More on planning for Bank Failures in NZ

This week:

– Triple bottom might be in for NZD gold

– Jim Sinclair first out the gate again

– More bull from “The Bernank”

– More on planning for Bank Failures in NZ


Triple bottom might be in for NZD gold

Last week we mentioned gold in NZ dollars might be looking to make a “triple bottom”.  Well with the passage of 7 days it could well be that the a triple bottom has formed at $2000NZ.  We got down to within a couple of dollars of $2000 last week but the price has now bounced back up to $2045 after being as high as $2080 yesterday.

Gold in NZD: 1 Year chart

Looking at a longer time scale on a 3 year chart we can see that at the $2000 level the price bounced off not only the horizontal support but also the long term rising trendline of support.  So kiwi gold seems reluctant to head down below this level right now.

Gold in NZD: 3 Year Chart

Jim Sinclair first out the gate again

Last week we also mentioned how Jim Sinclair had said to watch the USD as Iran began trading oil in other currencies.    Well one week does not make a trend but the USD has backed off a bit since then.

Now, as he alluded to just one week ago when he said, “History will record this decision at this time as a major factor in the final move to financial unwind in the West”, other nations are already looking at what they can do as an alternative to the SWIFT international payment system.

You see, 2 days ago he brought to our attention that…

Brazil, Russia, India China and South Africa are meeting next week because of the use of SWIFT as a weapon of war. Expect the formation of a competitive SWIFT system in three blocks. The dollar will test .7200 USDX and fail on the third tap…

…2012 is the year that the US dollar will suffer from a significant drop in utilization as the international settlement currency. The utilization of the SWIFT system as a means of making war is the singular greatest mistake dollar managers have ever made.

 Sinclair is referring to the fact that the US has basically outlawed the use of the SWIFT international payment system by any nation with Iran…

If a country doesn’t prove it’s making the necessary reductions by the end of June, any institution in that nation that settles petroleum trades through Iran’s central bank will be cut off from the U.S. banking system.” Source: Bloomberg.

Jim Sinclair has certainly been busy of late writing plenty and appearing in many interviews.  Recall he was the first to mention the  International Swaps and Derivatives Association (ISDA) recently.  He also reckons the recent $1630US lows will be the low for gold in this move.

And so with this removal of the SWIFT system from trade with Iran, we have somewhat of a potential “double banger”…

1.  This may pressure Iran into a retaliation, and

2.  It’s also likely to weaken the role of the US in international trade significantly this year, and therefore the weaken the dollar itself.

For a full summary this blog post on KingWorldNews is an absolute must read for the week as Jim discusses the likely implications of this SWIFT outlawing on gold.  The currency wars continue…

This weeks articles

Also on this subject of currency wars is one of this weeks articles “Iran thinks gold is money”.  The other article is an interview with Doug Casey with his thoughts on the current fairly rosy outlook on the global economy from most.

While we’re on the topic of articles, we’ve also added a “star rating” to the website so you can give each article you read a rating out of 10.  Just click the number of stars you want to give at the bottom of every article.  No need to leave your name or email or anything like that.  This is a simple way we can see what the most popular articles are and look to bring you more on these subjects.

More bull from “The Bernank”

We could also mention “The Bernanks” latest speech.  Hot on the heels of misinforming college students on the cause of the great depression, he yesterday made some murmurings which everyone seems to think indicates more currency printing to come.  Which is somewhat of an about face from a week ago.  But we won’t mention it and instead wait for the inevitable actual announcement to come.  Who knows when but it will…

More on planning for Bank Failures in NZ

Back home there’s been a bit more discussion of the RBNZ’s Open Bank Resolution (OBR).  A.K.A a haircut for banks deposit holders instead of a bailout in the event of a bank failure.  (We discussed this in detail last year if you need a refresher Bank Failures: Could they happen in NZ?).

This policy is under discussion until June, but has prompted ratings agency Moody’s to already comment that it could further negatively affect the ratings of the big 4 banks.

The good thing about the principle of the OBR is that it means theoretically a bank failure won’t result in a taxpayer funded bailout.  The bad thing is if you are one of the unlucky deposit holders at said bank you’ll face losing a percentage of your money held with the bank.  (Of course in a true free market system deposit holders would be encouraged to look closely at their bank’s financial strength and there’d likely be more banks not less, so a failure would not be so widespread in its impact.)

However we actually wonder what the government would do when faced with hundreds of thousands of customers complaining of losing a big chunk of their savings?

Would they buckle and bail out just as they did with AMI Insurance after the Christchurch earthquake?

But we think the really important point here is how few people actually know that currently they have no protection in case of a bank failure.  We’d guess most people have the vast majority of their savings with one bank, and they don’t realise the potential risk this puts them under.  So let those around you know what the risk is, and what is being planned, so they can do what they can to reduce the risk they are exposed to.

Of course in our opinion that would be to remove some wealth from the system and hold it in physical gold and silver – but you knew we’d say that didn’t you!

Buy silver for only 5% (+ ingot charge) above spot price.

So this would be timely to remind you that one of our suppliers has silver 1kg and 5kg bars available for only 5% (+$13.80 ingot charge per bar) above the silver spot price for orders of 5kgs or more.

You also have the option of paying a 20% deposit upon ordering and the rest at delivery time to further sweeten the deal.

So if you’re interested in getting some silver for what we believe is the cheapest available in the country then give David a call, email, livechat and he can get you a specific quote.

1. Email:

2. Phone: 0800 888 GOLD ( 0800 888 465 )

3. or Online order form and full product list

Have a golden week!


Glenn (and David).
Gold Survival Guide
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This Weeks Articles

Iran Says “Gold Is Money”
2012-03-20 23:41:31-04

As we mentioned earlier today in our weekly email to subscribers Iran is due to start trading it’s oil in other currencies due to sanctions imposed restricting them from using dollars and the usual banking system.  In the following article you’ll learn some more detail about how gold is likely to figure in this mix. […] read more…

Doug Casey: “It’s a Dead-Man-Walking Economy
2012-03-27 00:40:17-04

There’s been a bit of talk recently that things are looking up around the globe.  Europe has been “fixed” (not our opinion but we’ve seen it written), unemployment is down (if you believe the government unemployment numbers that is), and it seemed like the printing presses would be sitting idle for a while (at least […] read more…

4 thoughts on “More on planning for Bank Failures in NZ

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