Posted on 03/07/2009 12:07:33 PM PST by dennisw
With prices setting new records, the worried wealthy are piling up ingots in home safes. NEWSWEEK goes shopping for precious metal.
On the day I held the gold bar in my hand, it was worth $100,000. My companion—an established, accomplished, affluent businessman of retirement age—had bought it as a hedge against the sinking Dow and his fear that Obama's stimulus package will inevitably trigger wild inflation. We had picked it up in the basement of an HSBC bank branch in midtown Manhattan. When I handed it back to him, he put it in his briefcase. We went upstairs, past guards, through metal doors. Out on the street, we said goodbye and I watched him go, a tall, thin man carrying a $100,000 briefcase. He doesn't want me to tell you his name—or anything about him—because he's keeping the gold in a safe in his basement. His friends, are doing the same thing. "There is an increase in the number of wise, reasonable, well-read, well-intentioned people who are buying some gold and putting it aside," says Dennis Gartman, editor of The Gartman Letter, a daily analysis of financial news.
John Wynocker, a hydraulics inspector, lives in Cincinnati and has been buying gold and silver coins and bars for 15 years, but since the passage of Obama's stimulus bill, he has been motivated to buy more. He is hiding the precious metal in places where not even he can find it, he jokes. Are you burying it? I ask. "Perhaps," he says. "Our country is so far in debt, it's staggering. I'd like to retire someday. What else am I going to do to protect myself?"
the number of Americans who are taking delivery of gold coins and bars is rising.
The last time gold sales spiked so dramatically was Y2K,
(Excerpt) Read more at newsweek.com ...
$100,000 of gold in $20 double eagles each weighing aprox 1 oz. At today’s gold price of $940 per oz those $20 double eagles at their gold value alone without additional numismatic value would amount to $4,700,000. Not a bad investment. And much more sure investment than trying to pick the relatively few stocks that have survived from that period to this. With my luck I would have probably invested in whale oil production or maybe horse shoe manufacturing.
My grandfather? Let's see... World War 1, depression, Spanish Civil War, World War 2, Communist Cuba. Physical possession of gold would have not only performed better than book-keeping claims against some stock market index, it may have actually saved lives.
Of course, if we want to continue to live under the delusion that the accident of being born in the late-20th Century USA somehow makes us smarter than all previous generations, we can stake our families' futures on those book-keeping entries.
On the other hand Dow went from 100 to 14000 just a few years ago and 6400 now. http://www.analyzeindices.com/dowhistory/dow100.gif In a few years it will crawl back to 9000. Add dividends and I would take stocks anytime, especially since gold was just $300 a decade ago.
Granted one would need to be disciplined with stocks (even GM and Citi for example might be bust) but then gold can be lost or stolen as well. If we have a great depression for 50 years, you might do better assuming you weren’t beaten and robbed.
If I had $10 million, only about $200,000 would go into gold and silver coins for survival and that’s all.
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