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Physical Gold Can't Be Hacked

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Physical Gold Can't Be Hacked

Without a doubt, many of the people who enjoy buying physical gold (as opposed to shares of exchange-trade funds or futures contracts) do so for aesthetic reasons. No other metal has the same hue and luster that gold does. Not to mention that the yellow metal is timeless—it never corrodes.

gold.barBeyond these reasons, however, there are big advantages to physical gold over its paper analogs.

"Paper" Is Now Digital

What's the difference between a share in a publicly-traded company, ownership of a futures contract, or the funds on the screen in your savings account? Essentially, nothing! All of these assets are stored in digital form, meaning they are merely bits of data stored in a computer system.

Image courtesy of Mashable Image courtesy of Mashable

We've seen an alarming amount of electronic fraud in the past several years. This has ranged from stolen customer information (run-of-the-mill data breaches) to more serious thefts of sensitive financial information. Big businesses like Home Depot have been hit, as have government agencies like the IRS. Clearly, nobody's digital information is completely secure.

Renowned author James Rickards has detailed this ability of hackers to infiltrate digital data in his latest book, The New Case for Gold. One of the main arguments he makes is that when the value of assets are stored electronically, they are always susceptible to being hacked. This is obviously not the case with something tangible like gold bullion. More so than ever, Rickards asserts, gold is the best bet for providing safe haven for your investments.

More Reasons for Gold

Beyond the idea that gold cannot be hacked, even the mainstream financial news is taking notice of gold's growing appeal. Even for casual market observers who don't necessarily believe in the fragility of the global economic order, the logic of why gold is poised to shine can be seen in one failed economic policy after another.

helicopter-moneyIn the past few years, central banks around the world have pursued increasingly unorthodox monetary policies. These not only include huge stimulus packages and so-called "helicopter money," where the authorities simply shower the economy with more cash in the hopes of spurring more economic activity. In addition, near-zero and subzero interest rates have also contributed to the easy-money environment in today's inflated economic system.

Mainstream market analyst Mark Skousen points out that you need not be convinced by an imminent economic collapse nor by commentators like Rickards to understand gold's powerful appeal. Skousen emphasizes that the rapid expansion of fiat money policies and the money supply means that a great deal of excess funds are likely to flow into gold and other hard assets. Although some investors choose gold ETFs like IAU and GLD, there is no "harder" safe haven asset than physical gold. This trend is becoming clearer and clearer to even the more mainstream news outlets.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.

About the Author

Everett Millman

Everett Millman

Analyst, Commodities and Finance
Managing Editor

Everett has been the head content writer and market analyst at Gainesville Coins since 2013. He has a background in History and is deeply interested in how gold and silver have historically fit into the financial system.

In addition to blogging, Everett's work has been featured in CoinWeek, Advisor Perspectives, Wealth Management, Activist Post, and has been referenced by the Washington Post.

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