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WinstonSmith

Shelter From The Coming Storm: How will you protect your money?

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Whilst there now seems to be overwhelming agreement that something nasty is finally coming down the tracks (sooner rather than later) I've never seen such disagreement on here as to the best course of action to protect ones wealth when it all goes down.

 

I've seen bonds, shares, gold, cash, classic cars, vintage wine, antiques and even btl recommended as the best way to emerge on the other side in a position of financial strength.

 

Given the number of people on here who've given this a great deal of in-depth consideration, I thought it might be beneficial for all of us if we shared our ideas on a dedicated thread and debated the strengths and weaknesses of the options.

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Ok,iv been buying gold miners 20% portfolio (EGO,YRI,HMY,SBGL,GDX).I think gold might rally into the summer if the dollar index falls.I think sterling might rally for a few more months against the dollar.Its highly likely il sell those gold miners in the summer,up or down and then il keep 30% in what i consider cheap UK blue chips that i already own (in case im wrong about a deflationary event) 30% Sterling cash,and 40% US treasuries.If we do get a crash and the banks print il then be selling the treasuries (mostly TLT) and buying hopefully beaten down miners,including gold miners because i think a reflation cycle will kick in after the deflation.I just really hope the reflation doesnt kick in without a deflationary event.However if it does il miss out some gains.I can live with that.

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I've been tempted in the past to buy gold britanias, as they are tax exempt.

but when you combine security storage concerns, with the mark up on purchase; they look less attractive. Not sure I want I pay a business to keep them safe either. Then you need to sell them eventually and they can be hard to sell.

 

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4 hours ago, GrizzlyDave said:

I've been tempted in the past to buy gold britanias, as they are tax exempt.

but when you combine security storage concerns, with the mark up on purchase; they look less attractive. Not sure I want I pay a business to keep them safe either. Then you need to sell them eventually and they can be hard to sell.

 

 

Sovs are incredibly compact relative to their monetary value and don't require any special storage conditions.  There's a much greater mark up relative to spot gold price on purchase than there is with other physical gold but you also can sell them at a mark up, so that isn't a real concern.

In the event that they became really useful to protect your wealth, I'm sure there would be an extremely liquid market for them.

Unless you had an absolute LOAD of them and/or lived in an area of rampant home burglaries, I wouldn't be too worried about storage.

The real danger is that the government would impose restrictions on owning gold, or massive sales taxes.  Which is entirely possible when TSHTF and they desperately need to grab private wealth.  But at least you'd have the wealth in your own hands and thus have options (assuming you'd been circumspect in buying them).

 

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GrizzlyDave, I looked at buying gold or silver online but the pay page added VAT of 20% to the price.

Are gold brittanias exempt from VAT?

To answer the original question, I'm keeping my money in Stocks and Shares ISA with high risk high appreciation portfolio. I figure any falls will be made up eventually if I stick with it, which I intend to do for about 10 years.

Edited by Giordano Bruno

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1 hour ago, Sour Mash said:

 

Sovs are incredibly compact relative to their monetary value and don't require any special storage conditions.  There's a much greater mark up relative to spot gold price on purchase than there is with other physical gold but you also can sell them at a mark up, so that isn't a real concern.

In the event that they became really useful to protect your wealth, I'm sure there would be an extremely liquid market for them.

Unless you had an absolute LOAD of them and/or lived in an area of rampant home burglaries, I wouldn't be too worried about storage.

The real danger is that the government would impose restrictions on owning gold, or massive sales taxes.  Which is entirely possible when TSHTF and they desperately need to grab private wealth.  But at least you'd have the wealth in your own hands and thus have options (assuming you'd been circumspect in buying them).

 

Yes, I was going to say that Sovereigns were probably a better bet.

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20 minutes ago, dougless said:

You don't pay VAT on coins.

All gold bullion (coins and bars) is VAT exempt in the UK. Silver is subject to VAT, however.

Edited by Errol

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23 minutes ago, Errol said:

All gold bullion (coins and bars) is VAT exempt in the UK. Silver is subject to VAT, however.

Good point Errol; I was thinking of gold coins.

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buy 'permanent portfolio' book. the only sure fire way not to loose value over a lifetime. Unless society completely collapses, in which case be the meanest person the first. 

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National savings for me. 100 %  of your savings are safe, but the interest rates are lower than most others pay, but if safety is what your looking for in cash, then that's the best option.  Premium bonds are ok, but your limited to £50,000 max.  When the ship goes down, and bargains are to be had with cash, you need to be able to get your money out without delay or hassle. I could picture high street banks limiting withdrawals just when you need it.

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Gold/Silver coins denominated in GBP are exempt from CGT in the UK as well.

If you want to cross boarders etc then you can claim their face value...1oz Gold Britania is £100, 1oz Silver Britania is £2 and a Sov is £1.

Also all are difficult to forge with Titanium...unlike the bars; since it is very hard, Titanium is harder to strike into a coin.

At the moment, all gold is exempt from EU tax...not sure what the effect of Brexit will be.

 

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10 hours ago, GrizzlyDave said:

I've been tempted in the past to buy gold britanias, as they are tax exempt.

but when you combine security storage concerns, with the mark up on purchase; they look less attractive. Not sure I want I pay a business to keep them safe either. Then you need to sell them eventually and they can be hard to sell.

 

As noted sovs smaller and much easier to hide. You can easily split them up so unless someone knows how many you've got once they've found some they'll leave.

Sovs haircut by theft

Shares risk loss of capital via bankruptcy / share value

Money loss of value via inflation or bank bail ins

Property high taxes or price crash

No matter what you hold you risk losing it.

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12 hours ago, simon49 said:

National savings for me. 100 %  of your savings are safe, but the interest rates are lower than most others pay, but if safety is what your looking for in cash, then that's the best option.  Premium bonds are ok, but your limited to £50,000 max.  When the ship goes down, and bargains are to be had with cash, you need to be able to get your money out without delay or hassle. I could picture high street banks limiting withdrawals just when you need it.

Thats a very good point Simon about getting at your cash when the market melts down.Id by buying US treasuries now (TLT) that will become the most liquid market during a deflationary collapse,but i think the £ is going to keep going up against the $ into the summer so i only have a few yet.I also think gold will have a nice rise as will the miners into the summer before big falls.Il be selling in the summer whatever price and moving into cash/TLT.TLT with cash in my ISA,national savings whats outside.Im 100% sure the central banks will print to cover all deposits up to the protected levels though.Highly likely the bond/equity holders will suffer a capital wipe out,or at best a big bail in.The huge debt on the financial system is going.I think it will be through massive default (alongside massive wealth destruction in the collapse) followed by the rest inflated away during the huge reflation cycle that kicks in after the printing to come.

The ironic thing is if it does play out,the stocks hit hardest in the collapse (miners,including gold miners/energy/all commods) will be the biggest winners in a reflation cycle.In reflation cycles a lot of PE ratios etc contract slowly,the shares go down hugely in real terms over the cycle because interest rates are going up chasing inflation higher.Interesting times ahead.

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I am mostly in stocks (UK and international) but have been allowing cash to build up. Hopefully I will get a chance to use the cash to buy stocks (sooner rather than later).

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I'm worried by Premium Bonds, in that in the Terms & Conditions it says that the Treasury/Government reserve the right to change any and/or all terms/conditions at any time with almost no warning. This would mean that in the event of an emergency they could suspend withdrawals, stop prizes, lower valuations - basically anything they can think up.

Significant counter-party risk.

Edited by Errol

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3 hours ago, Errol said:

I'm worried by Premium Bonds, in that in the Terms & Conditions it says that the Treasury/Government reserve the right to change any and/or all terms/conditions at any time with almost no warning. This would mean that in the event of an emergency they could suspend withdrawals, stop prizes, lower valuations - basically anything they can think up.

Significant counter-party risk.

Well, that's the government. 

Quote

The doctrine of parliamentary supremacy may be summarized in three points:

  • Parliament can make laws concerning anything.
  • No Parliament can bind a future parliament (that is, it cannot pass a law that cannot be changed or reversed by a future Parliament).
  • A valid Act of Parliament cannot be questioned by the court. Parliament is the supreme lawmaker.

(from wikipedia: https://en.wikipedia.org/wiki/Parliamentary_sovereignty)

They can do anything. We live in adapted absolute monarchy which has handed power from the monarch to the government.

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