Why Physical Gold?
There are times in history when protecting your wealth should be the primary objective of your investment strategy. As Mark Twain said: ” I am more concerned about the return of my money than the return on my money”. To preserve wealth in a fragile financial system, involves investing in assets which have no counterparty risk.
Gold is not an investment, it is real money
Gold reflects governments ongoing deceitful action in destroying the value of paper money.
Matterhorn Asset Management (MAM) has invested in physical gold for clients since 2001. We advised our investors at the time to buy physical gold for up to 50% of their financial assets. The image shows how in 1913 you could buy nearly 50 oz of gold for $1,000 and today only 0.75 oz. Thus against real money – GOLD – the dollar has declined 98% since the creation of the Federal Reserve Bank of New York in the USA in 1913. But it is not only the dollar that has declined in value, all major currencies have lost 97-99% against gold since 1913. Until 1971 the US dollar was backed by gold. Since Nixon abolished the gold backing, money printing started in earnest and in the last 41 years the dollar lost 98% in real terms.
An unstable financial systemclose
An unstable financial system
The world financial system is more fragile than ever in history. Never before has there been a time when most major nations simultaneously are running massive deficits and creating debts in the trillions of dollars. The banking system is also virtually bankrupt. If the bank’s toxic debt was valued at market value, no bank would stand today. In addition the financial system has derivatives outstanding in excess of $1 quadrillion. An important percentage of these derivatives is worthless and there are no reserves to cover for the losses. The debts of governments and banks can never be repaid with normal money. Instead governments and central banks will need to create massive additional debt and print money at an accelerated rate. This will most certainly lead to a much higher gold price.
Very few investors own goldclose
Very few investors own gold
Gold is up almost 5 times in US dollars in the last 15 years (much more against many other currencies as of Q1 2015), and still only 1% of world financial assets are invested in gold. Thus very few investors have participated in this major appreciation of gold since the early 2000s whilst price risk in equities and fixed income is increasing. Gold has a very low volatility relationship with other asset classes which makes gold an important risk management asset in times of uncertainty. For Institutional portfolios a typical classic asset mix achieves a higher long term return with a percentage gold component depending on base currency (based on research going back to 1987). With likely further acceleration of money printing by the largest economies in the world, leading to further destruction of paper money, investors will become even more aware of the necessity to owning real money. Gold has been money for 5,000 years and maintained its purchasing power throughout history because it cannot be printed. Annual gold production of 2,600 tons represents only 1.5% of the total gold ever produced. Gold is both indestructible and indivisible which always made it suitable as ‘safe haven’ money. If physical gold does become an asset of choice for institutional investors and Family Offices, the physical market will not be able to meet that size of demand at current prices.
Informed investors no longer trust the paper gold marketsclose
Informed investors no longer trust the paper gold markets.
Currently the paper market in gold is at least 100 times greater than the physical market. Many investors are under the illusion that they own gold when all they have is a piece of paper with no physical gold backing. Gold dealers such as Comex, the interbank market, futures markets, many gold Exchange Traded Funds (ETFs), derivatives market etc would have no possibility of delivering physical gold against their paper commitments (“See Wealth Preservation”).
Furthermore, it is unlikely that Central Banks own the 30,000 tons of gold they say they do. An important part of their stated holdings is likely to have been sold or leased to bullion banks. The US Government gold has not been audited since the 1950s and many other governments refuse to reveal in what country their gold is held. This is most likely because they don’t actually own the physical gold that is on their balance sheet. We will soon be at a point when investors in paper gold realise that they need to take physical delivery in order to have the certainty of owning gold and eliminating counterparty risk. When that time arrives, there will not be enough gold around at current prices. Gold is then likely to appreciate very substantially due to massive shortages of physical gold.
Why GoldSwitzerland – a comparison
Matterhorn Asset Management/GoldSwitzerland [MAM] offers all green tick comfort as shown below because
only MAM offers direct ownership and full control of Precious Metals which eliminates counterparty risk.
MAM organises buying and storage of precious metals for its clients but is not a counterparty in this process. A client’s claim therefore is always directly with the ‘chain of integrity’ Storage provider. Hard assets investors should be conscious of the fact that eliminating counter party risk is critical to achieving true wealth preservation and this applies equally to private investors, institutional investors, sovereign wealth funds and central banks.
Wealth preservation principles and services compared:
|GoldSwitzerland||Bank account/vault||Gold ETF||Mint||Partial Gold ownership|
|Clients have immediate and complete control over their Gold/Silver bars and coins.|
|Clients receive a non-transferable warehouse receipt in their name issued by the vault.|
|Counterparty risk eliminated|
|Gold/Silver stored outside the banking system|
|Offers option to Trade and Store without any USA links or subsidiaries|
|Allocated & Segregated Gold/Silver bars in your name with your unique serial numbers|
|Inspect your physical Gold anytime at the vault|
|Immediately collect your personal Gold/Silver|
|Storage without initial purchase is possible|
|Lowest cost entry-exit|
|Swiss regulated group|
The table (click header) shows how Matterhorn Asset Management/GoldSwitzerland compares with other examples of precious metals investment facilitators. GoldSwitzerland scores 100% on strict wealth preservation principles/services and has become the primary choice for many investors.
Wealth preservation – Unique Safety – Swiss Solidity
Gold is the ultimate form of wealth preservation. Throughout history gold is the only currency that has survived in its original form. All paper money systems in history have been printed away until the money becomes worthless. Already in 1729 Voltaire had said:
“Paper money eventually returns to its intrinsic value – ZERO”
True Wealth Preservation Principles for owning gold
Virtually Risk Free
Although there is clearly no absolutely risk free method for buying and storing gold, GoldSwitzerland has created a system which surpasses virtually any other method and offers wealth preservation at the highest level.
- When you buy gold from GoldSwitzerland you receive the highest quality of gold (999.9 or 99.99% purity for 1 kilo and 100gr bars). 400oz bars are London Good Delivery.
- Your gold is stored outside the banking system, outside of the Eurozone or a USDollar zone, allocated and segregated in your name.
- One of the locations is within the compound of and underneath Zurich Airport.
- The other specialized vault location is for UHNW individuals and sovereign wealth funds. This location is entirely self supporting for electricity, oxygen and water supply.
- You own actual physical gold bars which are registered in your name, not an allocated fraction of a gold bar as with with other companies.
- The gold is insured by a major international insurance company.
- You are issued a signed Certificate of Ownership / Warehouse Receipt with the specific weights and serial numbers of your gold bars.
- You (or a representative authorised by you) can inspect your gold, normally during office hours, by appointment. As this requires assistance from security staff a small fee will be charged by the vault for this service.
- You can collect your gold from the vaults if you so wish.
- In case of a disruption in the financial system, you have gold which is safely stored and which you can readily access yourself.
Matterhorn Asset Management AG – (MAM) / GoldSwitzerland is a company specialising in asset management and consultancy for institutions, corporations and high net worth individuals, with particular emphasis on physical precious metals.
MAM is affiliated with one of the largest independent asset management groups in Switzerland, the Aquila Group.
The client lists of MAM/GoldSwitzerland and the vault companies are totally confidential and no one outside these entities has access to investors’ details.
Neither MAM nor the vault companies are required to report investors’ precious metals to any authority in any country.
Swiss Financial Market Supervisory Authority (FINMA)
Our affiliated company, Aquila & Co AG, is regulated by the Swiss Financial Market Supervisory Authority (FINMA) as a Bank and Securities dealer.
The FINMA List of Authorised Bank and Securities dealers (PDF)
Matterhorn Asset Management is regulated, through Aquila & Co AG, by the Swiss Financial Market Supervisory Authority (FINMA) under their money laundering supervision.
The FINMA List of regulated supervised companies (PDF)
PwC are the auditors of Matterhorn Asset Management AG and its Precious Metals Division GoldSwitzerland.
The 3 principles for safe storage of precious metals