Why Store Your Gold Outside the Banking System?

There are many risks associated with storing gold in the banking system, notably the risk of bankruptcy or government confiscation.



Risk of Bankruptcy or “Bank Holidays”

Investing in gold is generally done as a security measure to protect oneself against the risks associated with the fragility of the financial system, and to have access to a universally accepted means of payment in case of bank failure or temporary closing (bank holiday).

If you hold your gold in a bank’s vault and the bank closes temporarily or, worse, goes bankrupt (as was the case in Argentina), you lose the advantage of immediate access to a means of payment for your basic needs in times of trouble, when access to traditional means of payment like cash or bank cards is hampered.

The risk of bank failure is serious and real, as Max Keiser explains in an interview, with the banking system being entirely inter-connected.

Government Confiscation

Even though the risk is small, confiscation has occurred (Roosevelt’s Executive Order 6102 in 1933). Confiscation could happen following panic in the banking system or just before announcing a new monetary system. In that case, owning gold in one’s country of residence is risky because it can be legally seized.


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