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Why Investors Should Only Deal In Physical Gold

Why should you ensure that you get outright physical ownership of gold? It would be so much easier to just get a gold account.

The reason is risk of default. One of the patterns which recurs throughout history is that growing financial sophistication results in widespread expansion of credit and exposure to default, and few people successfully avoid it when it matters.

Banks, pension savings, mortgage guarantors and all the major banks on which we depend are now restrained in a web of undelivered assets. A is the registered owner of a bond payable by B, the principal on which has been credit-swapped out to C. The terms are overseen by a deed drafted by an investment bank D, which itself receives the interest. This has been aggregated with 30 others and sold notionally to E. E is overseas, and flattens the Foreign Exchange risk with a bank F, who rolls a future and sells on his long currency book. Now this is bought by another bank for an assured profit by running the position against a higher yield bond purchased from a junk-status borrowing customer. They have been insured against the risk of default with G, a major insurer, who happens also to be A.

You don't need to understand everything to understand something so complicated is also like to disintegrate eventually.

These are the styles of relationship which dominate the world in which ordinary peoples' savings are bound up, and they are profitable in the short-term. This is why financial as opposed to commercial companies increasingly dominate the list of the top companies in America and Europe. They find it easier to make profits by providing credit and assuming eventual repayment, rather than by actually demanding settlement; a habit which could put off no end of potential customers.

All our common savings products are bound up in these webs. We don't know anybody who really knows when and where these webs will break, and, with utmost possible respect, we don't think you do either. But it is so certain that they will break, and at an unexpected place and time, that we believe every forward thinking person with a respectable private reserve would do well to pull out with at least portion of their savings.



A purchase of gold is an excellent way to accomplish this. Gold accounts, indexes, spread bets, and futures all fail to extricate the buyer from the web of dependencies, because they are based on undelivered gold. The only way to opt out of the web is to own physical property outright.

Billionaire mutual fund managers use gold in order to help protect their customers. When there is uncertainty or a collapse in other financial markets, Gold typically goes up. Take for example the global financial crisis from 2008. While stock markets were crashing, banks failing, and people lost their houses and jobs; gold increased an unprecedented amount.

Many smart smaller investors are putting a portion of their portfolio into gold. The process of establishing a Gold IRA Rollover has certainly become considerably easier. The IRS ruled in 2007 that IRAs can purchase bullion, that fall under particular provisions, without any tax issues. Employing a Gold IRA Rollover is for that reason especially simple. Because of this a variety of choices exist for those that would like to refocus their investments during a period when the stock market appears increasingly more difficult to anticipate.

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