The following is quoted from the Australian Financial Review's feature "Why the golden bull is set to run and jump".
... But for those investors completely shy of risk, owning gold bullion outright is the safest way to go.
BullionVault was founded by Paul Tustain, a computer scientist who worked in the financial markets and later became an early shareholder in Betfair, the gaming system that now turns over $20 billion a year...
"You cannot get full value for your gold where it becomes restricted, or contraband, which frequently happens in countries whose citizens need it most", says Tustain.
So the people who are insistent on personal possession are likely to lose out. They become trapped owners.
"The way to own gold is to buy it outright, and take delivery, but offshore and in a place where ownership/property rights are likely to be respected.
"My position on this is that the best markers for a place which will protect property rights are: widespread personal prosperity; an absence of public and private debt; democracy and well established fiscally conservative politics."
Judged against these criteria Switzerland is hard to beat. It is no accident that the Swiss store so much international wealth, and their own interest is well served by continuing to do so reliably...
Once this sort of thing was the preserve of the very wealthy, as setting it up was expensive. But according to Tustain, "the globalising qualities of the internet, and easier international payment services, make offshore bullion accessible to everyone -- for the time being. This is why it makes more sense for long-term gold buyers to look for international accessibility rather than for leverage."
