Welcome To The Conversation: Broker Charles Schwab Now Suggesting Gold To Clients & EROI Update

In an interesting change of events, Retail Broker, Charles Schwab is now publicly talking about GOLD investments to their clients.  Financial expert Vic Patane, and I discussed this as well as many other interesting topics.

It seems as if the Financial Advisors missed the boat suggesting gold ownership to their clients when the price moved from $250 to $1,900.  This time around more clients are putting pressure on the Financial Advisors to allow them to include gold in their portfolios.  However, Vic and I discuss how these brokers will likely suggest shares in the GLD ETF rather than physical gold as they don’t make money on putting their clients into real metal.

Furthermore, we discuss the issue of precious metals storage and how many companies are taking a nice CUT of the fee.  We suggest investors educate themselves about the precious metals storage business and find out what they are being charged to store their metal.

Here is an MP3 of the interview:

DOWNLOAD AUDIO TRACK (right-click and Save Link As…)

Also, I add an energy update and describe how the Falling EROI -Energy Returned On Investment is impacting everything today.  I include an interesting example that makes it easy to understand why the Falling EROI is making it harder and harder for the middle class to make a living today.

Here is part of the email Charles Schwab recently sent out about Gold Investing:

A Guide to Investing in Gold

Learn about why gold is considered to be so valuable as well as various vehicles that allow you to hold an interest in gold.

By: Schwab Trading Services

Investors and traders have long held a great fascination with gold. Some of this fascination is no doubt related to the mystique that surrounds the yellow metal. Some of it is also due to the intrinsic value involved in holding a piece of essentially indestructible metal. In any event, due to its unique qualities, gold has long offered investors a one-of-a-kind investment opportunity.

In this guide we will discuss the reasons why this has been, why it remains so, and why gold will remain a unique investment opportunity far into the future. But even more importantly we will also detail a variety of investment vehicles available that can allow you to hold an interest in gold and to participate in bullish and/or bearish price movements in the world’s most renowned precious metal.

The decisions regarding if, when, and how to allocate investment capital to gold are personal ones. The purpose of this guide is not to tell you when or even whether to make such a commitment, nor to tell you which investment vehicle to choose. The goal of this guide is simply to provide you with an understanding of:

1. Reasons why an investment in gold may be right for you.

2. Primary factors that can affect the price of gold.

3. Commonly used investment vehicles for trading gold and their relative advantages and disadvantages.

Lastly, if you haven’t checked out our new PRECIOUS METALS INVESTING section or our new LOWEST COST PRECIOUS METALS STORAGE page, I highly recommend you do.

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10 Comments on "Welcome To The Conversation: Broker Charles Schwab Now Suggesting Gold To Clients & EROI Update"

  1. Great conversation. Particularly appreciated the discussion of why more people just don’t get it because they read or hear some story of a new battery breakthrough or something and lose focus on the enduring problem.

    Thanks,

    SteveW

  2. When you understand the significance of holding physical gold and silver, you buy it first. And after that, you start looking at the options to store it. The warder is not the one to safekeep your out of jail card.

    Very good to hear about this! Schwab is just another matrix paper pusher with short term and short sighted interests, trying to hold up his pants.

  3. One million dollars worth of gold eagles is about 725 of them. How many people have half that much?

    How hard is it to hide a few stashes of coins ONLY YOU AND A SPOUSE know the location of….without using a storage facility THAT CAN NOT ASSURE YOUR COINS’ SAFETY IN A CRISIS THE SIZE THEY HAVE NEVER FACED.

    • The larger the cache the easier it is to locate with detectors so spread it out for security.

      Buy a (more if necessary) 10′ peice of 3 inch PVC cut into 4 equal pieces. On one end of each glue on a solid cap, on the other end an access with screw in plug.cap. Drill a 3/8 inch hole in the middle of the screw in cap. Get 4 cloth bankers bags and put a small amount of your stash in each one. Put the bankers bag in a Ziplock bag. Tie a piece of 3/8″ rope or cordage around the bankers in the ziplock. Cut off the rope so there is 3′ of rope from the knot. Stick the other end of the rope through the screw on cap and tie an overhand knot. Put the bag into the pipe and screw on the plug.

      Rent a posthole digger with a 4″ auger, a big machine not the hand held because you can’t get deep enough. Drill four holes in your property 5 foot deep by a special rock, trees or any other special or different features. Put your PVC pipe canisters in the holes and back fill around the canisters just to their tops.. Find a 4″ rock and place on top of the canisters and backfill with the rest of the dirt from the hole. Dispose of the excess dirt so that is inconspicuous. Try and restore or camouflage the hole. Take a picture of your spouse or dog or whatever and the special feature. This will allow you or your descendants to locate your stash.

      If you don’t hold it, you don’t own it.

      Buy for cash and stash (see above).

      SteveW

  4. Hey Steve,

    You’ve probably read this below article before and you already know how this works – but I found this author’s work does a good job of explaining the concepts you have been teaching for years now regarding peak cheap energy (oil). A lot of people think that Peak oil is a myth because they don’t understand how it actually works, in fact a big part of this poor understanding is because economists themselves got it wrong:

    “In the early 2000s, the story that Peak Oilers came up with (or perhaps the way it was interpreted in the press) was that the world was “running out” of conventional oil, and that this would lead to all kinds of problems.”

    “the limit on oil supply is not the amount of oil in the ground; instead, it is how high oil prices can rise, without causing serious recession.”

    “Eventually, this oversupply problem is likely to result in “mother nature” cutting off oil production in whatever way it sees fit–oil prices dropping to close to zero, bankruptcies of oil companies, or collapses of oil exporters. With lower oil supply, we can expect recession.” [DEPRESSION]

    https://ourfiniteworld.com/2016/08/08/an-updated-version-of-the-peak-oil-story/

    Keep up the good work!

  5. Regarding your wealth, don’t keep it all in one place. Don’t keep it all in financial instruments that you can only point to on the screen, don’t keep everything in a single brokerage. don’t keep all your gold at home, don’t keep all your investments in one country, don’t just bet long – if you can’t identify an overpriced item, what makes you think you can identify the underpriced ones you own? Don’t invest in one currency. Don’t invest in one metal. Don’t have everything in one city or state.

    Spread everything out.

  6. “However, Vic and I discuss how these brokers will likely suggest shares in the GLD ETF rather than physical gold as they don’t make money on putting their clients into real metal.”

    I’ve been trying to do my due diligence into the SPDR Gold Trust (GLD). Anyone know why there is a clause in the GLD prospectus that states GLD has no right to audit subcustodial gold holdings? Why would the organizations behind GLD forfeit this right and create such a glaring audit loophole? I have not heard a single good reason for the existence of this loophole thus far. It also doesn’t help that GLD claims to be fully backed by physical gold bullion but yet it refuses to give retail investors the right to redeem for any of these ‘claimed’ gold bullion. There are a number of other red flags as well from what I’m reading:

    “Did anyone try calling the GLD hotline at (866) 320 4053 in search of numerical details on GLD’s insurance? The prospectus vaguely states “The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody.” When I asked about how much of the gold was insured, the representative proceeded to act as if he didn’t know and said they were just the “marketing agent” for GLD. What kind of marketing agent would not know such basic information about a product they are marketing? It seems like they are deliberately hiding information from investors.

    I remember there was a well documented visit by CNBC’s Bob Pisani to GLD’s gold vault. This visit was organized by GLD’s management to prove the existence of GLD’s gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this “GLD” bar was actually owned by ETF Securities.”

  7. Same procedure every month.Yellen said something about the interest rate and said(what a suprise) nothing.

    Who and how can this monthly soap be stopped?

    • That’s why they invented fiat currencies and central banks. To postpone the inevitable.

      Our banquet of consequences however, will have very few chairs.

      Bon appetit!

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