Gold has been money for 5000 years. Quite a provenance. The reason is that it does not decay physically or monetarily.
As I always point out to undergraduates: a gold sovereign would buy you bed & breakfast in a good London, Paris or New York hotel 150 years ago – and it would buy the same today, and will in another 150 years.
Historically paper money is a new invention, with a very sorry provenance.
In 1971 the United States came off the gold standard (currency backed by gold) to fund the Vietnam war with printed currency. The result was a fall in the purchasing power of the dollar against gold by 94%.
Similarly this has happened to all other global paper currencies.
Paper money is simply a credit note by a bank – underwritten by politicians. It’s value degrades with corruption. Just remember what you paid for a pint of beer or family car 20 years ago.
But remember gold is not an investment. It is a preserver of wealth as the hotel analogy shows. Thus gold coins are for people who want to seal in the spending power of their savings for the long term.
It is not a reasonable or recommended move to buy & sell Gold coins over the short term (trading). Buying & selling fees at most dealers, especially for smaller amounts, make this an unviable option – you will just lose money.
It helps when dealing to know what coins or bullion you need & an idea of the amount you want to spend.
Remember: Gold Sovereigns (Coins) in the UK are Capital Gains Tax & VAT Exempt. They are classed as Coin Of The Realm.
Silver coins are not treated the same – with silver coins, VAT is charged at 20% if you take delivery. So you have to hope for a 20% upward movement just to break even (not including potential selling fees or spread)!
When buying Gold Coins remember the golden rules:
- Find a reputable dealer.
- Check the buy/sell price on offer.
- For large amounts do they offer safe custody?
- Buy coins for bullion value & tax benefits, not collectability.
- Don’t trade (buy/sell in the short term), they are for the long haul, be patient.
I have connected to a dealer: THE PURE GOLD COMPANY
They meet all my strict criteria.
Better still you can talk to one of their consultants for any questions.
Give them a call, they will be happy to help. Their details are on the page linked above.
Their minimum buy requirement is £5000 worth of Gold.
This is to allow the best deal for the buyer – by reducing buying fees.
Buying & selling gold is very easy.
Large purchases require ID protocols, a regulatory requirement, but are standard practice and nothing to worry about.
See my videos on the topic for more information below.
Comments as always are welcome. Please use my contact page to reach me if you have any questions and I will add to the Q&A Section below.
Supporting Articles & Material
- Legal Definitions Of Money & Credit – Alasdair Macleod
Definitive History Of Gold – Straight Off The Shelf
- Gold’s Climb Amidst Wisdom’s Decline – Egon Von Greyerz
- Why Gold Has Out Performed The S&P 500 Over The Past 20 Years
- The $2.5 Quadrillion Disaster Waiting To Happen – Egon Von Greyerz
- Gold & Silver Charts
- The Upside Down World Of Currency – Alasdair Macleod
Technical – Needs reading twice for the layman.
- Top 3 Outcomes As The Elites Try To Reset The World Monetary System (Caution: Speculative)
- Goldmoney Insight: Imploding Credit – The Consequences
A very comprehensive historical guide to gold – by Alasdair Macleod, Head of Gold Money Research. Well worth the time to read it before buying gold.
- There Is Going To Be A New World Disorder – Egon Von Greyerz
- Credit Suisse & USD Policy: Signposts of Systemic Implosion to Gold Explosion – Egon Von Greyerz
- World Dollar Hegemony Is Ending – Patrick Barron
- Inflation – The Hidden Tax
- Gold About To Make New Highs In GBP Terms
- The Economy Had To Be Shut Down – Inflation Rates By Country
Q & A Section
- Premium Bonds:
Premium Bonds are a loan to the UK government. In place of a coupon (interest) they put the yield into a reserve & distribute that reserve in prizes.
The current yield is circa 4% (10 years).
Are they safe? Safer than banks yes.
But with inflation at circa 11% your investment must drop by 11%-4%=7% year on year.
So a premium bond holder in the medium long term must lose.
A bit like the casino roulette wheel, eventually the house wins.
Remember, Gordon Brown sold your gold holdings in the late 1990s at $250 per ounce – I was buying.
I hold plenty but it is an industrial as well as monetary metal.
The ride is bumpy therefore, it looks cheap today, but I thought it was a steal at $25 per ounce! Ouch !
Given VAT at 20% if you take delivery its a buy only for the brave. Gold first.
My Videos On Gold, Inflation, Currency & More
Other Reputable Gold Dealers:
R C Baird & Co
Atkinson of Birmingham
Bullion by Post