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A few years back an ex business partner of mine set up what's become a very successful inbound tour operator into the Czech Republic. As with all good business owners, he keeps a close eye on where his customers are coming from... and just recently, he was surprised to see that the Greeks have been flocking to Prague.
Now if you look at the news, you'd think they've got other things on their minds than going on holiday. So what's with the sudden rush over to Prague then?
He'd just read my piece on Greeks siphoning cash out of Greece and buying up gold. Could there be a link he thought to himself?
There certainly is - after hearing it, you may find yourself booking a plane to Prague yourself!
The laws on buying gold
In Europe, if you buy a certain amount of gold then your details will be registered. So in the UK if you invest more than £5k (or £10k in any one year) then you need to present the dealer with some identity (including photographic) so that a file can be opened on you.
Now, for many gold bugs, they're buying gold as an insurance policy to protect themselves against the authoritarians. It's all about wealth protection. The last thing they want to do is give away all the details of how much gold they've ferreted away. This is post-tax income after all, why can't they do what they want with it?
Remember, if things turn nasty, the authoritarians can get very ‘control freaky'. We've seen it happen in this country in the seventies and more recently in Iceland.
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Put yourself in their shoes
Now, not for the first time, my old mate put himself in the shoes of his customers. So he thought to himself, if Bengt's right and the Greeks really are going shopping for gold, would they come to Prague?
Well, if they don't want to advertise purchases to the EU authorities, then they'd better not go shopping in the united states of Europe. Greece's closest neighbours would put them in Africa, or Asia... but perhaps they wouldn't feel comfortable there with serious cash on the hip.
So what about a quick hop over to Prague then? And what about anonymity...
The Czech mint is very specific on this point. You can buy gold and silver with cash (which is not usually the case in Europe once you're dealing in size). And any personal data collected will never be handed to a third party. Moreover, "The Buyer has a right to request a deletion or correction of his/her personal data" - that's from the Czech Mint website.
So is this for real then?
Just to be clear on this. I can't confirm this story. The very nature of the story is that you can't get any data on sales and who's been buying the gold. What we do know is that retail sales of gold have been zooming up in mainland Europe.
But I can do something else...
My old mate is going to add the Czech National Bank (who sells the newly minted gold coins in Prague) to his website. He's going to put up a page describing how to buy gold in Prague and the benefits of doing so.
He'll monitor how many hits the page gets and which countries they're coming from - soon enough, we'll have an idea as to what's really happening. If anything interesting comes up, I'll be sure to let you know.
• This article was first published in the free investment email The Right side. Sign up to The Right Side here.
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