In Part I of this article, I laid out some basics about gold bullion bars, such as the fact that they can cost a bomb — but, on the other hand, also make for some excellent financial weapons for you to yield in the never-ending battle against insolvency.
In this thrilling conclusion, we’ll take a look at other reasons to buy, and why you should be careful when you do.
Bullion Bars Are Easy To Stash
One good thing about gold bars is that they’re compact and easy to stash. Given gold’s density, a bar of a particular weight takes up relatively little space, so you can store a significant amount in a small space — say, a safe or safe deposit box.
One or the other is recommended, particularly the latter, since gold is a physical asset. In other words, it’s subject to theft or loss, as much as we hate to think about that reality. That’s why I suggest that you keep the bulk of your gold bullion in a safe deposit vault somewhere.
Like them or not, trust them or not, banks are experts at keeping money and other valuable assets safe, and it’s a fairly simple process to visit the box and add or subtract bars from your stash as necessary. It won’t cost you more than a couple hundred bucks a year.
Bullion Bars Are Fairly Easy to Cash
Gold bars are also relatively easy to liquidate if you need cash — another reality we physical gold investors don’t like to think about much. Realize, however, that they’re not as easy to cash in as coin bullion, especially the coins produced and backed by the U.S. federal government.
It’s going to take a little more time and effort to “liquid” a bullion bar than a bullion coin. How difficult that will be depends on the type of bar and who issued it. If it’s a recognized format, like the Pamp Suiss, it may be a snap; dealers are more likely to take the piece at face value.
However, if it’s a plain-jane gold bar, you’ll probably need to pay for an assay to determine the chemical purity. Given the value of gold, few people are just going to take your word for it. Once the content is determined, which can take a couple of days, then they’ll be willing to deal.
As I’ve mentioned in previous articles, one way around this delay is to deal exclusively with a single dealer whom you trust and have worked with before. They’re more likely to purchase without an assay, especially if you bought the gold from them in the first place.
Real Social Security
Before I close up shop and head out of here, there’s one more benefit of gold bullion that I’d like to mention. This benefit applies not just to bullion bars but to all bullion, and it’s one that I don’t often mention, because I loathe those commentators who try to get you to buy gold by spreading gloom and doom.
It’s simply this: if you collect gold bullion, you’re protected somewhat from the financial ups and downs that plague other investments. Gold is an excellent hedge against inflation, for example, given its inherent value (something that fiat currencies like the dollar ain’t got).
Gold bullion also becomes a powerful weapon in the event of a global financial meltdown. Let me emphasize that I expect space aliens to land before the world’s banking system collapses… but in the event of something like Zimbabwe-style hyperinflation, a few gold bullion bars put aside will certainly be reassuring.
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