Wow, since you've posted it twice, I'm going to assume you must really want an answer, and are not looking for an excuse to fight or be bellicose.
Tedim disagrees with you and with your business, as he said earlier that buying gold as insurance and transporting, storing and insuring it is not for the majority of the population and that they would be screwed if currency free falls while inflation skyrockets.
With all due respect, I think Tedim should be allowed to speak for himself. Just because he may not choose to avail himself of my business model does not mean he disagrees with it. It could simply be that he has a strategy that works for him. He may or may not see merit in it, or see where it may indeed be beneficial to others, but that is irrelevant imo. Just as I have the ability to examine his model/strategy, and see where it has merit, but also determine that due to MY particular situation, his model may not be the most practical for ME. It's lack of practicality for ME however, in no way detracts from the wisdom, credibility or viability of his chosen path for HIM.
I don't give financial planning or investment advise. Simply stating my opinions.
Everyone should look at their own personal situation, and determine what is right for THEM
Okay, Jaguar Enterprises, I'll play along. Since you insist on quoting me and trying to answer my questions to Tedim.
Will you please be more specific and break it down for this hypothetical college student?
20% of $5,000 is $1,000. So he/she keeps $4,000 in a savings account that has say 0.95% annual percent yield.
So he/she takes this $1,000 and does what exactly with it? Please break it down for me, how much gold can he/she buy as insurance and how much would it cost him/her to transport, store and insure this gold?
I prefer you refer to me as 24KT.
Unfortunately a criminal with no relationshipship or association to me whatsoever has tainted the name Jaguar Enterprises, and I do not appreciate the negative association the name carries with it, or those who would exploit the name in order to maliciously associate me with the individual.
That said: A quick cursory response because I'm packing to go away for the weekend...
How much gold one can acquire as insurance for $1,000 will depend entirely on what the given price of gold is at that moment. Given current prices the volume of gold one could directly
buy out-of-pocket, would be measured in grams.
Some suppliers like mine, provide innovative, alternate ways to acquire & accumulate gold for no out-of-pocket cost. As for the cost of transporting, storing or insuring the gold, that too would all depend on to where & how you transported, stored or insured your gold, and which supplier you used.
I can't speak to other suppliers, but with
Karatbars, depending upon the amount being delivered, delivery costs may be free. Storage & insurance costs are also free depending on what storage facility one chose. One also has the option to accumulate, then take delivery periodically. The choice is entirely yours.
If taking delivery into the USA, I know there is I believe a $25 charge required by the US gov't for orders valued in excess of $2,000 Federal Reserve Notes (FRN) if memory serves me correctly.
Why someone would choose to use GOLD as a form of financial insurance:
If the Federal Reserve Note (FRN) continues to decline as all fundamental indicators predict it will, having any amount of FRN sitting in an account exposes the account holder to risk of loss via confiscation (whether by inflation or "bail-in haircut")
FDIC (provided it will even have the integrity to back it's promise), guarantees the NUMBERS of dollars in your account, ...but NOT the purchasing power of those dollars. In the event of bank insolvency, $5,000 worth of FDIC insured FRNs might buy you a stick of bubble gum (if you're lucky) No hyperbole. I have a genuine $100 Trillion dollar bill that if the seller was feeling extremely generous, might buy me a slice of bread.
Quick scenarios to ponder:The year is 1971, college student has $175 in savings. he takes 20% and buys 31 grams of gold for $35 dollars as a form of financial insurance, and leaves $140 in the Federal Reserve Note FDIC insured piggy bank.
The real rate of inflation is upwards of 10 - 12%. If you are getting less than 1% yield, in the FDIC insured piggy bank, you are effectively losing 10%+ annually simply for the privilege of having your money in the FDIC insured piggy bank... not even calculating any additional nickel & dime fees those piggy banks may impose. Confiscation via inflation. In addition to the
risk definite loss incurred from confiscation via inflation, there now exists the potential for loss via bank insolvency (confiscation via "bail-in haircut")
Fire Depts can respond efficiently if one or two houses were on fire, ...but if every structure within a city were ablaze, ...that fire will burn & burn until there was nothing combustible in the city left to burn. This is analogous to FDIC insurance. FDIC has roughly 250 billion in funds to cover trillions upon trillions of FRNs covered by FDIC insurance. in the event of a financial firestorm... the funds are not there to cover the losses. The Fed can print up the currency to cover the NUMBERS, (provided it maintains the integrity to fulfill it's promise) but with that rate of printing... trillions upon trillions ...what becomes of the purchasing power of those NUMBERS?
If the FED has to print up trillions upon trillions to cover the financial firestorm, the FRN takes on the purchasing power of a Zimbabwe Federal Reserve note. If the FDIC breaks it's promise, uses a Cyprus style "bail-in haircut", what happens to the FRNs in your FDIC insured piggy bank?
Seems like a mighty big risk to me to keep savings in a FDIC insured piggy bank for less than 1%
Interest rates would have to go way up for me to be properly incentived to leave money there, ...but if the interest rates go up, ...that spells disaster for the Gov't due to their level of indebtedness. Meanwhile QE to infinity is in place and will remain in place regardless of what they say imo. Quite the catch 22 no?
Quick example:In 1971, $1 bought 4 loaves of bread, 1 gram of gold bought 5 loafs of bread.
In 2013, $1 buys less than a half loaf of bread, 1 gram of gold buys 20+ loaves of bread.
Governments across the planet are simultaneously debasing the value of their currencies relative to gold. In previous days one could hedge against this sort of currency debasement by exchanging into a different currency not subject to debasement. Now, with the debasement being GLOBAL, and with the pegging of the Swiss franc to the Euro, despite Switzerland not being part of the Eurozone, the only safe haven currencies left standing are physical precious metals.
If a drastic reduction in the exchange rate of the FRN occurs, they approach the value of Zimbabwe dollars. If however, a portion of one's savings are held in hard assets with intrinsic value like GOLD, ...the FRN portion of your savings may be eaten away, however, the GOLD portion of your savings remains in tact.
Because gold has a 6,000 yr track record of not only keeping up but staying well ahead of inflation, it is quite reasonable to consider the possibility that in the event of a FRN meltdown, that 20% that was allocated into GOLD could infact make the difference between losing only some of your savings, and losing it ALL.
By having it in smaller, more affordable, transaction friendly weights, you allow yourself the flexibility you may require should GOLD get so far ahead of inflation that it has many zeros behind it, ...or if it is required for day to day transactions as an interim mechanism.
Just because one may not be able to afford to buy ounces should not imo dissuade someone from accumulating some, ...especially in the event it does what many experts are predicting it could.
I apologize for this quick rambling and disjointed response. I'm not the most succinct or articulate in print, and I got a boatload of things to do before 5am. if you or anyone else requires further clarification, will be happy to do so when I get back on Monday.