Gyroscopic Investing

After the latest gold crash, it strikes me that perhaps people who held ounces instead of statements may have been far less anxious...  While this poll does not address that, it did make me wonder just how much physical is the norm for this group...

What's the definition of physical? Does it have to be in one's possession or does a storage intermediary like "global gold" count? And how about safe-deposit boxes?

Libertarian666 wrote: What's the definition of physical? Does it have to be in one's possession or does a storage intermediary like "global gold" count? And how about safe-deposit boxes?

Isn't using a safe deposit box considered physical possession of the gold?  Just because it's not on your person or at your residence or in your car doesn't mean you don't have physical possession of it.  Whether or not it's secure is another matter entirely.

I can see that there may be a broad definition of what "physical" might mean...

What I meant by physical for this poll is gold that you have ready access to (coins, bars in a safe, safe deposit box here or abroad, buried in back yard, etc)...  Gold that you have actually laid eyes on at least once...I did not mean accounts held by others that you "bought" via some intermediary who you would have to trust to send you the physical in a timely manner when you request it although one could make the argument that you do "own" the physical in certain trust accounts... but that would still entail another a layer of trust and potential risk of getting what you think you are entitled to...

I think, it is a good idea to have right at hand:

An equivalent at current prices of one year of your expenses in physical gold, in not too large portions (so no bars, only coins).
An equivalent at current prices of one month of your expenses in physical silver (again no bars, only coins).
An equivalent at current prices of one day of your expenses in physical copper (only mid-sized portions, supplemented by a lot of coins).

This rough heuristic should hopefully be sufficient to buy you protection, food, shelter, a safe passage and a new start somewhere else in times of crisis with usable payment portions available immediately.

Everything beyond that may be paper, because the threat of being robbed (by someone other than the state) is not worth its increasingly marginal benefit of being at hand.

dkalder wrote: An equivalent at current prices of one year of your expenses in physical gold, in not too large portions (so no bars, only coins).
An equivalent at current prices of one month of your expenses in physical silver (again no bars, only coins).
An equivalent at current prices of one day of your expenses in physical copper (only mid-sized portions, supplemented by a lot of coins).

Eagles, Jeffersons and Lincolns!  Though you may need an entire garage...

http://www.coinflation.com/

Holy cow, look at the difference between pre-1982 pennies and post.

MachineGhost wrote:

dkalder wrote: An equivalent at current prices of one year of your expenses in physical gold, in not too large portions (so no bars, only coins).
An equivalent at current prices of one month of your expenses in physical silver (again no bars, only coins).
An equivalent at current prices of one day of your expenses in physical copper (only mid-sized portions, supplemented by a lot of coins).

Eagles, Jeffersons and Lincolns!  Though you may need an entire garage...

Well a day worth of expenses is currently around 30lb of copper, which fits into a small basement closet. Copper granulate is interesting, because it is easily divisible.

MachineGhost wrote: http://www.coinflation.com/

Holy cow, look at the difference between pre-1982 pennies and post.

MediumGhost wrote:Holy cow, look at the difference between pre-1982 pennies and post.

I have heard the post-1982 cents referred to as "Zincoln Cents".

so many 0% !

I am surprised at the large percentage of 0 votes also.

Kriegsspiel wrote: I am surprised at the large percentage of 0 votes also.

ETFs are easier and cheaper

I think this bimodal distribution--a lot of PP investors holding 0% physical gold and a lot holding >50% physical gold--is something we've seen before in similar polls/threads.

My theory is that the PP investors who hold little to no physical gold tend to be the relatively younger ones. The reason is that physical gold coins are typically purchased with after-tax savings. Younger PP investors tend to have less after-tax savings than older investors, who are often in their peak earnings years. Plus, younger PP investors tend to funnel most (if not all) of their after-tax savings into cash to support near- and intermediate-term savings goals like a down payment for a home. By contrast, older PP investors tend not to have those big near- and intermediate-term savings goals, so they don't need the stability of cash for that; they can funnel more of their after-tax savings into gold coins as part of their overall PP.

That's just my theory, though. I could be wrong.

And some of us just want to keep it as simple as we can...

I have most of my money in a retirement fund. If I sell it to buy physical golf, I would have to pay the tax first which is counter productive to making gains. I have the Schwab gold etf which supposed to be backed by them buying real gold as apposed to paper gold. I guess if they report that, you would think it is true.

I encourage holding at least some physical gold as a hedge against something really really bad happening. Call it disaster insurance. In an SHTF scenario financial markets might be closed and you might have difficulty redeeming paper shares of gold. In general I am not one of the conspiracy gold bugs who are convinced the ETFs are all frauds. I think that's silly. Too many people would have to be in on something that big and someone would blab. But that doesn't mean there aren't counter-party risks.

All things said as long as we don't have a disaster, ETFs are probably fine. And they admittedly are a lot more convenient. But even if you use an ETF I'd try to buy some coins when you are rebalancing into gold. You can use the ETF for rebalancing out.

Tortoise, I think you're right.  I'm on the younger side, although I'm old enough to have significant IRA as well as taxable savings, each in its own PP.  I don't have physical at the moment because the taxable savings is earmarked for a house purchase in the next few years.  I don't know how much we'll end up needing, so maybe I could do some physical, but if we do end up needing to tap into it, it'll be that much more difficult.  But perhaps Ad Orientem is right and I should at least get some.

I just watched that documentary The Secret World of Gold, and I was troubled by how gold via paper investments might not be backed by any actual gold (or at least not as much as you would expect).  So I think I'm going to start adding some physical gold to my PP here and there as funds permit.

rocketdog wrote: I just watched that documentary The Secret World of Gold, and I was troubled by how gold via paper investments might not be backed by any actual gold (or at least not as much as you would expect).  So I think I'm going to start adding some physical gold to my PP here and there as funds permit.

I think that's a great idea. As for the documentary, I would take it with a grain or 20 of salt. Some interesting facts cleverly melded with LOTS of sensational speculation.

rocketdog wrote: I just watched that documentary The Secret World of Gold, and I was troubled by how gold via paper investments might not be backed by any actual gold (or at least not as much as you would expect).  So I think I'm going to start adding some physical gold to my PP here and there as funds permit.

I think it's pretty funny that you own neither guns nor gold. We're gonna take away your libertarian card if you don't get with the program! 

Pointedstick wrote: I think it's pretty funny that you own neither guns nor gold. We're gonna take away your libertarian card if you don't get with the program! 

And strap him to The Chair and feed him meat!

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Pointedstick wrote:

rocketdog wrote: I just watched that documentary The Secret World of Gold, and I was troubled by how gold via paper investments might not be backed by any actual gold (or at least not as much as you would expect).  So I think I'm going to start adding some physical gold to my PP here and there as funds permit.

I think it's pretty funny that you own neither guns nor gold. We're gonna take away your libertarian card if you don't get with the program! 

Supporting a right is one thing, exercising that right is another.  For example, I support peoples' right to eat animals, I just don't choose to exercise that right myself. 

I highly approve of your attitude!

Pointedstick wrote: I highly approve of your attitude!

Well, Libertarians tend to think alike.  One of my favorite sayings is "We pay for our freedoms with tolerance."  Too bad most people don't grasp that concept.

If we are going to hold physical gold (for the SHTF scenario), it seems like the bulk of it should be out of the country.  Is the perth mint as good as any choice?

Benko wrote: If we are going to hold physical gold (for the SHTF scenario), it seems like the bulk of it should be out of the country.  Is the perth mint as good as any choice?

The Perth Mint comes highly recommended in the PP book.  I can't remember if they deal with Americans or not, but I'd say they're worth looking into.  Just the fact that it's a stable nation based on British Commonlaw and geographically isolated makes it appealing.  Plus you can always use the excuse that you want to visit your gold as a reason to book a vacation there.