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<p>[QUOTE=&quot;fatima, post: 1436133, member: 22143&quot;]You created a red herring situation to justify your belief that a party should only hold paper investments.&nbsp;&nbsp; An economic collapse, sovereign bankruptcy, bad management driving an investment fund into the ground doesn&#039;t mean Armageddon.&nbsp;&nbsp; Most people holding gold are not holding it for the end of the world scenario.</p><p><br /></p><p>What physical gold does do for you is that it removes all counterparty and judicial risk from your investments.&nbsp;&nbsp; A very good example exists in our own history.&nbsp; In 1933, FDR made all domestic transactions in gold dollars illegal and ordered the people to the banks to turn in their $20 gold coins in return for a $20 Federal Reserve Note.&nbsp;&nbsp; All contracts and investments on paper that were denominated and specified to be paid gold dollars were retroactively changed to FRN USD.&nbsp;&nbsp; </p><p><br /></p><p>So you say, OK, but the value of what I had didn&#039;t change.&nbsp;&nbsp; Oh but it did.&nbsp;&nbsp; Shortly after this took place, FDR then revalued the gold dollars that he paid the people $20 for to $35.&nbsp;&nbsp; Since the rest of the world still used gold, everyone in the USA lost 70% of the value of their paper investments and paper $s instantly.&nbsp;&nbsp; This transfer of wealth to the Federal government was then used to pay for all the social programs created during the 1930s. </p><p><br /></p><p>For the smart ones, the ones who kept their gold $s, you could go to Mexico, Canada, or Europe exchange the gold you kept for $35.&nbsp; For the suckers that had Federal Reserve notes, their paper was only worth $20.&nbsp; &nbsp; Holding physical gold also removes your wealth from &quot;the system&quot;.&nbsp; It makes it very hard for someone to take it from you. </p><p><br /></p><p>This is a long ago example and one not to be repeated again but it is a very good example of what counter party risk means.&nbsp; If there had been a GLD investment at the time, you would have lost out there too.&nbsp;&nbsp; This is why people hold gold.&nbsp; It&#039;s not because they are afraid a CME is coming to destroy the national grid, but instead, to protect themselves against a financial system that people are losing faith in. </p><p><br /></p><p>BTW, in your example $100,000 is just 3 rolls of AGEs.&nbsp; It&#039;s not that hard to store and the last thing you would want to do is to buy insurance for it.[/QUOTE]</p><p><br /></p>

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