I don't see either high spreads or illiquidity. At least in the US the spread from reputable dealers is under 1% for bullion; slightly more for coins. It is certainly a feasible (and, in current low interest rate scenario, inexpensive) hedge against catastrophic economic problems.
The only stuff with that kind of spread are 100oz silver bars or 1oz gold coins, all of which are well outside of feasible for $20/wk folks (unless they are willing and able to save for 2 yrs per coin anyway)
Using reputable dealers that deliver orders placed online. Strange as it sounds, it is, IMO, one of the better and safer (definitely low commission) ways to get gold. BD Bullion, APMEX are good ones. I did not check very recently, but when I did the difference with spot price were under 1% (slightly higher for APMEX, slightly lower for BD). A friend in Australia mentioned the same ballpark, 1-1.5% spread (combined, not each way). 10-20% is a highway robbery!!
An important caveat: this only applies to reasonably large orders, 1 oz or larger. You cannot buy $100 of gold with 1% spread.
I stand corrected -- currently, the difference with spot price is about 2% each way. Lower than 10-20%, but much higher than ~0.5% I remember earlier. I suspect this is due to recent gold price volatility, but not sure.
You don't need to be anonymous. Legal tender Gold coinage in the UK is free of capital gains tax, so even if the spot price goes up 1000% you still pay nothing to the tax man on sale.
For this reason alone lots of the extremely wealthy hold it as a hedge.
At volume the premium over spot is about ~6% even straight from the Royal Mint
How would you go about doing that, and what would it accomplish?
Gold doesn't multiply itself so that you have more gold that might be unreported. It's not like an investment account in the Caymans. It's just a collectible. You can also buy rare books, or antique furniture, or rubies, or any other collectible. There is absolutely nothing special about gold that doesn't equally apply to these other items, other than gold is more famous.
People who have businesses that are easy to run in cash (landlords, construction, restaurant trades) often run a portion of the business off book. Converting cash to commodities is a pretty common way to store value more securely, as cash gets unwieldy. Sometimes country folk use equipment like tractors or junk cars for similar purposes.
You go to a reputable dealer with cash, and buy what you want. If you’re clear you are doing a cash only deal no name, you’re good.
They’ll issue you an invoice made out to walk in or whatever, so you have documentation, and if you want, you can pay taxes on gains or whatever later.
It IS getting harder to get cash out of a bank without jumping through endless hoops, but most banks will still let you call in an order for $20k
cash or whatever (more than $100k starts to become much more difficult) and after a few days will have it ready for you with documentation (so if a cop pulls you over you can prove it is documented/part of a ‘legal’ source).
Some will make you sign a waiver so if you get mugged outside the bank, you were warned and it’s not their fault, etc. at some point it’s probably worthwhile to get an armored truck or whatever.
None of this matters. The police are definitely not going to be put in jail for doing their job. And seizing "large amounts" of cash falls squarely into their job description.
The department has an army of lawyers who deal with civil asset forfeiture all the time, and they can call in federal assistance if needed. There's a 95% chance the department will keep all of the cash, and in the other 5% they merely keep some of it.
Paperwork won't help because the prosecutors will successfully argue that it could be used for future crimes.
Civil asset forfeiture makes a mockery of the US legal system, but most people don't follow it enough to see just how bad it really is.
Civil asset forfeiture requires some degree of at least suspicion that things are not above board, AND they need to know it’s there. A receipt for a cash withdrawal sitting on top of the stack of cash that 100% shows every dollar came from a legit bank? And it was in a place you didn’t give them consent to search, and you can show there was no probable cause to search?
Someone’s gonna lose their job over that, at least if you have enough lawyers
Where civil asset forfeiture comes in hard core is when you can’t show the source of the money.
It requires no such thing. Police have argued (successfully) many times in many jurisdictions that the mere possession of large amounts of cash is suspicious in and of itself, and being able to show legal sources is pointless because the argument is that it COULD be used for a crime.
No because once your money is charged (not you, your money) it is very difficult to get standing to fight it unless you luck out with the judge or something. And no matter the outcome the cop never sees consequences because of qualified immunity.
I think he is talking about the reletively high number of people that buy and sell gold for cash as private parity sales.
Generally, I have been gold authenticated by taking the density with a good scale and water displacement. Though that technically could be faked it would be very hard. If you wanted to do it quickly you could probably cut a corner off because the stuff in circulation is normally high enough grade that it's almost soft.
Gold Plated lead would feel off to anyone that's handled gold before from density alone. Gold is nearly twice as dense. That's why it made a great coin in the past. It's far denser than anyother common materials.
i've never understood how this would work in these doomsday scenarios. are people going to walk around with scales to weigh the gold for every transaction as well as test the purity of the gold? are they going to mint their own coins? I just don't see how it's supposed to work
I think the idea is that gold is a universally desired good that can be exchange for money or anything of value in any situation or place.
So if you decide to flee the country, five pounds of gold is $150K and can easily be carried in a small backpack. Let's say you keep it in 1 troy oz pieces, so you have 80 of them worth about $1800 each. You can go to any nation on earth, and whatever currency they have, they will be happy to sell it to you for gold. Yes, only in $1800 pieces. That's fine, you can exchange it for whatever local currency is being used as you need it.
You can do this anonymously and privately. You don't need to worry about whether the US dollar has collapsed. Gold does go up and down, but it never goes to zero, and tends to do well in crisis situations and maintain value over the long term. It is not - or shouldn't be viewed as -- an "investment", it's insurance. It costs money.
Moreover even if you do not flee the country, having assets that you possess - true bearer assets -- is superior than assets others hold for you in a custodial account. How secure is your 401K? Secure until congress passes a law to take some of it. How secure is your bank account? It is as secure as someone who can convince the bank to freeze your account or close your account. So having a bit of gold or cash as a type of hedge for unlikely events makes sense to a lot of people.
You have to keep in mind that for a household living in Silesia, between 1880 and 2000, they would have lived through one hyperinflation, two world wars, two revolutions and three uprisings, and four foreign invasions. They would have been ruled by Prussia, Poland, Nazi Germany, Soviet-controlled Poland, finally free Poland. Each of these had their own currency regimes and currency reforms. That household would have been well off having a bit of gold tucked away. They would have been able to trade some of it for food during the Weimar collapse, and to transport some wealth through the dark days of communism -- maybe even bribing someone to let them escape the country with something more useful that worthless zlotys in whichever nation they landed.
Great example with Silesia. Funny thing about "worthless zlotys" is that "zloty" is the name of a currency, as well as literally meaning "gold". In this historical case, the latter would have certainly been a more stable store of value.
I understand the rational thinking of gold exchanges. You missed the detail about this being confusion on preppers. If the world has gone to shit (nuclear war, zombies, etc), then gold just isn't that useful. If it was silver, you could at least melt it down and kill the vampires with it.
You're attempting to use logic in a place where there is none.
I don't really understand your point; the fact that preppers have gold and gold didn't help against zombies seems easily explainable by preppers not actually preparing for zombies, but instead far more realistic events including short term social unrest.
I don't see the value of gold if there is widespread chaos. Like a walking dead scenario, gold and diamonds are almost worthless. Guns, food, medical care is what's worth something in that chaotic environment. Of course we aren't defining the environment here.
1) it’s fun to TALK or THINK about some crazy synthetic situation like a walking dead scenario, but not many folks are really thinking about it literally.
2) it’s a lot less fun to talk or think (and may be dangerous to even try) about more realistic issues - like if you’re on the wrong side of the situation in Bosnia or Rawanda.
3) it’s the same kind of general process though, and some of the same tools can be useful to defend, escape, or repel.
And gold and diamonds got a LOT of people out of harms way that otherwise would be dead - at least from the 2 folks I knew that got out of Vietnam with their families when the south fell (and are probably alive today) only because they were able to bribe their way onto the boats using gold.
But is this what preppers are really prepping for? Maybe I'm just too far into the conspiracy theorists and what not, but my personal experience with preppers are way way way futher than fears of social unrest.
Preppers aren't just a bunch of American right-wingers locked up in remote cabins with large stockpiles of food and valuables (although those people certainly exist).
Most of us prepare for short-term disruptions that are far more likely than hordes of undead roaming the streets. If widespread societal collapse should actually happen, then having a strong local community, and knowing how to co-operate and communicate with one's neighbours is far more important than having enough canned tuna to last to Ragnarok and back. That being said, having survival skills and basic supplies can come in handy in a wide range of situations.
Personally, I'm preparing for more basic things like long power outages, extreme weather and supply chain disruptions. Sure, we got food, fuel and supplies for a few months at home, and it's been very handy during the pandemic, while being snowed in for a week a few winters ago, and when being without power for two days last summer -- I could keep working like any other day, and didn't lose any income.
Yes, that includes some cash. It's been handy a few times when the card terminals at the store wasn't working. Storing large piles of it seems an unnecessary risk, though.
Near as I can tell it’s a generalized fear they are attempting to address this way, and don’t often really fully understand it or why they are even doing it.
If you think of it however as not needing to be rational, but more or from an evolutionary perspective ‘folks in the past who had similar types of fears and discomfort might have survived prior insane disasters that no one else expected to ever occur’ it might make more sense.
It doesn’t have to be rational. It doesn’t even have to help them survive or be successful most of the time. If it works even a little better and they survive when everyone else died because of their insane paranoia, those genes will propagate.
Not exactly. It was an analogy for the «mindless hoard» of the conformant - the "silent majority" -, promised a dull excuse for a life, but free of care inside a social system, which «comes to get you» with that promise wanting to assimilate you; more specifically the system would have been consumerism (as in "live to have and purchase"), installed over anti-intellectualism (as was already a very evident trend half a century ago). The revealing moment was the scene in which "ghouls/zombies" drive shopping trolleys.
Romero confirmed the depiction was that of "the revolution", where "the awake" realizes the vast majority is assimilated, but discovers "humanity" inside himself and decides that it is worth fighting to defend it, as the core hidden topic in the original work which provided the inspiration: Richard Matheson's I am Legend.
All of that installed in the social crisis of confusion, incompetence and violence seen as the core aspects of the '60 in the USA.
...Since we are discussing about cash, and surely you wanted to be on topic, I assume you meant to state "ghouls also renounce to privacy", worsening the scenario Romero originally depicted. Well noted.
...And this parent post seems to mean, with self-harming rhetoric, that the «veiled analogy» depicted a context of anti-intellectualism - as just written explicilty nearby. Yes, well noted.
The writer probably wanted to subtly refer to relevant Danish-American actress S.J. (a cryptic critique of the frugal accomplished Northern Europe?) in her statement "If I pay bucks for a movie ticket, I do not want to go there and think" (quoted from memory). Too subtle, let us not speak in riddles! (Even that «transphobia», presumably to be read as "fear of [monetary] transactions" - privacy, availability, inflation, currency as a token without intrinsic value: with such obscurity, little of the message can pass.)
Modern banking was also basically invented because of this very problem - gold was inconvenient so you had gold coins with insigna's which promised a standard weight of gold and could be reasonably trusted due to being hard to forge.
Which gave way to IOUs from gold smiths, since carrying large amounts of coins was still hard. Which, well, everyone knows the rest.
Right, so again, what do these people think they are solving? There's plenty of logic flaws with the doomsday preppers, but returning to the gold economy is just where I draw the straw. Sure, store all the food, guns/ammo, fuel, water, etc you can, but if the world is that screwed up, we've all seen the movies on how well best laid plans workout.
See my comment above. It doesn’t have to make sense in our current environment for people to do it.
Doing this kind of thing has meant their ancestors survived crazy insane disasters that most others did not, so they are going to keep doing it to some extent no matter what.
Think of it as humanities extra parity bits. Most of the time they’re useless, until they’re the only reason we’re still here.
Yup, though the minimum ‘buy in’ per unit without getting raked over the coals with high spread products is too high for many people. If you’re trying to set aside $20/wk, silver is terrible and good luck with Gold.
