How to Buy Physical Gold and Why Not to Invest in Gold ETFs! Gold: the ultimate store of wealth that's been used since time immemorial. Some sort of hedge or in bothered times, a 'safe haven' in the current crisis. If your wealth is stored in your old watches, then who really cares if the financial system implodes? Empires, currencies and rulers have come and gone... but your old watches has always retained benefits and purchasing power. In the various precious metals, gold is among the easiest, most liquid (effortlessly traded) asset you may invest in.
Goud inkoop : Gold is a traditional hedge against inflation and also deflation. Against currency devaluations. Against avaricious or incompetent government authorities or Central Bankers. Or shall I just say, in a a smaller amount politically correct manner, that America is bankrupt and Gold is the only real money? If you get Gold, you no longer ought to rely on the "full confidence and credit" of the us government - which is declining sharply.
If you're reading this article, you probably don't need me to tell you why you should buy gold. It's actually an obvious decision in the present economic climate. The question is not really much should you buy silver, as can you afford to hang on to assets denominated in a declining currency like this dollar or the pound sterling or the euro...?
The US dollar typically rises or falls inversely while using the value of gold. Recently, although there's been a slight increase recently, the trend in the US dollaris downwards. My view is that the dollar will continue to decline until the US economic fundamentals look better - till America originates out of bankruptcy, that is - and that could take some years.
In terms of your savings or retirement account, this means that if you invest in things like bank deposits (Dvds) the net return is usually negative. Since the beginning of 2003, US dollars held with 3-month US Treasury Bills have yielded lower than 3% per year (Source: Global Financial Data). Considering that the inflation charge over this same period of time has averaged more as compared to 3% annually (Origin: US CPI), the income accumulated had less buying power in October 2008 than it did half a decade before.
The carnage on Wall Street, and the fallout around the world, looks far from above - despite what the Feds or the mainstream media can have you believe. Every time you will find there's new panic like an additional bank or insurer collapsing, some sort of flurry of investors using dollars, euro and pounds start a new mini gold hurry.
At the same period, demand for the yellow metal is constantly on the significantly outweigh supply. The Chinese, for example, love gold and get plenty of dollars. China is keen to help diversify its huge foreign exchange reserves (by far the largest in the world) away from this dollar. A small increase within China's percentage of gold reserves would produce a huge increase in demand and therefore in the gold charge. Asia, particularly the American indian subcontinent, and the Middle East (think Dubai) are also seeing large increases with domestic gold demand as disposable income increases. When people think that paper currencies will be worth less in the future, they have historically looked to position their net worth into a more stable vehicle. And gold is typically viewed as a safe version of currency, as its value isn't as affected by inflation.
Why Buy Your old watches Offshore?
So far, so good. There's nothing particularly new or controversial regarding the information above. But I have always believed in a much more offshore, skeptical, pragmatic process. Like it or not, we tell things as they simply are.
Can we trust government to regulate our finances? I think the overwhelming evidence has revealed no. History shows that will gold is politically delicate, and governments (read Central Banks, particularly the Federal Reserve) don't wish to see individuals buying gold. Why? Because they can't regulate it. They can undoubtedly try. For example, in an earlier article you can find here, we asked seriously Will the government Confiscate Gold?
Then suddenly, as of late September 2008, we saw the us Federal Government beginning to limit the access of ordinary citizens to silver bullion - by withdrawing new bullion coins from circulation. (Suddenly and unexpectedly in mid-crisis the IRS also introduced an alternative form FBAR for canceling of foreign bank accounts)
What we can see from almost the entire package is that the smartest strategy is always to keep your gold holdings outside your property jurisdiction -- where they are going to well protected against several threats from governments to predatory ex-spouses. So you have to know:
How to Buy Silver Bullion Offshore
Gold bullion may be the most liquid form associated with gold. If you want to buy gold with the idea that you'll ultimately sell that, then you will need it gold bullion. Bullion suggests either bars or funds. Fortunately, you can easily buy gold this way and just as easily sell it again all over the world. If you need to help break it into more compact denominations, you can for instance exchange gold easily with regard to silver coins like Panama's aged Silver Balboa or Mexico's silver coins.
You can buy gold bullion by looking for offshore dealers. If you now have a particular kind of coin in mind - like the Canadian Maple Leaf or South Camera Krugerrand, to name many of the most popular gold coins - then perform a search for that certain coin, or find the state mint websites. For example, check out the South African Mint or that Royal Canadian Mint. A unique and more private option for Americans is fixed circulation coins. When you ought to buy gold, these sites all contain helpful tools for locating local and international dealers of coins.
Provided you don't 'look suspicious' and prove the origin to your funds with some paperwork, it is quite simple to buy gold bullion coins anonymously with cash. Some countries, like France, charge sales tax on gold and thus should be avoided. Some others place burdensome restrictions on export, like major silver producers Brazil and South Africa. Others, like San Marino, are simply too not even close to major gold markets for purchase there to be economical - choosing saddled with high transport and insurance costs.
So where should or do you go to buy silver offshore? The undisputed capital in the business is Zurich, Switzerland. There you can get and store your gold in the free trade zone in the airport. Major Swiss banks like Credit Suisse will sell you gold directly from their branches in Zurich Airport.
Most countries in mainland Europe are great for buying gold. Luxembourg, for instance, is a friendly little place where privacy is still respected in precious metals transactions.
In the Americas, Mexico is another country which you could simply walk in for a casa de cambio and buy gold 'centenarios' over the counter for cash. Mexico has suffered with so many devaluations which is a major producer of gold and silver, so investing in bullion coins has grown to become popular there. There has been a serious effort in South america to introduce silver funds as legal tender. (For information on Mexican gold coins, termed Centenarios, visit here...
Vital Warning: Here's why it is best to absolutely NOT Invest within Gold ETFs
In Sept 2008, shareholders in ETF securities were left high and dry - struggling to trade popular commodity sec, due to concerns on the future of their backer, insurance coverage giant AIG. Overnight, banks and brokerages stopped making markets inside Exchange Traded Commodities (ETCs) backed with the troubled insurer. The price of the stoc
Gold ETFs are vastly dissimilar to holding real gold. Turbulence, such as the above in the market, can affect the value of the gold ETFs markedly. After you buy an ETF you are buying electrons on some sort of screen. It is totally different from buying real solid gold. What if the bank or fund manager fades of business? What if trading inside shares is suspended, as to example short selling has been just suddenly banned? What if the whole exchange is suspended as has happened in the past? Shares can be controlled by massive manipulation and liquidity problems. I believe we will see dual gold prices from now on - one 'official' identify price, and another price determined by pure supply and demand which will dictate what you can easily buy and sell serious gold for in real life.
If you own stock in an ETF, that means you own a stock that depends on the price of gold, rather than gold itself. No matter that corporations which include ETF Securities own your old watches. How much gold they own is not clearly discernable by the typical "Joe Sixpack" who may well own ETF stocks.
A good downgrading by credit agencies like S& P or Moodies may well drastically affect the discuss price in ETF Securities - as it has done! In Sept 2008 shares in ETF Securities products, which were reinforced by AIG, were down as much as 50% in one morning after the US insurer was downgraded with the rating agencies. The cold hard the truth is that if the issuer of exchange traded note goes bankrupt, investors holding exchange traded products backed by these notes will join the ranks of other creditors hoping to get their money back. With any gold ETF one fails to own actual gold together with cannot automatically or instantly redeem gold in the fund.
Indeed, to shop for gold ETFs is adventurous and courageous - an individual might almost say dangerous - activity, in today's economic climate, with so many Wall Street firms going with.
The same is the case, in my personal opinion, to the Perth Mint Official document Program (PMCP). This program is run by the government of Western Australia, and is offered by many gold dealers and investment advisors around the world. The problem is, when you do due diligence on the Perth Mint program, you will see that you are not truly buying physical gold. You are just buying papers or 'notes', and redeeming people notes later could require substantial bureaucratic hassle. You are also reliant on this Australian government. If, for instance, the US tried to confiscate all gold kept by its citizens, do you think the Australian government might co-operate? Most likely without a doubt!
Also be aware that if you hold shares in an ETF they are reportable for tax purposes. Physical gold however is not reportable. That's just another reason to take into consideration real gold bullion bought offshore, rather than change traded funds.