My Stock Broker doesn’t think buying physical gold is a good idea?

Your plastic surgeon is obviously a smart guy, but I doubt you’d ask him about the best way to treat irritable bowel syndrome. Your family veterinarian is medically experienced and intelligent too, but I doubt you’d seek their opinion on the benefits of a hip replacement for your mother. This is why it’s so amazing to me that people assume stock brokers to be oracles of universal financial intelligence. I’ve always found that more than a little unsettling, particularly in light of the fact that brokers always make commission regardless of results. They don’t really have any skin in the game. Their entire job is to sell you on an idea and then let the chips fall where they may. And when it comes to physical precious metals, they have no knowledge, experience, or desire to recommend, because they’re only licensed to sell paper assets. So, if you indicate an interest in gold, they’ll recommend things like ETF’s, but you still only have a paper asset. Last time I checked, GLD only owned enough metal to provide actual physical metal to one in thirty shareholders. If you read the fine print (and there’s a lot of it), you’ll find that in the event of a dramatic currency collapse (like the one that’s coming), when a run to sell occurs, GLD has the right to freeze the price at that initial rate and suspend trading. So it’s a strong possibility that if the collapse occurred right now and gold ran to $5,000 an ounce by tomorrow morning, GLD holders would eventually get cashed out at the initial freeze rate. So, not only would you lose out on gold’s increase in value, but you’d be paid in Dollars at the initial freeze rate and those Dollars could have dropped in value by 30%, 50%, or whatever. You’d effectively be looking at a monumental loss on both ends. However, if you owned physical gold, you’d not only enjoy the benefit of gold’s appreciation, but you’d own and have possession of the money without worrying about currency devaluation.
By definition, diversification requires differentiation. Buying different types of a paper asset is not different. Paper assets have the potential to go to zero value, based on the product their tied to, whether stocks, bonds and even real estate. Throughout history, gold has maintained value. Yes, its value can rise and fall, but can’t become worthless. And when all other financial instruments fail, gold shines its brightest. A piece of gold provides peace of mind. Get yours while it’s available.

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