Gold Safe Haven Investment Status? | Recent Historical Examples

Gold investment hedge Gold safe haven appeal

Safe haven investments get usually defined as those asset classes that should, in theory, keep or even increase their value when markets are turbulent.

Investment hedges are typically made to help offset the risk of any adverse price movements in other particular investments one might have in an investment portfolio.

Both statuses for gold bullion ownership have and will continue to get used for safe-haven and investment portfolio hedging purposes.

For example, if an investor has a lot of exposure to fiat US dollar, euros, or other fiat currencies. One might try to offset the downside of long term purchasing power, losing fiat currencies by maintaining a prudent gold bullion investment allocation.

In terms of gold’s safe-haven status, there have been many times in local histories, and personal accounts where having gold bullion in hand was the difference between a life of continued hardship or potential prosperity.

Gold’s safe-haven appeal is precisely why during World War 2 many airplane fighter pilots carried on their person British Royal Gold Sovereign Coins in case they were shot down and needed some recognizable gold bullion coins to barter for life protection and potential passage.

If the past is any guide to our futures, owning some physical precious metal bullion is just basic common sense.

The following short clip and transcripts were produced by Real Vision, released on January 26, 2018, entitled “Gold: The Story of Man’s 6000 Year Obsession - Episode 2.”

This clip includes many financial commentators we have spoken with in the past, regarding gold bullion’s safe-haven appeal.

Gold Safe Haven History and Plan B Status


See the reality of the 2008 gold price to the 2011 gold price high.

By perhaps having a better understanding of how the current gold price discovery market operates [mainly through leveraged electronic derivative contract trades (e.g., COMEX)]. One can better know why there are moments in time when the gold spot price might move in the opposite direction one would deem commonsensical (e.g., the fall 2008 drop in gold spot price followed by a near tripling within three years to follow).

Grant Williams - “gold remains one of the few ways; you can both protect yourself and preserve both your wealth and purchasing power.”

“The difference between owning a paper contract or claim on gold versus holding the metal itself, while seemingly trivial, is a hugely significant one. The idea of owning a paper claim on physical gold, however, is viewed very differently in the West than it is in the East.

After countless episodes of inflation and where debasement of fiat currencies by governments is commonplace, gold (in the east) is viewed very differently indeed.”

Simon Mikhailovich - “we know the end game, we know that all of these debts cannot be paid. We know that unfunded liabilities cannot be met in terms of real purchasing power. So then the question is, how does that get resolved?

Well, there are only a couple of ways it can get resolved: either through inflation (fiat currency devaluations) or deflation (meaning defaults and write-downs).”

Luke Gromen - “A couple of years ago I was at a wedding, and some friends of ours-- I was talking with some friends of ours and they were Russian and Ukrainian and had immigrated here, were now American citizens. And we got to talking about what happened in the 1990s in Russia. They described to me-- the woman, her father had been a doctor in her village in Ukraine. And she said, we'd had enough saved in the bank, we were the richest family in the village, and we had enough in the bank to buy five cars, which apparently for that village was quite a bit.

And she said they closed the banks for two weeks, and. When they reopened the banks, we took the money out, we bought groceries for one month. And, you know, her husband said yes, similar story, I was saving up to buy a motorcycle and had enough saved to buy a motorcycle and my dad wouldn't let
me buy it. Closed the bank for two weeks, banks opened back up, I took the money out and bought a carton of cigarettes.

I said, so I probably don't need to explain to you. I said, how did gold do? And they both laughed and they said, anyone that had gold, silver, jewelry, they did totally fine.”

Ronald-Peter Stoerferle - “I once heard a story about the Soviet Union where gold obviously was forbidden - you could go to jail if you had physical gold. But you were allowed to have wedding rings, gold wedding rings. And there was a smart guy and he had like 50 wedding rings. Every month or every couple of months, he went to the market and had just enormous purchasing power due to his gold ring. And I think this clearly shows that you just have to own at least some gold.”

Simon Mikhailovich - “I know a person who grew up in Vietnam, whose father was a translator for the US military during the Vietnam War. And when the US left Vietnam, they were unable to leave with the US forces, and so they were left behind. And having been left behind, they obviously were subjected to oppression by the
Communist regime.

It so happened that the family of 14, one of the uncles there was a dentist, and he was able to accumulate over the next, whatever, 10 or 12 years a certain amount of gold. So that in the late '80s, this family was able to pay 7 ounces of gold per person-- so times 14, over 100 ounces of gold-- to get 14 seats on a boat that left Saigon in the middle of the night.

Lost power in the next day, drifted at sea for a few days, and eventually was towed to the Malaysian coast by the Malaysian Coast guard. They spent two years in a camp for displaced persons. They eventually made their way to Singapore where the father was able to go to the US Embassy, present his credentials showed that he was a translator for the US - or interpreter for the US forces, and the whole family of 14 was given visas to come to the United States.

And that's, you know, these people's lives were saved. And what did it take? It took 7 ounces of gold per person for a family of 14. And so I think that's as good an example of gold being planned B as I can come up with.”

Gold as a Safe Haven Investment Continues Onwards


To learn more about safely buying and selling gold bullion in the 21st Century, you can pick up our free digital Bullion Investment Guide.

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