Posted By Isaac Nuriani
I’m a gold bug, but a very discriminating one. When I buy gold, I want the real thing – gold bars, coins, ingots of the heavy golden metal that I can hold in my hand. Why do I mention this? Well, as you know, gold is red hot in 2016, which means a lot of people are jumping into the gold market any way they can. Many agree with me that the best way to profit from gold is to physically own gold, preferably in a safe location. But a lot of money also goes into exchange-traded funds (ETFs), such as SPDR Gold Trust (symbol GLD), which is backed by a physical store of gold. Now, I’m not putting down investors who take the ETF route – they help all of us by building momentum and excitement for the metal, and it’s been my experience that folks who start off with gold ETFs eventually graduate to owning the physical metal, for a number of reasons:
Gold holds its value even when paper money loses its value...
Gold is historically a great shield against inflation...
Paper money, especially in large denominations, may not always be there...
Let’s look at that last point. Recently on CNBC, U.S. economist Larry Summers called for the elimination of $100 bills, on the grounds that it’s a favorite way for terrorists and other miscreants to launder money. Personally, I am no fan of paper money of any type, except if it is backed by gold reserves. But if the government starts thinking about removing $100 bills from circulation, where will it stop? I think it might just be possible that one day all “money” will be electronic – pluses and minuses on computers that tell us how much money we own. That really scares me, because I would hate to wake up one day and find my money is gone thanks to a computer hacker!
Well, let’s get back to ETFs. With one exception that I know of, ETFs do not redeem your shares for physical gold. All you can do is buy and sell the shares on the stock market. Which means that your investment is on a computer, and maybe on paper if you demand your share certificates. You see the pattern? I suggest you contact Augusta Precious Metals and find out about our unique Gold IRA program – own the real thing!
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