Banks are known to be custodians of the people’s wealth in exchange for a small interest we get from them. In return for this, the banks are allowed to use our money to lend to other people or institutions who want to borrow, and they would in return earn interest from these borrowers. If you think about it, it’s quite a useful system wherein all parties benefit from each one’s role. Banks are also used for paying or transferring money to such things as public utilities, rent or mortgage, and insurance. This just shows how unavoidable banks are in our day to day lives, and we are able to utilize and save our wealth using them with the peace of mind that they will be keeping our wealth safe always.
Cash is King
While some people prefer to keep their money in banks, there are also those who believe that cash is better used in transactions than credit or other financial instruments. These are those individuals who would like to keep a more direct track of their spending. There’s nothing wrong with this at all, as there are some very advanced and rich economies in the world, such as Germany, who still use cash largely in their day to day operations. All in all, this boils down to personal preference and spending habits. However, one should also look at the risks of keeping cash, especially large amounts of it, on one’s person or property – these are big baits for thieves, and could all burn down or be washed away in the event of an accident or emergency.
Gold has always been a physical asset since ancient times which has contained intrinsic value. This means that the gold bar or coin itself has value due to its physical properties and is not symbolic of anything else, unlike cash or credit. Gold has many benefits that make it an investment platform of choice for many individuals and especially organizations. Gold is scarce, and its rate of discovery has allowed it to become a widely accepted currency and material asset. Essentially, gold locked away in a vault, or kept under a person’s care, is a way to remove one’s wealth from circulation, free from the risks of the financial and economic markets. Add to that the value of gold is rising over time due to its mining reserves worldwide continually decreasing and slowing down. This is why gold is deemed a “safe haven” asset.
Gold in Banks
If banks were a secure way to place one’s wealth in, then banks carrying gold would be the next logical step for things to happen. In fact, physical gold investments have been touted as an excellent way to balance one’s portfolio. Risk is low with this commodity, and the only thing one would need to worry about is the gold bullion, bars, or coins being lost themselves. This is where banks come in again, besides allowing for the sale of gold, they could also provide for its safekeeping. After all, there are fewer safer places in a city besides inside a bank’s vault. The bank could charge interest or a maintenance fee in exchange for this, and both the consumer and the banks would profit from this setup. Insurance would also be covered by the financial authorities in the case of extraordinary circumstances, just like any money, you would have in banks themselves. Gold bars are becoming more and more an attractive and low-risk method of preserving one’s wealth, and banks should be able to provide everyone with the means to purchase them, as well as to store and secure them for all consumers.