Posted on 12/12/2012 5:33:03 AM PST by DeaconBenjamin
Like Scrooge McDuck or the dragon Smaug in J. R. R. Tolkien's The Hobbit, Germans are gathering vast quantities of gold - a study showed that the average German owns close to €6,000 worth of the shiny metal.
Even though Europe's largest economy has weathered the world economic crisis relatively well, Germans have still been extra jittery about their savings, a study by the Steinbeis Research Center for Financial Services in Berlin revealed.
Around 32 percent of the gold owned in Germany in the form of bars and coins was accumulated since the financial and economic crises began, the study concluded.
Commissioned by precious metal trading group Heraeus, the study also found that people with surplus cash are becoming gold-greedier. The number of Germans with a net monthly income over €4,000 who say they intend to invest in gold has doubled in the current year.
On average, every German owns around 117 grammes of gold, comprising 55 grammes of jewellery and 62 grammes of bars and coins, the study, which surveyed 2,000 people, found. Taken together with gold securities, the average German owns some €5,750 of gold.
Including the German federal bank's gold holdings, that means the Germans have gathered seven percent of the world's gold.
Gold is considered a safe investment in times of economic stress because the precious metal is thought to keep its value over a long period, can be collected and kept safe personally, and can be traded easily.
Some 69 percent of Germans have invested in gold, and roughly half of these keep at least some the metal in their homes. Around 47 percent keep their gold in a private locker in a bank. Around nine percent, meanwhile, keep some of their precious metals with a specialized gold trader.
Rich people are more likely to invest in gold bars, while those on lower incomes are more likely to buy gold coins.
The average American has their wedding ring/engagement ring.
Well, I guess I’m not average.
Once upon a time everyone in Holland owned TULIP BULBs.
Call it the 'Weimar Hangover'!
6000 bucks is like 4 ozs. Not a horde at all
6000 bucks is like 4 ozs. Not a horde at all
Once upon a time everyone in Holland owned TULIP BULBs.
Okay, so the din is growing louder. Should I seriously consider owning gold, and if so, in what form? Should I cash out my IRA and buy gold? Seems forward foolish to me, since this sort of craze has happened in the past, but I’m growing nervous with the number of stories I’m seeing about it.
Probably institutional memory from super-hyper inflation after WWII.
Interestingly, I was searching last night for reputable sources to buy Gold/silver coins and bullion. I was thinking of the American Eagle series and the Englehard blanks and ingots.
Don’t ask me, I bought half my gold the week before 9/11 @ $295/oz so I think it’s a great investment. I bought the other half at @ $1200/oz; still a very good return. It’s impossible for me to be objective.
That said, I am pretty bullish on silver. I have some and want more. Paper investments are losing their charm as the government’s reach grows. But then again, I’m a rightwing tea party paranoid.
To explain to those unfamiliar with the history, because of World War I, the Germans replaced their gold-backed currency with a fiat currency, the Papiermark. After the war, in the ensuing International depression, caused by staggering reparations, the Papiermark experienced hyperinflation.
There was a two-stage method used to restore their currency.
First, a gold-backed currency was introduced, called the Rentenmark, which was just for bank and government use. Because it was gold-backed, it was entirely stable, so with the equivalent of pennies, it could overcome many billions of Papiermark debt.
This stabilized the situation in a hurry. But then a new “street” currency, also backed with gold, the Reichsmark, was introduced. It was also very stable, and was able to completely replace the Papiermark, and was so effective as a currency that even the Nazis did not mess with it, and it remained through World War II.
The Nazis did try other bad economic stunts, like fixing prices and wages, which created an enormous black market.
Only in 1948 was it replaced with the Deutschmark. After all the chaos and destruction, the Reichsmark was exchanged for the Deutschmark at a mere 10 to 1 ratio, an exchange rate ordered by the western occupation forces.
This persuaded the German people that gold is essential to having a stable economy, and for personal protection from government and war. The German government, however, afraid of Soviet conquest and the theft of their gold, stored much of it in Britain and the US.
After the end of the Cold War, this was a policy that needs rethinking.
Where do you buy? Online or local? When we’re talking about $1,000+ purchases, I want to have my knowledgebase set pretty firmly and buy from a reliable dealer. I’ve been asking FReepers about gold since the election, just haven’t had any definitive answers on all my questions.
Where do you buy? Online or local? When we’re talking about $1,000+ purchases, I want to have my knowledgebase set pretty firmly and buy from a reliable dealer. I’ve been asking FReepers about gold since the election, just haven’t had any definitive answers on all my questions.
Yeah, they do look a little hungover...
I always want to ask people who invest in the precious metal portfolios, do you think you will ever see your gold/silver/platinum if the world/US economy actually tank. The answer is no. The government will get it. If you don’t have possession of your asset you don’t have it. Better off investing in survival staples and ammo.
You should be more worried about the number of stories out there talking about the fed gov seizing IRAs and 401Ks.
A friend of mine has piles of diamonds that were pried from rings so the rings can be melted.
No. In the U.S. buy the metals that become precious in hard times. Lead. Brass. Copper. They are most easily traded and stored in the form of ammunition.
That is what I have! It is nice to know I’m average.
My brother has hundreds of thousands worth of physical gold that he bought when it was cheap. He bought junk jewelry, coins and bars.
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