Gerald Celente and I don’t agree on that many things. I love the guy, but when he told my radio audience to “get some gold and store it in a coffee can in your mother-in-law’s basement”, I couldn’t help but wince a bit.
While I’m not sure whether Mr. Celente would advise to let said mother-in-law know of your covert gold stash, I do not agree with this particular method of gold storage.
It just doesn’t seem safe to me.
As my friend James Turk of Goldmoney says, storing gold is binary. “There are only two ways to buy physical gold… buy it and store it yourself, or buy it and have someone store it for you.”
The risks of storing gold at home are rising.
As the United States economy continues to slide into irrelevance and the non-recovery marches on, crime is likely to increase. Already, stories of gold thefts have made headlines.
With so many security concerns, you might ask just where to hid gold so no one – not even a rogue regime – can take it. With that in mind, let’s examine some of the best ways to store gold.
Where to hide gold
1. Store your gold in a safe
In old days, kings would hire men to build them secure facilities for their valuables… and then kill them. They figured it was the only way to make sure no one had any insider knowledge of where their gold was hidden.
Many gold owners use safes to store their precious metals, but even the safe companies urge caution with this approach. For instance, most fire safes are completely worthless for preventing burglars from gaining access. One expert even suggested such a safe would serve as nothing more than a “convenient way for the burglars to carry around your gold”.
Higher-end safes are available and range in price from under $1,000 to many thousands. These safes weigh hundreds of pounds and must be delivered. Delivered, of course, by people who now know you have a safe.
Some contractors offer to deliver safes in the middle of the night, then install them underground or in a place no one will think to look. Except, again, for the contractor himself. Stories of homeowners being robbed not long after installing a safe are not unheard of.
2. Bury it in the backyard
Those who want to keep their gold close at hand might suggest a little “midnight gardening” to hide precious metals in the backyard.
Of course, there are several risks involved. One, of course, being theft. FBI reports show that precious metals and jewelry theft increased more than 50% over the course of just a few years.
In fact, some criminals are now using metal detectors as wands during home invasions. A thief in your backyard could easily find metal on the surface or as far as fifteen inches below ground, depending on soil conditions.
Experts advise burying precious metals four feet deep. While some gold owners suggest burying a soda can above your gold to foil metal detecting thieves, all it takes is a second wave of the detector to find more buried treasure underneath the scrap metal.
Burying gold also requires plans for waterproofing and other outdoor elements.
3. Leave it in plain sight
How about painting a big bar of silver black and using it as a doorstop? Foolish, says one precious metals expert. I’d say so.
Better ways to hide your gold and silver out in the open include using those fake coffee or soda cans. The problem with those is that some people decide to put a can of Campbell’s soup in their bedroom closet rather than in the pantry where children or visitors might find it. Yeah, that doesn’t look unnatural.
One expert suggests hiding precious metals in other things that are metal, like pipes or even inside a washing machine. Apparently, while millions of socks are lost inside washing machines every day, some gold bullion will fare better.
Another suggestion is to put gold and silver in your freezer behind some bags of peas. The cold temperature has a preservation effect on metals, although I can only imagine some neighbor kid reaching for a popsicle and ending up pocketing some Maple Leafs as well.
Also popular is camouflaging your gold hiding spot using fake rocks or other decoys. The idea is that rocks don’t draw much attention and there are already plenty of them in your yard. You can easily purchase hollow rocks that come in a variety of shapes and colors.
If rocks aren’t your thing, some suggest large planting pots. The idea is that some of these terra cotta pots weigh hundreds of pounds, making them hard to move. Unless, of course, they were simply smashed and broken.
4. Store your gold in a bank safety deposit box
For years, people entrusted their valuables to safety deposit boxes. Today, it’s not such a good idea. For one thing, you may be locked out of your box at any time, including if the box holder dies.
Experts say to avoid keeping sensitive documents in safety deposit boxes, which means I certainly wouldn’t want gold in there.
For one thing, you’re not supposed to store precious metals in a bank box. One US banker I spoke with several years ago told me, behind closed doors, that they never really inspected what went into their safety deposit boxes.
“What about precious metals?” I asked, smiling. She put her hands over her ears and replied, “What?”
However, the government wouldn’t be so kind. The IRS has said that not only is your bank account open to seizure if you don’t pay your tab (state governments feel the same way, even when doing so is illegal) but so is anything else you have at a bank.
Since opening a bank account involves you signing your life away these days, the government knows exactly where to find your money at a bank. And if you have a safety deposit box, they’ll find that in about five seconds, too.
When the government decides to go rogue and confiscate your gold, it will be similarly easy to grab from your local bank.
Think a bank holiday can’t happen? Just look at Cyprus. Banks don’t have to close of their own volition; the government can do it for them.
Just ask those who lived in Nazi Germany.
The contents of safe deposit boxes are not FDIC insured (not that I’m too worried about coverage by an insolvent entity), nor are they covered under any insurance policy unless you specifically order one.
And then there’s the risk that such a box, which is flimsier than you think, could be opened by a bank employee or other insider. Theft has been known to happen.
My recommendation: offshore gold storage
While I may disagree with Marc Faber on his investments in Thai and Vietnamese real estate, I respect his opinion in general.
In some cases, Marc Faber and I share the exact same opinion. He suggests, as do I, that the best system for a country to find economic prosperity (and keep their hands off your gold) is to be small and avoid entanglements with foreign governments. Places like Norway and Singapore are proof of that assertion.
And speaking of Singapore, we agree that Singapore is the best place in the world to store your gold.
Singapore is not only the “up and coming” place to store gold; they do a great job. So much so that Bullionstar in Singapore is one of the only companies in any industry that I recommend.
Offshore gold storage makes sense because it removes the two key risks in storing gold: risk of theft and sovereign risk.
The only real argument against offshore gold storage is the fact that you’ll be far away from your metals. Personally, I believe you should offshore yourself, as well. For instance, living in Kuala Lumpur but storing your gold in Singapore.
If you believe The Land of the Free will play host to bloody riots and a civil war, why on earth would you want to stay there? (Fighting for your country, of course.)
Whether you choose to remain in your home country or not, offshore gold storage provides an affordable way to store gold in a highly secure environment.
While in Singapore last year, I took a tour of Malca-Amit’s precious metals vault at the Singapore Freeport. No taxi driver had heard of the place. It seems more people outside of Singapore know about the Freeport than do locals.
However, it wasn’t until I actually arrived at the facility that I felt like James Bond. This vault has every type of security you could imagine. Christie’s uses the place to store high-dollar artwork, while another tenant stores cars worth millions there.
You can easily get space in the vault there, or rent a box that you have a key to. You can also get free storage in another facility.
I’ve walked around Singapore carrying a $2,000 MacBook at all hours of the day and night and no one ever bat an eye at it, let alone tried to grab it. Crime in Singapore is extremely low to begin with, making your gold stored under lock and key pretty well off.
And private vaults often carry insurance; just make sure to ask.
Beyond just thwarting criminals, however, storing gold in a private vault outside of the banking system is an effective way to minimize your sovereign risk.
Imagine if your home country decides to ban the sale of gold. They may not outright confiscate the gold you physically hold, but they can make it impossible for you to trade it on a transparent market. Businesses are already too afraid of the government, and I’m certain they won’t take your gold if Big Government forbids it.
Another benefit of going overseas is that precious metals stored offshore are non-reportable assets in the United States. You don’t have to tell the US government that you own the gold or are storing it.
While I would be worried about the theft of gold from my home, I’d be just as worried about some government agent grabbing my metals. It’s a lot harder for some paramilitary organization to steal your gold when it’s in a vault in Singapore – or New Zealand, Switzerland or Austria.
There are even facilities that will take on a power of attorney and sell your gold if you give them such instructions.
Storing your gold and silver from weather, robbers, and rogue government agents can be a challenge. While everyone has a different opinion on how to hide gold and silver, my strategy focuses on gold ownership as an asset safe haven.
While I see the continued decline of the US dollar and the continued irrelevance of the United States as a world economy, I don’t foresee the apocalypse hitting anytime soon.
For that reason, I’m less concerned with using my gold grams to buy food and more concerned with hoarding them as a store of value as part of a sound investment portfolio.
If you disagree, at least allow me to suggest Maxwell House as the best coffee can for your basement. I hear thieves hate that stuff.