Stacking Precious Metals: Where to Start?

Dear GoldBugs,

If you have made the decision to convert some of your paper dollars to gold or silver or both, the next question to ask and answer is who to deal with and who not to deal with.

The best advice you will ever get is to accumulate physical gold and silver which you hold and keep in your possession and under your control.  Shares in some mutual fund or a stock issue or in an exchange traded fund (ETF), may leave you believing you own gold or silver, but what you have then is a piece of paper, or the equivalent digital document in cyberspace, that has the word ‘gold’ or ‘silver’ on it.  You don’t own gold or silver at all.  All you own is a paper promise to pay you some gold or some silver.  Same goes if you stick your money in a futures or options contract that promises delivery of gold or silver in the future.   And if that satisfies you, then you just don’t get the basic premise of owning gold.  Gold is not a promise to pay or a promise to deliver.  Gold is the pay.  And it’s not paid and delivered until you have it in your hot little hands.  If all you have is a piece of paper with the word ‘gold’ on it, then good luck to you the day you need it, because I can promise you that you will never see it.

The same goes for buying physical metal which is then stored by the seller for you.  Personally, I avoid and ignore any offers to “store” my physical bullion for me.  And that’s even by companies I consider legitimate.   Those offers can be legit, but if I don’t have it in my hands, it isn’t guaranteed that I can count on it.  Once again, gold or silver stored by someone else involves a promise to you from those folks, however well meaning it might be.   That promise, to my mind, defeats the real purpose of owning precious metals. Read more