have they been getting up to over there, and why the hell should I take Karim Masimov's word for it, when just about all the other Iceland Look-alike show contestants seem to be saying the same? After all, didn't those extermely bright and able young people over at RBC Capital Markets in Toronto say in a report only last week that, along with Latvia, the country's $100 billion oil-led economy is among the most vulnerable to the present global credit crisis and the skid-row economic trajectories that go with it simply because of its excessive reliance on short-term foreign borrowing. And isn't it the case that the cost of protecting Kazakhstan government debt against default has more than doubled this month - to over 1,000 basis points (or 10%), the level for borrowers that investors term ``distressed,'' according to CMA Datavision credit-default swap prices. Only Ukraine, which as we know is already seeking IMF support, is classified as being a bigger risk among European emerging-market governments. Surely all those highly dedicated, bright, and extremely able young people who are doing all that trading know what they are about, don't they?

“Zuercher Kantonalbank, the Swiss lender that manages about $107 billion, said its gold vault is full after a surge in demand from investors seeking a haven during the credit crunch.

Assets in the Zurich-based bank’s ZKB Gold ETF, backed by about 2.66 million ounces of the metal, have risen to a record for seven consecutive weeks. That amount of gold is worth about $2.25 billion at today’s prices and equal to about 12 days of global production.

“Demand is so strong,” Susanne Toren, a metals analyst at the bank, said by telephone from Zurich today. “Our vaults are full right up to the top.”

Investors are buying gold coins and bars, and exchange- traded funds backed by physical metal, after banks including Lehman Brothers Holdings Inc. collapsed. Assets in SPDR Gold Trust, the largest ETF backed by bullion, advanced to a record 770.64 tons (24.78 million ounces) on Oct. 10.

Zuercher Kantonalbank, which …

Source: Adrian Ash, Bullion Vault  10/17/2008
“What we thought was a wall of liquidity, turned out to be a wall of leverage.” – Paul Davies in the FT, quoting “a number of senior bankers…”

WANNA KNOW WHY your stock market shares keep on tumbling, right back to what one Fox news anchor just called “the absolute lows” from the end of last week?

It’s credit – or rather, the lack of it.

The US bail-out, European unity, Gordon Brown’s sainthood, every new mortgage application…all these things now look incredible – quite literally unbelievable – against the stark backdrop of no credit, no leverage today. But nothing lacks credibility like trying to make fast money in finance right now.

Even David Einhorn, the baby-faced card sharp running Greenlight Capital, cost his clients more than 12% of their money last month. And he’s the guy who spotted and bet on Lehman Bros.’s looming collapse 14 months …

There has been a great deal of articles lately on shortages and unavailability of gold at the retail level.

My thoughts on this, are that in time it may become increasingly difficult to acquire physical gold at the retail level. This is a repeat of history.

I have suspected for some time that this would happen, but didnt imagine it would happen so quickly.

For a time I have thought, at some point, the only way people will be able to get into gold in large quantities, not a coin here or a coin there, especially if we see a default at Comex, is through a firm with access to gold and silver at the refinery level, and not just any refinery, it will have to be the big ones.

I have reports coming in from all over the world of shortage, its not just the USA. our business partners in Canada, UK, Germany,

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