Spoke Matthew Phillips, Bloomberg Businessweek, and Jim McTague, Barron's, in re the sagging economic reports from the markets and the metrics. The consumer confidence, the manufacturing and retail sales, the exports and trade deficit, all of it points to the worldwide slowdown pushing the US GDP down for the remainder of the year. The estimates for the 2Q just finished continue to slide, now toward 1.5% and below, with the possibility of downward revisions. Jim McTague tells me that there are former Goldman, Sachs employees selling gold to high-net-worth investors, those with more than $5 million in assets (the <1%). The glamorous hook is that the purchaser gets a gold bar with his or her own identification number inscribed, all wrapped in a velvet case in a Swiss bank vault (or New York, or Salt Lake City, or London). Jim McTague asserts that what's wrong with the phenomenon is that this money is not available for investment, and the velvet-wrapped bars now join the trillions of dollars kept in cash at the central banks, earning in the US 25 basis points. The hesitation of capitalists is the hesitation of cultures and consumers. This is the third year in a row that the economy has shown promise early in the year and then fallen off in the summer. Is there a solution? What I am told by both Phillips and McTague, joining other voices I hear on the Kudlow Report, is that the smart money hides itself and waits for leadership in Washington, in Brussels. The short version is that we approach the Fiscal Cliff of a combined tax hike and government cut backs. Estimates are that the cliff will send a 2% GDP for 2012 (best case) into -4% by Q1 of 2013. In sum, a recession for the new presidential term, regardless of Obama or Romney. Those who argue that there is a profound difference between the Republicans and Democrats must answer the projections that the fail of the US, European and Asian economies is unavoidable. How is your cash hoard? Do you own a gold bar? Do you wish to?
"Say you want to invest $100,000 in 1-ounce U.S. Gold Eagle coins. Your order is," writes Abram Brown in a June, 2012 Forbes.com, "essentially, crowdsourced to various established dealers. The platform currently sends the order to 14 suppliers. Once your order is transmitted you see only the lowest bid from five vault locations: New York City, Salt Lake City, Zurich, London and Melbourne. In such an ordinary investment you can expect to pay as high as 1.5% in transaction fees to GBI. After purchasing you have the option to store your physical gold in a Brinks or Via Mat vault or to take delivery of it. Vaulting fees run as much as 0.5% to 0.65% a year. After your order is confirmed the gold is allocated in your name, and GBI provides you with the serial number, refiner and purity of each piece of metal you own. You also get monthly statements."
Bank of England vault.