by Simon Black, Sovereign Man:

In early May in the year 878 AD, Alfred the Great of the Kingdom of Wessex fought a decisive battle against a massive Viking army at a place called Ethandun in southwest England.

Alfred won the battle, defeated the Vikings, recaptured London, and united England under his rule; he’s generally considered to be the first King of England.

One of his first orders of business was to mint silver coins so that his newly unified kingdom would have a common currency.

More than 11 centuries later, the Royal Mint still produces all the coinage for the United Kingdom, including the “Sovereign” gold coins.

And just a few weeks ago, the mint announced that they were planning to launch a new gold ETF in response to rising demand from investors who want to own precious metals.

I wrote to you about this a few weeks ago; with all due respect to the Royal Mint, gold and silver ETFs are just a BAD idea.

Specifically, the Royal Mint’s plan is to launch a fairly complex exchange-traded debt instrument that is backed by gold stored in their vaults.

This is purely a financial product that defeats the entire purpose of owning gold to begin with. Why turn one of the best, longest-standing physical assets in the history of the world into a paper asset?

With this type of debt instrument, you don’t actually own the gold yourself. You become a creditor with nothing more than a claim on someone else’s gold.

And this is the nature of pretty much any gold ETF.

If you want to see for yourself, go buy some shares of a major gold ETF, then ring up their Wall Street office and tell them to send your portion of the gold to your house… and see how that conversation works out for you.

There’s really no substitute for owning physical gold; you can buy a safe for very little money, and store gold in your home without having to pay some investment banker any unnecessary fees.

This is an easy way to store a LOT of wealth outside of the financial system… and that’s an idea that everyone ought to consider.

Most people hold their savings in bank or brokerage accounts, both of which can be quickly frozen by countless government agencies with nothing more than a phone call to your financial institution.

This happens every single day to innocent people who have never done anything wrong in their lives.

I’ve written a lot over the years about Civil Asset Forfeiture in the Land of the Free— cases where government agencies unjustly seized funds from innocent people without any due process whatsoever.

And these days, banks themselves are just as menacing.

Banks routinely freeze their customers’ accounts because they find completely normal, harmless transactions to be ‘suspicious’.

The culture of compliance among banks today is so extreme that they adopt a ‘guilty until proven innocent’ mentality to every single transaction, treating their depositors like criminal suspects instead of valued customers.

You’d have to be insane to keep 100% of your savings trapped in this kind of financial system where you be so easily separated from your funds.

And one easy alternative is keeping some gold stored in your safe.

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