I’ve enjoyed and learned from many of your posts, VT Gothic, but I have a different opinion about bitcoin. We had considerable discussions about cryptocurrencies here before you joined on and while I can see their value as a short term trading instrument for a small portion of one’s portfolio, I would not trust holding them long term.
Your statement, " it is only going up over time" are famous last words in the annals of investing. Furthermore, cryptocurrencies have been readily and easily confiscated by authorities both for tax reasons and for criminal actions. In addition, the exponentially climbing energy demands involved in mining and maintaining BitCoin guarantee to make it unsustainable in the long run. The fact that it is based on ephemeral electrons that can disappear at the drop of a hat (or an EMP) is another fact that would cause me to eschew them. Furthermore, the addition and removal of BitCoin from a wallet is a noteworthy vulnerable link in the system. And then there’s the issue of a government instituting a sovereign digital currency and making all others illegal (and completely worthless) with the simple passing of a government edict. I’ll pass.
Yep you the wife and kids are gonna take that vacation to Thailand and bring about 20 grand in Gold with you. Okay
Nevermind Thailand won’t let you in. Okay Let’s go to Orlando then. The Magic Kingdom accepts gold
VT – thanks for the suggestion and information.
I was interested in buying BTC in summer of 2017 when it was ~ Euro 2500, but Somebody in my household was reluctant to jump on this new, unknown opportunity until one of his colleagues at work was talking about his Bitcoin holdings. So, not wanting to be left out, he finally agreed, but by the time we bought it was late December 2017 and the price was well over Euro 12,000 per coin and……. you know the rest of the story 
It has never come back to the point where we bought it.
The original appeal as I understand it was p2p transactions that were separate from government and banking systems, in addition to being a digital currency with the benefits you mentioned. But my impression is that some banks are involved now and some countries are creating their own cryptocurrencies, as is Facebook, so it seems there may be a trend toward regulating the cryptocurrencies, but I’m not sure.
In addition to the sites you listed - if it is of interest to anyone, I used this website to find an exchange. It lists some popular exchanges worldwide, in terms of website ease of use, trust score (important) and how you can pay. Scroll half way down the page to get the chart:
https://www.bestcryptoexchange.com/
I haven’t looked at Bitcoin in a long time, but maybe it’s time to check it again. I agree that you would only use money you can afford to lose, and you need thick skin to watch the volatility. Some people have made a fortune with great timing, and some put a sum of money into it in the very early days and plan to leave it there for the future. Thanks for the reminder about Bitcoin VT!
Thanks MKI - good points. In addition to gold Eagles and Krugerrands, the Maple Leaf is the other coin with the highest purity and reputation (and is a negotiable instrument). You made an interesting point about holding coins from more than one mint - hadn’t thought of that.
I tend to think of Bullion as gold bars rather than coins.
Re: jewellery - that’s a good plan to check that the gold rings are stamped with the carat composition. I think all fine gold jewellery would have a stamp at the closure - my gold pieces do, so I imagine this is standard. It’s probably not as likely to be confiscated, taxed or regulated as gold coins or bars, I agree. And I like your idea of keeping assets in the family - or at least out of the taxation system.
There is no LET ME REPEAT no investment that can compare to crypto currency. Bitcoin has gone from pennies to at this moment $12,351 in eleven years. Ethereum has gone from .35 to $433.48 at this moment. This happened in a 5 year period. People come up with all kinds of silly reasons not to join the revolution, from if the internet goes down to the cost of electricity, to solar flares. The truth is if any of those things happen the least of anyone’s worries will be their crypto holdings. The truth is around 95% of USD is nothing more than pixels on a screen. Not really much different than cryptos. We are an almost totally cashless society right now. As for the government the likelihood of it becoming illegal declines everyday. It is a technology. Owning a token is like owning a share of stock in a tech company. Ethereum is deployed all over the world in many different ways. Remember Jamie Dimon? Well guess who is big time into crypto? JP Morgan. The TOTAL market cap of all crypto is $384 billion. Anyone care to guess how much money HSBC, Wells Fargo, JP, Morgan, BOA and others have laundered? They have aided and abetted everybody from drug cartels, to human traffickers. The coin of the realm for criminal activities has been and still is the Ben Franklin. So when people talk about the illegal activity associated with crypto I get hysterical. The banksters are some of the biggest criminals on the planet. If the government chooses to shine a light on any crypto transaction they can find it. Every exchange in the US has to comply with AML and KYC regs.
Bottom line every argument I have ever heard about crypto is a red herring. It is based on fear. Fear of the unknown mostly. You would think by this time on this site people would be smart enough to recognize what an incredible innovation is taking place.
Be that as it may the real reason to get on the crypto train is you are serfs tied to a debt based monetary system. The real promise of crypto is as a democratically issued currency with no debt attached. It would seem like a no brainer that the libertarian minded folks here would run to embrace it. But shocker of all shockers everyone wants to own equities, everyone wants the latest stock advice. Well to each his own.
One of my very first posts here was on the crypto discussion going on with Mark rees. At the time I suggested Tezos. I got no response. At the time of the ICO , which up till then was the largest ever, they were .36 each at this moment they are $4.14 each. That is they have gone up more than 10x in three years. If gold or silver had done that this site would not be the 3E’s site it would be the PM site.
You can now thanks to the innovation of DEFI earn interest on your crypto. You can earn anywhere from 3-12% compound interest .
Okay I am done you can now return to your regularly scheduled programming.
As I said Mohammed, I like many of your posts. And yes, cryptos have had incredible returns. Used judiciously as a trading instrument, they can make you a lot of money. But my practical nature and yes, fear, I fully admit (a rational, well controlled fear by the way which has gotten me to a place where money is the least of my worries), keeps me from pulling the trigger on them. Guess I’ve never been one to hop on trends and FOMO has never driven my actions. If anything, Mark Rees tended to trigger my huckster alert alarms. I couldn’t help but be reminded of time share salesmen I’ve run into. I may be inaccurate in my appraisal but that’s just my honest impression and I’ve learned to trust my instincts.
You mentioned Tezos going up more than 10x in 3 years. Well so did rhodium and I caught a good part of that. Furthermore, it was something I could hold in my hand and that no one else controlled. I guess to each their own and one has to operate within their personal comfort zone. The thing I’m investigating now is investing in physical metals such as iridium, ruthenium, scandium, etc. but I’m having difficulty locating supply sources near spot price so the research continues.
By the way, you tossed out another acronym that I am ignorant of. What is DEFI?
the Maple Leaf is the other coin with the highest purity and reputation (and is a negotiable instrument).The problem with the ML is that it is too pure, so it won't hold up physically if it's traded around. Look at some old Kugs to see how much damage can happen, and those coins are robust while the ML is fragile. So many people won't use buy it. It's critical that the the coins are liquid, that is they are well known and well used by all. The ML does have fans for some reason (the "pure" part is just a sales gimmick), but many won't buy ML for the reasons given, so I won't own them either since what I seek the most is liquidity. To be clear, I prefer Eagles in every way except they are technically US currency makes them a legal unknown in the future legal landscape - probably a good trait, but could be bad, depending on the law and country being traded. So I diversify with 25% Kugs just as a backup because it's known everywhere and for longer. I stick with the best known and most liquid.
I agree that the purity of the maple leaves makes them much more vulnerable to damage but even with less pure gold coins, they’re rather vulnerable to damage. But fortunately, gold coins aren’t traded around much, especially in contemporary times. For example, I’ve never touched mine with a bare finger. To me, the biggest plus side of the maples leaves is the anti-counterfeiting engraving of the newer ones, especially with better and better counterfeits coming to markets. Like you, I prefer eagles for their liquidity but there is a price for that liquidity in the form of a bigger premium, a price differential that may not necessarily be rewarded when it comes time to sell. Like any other asset, diversification is important so I would encourage one to hold both maple leaves and eagles as well as a third coin type such as krugerands or philharmonics and some collectible coins as well. Doing so expands one’s options, particularly if one has to vacate one jurisdiction for another or if one faces the possible threat of confiscation.
https://blog.coinbase.com/a-beginners-guide-to-decentralized-finance-defi-574c68ff43c4
https://www.youtube.com/watch?v=RxrqNmv2tR0
https://www.youtube.com/watch?v=RxrqNmv2tR0
https://www.youtube.com/watch?v=TI2YW_enZcE
MKI - Your points about the Maple Leafs are well taken, but the purity doesn’t seem to be a big concern based on the fact that they sell out every year. I agree with ao that most people holding or trading gold know it is a very soft metal and handle the coins and bars with cotton gloves, and also these tend to sit in a vault or safe and only get moved rarely. I’ve never received any Maple Leafs that are scratched. I suspect that with the recent Chinese counterfeits of gold coins flooding the market, the newer Maple Leaf coins will become more in demand due to the tiny maple leaf hologram, and their purity, which makes them harder to copy.
The Eagles and Maple Leafs are both legal tender, but my understanding is the Krugerrand is not. With respect to the idea of diversifying one’s holdings of gold coins, does anyone have an opinion as to pros and cons of holding legal tender coins vs. Krugerrands? What are the potential implications? Also are there advantages to holding bars over coins, or vice-versa?
If there is a confiscation event, which I am not predicting per se, then you really want to hold some of your metals outside the country you live in - preferably in a jurisdiction known for strong rule of law. Switzerland, and Singapore come to mind. I hold some in Singapore, outside the banking system. That money becomes my helicopter out of Dodge if and when Dodge falls, and if I have not decided for the good of my kids to die on that hill, in which case the helicopter is still there for them.
ML purity doesn’t seem to be a big concern they sell out every year.Heh; in this market every bullion coin made is selling out :-). What should concern us is trying to sell in a bear market...that's when liquidity becomes a challenge. Regarding ML fragility, three, no four points: 1) Look at old Kugs; tons of them damaged. So many are indeed handling them & the ML excludes those folk, making ML less liquid. 2) I never handle my bullion (buried immediately). However, I still don't buy ML, because my future buyers don't like them for their lower liquidity in the hand trade. Your market may vary. 3) The fact the ML is currency is actually a legal negative to me, since I'm not Canadian but there well may be future US laws regarding CA currency. Kugs are unlikely to face the same laws since SA is a basket case not overly friendly plus Kugs have become more historic than SA currency anymore. But this uncertainty is why I hold two types. one "modern" and the other "historic". 4) The high premium on Eagles tells me everything I need to know: my future buyers agree with my assessment it's the most liquid coin. Liquidity is my key issue, and I'll pay it :-). This extra premium has held up my entire life.
the newer Maple Leaf coins will become more in demand due to the tiny maple leaf hologram, and their purity, which makes them harder to copy.Copying is a non-issue; one cannot fake gold coins to any aware buyer; all one needs is a Fisch or a digital scale and a pair of calipers. It's really easy. This is exactly why I buy bullion.
Also are there advantages to holding bars over coins, or vice-versa?Bars have zero advantages unless you are a billionaire and need to stack! I'm fairly well off and 10% of my NW in bullion coins have no storage issues. If you do have storage issues? You are sitting very, very pretty. Now silver, that's a different issue, and I do own bars of that, because it's less valuable and the risk of forgery is much lower.
A number of years back, when I did extensive research into the matters you are currently investigating, I came to the conclusion that 1 ounce sovereign bullion coins that are legal tender like eagles and maple leaves were my preferred investments. Fractionals had too high a premium. Numismatics were overpriced and not quite as liquid although having a few collectibles is certainly reasonable. The Krugerrand was gradually falling out of favor with the South African history of apartheid and SA’s growing political problems and that decrease in popularity seems to have grown over the years. Also, coins are more readily recognizeable as bona fide and are more liquid than bars. This is especially true as it pertains to larger bars. I remember doing a like-for-like exchange of a gold kilo bar for 1 oz. gold eagles after realizing that fact when the bar greatly appreciated in value. If you think about it, who are you going to sell a kilo bar to? It’s not like you can walk up to just anyone and say, “Hey, will you give me $65,000 for this gold bar?”
If, on the off chance, you would choose to move your gold from one governmental jurisdiction to another, there may be other considerations. For example, if you decided to move to Canana and take your gold with you, Canada imposes a goods and services tax on any gold that is less than 99.5% purity, meaning maple leaves and philharmonics would be exempt but eagles and krugerrands would not. There may be other laws of this type of the books elsewhere but that is not something I know.
I really agree with your comment; well written. Your discussion of the import barrier into Canada is exactly the “type” of law we can expect from all over, every nation, using their own evil formula to push their own agenda. There was zero reason to have ML so pure except as a gimmick. Hell, we don’t even need to wait until some future crisis for Canada to write laws punishing gold owners :-). Just imagine the crazy laws once gold hits $10k in a runaway bull market. Lesson: now is the time to start building networks to buy and trade, before it gets ugly.
Krugerrand was gradually falling out of favorI haven't seen this; could you give me some examples? I'm pretty reclusive and may have fallen behind. f anything, I see the opposite, because some people are really anti-American and anti-western so shun the GE for spite, but enjoy the "black market" & "historic" vibe of the Kug. But 99% still think the Eagle is top choice for every other reason. But the GE better metallurgy has really made it the international bullion these days.
Thanks for your comment. Yes, if gold skyrockets, TPTB have a number of options they can use against us, ranging from a high percentage windfall profits tax to outright confiscation. Nevertheless, I still like physical metals and if I can’t trade them, I’ll pass them on to my children since it is unlikely for that restrictive condition to persist permanently.
I’m sorry I can’t provide concrete evidence about the krugerrand falling out of favor. My opinion in this matter was formulated by noting the trend towards a falling premium in recent years, the greater availability relative to eagles and maple leaves on several occasions, the sense I got from talking to some gold dealers with deep experience and connections, and a few articles that touched on the subject. Also, I don’t know if you remember when silver krugerrands came on the market back around 2017. I thought there would be a rush to buy them. There was not. They seemed to languish on the market and the premiums drifted far below those on silver eagles. Nevertheless, I don’t think it’s a big problem and krugerrands should hold value but, like you, I greatly value liquidity and therefore hold more eagles than any other sovereign coin. The exception is palladium eagles which are scarcer than hen’s teeth and have an outrageous premium, such that I have not purchased any.
Thanks very much for all the comments and considering my questions - these have given me some things to think about.
My particular situation is that I’m a Canadian expat living overseas (hence my bias toward gold from my own homeland - sorry MKI, you won’t convince me to avoid Maple Leafs!), and there is a distinct possibility we will return to Canada, but the timing is uncertain at this point. I suspect there will always be a market for Maple Leafs within Canada, as well as anyone who values the purity or security features, or if gold becomes quite scarce. Liquidity may depend where you are selling and if it is a country that mines precious metals - in Europe, the Eagles, Maple Leafs and Krugerrand all seem well represented at PM dealers. I agree with ao regarding the fractional coins - they are great to give children as gifts but otherwise are too expensive per ounce.
I suspect the reason for Canada’s taxation of coins below a given purity is to encourage the sale of their own gold within Canada. But I wasn’t aware of this fact, so that is good to know for anyone planning a move to Canada. My impression is that the sale of bars are taxed but coins are not, but I’m not sure if that is true everywhere and for various metals.
The idea of holding some gold in a different country, at a safe location, is a great idea as well. I’ve noticed in the last few years, that the governments of several nations have been building their gold reserves, and/or returning reserves held in other countries. And they want to know who is holding precious metals in their country. Germany recently passed a law that gold can now be purchased anonymously up to a value of Euro 2,000, otherwise the dealer must take a copy of your ID. That’s a single 1 oz. Gold Eagle or Maple Leaf coin.