Saturday, March 7, 2015

Physical Gold – Why Bother?

Below is the sad story of the pensioner in France that has his Gold bars stolen by well-informed thieves.

It begs me to ask, Gold – Why Bother?

I don’t disagree with the value of holding some physical Gold, either in the home or elsewhere.  But certainly, if in the home, not too much that you are destroyed by its loss.

The reasons for this, to me are simple:

1. Holding Gold to me is cataclysm type event protection.  If it’s just as an investment, or to hedge inflation, buy GLD the ETF.

2. In a cataclysm type event, any Gold you own will be ripe for the taking as soon as it is known that you have it.  So you better have it well hidden and protected with security. (i.e. guns and bullets).  You will need them!  (The most amusing thing about “Doomsday Preppers”, is that they go on TV, showing us what they have and often where.  This is totally is defeatist in intent).

3. Big value, one kilogram Gold bars are next to useless when you need to live on them.  Coins are definitely better.  I would argue Silver coins are better again, as they have lower value per coin.  Gold coins if you needed to travel would work fine however to move wealth.

4. In a cataclysm type event, Gold ownership is likely to be made illegal, as during the Depression era of the 1930’s in the USA.  (In this case physical Gold in vaults is even more at risk.  Penalties after the fact of hoarding it could be severe too.

5.  You can’t eat Gold, meaning that someone with land, water, defense, crops, and some source of power is more likely to be useful and thrive.  They simply wouldn’t need your Gold necessarily.

6. If I need Gold THAT badly, in an end-game scenario, without the things listed in point 5, I am not sure I would even want to be around!

7.  Finally there is an opportunity cost in holding large amounts of Gold.  What is the probability that the world will put us in a position to NEED it?    I am certain there will come a time of high inflation where owning Gold as an investment makes sense again.  I am not certain that I will ever need it as a physical asset to trade to live.  (But it’s pretty and nice to have a bit – until the thieves come).

Below the article on the theft:

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