I've also been seriously considering buying physical gold as long-term insurance against out of control inflation/national debt, large devaluation in AUD or raid on deposit/superann by Oz Govt. But I'm stuck with a few logical dilemmas:
- There doesn't seem to be any point in buying a few ozs of gold (say, $10K worth) if most of my assets are held in cash, property or Oz shares. The few ozs represent insignificant safety net and are unlikely to cover the family living expenses (and various charges that come with owning property) for more than a couple of months. What happens after that if Oz economy continued to be in seriously bad shape?
- I suppose I can sell a big chunk of my existing assets and buy a much larger amount, say, $300K in gold. That's approx. 200ozs or 6kgs, which should last for a while until Oz economy improves, hopefully. But where would I keep the gold? 6kgs are easily hidden and moved in a grocery bag if someone found it or intended to steal it. I definitely wouldn't want anyone to know about it even in the best of times, much less during times of economic crises and desperation. And how do I discreetly and in stages sell the gold without attracting the attention of human predators?
- If the Govt. could not be trusted to keep their hands off our cash deposits or superann, then why would it be trusted not to lay claim over our gold holdings when we sell it? A gold sales tax of, say, 10%, or more, might be levied.
- In times of desperation, the Govt. could also impose various taxes on any or all of our assets in order to raise revenue to pay off debt, maintain profligate spending, etc. By focussing only on gold, am I not forgetting that the other assets are vulnerable too? How do I protect these?
Fair notice: from this point on, I'm waffling...
- So I thought about investing in several hectares of arable land sitting on world class soil and free access to limitless fresh and unpolluted water. But, if there was widespread famine due to food & water shortage and during which time all gold is of little nutritional value, that valuable tract of land then becomes targetted by gun-wielding gangs. A case of "move out now or we'll shoot your family". Unlikely that I can win in a gang war here.
In the end, I decided that there are just too many unknowns and just as many worst case scenarios.
So, maybe the best option (for me) is to stick with keeping some cash in the bank, building a cottage on a few acres of decent quality rural land (with adequate fresh water supply) and becoming as self-sustainable as possible. And hope to have the good fortune of leading a simple peaceful life. It feels right too, possibly because the fear of worst case scenarios coming true just seem to fade away in such a setting.
But until I have saved enough to lead that lifestyle, I remain working in the city and remain exposed to those fears all over again. Is that what they call a First World problem?
BDR Price at posting:
94.5¢ Sentiment: Hold Disclosure: Held
