Three key features of gold as insurance…

Fred wrote about how he likes owning producing real-estate as a hedge against a real financial disaster, but isn’t a fan of gold.

Portability, defensibility and anonymity are three points Fred is missing.

1. If shit hits the fan, I can put $1m worth of gold into a suitcase. I can’t do that with an apartment building.

2. I can defend my own gold with my own gun. If the aggressor is another citizen or a foreign government, my government will defend my property rights on the apartment building. But if the aggressor is my government, or my government is neutered/ineffective, I really have no way of effectively defending anything that isn’t small and portable.

3. It’s much easier to “nationalize” land and real estate than gold (or tax them heavily in order to buy the votes of the lazy). No one has to know I own gold, or where I keep it. p.s. keeping $1m worth of gold in a bank is useless….you’ve got to keep it unregistered, anonymous and well hidden. It can be done.

I think Fred’s argument still holds a lot of water when talking about currency devaluation or “normal” scare cycles. It’s just not a war-chest argument for me.

The best hedge against a massive downturn is a productive mind!

Win.