In Protecting Your Currency Protection

December 14, 2012 | By Tekoa Da Silva

How many times have we seen a bank robber movie in which the clever thieves hoist a locked safe deposit box onto a truck before driving away, or simply drill holes into it to get the goodies inside? Many times. In fact, such movies are usually shot in a way to make us root for the criminal to get away with the crime!

But what if it was your gold and silver inside that safe being stolen? What protections could you take to prevent such thefts (both internal and external) from occurring?

One idea is to get a combination safe and physically place it inside another, much larger safe. I won’t ever be trying that, but you can if you wish.

Another idea is to resign to the fact that there is never a guarantee on “guaranteed safety”. You’re best bet is to create onion-like layers of financial security in your life that are very difficult to get through.

What might some of those layers be?

Physical Gold & Silver

The metals are your protection against currency devaluation, but once you have them, you’re saddled with the responsibility of protecting that protection. All storage locations carry different types of risk. You can bury metals in your garden or back yard, or under a special tree from your childhood.

Risks: You forget where you buried it, or, you tell the wrong person where you buried it, OR, your nephew, in using the metal detector you gave him for Christmas last year, discovers and unearths the treasure for himself.

There is also the option of having other people store the metals for you. In this instance, your metal is only as safe as the person with whom you’ve given it too. Regardless of the fact of whether they tell you it’s stored in London, Zurich, Amsterdam, of Anaheim…it’s in “their pocket” in a metaphorical sense, and they always reserve the right to head to Vegas and “put it all on red” (if you don’t believe me, just wait until the bull market matures, we’ll see stories like this).

Mining Stocks/Stock Investments

I hear many people in the precious metals community decry the stock market to be rigged, it’s a paper game which will all end up worthless, with everyone losing their money. All the precious metals ETF’s will be worthless, so on, and so on. The fact is, billionaires are upping their antes in the precious metals stock investment space, and are doing so in incremental blocks of $50mm and $100mm. It always amuses me that those who claim to know more about investing than billionaires, never seem to share a financial statement and investment track record to back their arguments up.

The “worthlessness” story is a rattle used by the embittered who have already lost and no longer have skin in the game.

What the smart investors are doing is using legal methods to protect their assets to the furthest extent possible—of which you can do as well. Corporations are not reserved for the oligarchs of the world, anyone can create one and consult with an attorney and an accountant on the advantages they offer.

What also comes to mind (and I keep telling people this) is a conversation I had with ComputerShare Inc. transfer agent company. In researching direct registration and paper share certification for a recent report, I asked the service agent, “Why don’t more people call up and use these methods?” Service agent response: “Well, most people simply don’t know we exist. It’s usually corporations and investment funds that call us.”

Direct registration and paper share certification are stock ownership methods in which stocks are recorded in your name, rather than in the default name of the stock broker. The utility of said methods, is that if the stock broker who purchased your stocks for you ever goes bankrupt—your stocks are out of their reach, and cannot be harmed (see my website for recent report on this).

Real Assets 

I’ve told many friends over the years that gold and silver are not the cure-all for everything financial. They’re just check boxes. You pick some up, check off a box, and move on. Owning other types of assets are just as (if not more important than) owning physical gold and silver. Things like a home, an apartment building which produces rent, a farm, water, gas, or oil production…and more importantly, people and community.

In extreme times, a community will be far more valuable to you than your gold and silver. Why not have a “community day” with everyone who lives on your street/building, and create a weather/event support plan for everyone to follow if the need ever arose? Just having those relationships in place is worth gold bullion in the bank (placed in a safe inside a larger safe, no doubt).

The smart money didn’t get to where it is without creating layers of security around investments and assets. If the first layer gets blown out—that’s fine, there’s 2-3 more layers underneath that are even stronger. Additionally, many of the excuses emanating from the precious metals community about not investing in such in such an asset, are derived from a complete ignorance of basic accounting practices.

The smart money preempts those risks by spending the money and time on education and building communities—of which the returns are usually in the very high multiples.

All the best,
Tekoa Da Silva