Panama Leaks is No Surprise; Confirms That Gold is Money – Frank Holmes
All eyes are on Panama today, with leaked documents showing how some of the rich and powerful used the country as a tax haven to hide their wealth. A Panamanian shell company in the country was even linked to one of the biggest gold heists in history. On Sunday night, documents were leaked by German newspaper Süddeutsche Zeitung, implicating 72 current and former heads of states to secret offshore accounts in Panama that helped them hide money and evade taxes. But, for U.S. Global Investors’ chief executive officer, Frank Holmes, the news comes as no surprise and shows the ‘real value’ of gold. ‘It validates that gold is money,’ he says in an interview with Kitco News on Monday. ‘There is audience of people that believe that gold is not money and it is just a commodity.’ As for the yellow metal’s price action, Holmes says April is a ‘sloppy month’ and that gold is going through a transition. The metal started the second quarter lower and ended the day with June Comex gold settling down $4.20 at $1,219.30 an ounce.
Multiple press agencies (ICIJ, SZ, BBC and others) have reported on a large data breach at Mossack Fonseca, a Panama-based law firm specialising in offshore services, highlighting the roles of up to 500 banks in creating offshore shell companies. While the ultimate implications for European banks are impossible to gauge (and, at this stage, there do not appear allegations of illegality), this leak is likely to heighten ‘tail risks’ for the sector, with globally-active banks intuitively most vulnerable to adverse outcomes, while those with strong retail franchises typically having proven most resilient in the past.
Panama Leaks interview with Frank Holmes below