“…as with any other ETF, you don‘t really OWN the physical precious metals in storage. You only have a CLAIM to the metals held in storage. Therefore, your investment depends on the financial health of a bank.”

“While I don’t want to make too big a deal about it, there have been clear signs of late that the U.S. government is taking an unhealthy interest in your gold.”

A couple of very informative articles have come my way recently from trusted sources. These help to address the constant questions we get here at Q Wealth about how to invest in gold.

ETFs like the GLD ETF or the ZKB Gold ETF, as well as so-called ‘digital’ gold like GoldMoney and BullionVault, certainly serve a purpose for those who want to speculate in gold, offering easy in and easy out terms.

They are NOT, however, suitable investments for those looking at gold and silver as long term capital preservation hedges. Ask yourself this question: if you are buying gold because you don’t trust the financial system, why would you buy gold within that very same financial system? Or, as our Swiss friend Frank Suess puts it:

How you invest in gold or silver depends very much on your belief system and your objectives. If you are not concerned about the current economic climate and the state of the international financial system, then you may be much less critical of HOW you invest in gold.

Frank, who will be giving a few presentations at our event in Ireland at the end of this month, has written an excellent article on the subject, in his free Mountain Vision newsletter. He specifically gives Ten Reasons Why You Should Avoid the GLD ETF. If you have money in that ETF, you definitely need to read this.

A lot of people apparently trust ZKB’s Swiss gold ETF more, because of its Swiss pedigree and the venerable institution that is backing it. However, Frank has gone through this ETF’s prospectus with a fine tooth comb too, finding a section published only in German that can be summarized as follows:

The fund may be suspended temporarily at the discretion of the fund´s managers if gold trading in New York is interrupted for some reason; if a political, economic, military, monetary or other emergency (this pretty much covers it all) occurs; if a lot of redemptions are placed, which might in turn harm the interests of the other investors in the fund.

Hmmm…  not much ‘safe haven’ there then.

If this has got you scared, then Frank has a solution: the Global Gold program that offers real, physical non-bank secure allocated gold storage. Details of it are here, and if you would like further advise on the matter we strongly recommend you get in touch with Global Gold. Contact the Q Wealth offices and we will be happy to refer you through to our personal contact there, Scott Schamber.

I mentioned another source too, and that is Casey Research, one of our own preferred information sources. They get asked every day about gold confiscation rumours. Will the US government confiscate privately owned gold as they did back after the great depression?

David Galland, Managing Director of Casey Research, writes:

While I don’t want to make too big a deal about it, there have been clear signs of late that the U.S. government is taking an unhealthy interest in your gold.

He writes about the possible introduction of a Value Added Tax in the USA, and something even more scary: a regulation slipped quietly into the Obamacare legislation,requiring  coin dealers – and all businesses, for that matter – to report any purchases of $600 or more from anyone… including clients selling back their gold.

I also suggest you read David’s article (that you can find by clicking here) because of the point he makes about how some unscrupulous coin dealers are cashing in on the rush to hard money by selling illiquid collectors’ coins instead of the bullion coins, such as those offered by Global Gold, that people should be getting into.

I hope you find these reference sources as useful as I did. If you have any comments or feedback, please remember that you can post comments on this blog. Up until now not many people have used this facility, but we would like to encourage more interaction and feedback. So please tell us what you think!

Some investors are so worried about the prospect of economic collapse that they are buying gold and having it delivered to them, rather than holding the precious metal in the form of futures contracts or other securities. That’s the conclusion of a recent article in the Wall Street Journal.

Perhaps more interesting, however, was the informed discussion that followed on the WSJ’s site, in the “Comments” section.

“Why place your trust in paper that is printed by the government?” asks reader Linda Hawkins. “Gold has been serving as money much longer than governments have been printing fiat currency. The risk is that the government may print so much of it, that we end up like Germany in the 1930s, or Zimbabwe right now.”

Gold, as commenter Avery Goodman went on to explain, “is not bought for “end of the world” planning. It is bought for preserving wealth when the financial system is working incorrectly … People are buying gold to have a thing of value that has no counter-parties, and, in that manner, protect themselves from a collapsing financial system, and a probable depression and/or hyperinflation.”

I particularly liked that point about gold having no counter-parties. That is, of course, assuming we are talking about real physical gold bullion, not about paper or virtual gold like ETFs. I have blogged over on my personal site before about the dangers of investing in GLD ETF, and – for that matter – other commodity ETFs. Journal reader Alex Vasilyevich points out: “I personally believe that the gold short trades on COMEX are not backed by any physical delivery capability. If there is a sudden spike in the deliveries demanded by buyers, the game will be exposed, just like what happened with Madoff and Stanford.”

Of course, regular Q Wealth readers will see nothing new in this discussion, but sometimes it is reassuring to know that even the mainstream financial press reports and respects our views, and that onshore Gold dealers in places like London and New York City are doing a roaring trade. It follows on from the article in January in London’s Daily Telegraph about Why the Rich are Running to Gold Bullion.

We do take matters one step further, however, by suggesting international diversification for your gold bullion holdings. Why? For example, there have been many rumors that the US might once again prohibit private ownership of gold, and confiscate – or, purchase at an artificial exchange rate – existing gold bullion held by individuals onshore. The same applies to many European governments, some of which only legalized private gold ownership in the last decade or two.

There’s also the important matter of how to buy gold bullion. Most gold sales go through a cartel of international bankers and precious metal traders. It is however, possible to go direct to the source and buy pure gold direct from the producers.

All these aspects of buying gold offshore and more are covered – together with step-by-step practical instructions and contact details – in the new Gold Report – otherwise known as How to Buy and Hide Gold Bullion Offshore. Of course we must stress what we are suggesting is a perfectly legal form of offshore asset protection. Unlike bank accounts, or ETFs held through brokerage accounts, real gold bullion is not subject to reporting requirements. If you want to keep it secret you can – legally. That personal and financial privacy aspect is just one more reason why we are so bullish on gold bullion right now. It is a secure, private store of wealth management with a view not just to asset protection but to really creating wealth in a secure, offshore environment. And that is what The Q Wealth Report is all about.

Would you like to obtain your copy of The Gold Report while the unique information in it is fresh and bang up to date? Well the good news is – it’s FREE. It’s available for download right now in our Members’ Area. The bad news, of course, is that you have to be a member to access it. But a membership still costs just $87 per year and brings numerous other benefits. What are you waiting for? Join Q Wealth today!