Silver & Confessions of a Swiss Banker


In a moment, we’ll see about silver & some real confessions from a Swiss banker.

credit suisse silver

Let’s start with a weekly global stock market update from Jyske Global Asset Management (JGAM).

The week started with the announcement of Osama Bin Laden’s death. Monday, Asia and Europe woke up with the news first, opening their markets higher adding the event to the ongoing positive sentiment. However, the feel-good effect was short-lived, as the news of the al-Qaeda leader’s death may have been the trigger behind this week’s massive drop in oil prices. Overall this week has been tough on commodities, WTI Crude is down almost 15%, Copper down 5% and Silver, partly due to new margin rules, down almost 30% – the precious metal is currently struggling to set a bottom around the $33-34/Oz level.

Portugal, the third euro-zone nation requesting a debt rescue, reached a 3 year agreement with the European Union and IMF worth 78bn euros. The rescue package has not done much to reduce the extra risk premium demanded on Portuguese government bonds, as the yield spread to German bonds after the announcement reached a record of 650 basis points.

On Thursday, the ECB president, Jean-Claude Trichet, in a televised speech indicated that the Central Bank will postpone its next interest rate hike till after June. During the speak the EURUSD fell almost 3 full figures as the market had anticipated a much more hawkish rhetoric. During the last 24 hours, the euro has dropped almost 3% versus the Greenback.  Ole Stig Helland

American investors can get more details on how JGAM can provide a multi currency portfolio from Thomas Fischer at  Fischer@jgam.com

Non Americans contact René Mathys mathys@jbpb.dk

This current commodity plunge and silver’s drop of 25% could push my personal portfolio down.  I have some silver shares (not silver) in my portfolio, however, as you will see below I learned an important lesson about silver bubbles, the risks of leverage and the importance of diversification clear back in the 70s…when silver also touched $48 an ounce.

In fact you will see some very interesting coincidences relating to silver in the 70s and now (see below).

I am sending our Multi Currency Portfolio Update subscribers data on how to take advantage of this short term drop in commodities.

Learn how to subscribe to our multi currency portfolio update service here.

Swiss Banker’s Confession.

Coincidences are interesting to me. So I perked up the other day when a reader sent me this note:   “Gary, It has been a while since our last contact but here I am again. Could you delve into your vast memory bank please…. re the Silver Dip program in UK in the ‘70’s?

Now that silver is ‘up there’ I would like to track down my investment. This is how I remember it. Silver Dip using Amex via Lloyds Bank, Elephant and Castle, London through Credit Suisse for storage…but which Branch of CS Bank? I purchased 1100 ozs. and now cannot remember the contact but I do remember contacting him for help…many years ago and had no help given. If you know the Credit Suisse branch, I can contact them directly for their archives.  Any info will be greatly appreciated.
So here was a British client asking me to remember stuff  about silver from the 1970s!
It must be nice to suddenly remember you have 1,100 ounces of silver socked away. However the memory is not the coincidence.

Let me give you some background on the coincidence by sharing the introduction to my report  “Borrow Low-Deposit High” which was updated in 2010.

Hong Kong-1976. Squat, green ferries cut slow white scars on the harbor. They come, load up and go…again and again. The scene is continuous action, full of life-night and day. My mind isn’t on the scene. It is on money. I have just opened my first Swiss bank account.

My experience with the MultiCurrency Sandwich started forty years ago after I opened my first Swiss bank account with Credit Suisse (then, one of the big three Swiss banks) via their representative, a Mr. Schweitzer in Hong Kong. I had been living abroad for several years. It had slowly dawned on me that banks outside my homeland had much to offer. So I opened an account and used it in many ways.

Mr. Schweitzer sent me to the Bulach branch of Credit Suisse (a small village near  Zurich’s Kloten airport) and my account executive was Andi Kaegi.  He remained at the helm of my portfolio for over 30 years and then retired from CS. Not long after he left,  I stopped using this Swiss bank myself.  Andi and I lost touch.

So I was delighted when Andi sent me this note and found it interesting that he recalled my silver speculation (without any prompting) way back in the the 1970s.  Andi wrote:

Hi Gary and Merri,  Long time no talk; –  thought after many years it’s time to update you. I hope your silver holding from the seventies is still there!

For almost one year now I have been retireed in beautiful Thailand.  Even with “Dolce far niente” I  feel pretty pre-occupied with following never-ending, interesting world news and financial market news and pondering thoroughly and critically about almost everything (including the Tea Party).

In this place I wanted to share some truths about bankers and advisors… and the lies they tell:

Believe it or not even nowadays with decades of education, bankers simply lie to you (or despite of education they still do not know anything):

If you ask them “Why is the market rising so much today/this week?”   Even today the standard answer will be: “There are more buyers than sellers!”  If you get this answer, you must fire your present banker and look for alternatives. This answer is never true – for a simple reason:

In any trade there is a buyer and a seller – not  more or less – or we have no matching trade. How can anyone buy from nobody prepared to sell?

A more educated banker might present responsible econimic underlying facts, geopolitical developments or whatever and explain in the only correct form: “Sellers are prepared only to sell at a higher price”.  It is a psychological decision by the buyer to buy at higher prices.  Psychology  rarely goes hand in hand with real economic developments by the way.  This is what leads to the random prices in stock and commodity markets. If psychology were alway correct, prices there would be an  orderly market with no bubbles that need to burst, as we have all experienced.

To put it short: More buyers than sellers or more sellers than buyers is a reason to change your banker/advisor immediately – he is not abreast of the markets.

I am happy to advise on any Thai related issues.  I sell nothing, just love to contribute to educate interested people and share.

Looking forward to your news.  Best personal regards. Andreas

Here is the coincidence.   I has not heard from my former Swiss banker nor the reader above for years… over a decade actually.  Then I heard from them both and Andi is exactly who this reader was looking for.  The common thread is silver at a time when silver is taking a dip.

What does this mean? I do not have a clue. Yet.

What it does mean is I’ll pay attention!… especially to ideas relating to silver.

I was a big enough silver speculator when silver rose all the way to $48 an ounce in the 1970s, that my Swiss banker remembers over 30 years ago.

I was lucky to have sold at the very top  but only due to a fluke. I was taking a trip and was so highly leveraged I did not want to worry about a margin call… especially since I had no more liquidity to invest.  I sold planning to rebuy after the journey and in that time silver tumbled about 50%.

I realized then how absolutely close I had been to financial disaster and have not been much of a speculator since.

JGAM’s weekly update above mentioned that there have been increased  in the margins required for silver.  On Tuesday, May 3rd, the COMEX raised margin requirements for trading silver futures contracts. This was the third increase in the past week and brought the new margin requirement from $14,513 to $16,200 for initial margin and from $10,750 to $12,000 for maintenance margin.  The silver margin has been continually raised.  As recently as early February the initial margin requirement per silver contract was only $6,075.

Andi Kaegi (the Swiss banker above) also reminded me in his note how Bunker Hunt, (the man who tried to corner silver in the 1970s), went bankrupt when silver margins were raised back then.

Most investors should have a philosophy for how much silver and gold they hold in their portfolio and not let bubbles as we have been seeing recently sweep them into buying at the top.

You can see how I have research silver’s value in our recent silver update.

My philosophy is to seek value. I do this in numerous ways.

In the equity market, I seek value by tracking Kepler Asset Management’s value analysis.

Then I watch the portfolio of the State Street Global Advantage funds. Keppler is the advisor to these funds and they seek to invest in good value shares in good value markets.  I also watch the funds of Jyske Invest, Jyske Bank’s fund managers since they use a value orientation in their decisions as well.

You can see from the Global Advantage Major Market Fund’s latest report how it has strongly outperformed its bellwether, the Morgan Stanley Capital Index World Index.

major-market-data

Here is this fund’s current geographical diversification and top ten holdings.

major-market-data

Non US investors can invest in this fund.  Details are below.

major-market-data

Speculators can have fun. Some speculators win, but most speculators eventually lose unless they are pros.  Unless you are an experienced disciplined trader… watch out for speculation.  Develop a common sense value oriented philosophy of accumulation instead.

Gary

Learn how and why we invest globally, plus see our latest portfolio updates at our upcoming International Investing & Business seminar in West Jefferson, North Carolina.

See details here.

This is the last day you can save $300 and attend our North Carolina and 10 more seminars FREE. See how below.

Prosper From Forces of Inflation

Join Merri and me as we look at ways to prosper from the forces of inflation.

International Club 2011-12 Membership special until May 7, 2011 $1,499. Enroll here.

Inflation is here and the US dollar will fall. This fact is conformed in an April 12, 2011 Wall Street Journal article by Cynthia Lin “Inflation Concerns Weigh on Treasurys”. Here is an excerpt:  Worries that the central bank may be falling behind the curve on inflation weighed on U.S. Treasurys on Monday, even after a senior Federal Reserve official signaled that interest rates could stay low for longer.

The prospect of $66 billion of note and bond auctions also dragged prices lower, strategists said.

“The bottom line is that the current perception has subtly shifted toward the view that global central banks are in monetary tightening mode,” said Andrew Wilkinson, senior market analyst at Interactive Brokers. “Even though the Fed appears to be nowhere near that point, U.S. yields have been dragged higher by surrounding fears of inflation.”

Highlighting those fears, the 10-year breakeven rate—which measures the difference between 10-year Treasurys Inflation Protected Securities, or TIPs, and nominal rates—hit 2.655% on Monday, the highest since May 2006. That signals the market’s annual inflation expectation over the next decade.

As other central banks begin to tighten—including the European Central Bank, which raised rates by 0.25 percentage point Thursday—the fear that U.S. officials may be lowering their guard against global inflation has been a headache for bondholders. It has been especially  troubling for investors holding 30-year bonds, those most vulnerable to inflation eroding their value.

Government bonds were also under pressure from the prospect of supply.

The Treasury is scheduled to sell $66 billion in notes and bonds this week, comprising $32 billion in three-year notes, $21 billion in 10-year notes and $13 billion in 30-year bonds.

With a government shutdown averted, “the focus is back on how well these auctions will go and who will participate in the face of what appears to be future inflation,” said Kevin Giddis, president of fixed-income capital markets at Morgan Keegan.

Still, the policy debate underscores an increasing focus on inflation.

This means that while the US government continues to borrow to spend, other governments are cutting back… a sure sign of US inflation and a weakening greenback.

We consider this risk so high that we have taken the unusual step (the first time in our 43 years of business) of setting our 2012 Spring schedule.Then we created a new option so you can participate in all these seminars and course into 2012.

There are five ways to combat the destructive inflationary forces that will raise havoc with your purchasing power.

#1: Multi Currency Investing through US brokers and bankers abroad.

#2: Commodities.

#3:  Real estate.

#4:  Living in lower cost zones.

#5: Having your own micro business for extra earnings, freedom fulfillment and fun.

We have specialized for over four decades in helping our readers excel in these five inflation beating opportunities.

The big benefits of belonging to the International Club is the power of repetition, updates and international friendships.  As a club member you become friends with other members as you meet again and again.

international-club

International Club members are invited to our Florida home during the winter seminars.

Your first savings is $7,690 in 2011 and 2012 just on waived seminar fees.

As you will see below you can attend 11 Florida & North Carolina seminars that would otherwise cost $9,189.  The $1,499 membership saves you $7,690.

Join us and our International Club 2011 – Spring 2012 and enjoy this savings plus much more.

The International Club brings together experienced, like minded souls, who take a positive view and think outside the box..in a constructive…thoughtful way.

Merri and I are in our 43rd year of organizing courses, seminars and newsletters about international and quantum lifestyles. The importance of this sharing…by like minded souls…was reinforced when a delegate from a course sent an email that said:

My Dearest Merri and Gary, Thank you for your most gracious hospitality last weekend. I am just thrilled at being a part of your group. You and Gary were exactly as I imagined you to be, warm friendly, kind, considerate, genuine, helpful, fun, sincere, what else can I say……I felt so comfortable in your presence and learned so much in your course. I was sad to leave the farm that Sunday afternoon. You made us all feel so welcome and cared about. You were so kind to make arrangements for a ride with the other delegates from the Charlotte airport. They were so nice to me and so helpful, by the time the weekend was over I felt like they were my long lost brothers. Monday morning we all had breakfast at the airport together and I was so sad to see them go, I was sad the weekend was over, perhaps sad is not the right word for how I was feeling perhaps Gratitude is a better way to describe it. Grateful for having the opportunity to share the weekend with such wonderful, like minded Human Beings, in the beautiful mountains of North Carolina. Thank you Merri and Gary.

Thanks to you I now have new hope and a new direction to move forward in my life. Thanks to you I am so ready to move to Ecuador and begin a new life. I just have to figure out what I am going to do and how to do it.

I know by attending your classes and conferences that through education and due diligence I will make the right choices.

This delegate’s comments about “belonging and feeling like a brother” to the other delegates is a wonderful refrain we have heard from our readers, year after year.

21 years ago Merri and I created a way that readers can join us to be immersed in a year-long learning program through our International Club.

The ideas behind this program began all those years ago in Vienna, Austria while we were conducting a course there. One of our older delegates, had some sort of attack. The first fear was heart trouble. Several delegates took him to the hospital. Others stayed with him there. I don’t think that delegate was alone for a minute!

What impressed Merri and me was that no one asked the delegates to help this man.

The friendships of delegates sharing many courses had just grown so strong that it was a natural reaction, just as if a family member was ill. Fortunately, it was only travel fatigue and the delegate didn’t miss a session of the course!

When you join our International Club 2011- Spring 2012 you become part of a special family. The very first member to join the club all those years ago wrote, Thank you for the enjoyable and informative courses. I am pleased to be part of your international family and look forward to continuing my education at the next course.

His feeling struck a familiar chord. It has always been one of my greatest satisfactions to see how much fun delegates have getting together, sharing information and making friendships.

These courses somehow draw together like-minded souls. For this reason some delegates come back again and again. They come to learn, but also to be with their many friends made at the courses. When like-minded souls get together again and again to discuss a common purpose, magic happens! I can’t explain it in any other way-but it is true.

In a way our meetings are almost like family reunions. Perhaps it is getting together and reflecting on what has been said and what has been happening.

Learning with those who are also interested in the world creates thoughts that multiply the value of what we gain. This is hard to describe but results are most powerful and wonderful! This is to me is as important as the great financial benefit of attending many of our courses.

See our 2011 – Spring 2012 schedule below.

We started and have continued this program for 21 years because there are wonderful benefits from having repeat delegates at courses. Having repeat delegates makes the whole course somehow more exciting for all. Being a repeat delegate makes it easier to make and keep wealth and to lock in the knowledge you gain. It’s an exciting lifestyle. We have fun, gain adventure, discovery and friendships and share ways to improve our health and wealth!

Normally we only accept membership at the end of each year… but due to the unusual risk we see now, we added this new option to club membership that entitles you to all US courses in 2011 and the Spring of 2012…  in the cool Blue Ridge of North Carolina and  in Historic Old Florida.

The next saving is Seminars via MP3 (or disc) and one Ecuador tour fee is waived as well.

You’ll see a very busy 12 month schedule below.  Very few club members actually attend every course and tour…  but certainly some attend almost all of them!

If you attend even a few of the courses, you gain considerable savings… PLUS we record the investing and business seminars so you can have the course downloaded on your computer to listen on MP3 or on disc when you cannot attend in person.

This means that you stay in touch with all the business and investing ideas we develop at each of the investing and business seminars you cannot attend.

Here are the courses and tours where your seminar or tour fee is waived.  Then see more savings below.

May 7-8  Imbabura Real Estate Tour ($499 or couple $749)

May  9-10   Shamanic Mingo Tour  ($499 or couple $749)

May  12-13-14   Cuenca Real Estate Tour  ($499 or couple $749)

May 17-18-19   Coastal Real Estate Tour   ($499 or couple $749)

June 24-25, 2011  International Investing Made EZ,  Jefferson NC. ($499 or couple $749)

June 25-26, 2011   International Business Made EZ,  Jefferson NC. ($499 or couple $749)

international-club

International Club members are invited to our farm during June, September and October seminars in North Carolina.

June 16-17-18   Coastal Real Estate Tour   ($499 or couple $749)

July 4-5-6      Cuenca Real Estate Tour ($499 or couple $749)
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Aug 21-22-23   Coastal Real Estate Tour   ($499 or couple $749)
Aug  25-26-27 Cuenca Real Estate Tour ($499 or couple $749)
Aug. 31-Sept. 1-2-3-4  Ecuador Export Tour ($749 – $999)

Sept.  8-11 Learn Spanish in 4 Days, Seattle, Washington ($749 or couple $999)

Sept 15-16-17  Coastal Real Estate Tour   ($499 or couple $749)

Sept 19-20-21  Cuenca Real Estate Tour ($499 or couple $749) Oct 21 22 23 Coastal Real Estate Tour   ($499 or couple $749)

September 23-24-25, 2011  Investing & Business Beyond Logic, North Carolina with Blaine Watson ($499 or couple $699)

Multi-currency-courses

(Blaine Watson teaching delegates and International Club members at a previous seminar.)

Oct. 7-8, 2011  International Investing Made EZ,  Jefferson, NC. ($499 or couple $749)

Oct. 8-9, 2011  International Business Made EZ , Jefferson, NC. ($499 or couple $749)

Oct.  25-26-27  Cuenca Real Estate Tour ($499 or couple $749)

November 3-6, 2011   Learn Spanish in 4 Days, Mt. Dora, Florida  ($749 or couple $999)

Nov. 9-10-11    Imbabura Real Estate Tour ($499 or couple $749)
Nov. 14-15-16   Coastal Real Estate Tour ($499 or couple $749)
Nov. 18-19-20   Cuenca Real Estate Tour ($499 or couple $749)
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Dec. 12-13-14   Cuenca Real Estate Tour ($499 or couple $749)

January 12-15, 2012  Super Thinking + Spanish, Mt. Dora Florida ($749 or couple $999)

Feb. 10-11, 2012  International Investing Made EZ.  Mt. Dora FL ($499 or couple $749)

Feb.11-12, 2012   International Business Made EZ,  Mt. Dora FL ($499 or couple $749)

March 8-11, 2012  Super Thinking + Spanish, Mt. Dora Florida ($749 or couple $999)

Schedule subject to change. Always check final schedule at www.GaryAScott.com/catalog

International Club 2011 Membership $1,499. Enroll here

There is even a third saving:  $897 more!

When you join the club, I’ll email you our online course “International Business Made EZ”, a $299 value, plus four bonuses.  You receive the bonus course “Self Fulfilled – How to be a Self Publisher”. which also has a $299 value.

Plus I email you the bonus course “Tangled Web – How to Have Your Own Web Based Business” which also has a $299 value.  Because our self publishing business has become totally online, I am send you this extra course free as I think it will help you have greater success.

In addition you’ll receive the 52 lesson course on how to create your own website using sitesell and finally I include an internet video on how to set up a website presented by our webmaster David Cross.

These courses are valued at $897… in addition to all the US seminars you can attend.

You may well wonder why I would make such an offer and ask why the cost is so low?

Let me answer this question frankly and from the heart. First, it helps us do a better job for you. We feel greatly enriched when we can really help our clients improve their lives. We have learned through years of experience the best way to do this is to meet with you regularly. We can best help you learn how to improve your health and wealth through continual expansion of knowledge.

Second, we gain enormous fulfillment from the many friendships we form through the years. Our friends have enriched our lives tremendously. Let me explain this in more detail.

As a member, you will be part of our international family that meets intensively over the next year to examine ways we can make our lives better. Our goal is beyond just having money. Our goal is to have quantum wealth… good health… wealth and fulfillment through service.

Though we give all course delegates our very best, we cannot help but to do a better job for those who come again and again. As we meet often; your particular wants, needs and desires become clear, and it is easier for us to help you find the right direction.

Another phenomenon is that repeat delegates help each other! They get to know one another, help each other learn, share their insights, make contacts, become friends and gain more wealth.

The fourth savings: Lifestyle for Two.

There is still more!

We have learned at our courses that many repeat delegates were couples.

We want couples! As a member of the program, you are entitled to bring another person to every single course or tour. The cost for that extra person will be ZERO!  You can bring whomever you wish. Bring your spouse, a friend, son or daughter, partner, accountant, adviser. You can bring the same person each time or a different person, whomever you choose to accompany you. (Accommodations and air fares relating to the courses are not included for members, delegates or their guests.)

Won’t you join us in this exciting club and share Merri’s and my lifestyle for the next year?

We look forward to seeing you at as many courses as possible and sharing this wonderful world of abundance and well being with you!

The fifth savings:   You gain Ecuador tour savings as a member of the International Club.

International Club members can benefit in Ecuador in the mountains or…

Meson de las flores

on the sea.  Delegates and International Club members on tour at Land of the Sun Inn.

ecuador sea view

View shot by an International Club member of real estate for sale on an Ecuador Pacific real estate tour.

The International Club offers this benefit… as a gift in Ecuador from the organizers of  Ecuador Discovery Tours.

The International Club fee is normally $1,799 yet during this Spring offer which ends May 7,  I have reduce membership to $1,499.  You save $300 more.

Take for example if you plan to attend our Super Thinking + Spanish, $999 for a couple and one International Investing and Business program, the normal cost would be $1,998.   International Club members attending just these two programs would already save… plus could attend all the other  Florida and North Carolina seminars plus receive $897 worth of emailed courses.

Our seminars and the Ecuador tour schedule is shown above.  You can attend all the Florida and North Carolina seminars and choose to accept an Ecuador’s savings.  Morya Ecuador Discovery SA has agreed to let International Club members attend one Ecuador tour in the schedule above for just $40 per person per day internal transportation cost.

This is a savings of up to $599.

I invite you to be a member of the International Club which allows you and your guest of your choice to attend all of these courses and tours.

Savings #6:  YOU SAVE EVEN MORE if you take a Galapagos Cruise.

We work closely with Haugan Travel which have expanded their fleet so club members can enjoy a Galapagos cruise for as little as $509 per person.

Galapagos-savings

Haugan Cruises has added three new vessels so they have a  broader range of cruises to suit all budgets. They now have 5 vessels and are offering several special introductory tours.  This creates special savings up to $1,000 for all our readers and provides club members an extra savings of up to $554 more…. a total of $1,554 saved.

Savings #7: Membership is normally $1,799 – save $300 more. International Club 2011-12  Membership $1,499 until May 7.

Add all the savings together!

You can calculate the savings as our schedule of all 2011 courses.

Florida & North Carolina seminars you can attend or receive in an MP3 file worth $9,189.

emailed courses sent to you worth $897.

Ecuador Tour Savings up to $599.

$300 membership discount until May 7, 2011.

Total Savings from your $1,499 club membership fee.

You Gain $10,985 of benefit for just $1,499.

Plus more if you take a Galapagos Cruise.

Lock in savings!

Here is one final benefit. When you enroll… we automatically lock in this low fee for next year so your savings are automatically renewed in 2012 and 2013 at $1,499. Of course if you choose not to renew, just simply cancel membership at no cost.

Let’s beat inflation.  Won’t you join us in this exciting club and share Merri’s and my lifestyle for the next year? We look forward to seeing you at as many courses as possible and sharing this wonderful world of abundance and well being with you!

Gary

International Club 2011-12 Membership $1,499. Enroll here.


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