Althouse: "Few match the opulence of the airstrip setup, whose owner claims to run the largest store of gold for private clients..."

October 1, 2016

"Few match the opulence of the airstrip setup, whose owner claims to run the largest store of gold for private clients..."

"Near the runway sits the VIP lounge and a pair of luxurious apartments for clients. The walls of the apartments are lined with aged wood from Polish barns. South African quartzite was chosen for the floors to match the faded gray timber, and the amenities—bathroom mirror, TV screens—can retract into the ceiling, counter, or wall. The owner offers a place for clients to sleep and eat, because 'many do not want to leave a paper trail of credit card receipts and passports' at hotels and restaurants."

From a Bloomberg article titled "Secret Alpine Gold Vaults Are the New Swiss Bank Accounts." These vaults are built in "a maze of tunnels" — old military bunkers in Switzerland. With "luxurious apartments" on top. What inspires people with gold to trust these places? Aged wood from Polish barns?? You've got to trust something when you have gold that needs to be stashed.

"We don’t see any tangible evidence of criminality of a systemic nature, but this could be a topic for the future," said the Swiss secretary of state for international finance.

25 comments:

mccullough said...: Sounds ripe for a heist; 10/1/16, 8:02 AM
MacMacConnell said...: "We don’t see any tangible evidence of criminality of a systemic nature, but this could be a topic for the future," said the Swiss secretary of state for international finance.

The state wants their vig, everything the Mafia knows they learned from governments.; 10/1/16, 8:09 AM
Curious George said...: "'many do not want to leave a paper trail of credit card receipts and passports' at hotels and restaurants."

"We don’t see any tangible evidence of criminality of a systemic nature, but this could be a topic for the future," said the Swiss secretary of state for international finance."

For the future. Maybe.; 10/1/16, 8:11 AM
rhhardin said...: I'm on the igneous rock standard.; 10/1/16, 8:13 AM
rehajm said...: Criminality aside this isn't surprising where much of the world is experiencing negative interest rates...and a resurgence of socialist bureaucracy.; 10/1/16, 8:13 AM
rhhardin said...: My experience with private airports is that there's a vending machine.; 10/1/16, 8:17 AM
tim maguire said...: The only reason to stash legal gold is in case of societal meltdown. And it's not much use if it's not nearby.

If this isn't a place to hide illegal loot, then it's the high tech version of stuffing it in a shoebox and burying it out back. Except "out back" is far away and hard to reach.; 10/1/16, 8:18 AM
Wince said...: This comment has been removed by the author.; 10/1/16, 8:19 AM
Bad Lieutenant said...: mccullough said...
Sounds ripe for a heist
10/1/16, 8:02 AM

Yeah buddy. Let us know how that works out for you.; 10/1/16, 8:20 AM
Wince said...: Althouse doesn't expect you to comment...

She expects you to die!

"There is nothing you can comment that I don't already know."; 10/1/16, 8:24 AM
Jaq said...: In fifty years, when they are making movies about the collapse of 2022, they will make one about a raid on this facility. They will call it something like "Zuckerberg's Gold."; 10/1/16, 8:24 AM
Wince said...: "Few match the opulence of the airstrip setup, whose owner claims to run the largest store of gold for private clients..."

Aw, shit, I thought this was another post about pubic hair.; 10/1/16, 8:27 AM
Rusty said...: Why do you automatically assume it's illegal gains. Unlike the United States it is legal to do business in cash and bullion.

mccullough said...
Sounds ripe for a heist
The Swiss people are a pretty honest bunch. Their banking reputation is based on it. Plus, like, the whole country is an armed camp.; 10/1/16, 8:29 AM
MayBee said...: It's weird how the super wealthy always find a way to hide their money, while the government makes the rest of us report every pitiful penny of savings account interest, and makes it illegal to wire transfer less $9,900 too many times.; 10/1/16, 8:44 AM
Humperdink said...: "It's weird how the super wealthy always find a way to hide their money, while the government makes the rest of us report every pitiful penny of savings account interest, and makes it illegal to wire transfer less $9,900 too many times."

According to Zero Hedge, the magic number is now $5K.; 10/1/16, 8:54 AM
Humperdink said...: Unannounced, of course.; 10/1/16, 8:55 AM
Paul Snively said...: tim maguire: The only reason to stash legal gold is in case of societal meltdown. And it's not much use if it's not nearby.

This isn't quite right on either count.

The wealthy are accustomed to (I'm tempted to say "by definition") having the majority of their wealth in illiquid financial assets. The "illiquid" part means they're OK with "not nearby." The "financial" part means they aren't thinking of these assets as currency, and have historically expected to earn interest on them.

Fast forward to today, with its central-bank-imposed negative real interest rates on wide varieties of financial assets and even the occasional saber-rattling about nationalizing "individual" retirement accounts, and those whose wealth consists primarily of such financial assets begin a flight to safety. The ultimate safe-from-inflation asset is, always has been, and always will be, gold. The other aspect of "safe" that's important is "protected from confiscation." These WWII alpine bunkers (which featured in levels in Rainbow Six 3: Raven Shield), combined with Switzerland remaining a nation of riflemen, might do the job.

So gold-in-a-bunker is a hedge against inflation and confiscation, not an alternative to handling day-to-day expenses. From this point of view, it's not even a reaction to societal collapse. It's just a reaction to current economic madness, in which governments straight up steal from us, and to add insult to injury, force us into a neverending debt spiral by making saving a negative-sum game.; 10/1/16, 9:06 AM
William said...: They have their private jets, but how long before the first rich man constructs his own private airport and soon they all need have their own private airport and most of the arable farm land is converted into private airports and we all starve so these rich bastards can have their own airports. Vote Hillary.; 10/1/16, 9:55 AM
khematite said...: Sounds like this comes out of an episode of the NBC show The Blacklist.; 10/1/16, 10:23 AM
Captain Drano said...: The subtitle says it all: “There has been a real interest in alternatives to bank deposits.”

They know what's coming.; 10/1/16, 10:31 AM
tim maguire said...: The ultimate safe-from-inflation asset is, always has been, and always will be, gold.

Paul, that hasn't been true in decades, if ever.; 10/1/16, 2:52 PM
Humperdink said...: "The subtitle says it all: “There has been a real interest in alternatives to bank deposits.”

They know what's coming."

Interesting comment. I spoke with a used car dealer friend of mine. He mentioned that he had sold 17 cars. The bank(s) who typically finance these sales, declined 14 of them. In his experience, this rarely happened to this degree in the past.

I related this anecdote to a retired Wall Street guy I know. His response? "They (the banks) know what's coming".; 10/1/16, 3:22 PM
Jon Ericson said...: Winter is coming.; 10/1/16, 4:18 PM
David said...: "Aged wood from Polish barns?"

Perhaps with a nice inlay of bone and tooth from the first half of the 1940's?; 10/1/16, 10:47 PM
Paul Snively said...: tim maguire: Paul, that hasn't been true in decades, if ever.

Of course it is, and has been. What seems to confuse people is a combination of what can happen in exchanging gold for fiat currency for the purposes of consumption and the timelines over which keeping some of your wealth in gold proves itself out even given that. For example, here is a ten-year chart. I certainly wish I'd bought a few ingots in 2006...

But this still suffers from the idea that the dollar is the stable unit of account, and people with wealth know better. A better approach is to continue to take weight in gold as the baseline and compare everything to it, as with Priced in Gold. This gives a much more realistic view of the values of various commodities and instruments, although the wealthy, of course, have access to analyses based on more information and in some ways better analytical tools.; 10/2/16, 9:14 AM