Friday, September 14, 2007

Is this a “Run on a Bank?”

Northern Rock customers queue for cash as crisis hits high street

I don't believe I have seen a "run on a bank" so I am not able to judge whether this is one or not. Please read the article and let me know if you think it qualifies as a "run." Can anyone tell me the best way to buy gold? (Not that I wish to be alarmist, of course. I just think it would be a good investment anyway.)

Posted by talking rot @ 06:15 PM (891 views)
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9 thoughts on “Is this a “Run on a Bank?”

  • Im thinking Randgold resources could be a very nice little pick over the next year or so if you want some exposure to gold…

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  • Bear Of Very Little Brain says:

    Re: owning gold:
    To minimise portfolio volatility, researchers have recommended 10% of total asset value should be in gold. Owning gold is also a political act (see below)

    If you want protection against total economic collapse, buy bullion and take delivery. Baird & Co. of London is one source for bullion coins and small investment bars.
    http://www.goldline.co.uk/goldlinedev/GC/Global/GLHomeFrame.ghtml

    For alternatives, check out BullionVault (who store allocated gold for you at a low cost) and Gold Bullion Securities (who do something similar at a slightly higher cost through an Exchange Traded Commodity – but you’ll need a stockbroker/trading account, e.g., iWeb, TDWaterhouse)
    http://www.bullionvault.com/
    http://www.lyxorgbs.it/sites/uk/shares/

    Many consider gold to be real money. If you think that the currency in your wallet and bank account is real money, check out “Money as Debt”
    http://video.google.co.uk/videoplay?docid=-9050474362583451279&q=Money+as+Debt&total=1241&start=0&num=10&so=0&type=search&plindex=0

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  • Better Be Quick says:

    Good options for gold are http://www.bullionvault.com (doesn’t protect you if this company goes out of business… Kind of unlikely seeing that they do not let you buy gold that they don’t have). Use an off-shore location. Would recommend Switzerland over US. Buy coins, say sovereigns or kruggerands. Good company is Chards (google them). You will pay a premium – perhaps between 6 and 7%. This is a good way to own physical gold. Avoid bar as it is difficult to prove authenticity once out of a vault. Coins are compact and can be hidden easily. Gold is rapidly rising in value at the moment. However, it is likely to take a fall if (when) the stock market crashes. Buy as much as you can when that happens. Good luck! It’s not going to be easy!!

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  • Hope this helps…a depositor worried about the ability of a bank to redeem deposits will want to ask for her cash before the bank runs out, and any depositor worried about what other depositors will think and do will act the same way even if she thinks the bank is solvent. In short, worries lead to a crisis of confidence that creates panic. While the Bank may have assets in the form of debt obligations from householders, they are not quickly or easily realised – the only act of the bank may be to “sell on” the mortgage.

    For a domestic banking system, deposit insurance is an effective protection against runs, and a nation’s central bank (BoE) acts as a “lender of last resort” to provide liquidity to banks under attack. NR is under attack, and recieving support.

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  • A ‘Run’ British style, i.e., there was a ‘queue on the bank’.

    It’s nice to know that in the midst of financial Armageddon, the British still behave with decorum! How quaint.

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  • best way to buy gold is bullionvault.com

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  • C'mon Correction says:

    yes, everyone waiting in their orderly queue !!

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  • Having seen the queues on the telly I think we can safely say it is the start of a run.

    So. Having gone to the BoE for emergency funds………all of their customers have removed their money…meaning …..they have less money than they started with…. meaning …….the emergency is worse now?

    Does that mean that NR are going to go t1ts up?

    Will it be the first of many? (Sorry second of many, victoria mortgages went awol a few hours ago.)

    Oh yes, I think it will be a good christmas.

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  • Also nice to see how trusting we have become of the government and big business assurances that all is well – honest. Incidentally, do you think that Darling’s comment that “Northern Rock has a good-quality loan book” will come back to haunt him through compensation claims once Northern Rock has gone under. It is quite plain to everyone that Northern Rock has practiced excessively dangerous lending habits, which is why financial institutions (BoE excluded of course) won’t touch them with a 10ft barge-pole. Their loan book has got sub-prime written all over it …… ooops, sorry I forgot ….. no subprime in the UK ….. all America’s problem ….. yeah right.

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