dollarvigilante.com / February 22, 2013
GOLD STORAGE VS. DELIVERY
I have a question about buying gold. I’m considering buying online through an online intermediary such as BullionVault, and I have the option to either arrange storage in one of their vaults or to take delivery.
If, as may happen, the lights go out, ‘money’ goes back to its true value of zero and the internet is inaccessible, I may not be able to arrange delivery from them. Or another scenario: what if they get a run on their vaults and simply shut the doors?
We’re not talking large amounts in my case, it could certainly be stored in a safe. What’s your opinion – storage or delivery? And thanks for the quality information that you provide. It has certainly opened my eyes.
Vin Maru’s Response:
The biggest risk right now is having all your assets in the current paper financial system in which the risk of loss is much greater than having physical gold stored in an overseas vault. If the financial system does implode, the losses in the paper system will most likely be the first and most extreme since that paper is backed by nothing other than promises to pay from institutions (most western banks and governments) which are technically bankrupt in the first place. Whether this is happens by outright confiscation, default or loss of value via inflation, it makes very little difference. The end result for those holding paper will be the same.
The best plan would be to first have some of your assets (including gold) close at hand and in your control, so you have access to it during times of emergency. Secondly, if you have a significant amount of assets that need diversification outside of your country, then consider buying and storing some gold with one of the bullion dealers that offer offshore storage outside the banking system (We have covered many such options in Get Your Gold Out Of Dodge which is a free report to TDV Weekly basic and premium subscribers). If we had to choose between storing wealth in a morally corrupt and bankrupt western financial system backed by faith and force, or at a private vault whose business is to protect your assets from theft, then the choice is pretty clear because we have a little more faith in the private storage option.
As for not getting access to your bullion if the lights go out and the bullion dealer shuts down or there is a run on the vaults: yes, these are definitely possibilities and there are no guarantees in life. This is why geographical diversification of assets is probably the best way to manage and protect those assets. Diversification of assets outside one’s country could also include purchase of other strategic metals stored in vaults, foreign real estate or even private investments in businesses backed by hard assets or commodities. This could also mean using several bullion dealers and vault locations. We also suggest making sure that the bullion dealer offers allocated or segregated storage options. Also try and get actual serial numbers on the bullion bars you own and keep all your receipts and documentation for the purchases.