Tag Archives: currency

Abstract
It is puzzling to many world investors that the largest economy in history (at least for a few more years), a confident nation of unrivaled military power and respected for its bold entrepreneurial spirit, has been hesitant to embrace physical gold as a component of allocations of institutional and personal wealth. After all, physical gold has been the most enduring symbol of affluence through the ages, and the role of the metal in stabilizing portfolios by reducing risk has been convincingly documented and reaffirmed over many years. This paper examines seven compelling reasons for the paradoxical paucity of gold demand in the US for investment purposes. These arguments attempt to explain why American individuals and institutions invest an amount in gold and other precious metals that is far smaller than their own financial experts consider to be ideal.
The research concludes that a portion of the reluctance to hold gold is based on culture, some on politics, and some on a lack of appealing investment alternatives in the precious metals space. The essay accentuates the absence of a long cultural tradition of holding physical gold, the fear of repetition of the confiscation of gold that occurred in the nineteen-thirties, and the clunky nature of existing physical gold products compared to the sleek securitized versions. The recent development of more convenient and flexible ways of holding gold bullion represents a gold solution that overcomes most of the persistent hesitation of US investors to own tangible precious metal. The giant need not be reluctant anymore. Continue reading →