At yesterday’s Total Wealth Symposium in Panama City, a delegate asked me what I thought about holding physical gold at a bank in the United Kingdom or Australia. It’s not the first time I’ve been asked this question – and my reply is always the same.
The Anglo-Saxon countries are not an ideal location for storing physical gold. That’s because gold storage is usually viewed as financial insurance and is tied to asset protection, privacy and safety.
The United States confiscated gold in the last century; the British imposed foreign exchange controls in the early 1970s and Australia and New Zealand aren’t exactly safe-havens since both have deep economic ties to the United States.
For gold storage, I prefer Switzerland and Austria. Both countries offer strict privacy and asset protection laws.
Switzerland has a long history of banking confidentiality while since 1955 the Austrian constitution ensures privacy to international investors. Bankers in both countries are jailed if they divulge information to third parties outside the banks’ auspices.
Switzerland and Austria can store either physical gold or will purchase gold certificates for your account. You’ll pay an annual storage fee for this service plus trustee and safe-keeping fees.
If I’m truly worried about protecting my wealth from the devastating effects of long-term inflation and the decline of fiat money, then gold is a natural. Holding most of your gold in a country with a strong tradition of protecting foreign investors is exactly where you want to store your gold. That means Switzerland and Austria.
Also, if you want to protect yourself from total financial Armageddon, gold coins (not numismatics) are portable, easily exchangeable and should be stored in a safe place at home, not overseas.
Gold offers piece of mind. I doubt we’ll see 1930s-type bread lines again any time soon. But in today’s environment, anything is possible. If you’re bullish on gold, consider holding your physical bullion, or most of it, in Switzerland or Austria.
Monday is Victoria Day in Canada. I’ll be back on Tuesday. Have a good weekend.
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