buying gold bricks

Buying Gold Bricks for the End of the World

Yes.  The world is coming to an end this year. World War III is trending on twitter and Iran has the red flag of death above their mosques.  So what does this mean for the United States? After we leave the fallout shelter, how will we conduct ourselves? What will be our new currency? Should we be buying gold bricks?

Of course this is hyperbole, but it begs the question: Why don’t I just buy physical gold?

There are several ways to own gold, you can own it in a physical form, like gold bullion, aka investing in gold bars- or jewelry, or you can hold it in your portfolio as an ETF. $GLD is the most popular ETF for holding your wealth in gold. But let’s think about the former.

Holding gold on hand aka in your house, or however you want to keep it out of the public eye can help you confuse the courts in the case you are sued for your entire net worth.  There is no registration for physical bullion, whoever is holding it, is theirs.  This presents a problem, however, in that without registration, ownership is “hazy”.  If someone comes and raids your shelter and steals your gold, good luck proving otherwise. 

Another benefit, yet drawback is the absence of any counterparty risk.  Gold is a commodity, and as such there is no way for bullion to default on its loans… Holding your bullion in good times (aka not a nuclear holocaust scenario) may be more of an illiquid investment than securities traded on an electronic exchange, but there would still be a market in some sense for gold as a conductor etc.

However, in a nightmare nuclear holocaust scenario, you can forget about buying gold bricks.  Your best bet is to find your nearest stocked shelf of canned beans, as non-perishables will become your net worth.  That, and your trusty blunt object.

Happy thumpin’!

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