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The Bullion Buzz - November 3, 2009

The Bullion Buzz - November 3, 2009
 “The government’s finances not only are out of control, but the actual deficit is not containable.  Put into perspective, if the government were to raise taxes so as to seize 100% of all wages, salaries and corporate profits, it still would be showing an annual deficit.”
The Raid That Rocked the Met: Why Gun and Drugs Op on 6,717 Safety Deposit Boxes Could Cost Taxpayer a Fortune
Adrian Levy & Cathy Scott-Clark

This recent incident in the UK underscores the risks of private vault facilities for the storage of bullion.  In June 2008, traffic in London, England slowed to a standstill as drivers slowed to gape at the massive police operation underway. Police cars and armored trucks jammed up the roads; dozens of armed officers in bulletproof vests were standing by. From the sheer manpower and weapons on display it looked like Britain’s capital was under a terrorist attack. But the ambitious Metropolitan Police operation had nothing to do with national security. In all, more than 500 officers took part in the top-secret Operation Rize, raiding smart addresses in well-heeled parts of the capital, as well as an office and three homes. The police rolled through London in a convoy made up of scores of patrol cars, armed-response vehicles, outriders on their bikes and vans with their windows shielded by metal cages. At the various premises, which housed 6,717 safety deposit boxes, detectives forced their way past security guards, demanding the secure doors that led to the strong rooms be opened. Never before had British police been granted a warrant this broad; smashing into each and every safety deposit box was tantamount to raiding an entire subdivision. Ostensibly, the police were looking for criminal networks that used safe deposit facilities to hide assets, but the paper trail reveals that as few as 10% of the boxes had any connection to serious crime. Scores of innocent box holders have struggled to recoup their money and possessions, been forced into legal trench warfare with police lawyers and told they must prove how they came by the contents of their boxes. Some, having had their possessions returned, claim that money and jewels are missing. Now, Operation Rize is defending itself before two Judicial Reviews, being pursued for millions in legal fees by innocent box holders and facing inquiries into theft. The political, judicial and financial costs are stacking up, and the entire operation may end up costing taxpayers a fortune.  While private vault facilities may seem appropriate they run this type of risk which would not be applicable for bank owned vault facilities where bullion is stored on a fully allocated insured basis.
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