PRODUCT PRICES IN GOLD ARE THE SAME NOW, AS A HUNDRED YEARS AGO.
Why Gold
- Store of value.
- Gold is sold without VAT, purchase is completely anonymous.
- Security – no one can touch your gold, not even a bailiff.
- Exemption from income tax.
Gold in portfolio
- Offers competitive returns in both bull and bear stock market environments.
- An extremely liquid, over €160B/day market.
- Gold is the only asset class that does not bear a counterparty risk (BIS).
- A truly global asset.
- The third largest reserve currency of central banks.
Protection from inflation
Gold returns during low and high inflation for the last 50 year.
Gold and other currencies
Traditional financial assets such as stocks, bonds and real estate carry a risk of future cash flows, and along with this risk come the calculable returns. Gold, on the other hand, should not be compared to such investments. Just like other currencies, gold does not yield anything and thus there is no associated risk of future cash flows. In contrast to other currencies, gold does not have a central bank that could create it out of nothing. Thus gold is the only asset that truly does not carry a counterparty risk.
Investment returns measured in gold
What is often overlooked when evaluating investment returns is how currencies lose purchasing power when measured in gold.
Even a substantial nominal return can end up modest or even unprofitable.
When measuring the real returns in gold from the beginning of 2000 to the end of 2021, it turns out that none of the major asset classes had positive returns.
During the high inflationary years of the 1970s S&P 500 gained 17% appreciation in dollars. When measured in gold, S&P 500 lost 92% of its value, and at the end of 2021, S&P 500 was at the same level as it was in 1965.
Gold is an extremely liquid asset class
| Market | Daily turnover |
|---|---|
| S&P 500 | €195B |
| Gold | €160B |
| German Bunds | €25B |
Who owns gold
| Country | Amount of gold (tons) |
|---|---|
| 🇺🇸 The United States | 8,133 t |
| 🇩🇪 Germany | 3,355 t |
| 🇮🇹 Italy | 2,452 t |
| 🇫🇷 France | 2,437 t |
| 🇷🇺 Russia | 2,299 t |
| 🇨🇳 China | 2,011 t |
| 🇨🇭 Switzerland | 1,040 t |
| 🇯🇵 Japan | 846 t |
| 🇮🇳 India | 787 t |
| 🇳🇱 The Netherlands | 612 t |
| 🇸🇪 Sweden | 126 t |
| 🇫🇮 Finland | 49.02 t |
| 🇮🇸 Iceland | 1.98 t |
| 🇪🇪 Estonia | 0.25 t |
| 🫵 You | ??? |
There is Only One Way to Own Gold
Large institutions and central banks prefer owning physical gold directly rather than through complex options like gold ETFs or futures. Direct ownership offers all the benefits of gold and protects against systematic risks, unlike ETFs and futures which carry counterparty risk. Gold’s safety lies in the absence of counterparty risk, making direct ownership the safest choice.