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Comment by D895n9o33436N42 | Hacker News Reader

Gold is a poor asset no matter how you turn it. Most people don’t hold physical gold when they trade in it. If the current financial system were to fail, do you really believe that people will begin taking delivery of their physical gold positions in their garages? They’ll simply get wiped out, and that will be the end of it.

Even barring a catastrophic nosedive in the level of civilized trading, regular people aren’t equipped to store gold in their homes. The problem of securing such holdings isn’t something the average Joe will be able to solve well, and he knows it.

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Unless you are storing the majority of your wealth in gold, it is not that hard to take possession of gold and store it in a decent removal resistant and fire resistant safe in your home. Your average smaller stand up gun safe can store more wealth in gold that I personally have. I personally take delivery of any gold I hold, but I really only hold enough as a unlikely but not impossible to happen insurance policy that society completely collapses.

The issue with doing that, is it is an insurance policy and not a immediately liquidate-able asset that can be traded in seconds. I think it is a sound strategy to take possession and store enough gold that in the event of a reset you can reestablish yourself. It is the closest thing to a guarantee that, that portion of your wealth will carry over into what comes next, in the unlikely possibility that it happens in your lifetime.

> it is not that hard to take possession of gold

I don't know if I buy that. Show me how I can guy a commodity on the market and have it delivered to my house. And the guarantee that process will work when the global financial system starts imploding. For the vast majority of people holding gold, their holdings are only on paper, and that's all they'll ever be.

If I'm stocking up on items with physical value to hedge a complete economic collapse, I'd rather have butane lighters, buckets, vacuum sealed sugar/salt/grains, water storage, and ammo.

Yes you should have all those things in a realistic quantity but after a survival ration, hording those items is not realistically your best bet. Ammo would probably be the best out of the lot, but it will only hold temporal value while the unrest is happening, lets say it's a really long unrest say a decade until peace is restored you still only have a 10 year store of wealth if you put it all in more ammo than you need, while gold will almost assuredly retain at least a decent portion of the wealth you stored in it. It might loose some value in initial unrest when and if people are in pure survival mode but will almost certainly take a primary status in the period between the ending of unrest and the stabilization of a fiat.

Also for myself personally, I purchased a simple test kit that most jewelers use. It is an electronic test kit that is very accurate for gold and platinum and when I look to reallocate some of my wealth to gold I buy scrap gold and test it. The kit was about a $200 investment but It allows me to buy the gold at a deep discount (deeper if it is not 24K) under the spot price for the day, you can melt it with a propane torch, that can be purchased from Home Depot and they make plenty of bar molds. It takes me about 5-10 minutes effort (short of procuring the gold) to turn scrap into bars. But if one does not want to go thru the effort, it's pretty easy to buy gold bullion at the spot price for the day + shipping, even on ebay there are plenty of reputable sellers. I don't trade in millions of dollars in gold and I have yet to liquidate any that I hold as I only hold about 3% of my total wealth in gold and I try to keep that pretty stable. Again I view it as insurance, not an investment, that being said if I liquidated it all today, it would have turned out to have been a pretty good investment.

There are plenty of physical gold dealers. Either bullion or coins. Anywhere in the world.

apmex.com

I think the point OP is making is: Say you have $1000 in a gold ETF with some brokerage somewhere. The Zombie Apocalypse comes. Banks are all failing, cities are burning, roads are torn up, and electricity is shut down.

Do you write a letter to your broker asking, "Dear, Schwab, I have $1000 in a gold ETF and shit is crazy now! Can you please have one of your customer care folks briefly stop stocking up on water and food, use a generator to turn your servers back on and verify I have that security? Then please deliver the equivalent amount of physical gold to my address via the postal system which is partially working? Thank you and look forward to continuing business with you!"

Point is, if you ever really need the physical gold behind the security it will not be available. To me, that makes the security worthless.

>insurance policy that society completely collapses.

When society collapses gold will be completely worthless as well.

http://cddawiki.chezzo.com/cdda_wiki/index.php?title=Gold

Society has collapsed several times throughout the millenniums of human existence and gold has been one of the few constant sources of wealth store and retention that has resurfaced with each new incarnation of society. Given this truth, it is a pretty good indicator that it will resurface after/when the next collapse comes. We know gold was used a exchange and storage of value since the dawn of recorded human history and probably was for sometime before humans started recording history and it is still used now, which could be argued that it is of least use to modern society yet it has endured. Simply put gold while maybe not the greatest investment, is one of the most stable sources of wealth. If I have a million dollars today and I want the equivalent of a million dollars in 100 years, gold is one of the best stores of that value. That does not mean I will get a return on my money (i.e my money working for me) but it means I have reasonable faith that I will at least get out close to what I put in and that is what gold has been traditionally good for. I heard it said one that in the 1800's an ounce of gold would buy a man a finely tailored suit. Today and ounce of gold will buy a man a finely tailored suit and that is really the point of gold, it is not an investment, it is a fairly secure long term storage of wealth.

> regular people aren’t equipped to store gold in their homes

I don't see why not?

I have never had a break-in, but if I did I'm sure I could hide a few kilos well enough that a regular burglar would never find it.

Either way, my gold is in a bank vault, which seems safe enough, but I honestly would not be too worried storing it at home.

"I have never had a break-in, but if I did I'm sure I could hide a few kilos well enough that a regular burglar would never find it."

Not on their own, but once they've found you, they've found the gold.

If people routinely stored gold bars at home it would improve the cost-benefit ratio of breaking into people's homes.

> do you really believe that people will begin taking delivery of their physical gold positions in their garages

They could set up a trusted storage facility to hold the gold in a vault for them. It isn't that hard to imagine. They could call it a "bank" if they really wanted to be traditional.

Just because you don't feel like being imaginative doesn't mean that people won't be when large amounts of money are on the line. People are downright ingenious when it comes to securing their wealth.

The story of Alan Turing and his plan for securing his wealth comes to mind:

https://www.reuters.com/article/us-markets-saft/saft-on-weal...

Fascinating.

>perhaps fearful of confiscation by a successful enemy or a government tax on capital, a plan that was mooted in Britain in 1920 ...

Hard asset confiscation, in the US case of gold, has been mooted, passed into law, and enforced:

https://en.wikipedia.org/wiki/Executive_Order_6102

Wow that's sad. So he correctly knew to buy silver, but lost it because of the complexity of where he hit all the different pieces of the collection?

The problem of storing gold is the same as the problem of storing paper money, there is no difference. Have you tried storing a million dollars in your own home? It is not for the faint of heart.

There is no difference except that in a crisis gold will retain its value, and the stacks of paper money will only remind you of the better days.

Now, of course neither of them is optimal. The best way of maintaining your purchasing power is with a competent government. But that is even more rare.

Gold is very dense. $1M in gold is 25x 20-coin tubes of 1oz coins @$2000 per coin, which is probably around an 8" square surface area 6" tall. Bottom of pretty much any standing safe you can buy (typical gun safe, e.g.).

Most consumer gold trading is done in grams, tenths quarters and half an ounce, outside of numismatic (old real gold coins, not bullion) due to its insane cost, it's easier to move assayed grams@$50 than $2000 single ounce coins for "regular" people. Also because it's easier to fake in larger ingots and XRF devices are very expensive, smaller assayed quantities move fast and are traded heavily.

> Gold is very dense. $1M in gold is 25x 20-coin tubes of 1oz coins @$2000 per coin, which is probably around an 8" square surface area 6" tall.

Most/all Federal Reserve Banks have a "Money Museum" attached to them. They will have $1 million in one dollar bills, which is a cube approximately 3 or 4 feet on each side. They will also have $1 million in twenty dollar bills, which fits on a 2-3 foot in diameter table, stacked perhaps 12 inches high.

Lastly, they will have $1 million in one hundred dollar bills, which fits in smallish suitcase that's probably less than twice the size of your stack of gold and weigh hardly anything at all.

They are really interesting - you should definitely go to your nearest one when you can, not least for the free shredded cash they give out; you can have the most baller confetti at your next party.

It's no different until raiders show up at your door. Your million dollars can be stored in assets outside your home.

Also, IIRC, gold quickly lost its trading value in post WW2 Germany because, uh, you couldn't eat it.

Sure, neither can paper money be eaten. Well, it can, but it is not nutritious. All the problems of gold are the same with paper money, there's no need to type the wheelbarrow story again. And gold might've not been useful in germany, but other places did take your gold. No one took Reichsmarks.

If you are storing a million 'dollars' in assets then you are not storing a million 'dollars', you are storing assets currently valued at one million dollars OR also 500oz of gold.

>civilized trading

Does that mean dumping money into Vanguard or something else?

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