The New Case for Gold

If global uncertainty has got you thinking about the increasing likelihood of another economic meltdown, you may be interested to read Jim Rickards’ The New Case for Gold (here’s the Amazon link).  Rickards, of course, is not alone in recommending that investors have at least some exposure to gold as a hedge against financial instability, but one of the key points he makes is that it’s worth considering how that exposure is achieved.  For a while I thought I was OK with a physical gold ETF, just until I realised that such instruments actually work on the same fractional reserve basis as banking.  Yes, the ETF tracks the price of the physical metal, but the fund doesn’t actually own anything like enough of the actual commodity to cover its liabilities to fundholders.  That being so, the ETF shares would be as flaky as any other paper-based asset should there come a day when banks are failing left, right and centre.  (Which is what could have happened in 2008 after the Lehman Brothers debacle; and bear in mind that since then the same problem has been allowed to become many times worse than it was then.)

As Rickards suggests, it’s prudent to actually own some gold in case the worst should happen.  But how?  One popular answer is to acquire some gold coins, perhaps even collectible ones that may trade for a premium over their actual gold content.  Doing that opens you up to the likelihood of theft, and the certainty of increased home insurance premiums.  Enter Bullion Vault, which gives private investors access to the professional bullion markets and a safe, convenient and economical way to store precious metals too.  You even get a choice of storage location (London, New York, Zurich, Toronto or Singapore).

I’ve been with Bullion Vault for a little while now, and have been very impressed.  That’s why I’m happy to recommend their service, and to refer my friends to them.  Here’s my referral link.

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