Business

Bloomberg: Hide Your Gold

A recession in the U.S., the eurozone crisis, protesters on Wall Street, the Arab Spring, etc.

With all of these dark portents of things to come, is it really surprising that one of the most discussed topics on Bloomberg this month was titled Hiding Gold in All the Unusual Places?

Bloomberg’s Ben Steverman writes:

If you’re looking for a safe place to put your investments, Chad Venzke has a suggestion: Dig a hole in the ground four feet deep, pack gold and silver in a piece of plastic PVC pipe, seal it, and bury it.

Venzke is hardly the only investor who wants his precious metals nearby at all times. A pound of gold worth about $24,000 can easily fit in a pocket; how to protect it is a decision that carries expensive consequences. Do-it-yourself investors who don’t trust banks must find creative storage options, whether burying gold in the yard, submerging it in a koi pond, stashing it behind air-conditioning ducts, or placing it under carpets.

And there is more than just a general distrust of banks that would make an investor leery of entrusting their precious metals to anyone but themselves:

Indeed, as Venezuela is about to reclaim possession of its tons of gold from UK vaults, even as the Dutch central bank proudly admit to hiding its own gold in precisely the same venues that are no longer good enough even for Chavez, the topic of where one should hide their physical is rapidly becoming a very incendiary.

One thing is certain: among the hard-core “physical” community, the idea of storing it in the same banking system that would be insolvent once the fiat status quo collapses, is verboten anathema. So what are the options?

Bloomberg continues.

[T]here are growing piles of precious metals in, under, or near American homes. From mid-2010 to mid-2011, U.S. investors bought up more than 100 tonnes of physical gold coins and bars, up from 15.2 tonnes in 2007, according to the World Gold Council . . .

The notion of keeping one’s gold in a safety deposit box—inside the banks many gold aficionados find so untrustworthy—is anathema to many gold bugs. Venzke, who predicts “runaway inflation” and a crisis leading to a “new form of currency within this decade,” worries that the boxes won’t be accessible if banks shut down in a crisis. “How are you supposed to get your stuff out of there?” he asks.

For those storing gold and silver in or around their home, the most immediate danger isn’t a crisis or a dip in metal prices. It’s theft. The FBI, which tallies the theft of precious metals and jewelry in one category, says $1.6 billion was stolen in 2010, up 51 percent from 2005. Just 4.2 percent of the lost loot was recovered last year.

Metal detectors are a big worry. Basic detectors can find metal on the surface or in the first 12 inches to 14 inches below ground, depending on soil conditions, says Louis Mahnken Jr., a sales representative for Kellyco Metal Detectors in Winter Springs, Fla. That’s why Venzke advises burying it at least four feet deep. There are online debates about the best way to frustrate such thieves, including using scrap metal as decoys or hiding metal by covering it underground with asbestos or mirrors.

Metal owners also use the “hiding in plain sight” maneuver. According to dealers, some customers buy 100-oz. silver bars, paint them black, and use them as doorstops. That’s foolish, says Steven Ellsworth, a coin dealer in Clifton, Va., who teaches security classes for the American Numismatic Assn.

Safes can certainly deter thieves. Yet an inexpensive fire safe may be exactly the wrong place to put your valuables. Richard Krasilovsky, president of Empire Safe, calls such safes “handy carrying cases for burglars.” A fire safe is designed to protect papers from fire, not from intruders, says Ryan Smith, a senior product manager at SentrySafe. “It wouldn’t be wise to put any more than $20,000 of valuables in our products,” he says.

Yet, writes Zero Hedge, as many of the more pragmatic survivalists have pointed out, in a game of rock, gold or lead, it is the latter that usually wins:

[W]hether gold is buried, put in a safe, or hidden under your bed, there’s nothing to stop a determined person with a gun from making you show them where you put it. That’s why it’s important no one ever know you have gold in the first place. Krasilovsky’s company will deliver safes in the middle of the night, installing them where no one, including a contractor, is likely to stumble across them.

“People have to be extraordinarily secretive,” Krasilovsky says. This secrecy keeps away not only thieves but also prying relatives and the tax man. “One of the benefits of owning precious metals is nobody knows you own it,” Venzke says. “It’s the most private investment you can make.”

Practical advice or worrying too much? Recent trends seem to lean in favor of the former rather than the latter.

Comments (21)

  • Carol Ingian
    Posted on October 12, 2011 at 4:17pm

    It will be interesting for people 100 or so years from now, if when they are digging out in the yard they find some forgotten treasure. I would think if someone wanted to bury their gold, the cellar would be a better place (if you have a dirt floor)than the yard ,or under a shed.

    Report Post »  
    • MR_ANDERSON
      Posted on October 13, 2011 at 7:45am

      Recommendation: don’t keep all your eggs in one basket!

      Personally, I believe in having a safe that is used somewhat, it makes a great means of distraction from the full pot of gold.

      Report Post »  
  • Ben
    Posted on October 12, 2011 at 3:44pm

    Keep your gold to pay for the flight from Phoenix to Fiji? Tip the pilot well and don’t ask for change.

    Report Post » Ben  
  • CharlieB.
    Posted on October 12, 2011 at 3:34pm

    So called “junk silver” or pre-65′ U.S. silver coins are well worth investing in now as silver is easy to aquire and spend. As to it’s value during a (WROL…without rule of law) point, the starting point would be the most recent market value. Of course the longer WROL continues, prices will seek their own point of stabillity from place to place. It is safe to say that people will be willing to take silver, gold, lead, and other popular items in trade. Personally, I stear clear of war nickels and collect only pre 65′ coins rather than bars. The coins have already been validated by the Fed when they were made, so there won‘t be a problem with people wanting to test it’s content. I believe things like portable water filter systems, small propane tanks and the like will be popular for barter too.

    In truth, I pray none of this comes to pass but it’s wise to consider the possibility and go with your conscience. I love my family and will do anything I can to keep them safe and well.

    Report Post »  
  • packsack54
    Posted on October 12, 2011 at 2:31pm

    Have anyone of you have given a 1 minute of thought of a government banning gold or silver ownership? First there is a record of sales from the US mint of items sold to custumors and dealers.
    Second there is list from the dealers to dealers and if you used a check or a bank transfer or credit card. You could hear the knock at you door. Third it is safe in my banker box. LOL. Now try to move it across town or out of the country. Could be robbed by crimmals or stop by state, county or local polices and searched? Remember the Jew could not take gold out of Germany in 1935 to war ended. Some put it in Swizerland banks, would rob them of their accounts. Us mint expect to sell 40 million silver eagles this year. Mining in the US is grand total of less or near that amount. Do not be a FBI.

    Report Post »  
  • drphil69
    Posted on October 12, 2011 at 1:47pm

    The exchange rate would be…. whatever is agreeable between the 2 parties. No different than selling a used car, buyer and seller agree on price. Want to trade some silver for food? Buyer and seller need to agree on price. If you have gold or silver, it would udder foolishness to trade that for greenbacks during a time of high inflation. Nice thing is, no taxes when you pay in precious metals!

    PS Have small denomination available. I like the “war nickels,” as they are only 35% silver, currently worth about $2. Pre-65 dimes and quarters will also be useful, as will 1 ounce coins. Also keep plenty of lead, encased with some brass, inside of a barrel, nearby.

    Report Post »  
    • melbhinn
      Posted on October 12, 2011 at 2:18pm

      Sound adviice. Whoever comes for my gold will get lead, followed by some iron.

      Report Post »  
    • independentvoteril
      Posted on October 12, 2011 at 3:14pm

      with the price of GOLD and SILVER even jewelry is worth a great deal .. well a better deal than when you bought it..my neighbor 3 years ago got over $650 for 2 small pieces of jewelry just for it’s gold content..thinking logically IF you have FOOD you WILL have the gold.. people will pay high prices for it.. and for heritage seeds as well.. since losing my job 4 years ago I have been spending my time learning all I can about growing food and canning what I grow.. this year I started teaching my neighbor..he doesn’t do canning but between his land and mine we can produce quite a bit and I learned to save seeds so we will have quite a selection..

      Report Post » independentvoteril  
  • americathebankrupt
    Posted on October 12, 2011 at 1:44pm

    If $hi? actually hits.I do not think you will need change.You will buy as much as you can!With what ever the seller will take for it.Old saying God,Guns,Gold&lead.Will all save you!

    Report Post » americathebankrupt  
  • JTMailman
    Posted on October 12, 2011 at 1:05pm

    I suggest precious metals in the smallest coins/bars possible. If you have 1 oz gold ($1700) or even 1/10 oz ($170) how are you going to get change? It would seem silver ($32) would be a more practical thing to have for spending purposes.

    Report Post »  
    • steveh931
      Posted on October 12, 2011 at 10:18pm

      JTMAILMAN,

      Your right, small coins in silver for daily use, however you will still need gold for large purchases.

      Report Post » steveh931  
  • ShineTheLightBrighter
    Posted on October 12, 2011 at 12:31pm

    Finally, something California is good for! There is still GOLD in them there hills!

    Report Post »  
  • The next to last american president
    Posted on October 12, 2011 at 11:01am

    Barack – 20 years of Black Liberation Theology at the house of Jeremiah. Barack – “ I never heard any of that stuff” He must have been in hibernation for 20 years. Thinking of your President.My conversation with a Black Liberationist:

    Fred C. Dobbs
    “Black theology refuses to accept a God who is not identified totally with the
    goals of the black community. If God is not for us and against white people,
    then he is a murderer, and we had better kill him. The task of black theology is
    to kill Gods who do not belong to the black community … Black theology will
    accept only the love of God which participates in the destruction of the white
    enemy. What we need is the divine love as expressed in Black Power, which is the
    power of black people to destroy their oppressors here and now by any means at
    their disposal. Unless God is participating in this holy activity, we must
    reject his love.”! – Thu Aug 25, 2011 4:16 PM EDT

    My response – Love and black Power, sounds like an orgy to me. There is only one God as I had one mother and a father. Just because I seldom get my way, or given gratis, or put on easy street; doesn’t mean that God or my parents were unjust. God is of the spirit and as such is not in tune with one eating Kobe Steaks, drinking fine wines, living in a mansion or driving a nice car. All these material things are thus irrelevant to God. Your God is that of envy, anger, jealously, conceit and revenge. Good Luck with that! If you think Allah

    Report Post »  
  • mamaearth
    Posted on October 12, 2011 at 10:01am

    Purchase semi-numismatic coins. They were not confiscated by FDR in 1933. These coins are valued on the spot price and rarity and condition.

    Report Post »  
  • iac
    Posted on October 12, 2011 at 8:55am

    The problem with gold/ silver is if the ‘*hit hits the fan’, just what is the exchange rate? Who decides?
    If all your prec. metals are in bars, you’ll have to cut them up into pieces for small purchases.
    If you have large coins, will you have to cut THEM up like the old ‘pieces of eight’?

    Report Post »  
    • Tyson
      Posted on October 12, 2011 at 9:17am

      You are right just keep stacking those Federal Reserve Notes, you can always use them for tinder or toliet paper, two uses for that will be worth more than the value of a hundred dollar bill!

      But if I have extra food rations don’t plan on pulling out any of that worthless currency, I’ll consider trading the rations for silver.

      Sarcasism now Off: Buy fractional silver 1/10, 1/4, 1/2 ounces along with pre-1964 Silver Us coins. There will be a market exchange established fairly quickly at the onset…..

      Report Post » Tyson  
    • NVictus
      Posted on October 12, 2011 at 10:46am

      I’ve asked the same questions as all of you have asked as asking sites that sell gold online. According to a discussion I’ve had with supposedly they cannot give up info who made purchases of gold. I have also wondered what the exchange rate would be. It’s marked up on the purchase (rightfully so), and probably a mark down on the exchange.

      Report Post » NVictus  
    • Mike N
      Posted on October 12, 2011 at 12:24pm

      Buy gold for storage of large sums of money. Buy 90% silver coinage for smaller expenditures and for making change on sales where you need to take gold as payment.

      Report Post »  
  • pamela kay
    Posted on October 12, 2011 at 4:13am

    That is a comforting statement, but not a bad idea. Unfortunately they can trace the purchases back to the owner I suspect. Better to be prepared now with supplies that your family or preferably group needs. When you start spending gold out of desperation somebody will be watching.

    Report Post » pamela kay  

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