Originally published October 10 2014
Super-rich class scrambles to buy gold bars amid uncertainties in global fiat currency
by J. D. Heyes
(NaturalNews) Do the uber-wealthy know something that the vast majority of us do not about the true state of the U.S. and world economies? And if so, could that be why they are stashing cash and buying gold?
In recent months, the super-rich have begun looking for traditional ways to protect their wealth, and we're not talking about plunging millions into the stock market. No, the rich are increasingly stockpiling gold bars, a la the movie The Italian Job, according to bullion experts.
Indeed, they say, the number of 12.5 kg (27.6 lb) bars being scooped up by the wealthiest of the wealthy has ramped up 243 percent this year compared to the same period last year, Rob Halliday-Stein, founder of BullionByPost told Britain's The Telegraph newspaper.
"These gold bars are usually stored in the vaults of central banks and are the same ones you see in the film 'The Italian Job,'" David Cousins, bullion executive from London based ATS Bullion, also told the paper.
Gold has always been the safe haven of choice
The bars are of course manufactured from pure gold. Given current prices, market value for each bar is currently about £300,000 (about $483,000), or about $1,224 an ounce. Cousins said that he is seeing gold buyers exhibit much more confidence this year while prices remain stable following sharp drops in gold prices in 2013. The Telegraph reported:
The sales of 1kg gold bars, worth about £25,000 [$40,000] each, has doubled during the three months ended August, when compared to the same period last year, according to ATS Bullion sales figures.
Sales of the more popular gold coins such as the quarter ounce sovereign and one ounce Krugerrand have also doubled this year, according to figures from BullionByPost.
Halliday-Stein added that though most customers are arranging to have their gold stash stored securely in secret vaults operated by Brinks, a global security firm, some are taking physical delivery of their 27-pound bars. In addition, small gold coins can also be stored remotely.
The uptick in the purchase of gold was especially noteworthy given Scotland's recently failed vote to break away from the United Kingdom. That vote failed with 55 percent voting "no," but as evidenced by the plurality of "yes" votes, many believe that there remains enough political instability in Scotland to test the country's allegiance to the UK for years to come. And the vote led to record purchases of gold assets, triggered by uncertainty over what a breakaway would have meant.
Meanwhile, the uber-rich have also begun to stockpile and hoard cash. As reported by CNBC.com, billionaires "are holding mountains of cash, offering the latest sign that the ultra-wealthy are nervous about putting more money into today's markets."
According to the new Billionaire Census, conducted by Wealth-X and UBS, the world's billionaires are now hoarding an average of $600 million each in cash, which is more than the gross domestic product of Dominica. That is an increase of more than $60 million from just a year ago, and it translates into billionaires' holding about 19 percent, on average, of their net worth in cash.
"This increased liquidity signals that many billionaires are keeping their money on the sidelines and waiting for the optimal moment to make further investments," the study said, according to CNBC, which further reported:
Indeed, billionaires' cash holdings far exceed their investments in real estate. Their real-estate holdings average $160 million per billionaire, or about one-fifth of their cash holdings.
The chief investment officer for Ultra High Net Worth at UBS Wealth Management, Simon Smiles, told the financial news network that billionaire families and family offices that he has spoken to are keyed into the same question, for the most part: now what to do with all that cash?
"The apparent safety of cash, reinforced by the painful psychological experience of the 2008-09 global financial crisis and the subsequent troubles within the European Monetary Union, likely reinforces the tendency to favor this cautious allocation strategy," Smiles said in the report.
Fiat money, loose financial policies (especially in the U.S. where the Federal Reserve has been printing money like mad) and global unrest are all leading to major shifts in wealth and asset management. As the global situation worsens, you can expect that the uber-wealthy will do more to protect their money.
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