Curious about whether forum members hold physical gold in their possession whether in professional third party storage or a home safe or other.
I have seen a lot of Jim Rickards press in the media especially lately with his new book "A New Case for Gold." His previous books "Currency Wars" and "The Death of Money" also have quite a strong following.
He advocates a 10% allocation in physical gold in one's net worth just in case the system temporarily has a crash or the exchanges are closed, banks closed etc. This holding is supposed to protect your portfolio as gold in such case would rapidly advance in value when other assets would be frozen or confiscated (for example bank deposits) to save the system. If physical gold is held in your possession, a bank or the government can't get at it, where digital assets theoretically they could.
Rickards goes on to explain that a lot of these "possible outcomes" have happened in the past. For instance, The Federal Reserve just lost $100M of a Bangladesh deposit. In financial turmoil, the rules can be changed really fast and even stock and bond owners could see their assets disappear by hackers for instance.
So these are the arguments. But of course I wonder why they don't talk about the case if your gold suddenly goes missing in your safe or third party storage. Or if you are carrying it if it gets stolen etc. They seem to not talk about the risks and costs to storing gold physically. It seems to me that it would be pretty nervy to be handling an albeit small but very valuable amount of gold in your possession out in public, especially during a crisis. And maybe access to the third party sites could be unavailable during such a crisis.
Anyways, wondering if it is worth the trouble to invest and store physical gold. I haven't yet and probably would not but I do have a small share of physical gold and miners on the exchange. Thanks all!
Physical Gold Holding and Storage
Re: Physical Gold Holding and Storage
one reason why Bitcoin is promising as an e-gold. More or less how it is being used today by most (buy and hold). Much easier to secure Bitcoin private keys than gold, though you have to be comfortable with the digital representation/manipulation.
Sure I have some gold etc. Easiest to have it in jewelry or some other practical form and keep it secure yourself or in a safe deposit box. I keep mine out in the open more or less.
Not a huge fan of gold as an investment unless you view it as a sound money and just want to diversify in that space (I also own some things which are not coupled to my country's fiat currency) or expect a bit of an economic/market collapse.
Sure I have some gold etc. Easiest to have it in jewelry or some other practical form and keep it secure yourself or in a safe deposit box. I keep mine out in the open more or less.
Not a huge fan of gold as an investment unless you view it as a sound money and just want to diversify in that space (I also own some things which are not coupled to my country's fiat currency) or expect a bit of an economic/market collapse.
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jacob
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Re: Physical Gold Holding and Storage
Sure they can get your gold if they really want it:stand@desk wrote:If physical gold is held in your possession, a bank or the government can't get at it, where digital assets theoretically they could.
https://en.wikipedia.org/wiki/Executive ... Order_6102
https://en.wikipedia.org/wiki/Asset_forfeiture
https://www.google.com/search?q=asset+f ... re&tbm=nws
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stand@desk
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Re: Physical Gold Holding and Storage
Well there you go, if the state can just confiscate it anyways, is there a point to owning or holding any?
I guess this devolves downward and downward to the argument whether there is a point to doing anything at all. But we gotta do something. So is there still a point to this then? If enough people did it I guess they could/would just take it all away.
I guess this devolves downward and downward to the argument whether there is a point to doing anything at all. But we gotta do something. So is there still a point to this then? If enough people did it I guess they could/would just take it all away.
Re: Physical Gold Holding and Storage
Gold does not grow or produce anything, so probably a bad long time investment.
To own some smaller gold bars and coins can be good for emergencies, since it is easy to take with you if you have to flee. If you are worried about a collapse of communications and electricity, gold maybe not the correct answer. Have plenty of fuel for cooking and food like salt, pasta, rice, cans, vitamin pils etc. If you have fuel to boil water, I think in most places you will find some source of water.
To own some smaller gold bars and coins can be good for emergencies, since it is easy to take with you if you have to flee. If you are worried about a collapse of communications and electricity, gold maybe not the correct answer. Have plenty of fuel for cooking and food like salt, pasta, rice, cans, vitamin pils etc. If you have fuel to boil water, I think in most places you will find some source of water.
Last edited by Forskaren on Tue May 03, 2016 5:07 am, edited 1 time in total.
Re: Physical Gold Holding and Storage
You don't have to simply hand over your life savings because someone demands you do so.
To my knowledge not that many people were charged with illegal possession of gold after the confiscation in the USA, so long as you don't store it in a safe storage box with a bank, or tell every person that you meet that you have 100 oz of gold buried in your garden, there's little the gummit' can do to physically take it from you.
How realistic is it that the government has the resource to raid everyone's home and search for your gold? I would be concerned however about the government abusing its powers to track electronic bank records to see who specifically has been buying gold in the past, so would recommend buying bullion in cash only. You would have to be comfortable in dealing in a black market trade, and all that comes with it, should gold be outlawed. It will always have value overseas, even if not in the US. Failing that, if you didn't have the guts, you should get a fair price at the time of confiscation, providing you live in a country that values property rights.
The key to storing your wealth safely is to diversify, your gold holdings should be no different.
In response to gold being a bad investment, this is typical anti-gold argument, yes gold doesn't yield dividends, but it can increase in price as dollars get printed due to central banks following their perverse monetary policy. Your bullion should command a higher price as time goes on, while cash and shares are being slaughtered in a high inflationary environment, it might be gold that everyone wants and the price skyrockets. This is why gold can be a great insurance policy, hence the recommendation to hold at least 10% of your investment portfolio. Others recommend >10%, the permanent portfolio recommends 25% with annual re-balancing, plus further threshold re-balancing events, the PP has performed quite well relative to local indices over time.
To my knowledge not that many people were charged with illegal possession of gold after the confiscation in the USA, so long as you don't store it in a safe storage box with a bank, or tell every person that you meet that you have 100 oz of gold buried in your garden, there's little the gummit' can do to physically take it from you.
How realistic is it that the government has the resource to raid everyone's home and search for your gold? I would be concerned however about the government abusing its powers to track electronic bank records to see who specifically has been buying gold in the past, so would recommend buying bullion in cash only. You would have to be comfortable in dealing in a black market trade, and all that comes with it, should gold be outlawed. It will always have value overseas, even if not in the US. Failing that, if you didn't have the guts, you should get a fair price at the time of confiscation, providing you live in a country that values property rights.
The key to storing your wealth safely is to diversify, your gold holdings should be no different.
In response to gold being a bad investment, this is typical anti-gold argument, yes gold doesn't yield dividends, but it can increase in price as dollars get printed due to central banks following their perverse monetary policy. Your bullion should command a higher price as time goes on, while cash and shares are being slaughtered in a high inflationary environment, it might be gold that everyone wants and the price skyrockets. This is why gold can be a great insurance policy, hence the recommendation to hold at least 10% of your investment portfolio. Others recommend >10%, the permanent portfolio recommends 25% with annual re-balancing, plus further threshold re-balancing events, the PP has performed quite well relative to local indices over time.
Re: Physical Gold Holding and Storage
Rowlands&Lawsons Permanent Portfolio book talks quite a bit about this(counterparty risk, geographic&institutional diversification, confiscation). There's a fair bit on the blog(crawlingroad) as well.
My take is that you can always device a scenario wherein your defensive moves are made useless by circumstances, i.e nothing is perfect. Doesn't mean that it's useless to employ them. I can think of many scenarios where gold could be a good help. Backtesting suggests that it isn't an obvious drag on performance to carry a bit of gold in your portfolio(10-20%), making the insurance cheap. Of course, it will be helpful in some time periods and not so in others.
There is always risk, but you can manage it intelligently.
My take is that you can always device a scenario wherein your defensive moves are made useless by circumstances, i.e nothing is perfect. Doesn't mean that it's useless to employ them. I can think of many scenarios where gold could be a good help. Backtesting suggests that it isn't an obvious drag on performance to carry a bit of gold in your portfolio(10-20%), making the insurance cheap. Of course, it will be helpful in some time periods and not so in others.
There is always risk, but you can manage it intelligently.
Re: Physical Gold Holding and Storage
Physical gold is your insurance against government and bankers. It's not a typical investment. It only works when bought with cash, anonymously and kept by yourself. No gold backed etfs, not paid by card, not kept in third party deposit box, not "bullion by post" purchase. Only cash in hand, no questions asked, just like you buy fresh milk every morning.