Why I Own Physical Gold

There is a particular kind of clarity that comes from holding a gold coin in your hand. It is dense, surprisingly so — a one-ounce American Eagle carries a weight that seems disproportionate to its size. And in that weight, you can feel something that no digital asset, no paper certificate, no financial instrument can replicate: the tangible reality of stored value.

I have spent years studying markets, currencies, and the mechanisms by which wealth is created and destroyed. And after all that study, I keep returning to the same conclusion: physical gold ownership is not just a hedge — it is a philosophical statement about the nature of money itself.

The Case Against Infinite Money

The fundamental problem with modern currency is that there is no natural limit to its creation. Since the final abandonment of the gold standard in 1971, the U.S. dollar — and by extension, most global currencies — has been backed by nothing more than institutional trust and government decree.

This is not inherently catastrophic. Fiat systems can function well for extended periods. But they carry within them a structural temptation that has proven, historically, to be irresistible: the ability to create money from nothing to solve short-term political problems.

“Gold is money. Everything else is credit.”

J.P. Morgan, testimony to Congress, 1912

Consider the numbers. In 2020 alone, approximately 23% of all U.S. dollars in existence were created in a single year. The M2 money supply expanded from roughly $15.4 trillion to $19.1 trillion. This was not an aberration — it was an acceleration of a trend that has been building for decades.

Why Physical Over Paper

You can gain exposure to gold through ETFs, futures contracts, mining stocks, or digital gold platforms. Each has its uses. But none of them are gold.

An ETF share is a claim on gold held by a custodian, subject to counterparty risk, management decisions, and the solvency of the institutions involved. A futures contract is a promise. A mining stock is an equity in a company that happens to dig gold out of the ground, subject to management risk, regulatory risk, and operational risk that have nothing to do with the metal itself.

Physical gold has none of these dependencies. When you own a gold coin or bar, you own it in the most absolute sense that property ownership allows. There is no counterparty. There is no password to remember, no server to maintain, no institution that needs to remain solvent for your asset to retain its value.

The Practical Considerations

Owning physical gold does come with genuine trade-offs that should be acknowledged honestly:

• Storage — You need somewhere secure to keep it. A quality home safe costs $500-2,000. A bank safe deposit box runs $75-300 annually.
• Liquidity — Selling physical gold is slower than selling an ETF. You will face a spread between buy and sell prices, typically 3-5% for common bullion.
• No yield — Gold does not pay dividends or interest. It just sits there, being gold.
• Premiums — You will pay above spot price when buying. Government-minted coins carry premiums of 3-7% over spot.

What Gold Actually Does in a Portfolio

Gold’s role in a portfolio is not to generate returns — it is to reduce the impact of the things you cannot predict. It is portfolio insurance that also happens to preserve purchasing power over very long time horizons.

During the 2008 financial crisis, while the S&P 500 fell 37%, gold rose 5.5%. During the COVID crash of March 2020, gold initially fell with everything else but recovered within weeks and went on to reach all-time highs.

But it is the one asset that has maintained its purchasing power across millennia, across civilizations, across every political and economic system humanity has devised. An ounce of gold bought a fine toga in Roman times. Today, it buys a fine suit. That consistency over 2,000+ years is not a coincidence.