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Related Reading: Fort Knox-Styled Armitage Vaults Opens In Central London

I just learned of a high-security self-storage facility that has opened in central London, England. The Armitage Secure Storage, or Armitage Vaults as the British media is calling it, bills itself as “London’s First Prime Self Storage Facility” and offers “high quality storage units in the centre of London.” Adrian Hearn reported on the Daily Mirror (UK) website Monday:

Britain’s super-rich are being offered a place to hide their most valuable items – in a Fort Knox style, bombproof bunker created in a former library basement.

The 10,000 sq/ft underground facility, which cost £30million to build, is situated up to 40ft below ground and has one-metre thick ferrous-concrete walls.

It has been designed to be virtually bombproof, fire-resistant, watertight and is aimed at people who need a secure facility following the Hatton Garden heist…

(Editor’s note: Bold added for emphasis)

Hearn added later in the article:

Bosses at Amazon Property have billed Armitage Vaults as the London’s answer to Fort Knox, claiming there is nothing else on this level in the capital.

Charles Gourgey, chief executive of Amazon Property, said: “We were inspired by the famous Fort Knox vault in Kentucky and there is nothing else like it in central London

Chris Lanitis, Director of Amazon Property adds: “The private clients occasionally bring friends or family to view the artwork and valuables being stored, whilst the corporate clients include private medical outlets and hospitals storing sensitive documents and equipment.

“There are also luxury retailers storing stock.”

(Editor’s note: Bold added for emphasis)

The Armitage Vaults website reveals the following about the operation:

Accessed from Bolsover Street, the facility provides convenient loading and unloading, allowing secure access from the street to the underground facility.

All units include the following:

-Secure loading access from the street to the underground facility
-On-site dedicated management team & security concierge
-Security reception is manned to ensure easy access and the highest levels of security
-24-hour CCTV
-Video-entry system
-Unit access via unique pin code
-Wide access units and high-end goods lift
-Climate controlled

The 135 steel-lined units for rent range from 6 square feet (“Designed for golf clubs, skis, or those sentimental possessions you need to keep safe”/£15 per week excluding VAT) to 100 sqaure feet (“Single garage size”/£140 per week excluding VAT), according to Armitage’s website.

Safe deposit boxes are not offered as far as I can tell.

Congratulations to Armitage Vaults on their launch. Offshore Safe Deposit Boxes wishes them all the best with their new secured self-storage facility. For more information about Armitage Vaults, head on over to their website here.

By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)

(Editor’s note: The mention of entities marketing themselves as secured storage facilities outside the U.S. should not be construed as confirmation of services claimed to be provided or any sort of recommendation. A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. Christopher E. Hill, the creator/Editor of this blog, is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented on the site.)

Source:

Hearn, Adrian. “Fort Knox style bombproof bunker offers mega-rich Brits a secure place to hide valuables after Hatton Garden heist.” Daily Mirror. 23 Jan. 2017. (http://www.mirror.co.uk/news/uk-news/fort-knox-style-bombproof-bunker-9676467). 23 Jan. 2017.

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Ecuador President Announces One-Time Tax On Millionaires, Workers After Earthquake

From an Associated Press article on the Fox News Latino website Thursday:

President Rafael Correa announced Wednesday night that he is raising sales taxes and will charge a one-time levy on millionaires to rebuild cities devastated by Ecuador’s worst earthquake in decades…

Using authority granted by the state of emergency he declared after Saturday night’s quake, Correa said sales taxes would increase to 14 percent from 12 percent for the coming year.

People with more than $1 million in assets will be charged a one-time tax of 0.9 percent on their wealth, while workers earning over $1,000 a month will be forced to contribute a day’s wages and those earning $5,000 a month the equivalent of five days’ pay.

Taxes on companies will also go up…

(Editor’s note: Bold added for emphasis)

A “just” tax in the aftermath of a natural disaster? Wealth confiscation for a “just cause”? Just plain wealth confiscation?

Spanish international news agency Agencia EFE reported on the Fox News Latino site back on March 20 the Ecuadorian government was already seeking to hike taxes prior to the quake. From that piece:

Ecuador’s government is working on a reform package that will raise the taxes on cigarettes, alcoholic beverages and soft drinks to cover the budget deficit created by the drop in the price of oil, the Andean nation’s top export product, President Rafael Correa said.

“The price of petroleum keeps dropping” and the government must make “certain adjustments,” Correa said during his weekly show on Saturday…

(Editor’s note: Bold added for emphasis)

“Sin tax” hikes. Sounds like what’s routinely proposed/passed in my neck of the woods (Chicago).

If Ecuador follows through with this tax on millionaires and workers, some will be wondering if other governments won’t be following its implementation closely to serve as a model for a future “state of emergency” of their own.

Like a sovereign debt crisis, for example.

At the same time, I wonder what this could mean for bank safe deposit boxes (I don’t know of any private, non-bank safe deposit box facilities in Ecuador)? Will Ecuadorian government officials inspect secured containers belonging to suspected millionaires/millionaires suspected of under-reporting the value of their assets, in an attempt to ensure compliance with the announced tax levy?

Would box holders find themselves in a situation similar to what was announced in Greece last fall?

I blogged back on November 6, 2015:

Just when the reputation of bank safe deposit boxes couldn’t get any worse comes this out of Greece. Anthee Carasavva reported on The Times (UK) website back on October 12:

Greece’s government is raiding savers’ safe deposit boxes to raise revenue and stamp out tax evasion.

Tryfon Alexiadis, the deputy finance minister, said yesterday that Greeks owing more than €150,000 in back taxes would be targeted. Those suspected of tax evasion would also come under scrutiny and their bank deposit boxes prised open without notice

“Safe deposit boxes across the country will be subject to these inspections immediately,” Mr Alexiadis told an Athens-based TV network…

(Editor’s note: Bold added for emphasis)

I added later:

Regarding that bit about tax evasion suspects, Mark Yaxley of Cayman Islands private vault Strategic Wealth Preservation penned back on October 20:

The government’s justification is that they’re chasing tax evaders, stating that they’re targeting those who owe more than €150,000 in back taxes. However, they have also revealed that they will target any boxes held by those who are “suspected” of tax evasion and, since literally anyone can become a suspect at any moment, without having to be charged with a crime, inspectors will have the authorisation to decide on the spot that a box holder is “suspected” of tax evasion

(Editor’s note: Bold added for emphasis)

It was reported Greek tax inspectors would be allowed to open bank safe deposit boxes and confiscate as much as half of the cash they found. Stocks, bonds, jewelry, and works of art would be confiscated in their entirety.

Stay tuned…

By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)

Sources:

“Ecuador to hike sales tax to help rebuild cities devastated by earthquake.” Associated Press. 21 Apr. 2016. (http://latino.foxnews.com/latino/news/2016/04/21/ecuador-to-hike-sales-tax-to-help-rebuild-cities-devastated-by-earthquake/?intcmp=obinsite). 21 Apr. 2016.

“Ecuador plans to hike taxes on cigarettes, alcohol and soft drinks.” Agencia EFE. 20 Mar. 2016. (http://latino.foxnews.com/latino/politics/2016/03/20/ecuador-plans-to-hike-taxes-on-cigarettes-alcohol-and-soft-drinks/). 21 Apr. 2016.

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The U.S. Private Vault Boom Of The Early 1980s, Part 4

Today I’m going to wrap up that four-post series on the U.S. private vault boom of the early 1980s. To recap, in part one I blogged about the rapid growth of the non-bank vault industry in the United States at that time, where the number of safe deposit box facilities reportedly went from zero in the autumn of 1980 to approximately 170 vaults just a few years later. And back down to just 3 by 2010. I ended part one asking:

So how did the boom fizzle out? And why such explosive growth in the first place?

In part 2, I examined the “boom” phase more closely. Various news outlets at the time reported elevated demand for safe deposit boxes due to:

• Rising gold and silver prices
• Growing interest in collecting antiques, artwork, coins, stamps, etcetera
• Corresponding increase in crime. U.S. property crime rates increased year-over-year from 1977 to 1981, according to Federal Bureau of Investigation uniform crime reporting statistics.
• “Economic survivalists”
• Businesses requiring offsite, secured data storage

Meanwhile, banks didn’t have enough safe deposit boxes- particularly large-sized ones- to satisfy demand. Hence the three- to five-year “wait lists” being reported. And the arrival of more private vaults.

In part three, I looked at the “bust” phase in more detail. I suggested changes to those factors that helped spur demand for safe deposit boxes in the early eighties may have contributed to the “bust” for the next quarter century. Those developments included:

• Gold and silver prices falling significantly from their January 1980 highs
• Collector interest (and prices) peaking in baseball cards, coins, comic books, and stamps by the late eighties/early nineties
• U.S. property crime rates decreasing year-over-year from 1981 to 1984 and again from 1991 until 2010 (save 2001), according to FBI uniform crime reporting statistics
• Fears of the “economic survivalists” never materializing. Or at least, their concerns never going mainstream.

In the meantime, the media reported the supply of safe deposit boxes grew (including the larger-sized containers) via financial institutions and the new non-bank vaults coming online.

The “bust” of the U.S. private vault industry was on.

Today, I’ll end the series with a talk about the tail-end of that bust and the relevance of the whole phenomenon for the U.S. and offshore non-bank vault industry here at the start of 2016.

But first, I’d like to go back to part one where I talked about a Colorado Vault & Safe Deposit Box Co. blog post from August 2015. The Centennial, Colorado-based facility pointed out:

In 2010, when Colorado Vault & Safe Deposit Box Co, opened there were only 3 private vaults in the United States…

“Only 3 private vaults in the United States”

At the tail-end of the bust (lasting until 2010 or so), I suspect the U.S. private vault industry found themselves to a certain extent in the same boat as their banking system counterparts. Deirdre Fernandes reported on The Boston Globe website on March 8, 2014:

The safe deposit box, once a staple of any bank branch, has itself become an antique. Banks are reporting that safe deposit box use is on the decline, with occupancy rates dropping quickly as customers buy home safes, digitize and store documents electronically, and, in this era of conspicuous consumption, prefer to display their valuables rather than stash them away for special occasions.

Jerry Pluard, the owner of Safe Deposit Box Insurance Coverage LLC, an Illinois company that insures the contents of the boxes, estimates that nearly half — 45 percent — of safe deposit boxes in the country are empty today. Boston-based Santander Bank says demand has slipped so much that it won’t even include safe deposit boxes when it builds new branches…

Younger customers, however, mostly find it a hassle. Already using branches less for all services, they don’t want to make a special trip just to get access to their belongings, said Bob Hedges, a managing director at Alix Partners, a global consulting firm based in New York City. Only 6 percent of bank customers rent a safe deposit box, and one third of those customers are over 65, according to recent survey by the firm.

Safe deposit boxes now rank along coin-counters as lowest-used bank service, Hedges said…

(Editor’s note: Bold added for emphasis)


“Banking trends making safety deposit boxes obsolete”
USA Today Video

The private vault industry also (undeservedly) received a “black eye” as word got out about Britain’s “Operation Rize,” a June 2008 police raid where thousands of non-bank safe deposit boxes in London were confiscated over suspicion of criminal activity- yet only 30 people were ever convicted of wrongdoing out of 6,717 box renters last I heard.

But fortunes were changing for both bank and non-bank safe deposit box facilities. Eric Zorn reported on the Chicago Tribune website on April 24, 2014:

It’s [SDBIC’s Jerry] Pluard’s best guess, however, that the decline has leveled off and that reports of the demise of the safe-deposit box — “On the way to oblivion,” said a Crain’s New York Business headline last year; “A relic,” wrote The Boston Globe in March; “Obsolete,” added USA Today this month — are overblown.

“It’s mostly bigger banks where I’ve seen the falloff,” Pluard said. “They open new branches that don’t offer safe-deposit box services. But business is still good at smaller, community banks, and demand is still high for the biggest boxes.” He added that he’s “noticed a growth in private-vault companies that aren’t affiliated with banks,” which might explain the perception that the safe-deposit box is a “dodo bird,” as the New York Daily News wrote last year.

These private companies are analogous to self-storage locker businesses.

Those have boomed in recent decades, suggesting that we’re still interested in keeping our stuff safe, but that our stuff has just gotten larger…

(Editor’s note: Bold added for emphasis)

“These private companies are analogous to self-storage locker businesses”

Highly-secured, self-storage locker businesses, a prospective/current customer would hope.

This decade, a resurgence in private, non-bank safe deposit box facilities opening their doors is underway in the United States and overseas. Megan V. Winslow reported on the Los Altos Town Crier website on April 1, 2015:

Mark Paul, director of U.S. Private Vaults Inc., of Beverly Hills, said he is aware of 15 private vault companies in the country

“This may seem unusual in the U.S., but it’s very common in Asia and it’s fairly common in Europe,” Paul said…

(Editor’s note: Bold added for emphasis)

And from that Colorado Vault & Safe Deposit Box Co. blog post:

Do you know how many privates vaults are in the United States?

If you guessed over 10 then you were correct. The private vault industry is on the rise in America as well as around the world. In 2010, when Colorado Vault & Safe Deposit Box Co, opened there were only 3 private vaults in the United States; Dallas, Las Vegas, and the San Francisco Bay area. Now, private vaults are all across the U.S. from over 3 in California to the newest facility in the Washington D.C. area. Furthermore, as of June 2015 there were over 130 private vaults worldwide

(Editor’s note: Bold added for emphasis)

I’m familiar with two private vaults in this state (Illinois) alone, with one located just a short drive from me. And glancing at this blog’s sister site- Offshore Private Vaults- I now count just over 200 overseas, non-bank facilities that are either open or will be soon. And I come across new ones on a regular basis as part of my research.

So that was the tail-end of the bust (and start of the next boom). As for the relevance of the whole phenomenon for the U.S. and offshore non-bank vault industry here at the start of 2016? Well, it appears some of the same factors that powered the early 1980s U.S. private vault boom are back again, such as:

• Higher gold and silver prices compared to levels at the beginning of the millennium
• Increased property crime. While the statistics may not confirm this (anyone else suspicious of “official” numbers besides me?), the perception exists for many. And often that’s what drives people to act.
• Financial upheaval that’s spawned a new generation of “economic survivalists.” The global economic crisis that reared its ugly head in the autumn of 2008, the subsequent central bank “papering-up,” and tepid recovery boasting plenty of low-paying jobs have made “hard assets” alluring again to the smart money and new breed of “preppers” who have a pretty good idea of where this is all heading.

As supply is concerned, safe deposit boxes of all sizes seem to be readily available (for the most part) in the United States through financial institutions. In other parts of the world, banks are no longer offering this service and ditching these secured containers (blogged about as recent as November). That being the case, I won’t be surprised if the ongoing private vault “boom” is more pronounced overseas than here in the U.S.

Three catalysts most likely having a significant positive impact on continued industry growth going forward will be:

1. Higher precious metal prices
2. More property crime (I recently read a report out of Ireland that burglars are bringing metal detectors along with them on the “job”)
3. Increased capital controls/wealth confiscation activity by governments and banking systems around the world (catalogued on sister site here starting at paragraph number four).

Regarding that last point, if such desperation by politicians and bankers becomes commonplace enough that Americans are fully-aware of it, storing one’s valuables in a bank safe deposit box may be considered an act of insanity. At which point, I suspect more safe deposit box facilities outside the banking system may open their doors from higher demand/lower supply (bank boxes being pretty much out of the equation under such circumstances).

I don’t know how long this current “boom” in the private, non-bank vault industry will last, but at the present time it looks to be on solid foundations and I believe it’s very possible all three of those catalysts mentioned above will play out down the road.

By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)

(Editor’s note: A qualified professional should be consulted prior to making a financial decision based on information found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. Christopher E. Hill, the creator/Editor of this blog, is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented on the site.)

Sources:

Fernandes, Deirdre. “The disappearing allure of the safe deposit box.” The Boston Globe. 8 Mar. 2014. (https://www.bostonglobe.com/business/2014/03/08/the-disappearing-allure-safe-deposit-box/HvwkPkvAUtoo8329bZrKsM/story.html). 21 Jan. 2016.

Zorn, Eric. “Safe-deposit boxes are in decline at banks.” Chicago Tribune. 24 Apr. 2014. (http://articles.chicagotribune.com/2014-04-24/opinion/ct-banking-safe-deposit-boxes-decline-oped-zorn-04-20140424_1_safe-deposit-decline-bigger-banks). 21 Jan. 2016.

Winslow, Megan V. “First Street’s ‘Fort Knox’ up for sale.” Los Altos Town Crier. 1 Apr. 2015. (http://www.losaltosonline.com/news/sections/business/183-business-features/49867-first-street-s-fort-knox-up-for-sale). 21 Jan. 2016.

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New Private Safe Deposit Box Facilities Open In U.K.

Two new private, non-bank safe deposit box facilities have opened in the United Kingdom- Sharps Pixley in London (England) and Glasgow Vaults in Glasgow (Scotland). In the fall I added Shaprs Pixley (dating back to 1778 and an original member of London’s twice-daily gold price fixing establishment) to the list of private vaults on this blog’s sister site- Offshore Private Vaults- after learning about their safe deposit box offerings. Reuters’ Clara Denina reported on January 14:

London bullion dealer Sharps Pixley has opened Britain’s first showroom making gold coins and bars available to private investors in the capital’s exclusive district of Mayfair, the company said in a statement.

The showroom will offer coins and bars from one gram, costing 35 British pounds, to 400 ounces or 11.3 kilograms, which can be stored in one of the 2,500 safe deposit boxes that Sharps will also offer

(Editor’s note: Bold added for emphasis)

Denina added that Sharp Pixley’s parent company is Degussa, which also has private vaults (under the Degussa name) in Germany (Berlin, Cologne, Hamburg, Hanover, Munich, Nuremburg, and Stuttgart), Singapore, and Switzerland (Geneva and Zurich).

Another private vault that just opened its doors in the U.K. is Glasgow Vaults. Located in Scotland’s largest city, the sister company to Merrion Vaults (Dublin, Ireland) published the following on its Facebook page this past Sunday:

Delighted to announce Glasgow Vaults is now open. Scotland’s first independent Safe Deposit Box facility, open 7 days per week

(Editor’s note: Bold added for emphasis)

According to the Glasgow Vaults website, they offer various box sizes and are “the only safe deposit box facility to offer high security private walk-in vaults for the storage of fine Art and valuable furniture.”

Congratulations to Sharps Pixley (Degussa) and Glasgow Vaults. Offshore Safe Deposit Boxes wishes them all the best with their new facilities. For more information about the Sharps Pixley showroom/safe deposit boxes, visit their website here. For info about Glasgow Vaults, head on over to their site here.

By Christopher E. Hill
Offshore Safe Deposit Boxes (www.offshoresafedepositboxes.com)

(Editor’s note: The mention of entities marketing themselves as private vaults outside the U.S. offering safe deposit boxes/lockers at a minimum should not be construed as confirmation of services claimed to be provided or any sort of recommendation. A qualified professional should be consulted prior to making a financial decision based on material found in this weblog. If this recommended course of action is not pursued, then it must be understood that the decision is the reader’s and the reader’s alone. Christopher E. Hill, the creator/Editor of this blog, is not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented on the site.)

Source:

Denina, Clara. “London gold dealer Sharps Pixley opens first UK showroom.” Reuters. 14 Jan. 2016. (http://www.euronews.com/newswires/3126373-london-gold-dealer-sharps-pixley-opens-first-uk-showroom/). 20 Jan 2016.

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