Critics are quick to point out that very few places accept gold as payment, or that dividing a gold bar into pieces is no easy task, but advancements are being made in the gold industry. In order to offer gold holders more flexibility, Swiss refinery Valcambi has been selling 50-gram gold bars that can easily be broken down into one-gram pieces. The product is called CombiBar and is roughly the size of a credit card. Wealthy private investors in Switzerland, Austria and Germany who are worried about the worldwide financial system have been purchasing the CombiBar. Valcambi also wants to bring the product to the United States and India, the world’s largest consumer of gold.
Michael Mesaric, chief executive officer of Valcambi, explains, “The rich are buying standard bars or have deposits of physical gold. People that have less money are buying up to 100 grams. But for many people, a pure investment product is no longer enough. They want to be able to do something with the precious metal,” according to the Daily Mail. He adds that the CombiBar “can be used as an alternative method of payment.” The CombiBar is also available in silver.
Gold is not widely accepted as payment, but the CombiBar adds another function to the precious metal. Furthermore, there are plenty of other reasons to diversify a portfolio with gold. In case you did not notice, the world is awash in debt and central banks believe they can solve every problem with more money printing. Recently, the United States had a chance to deal with its fiscal situation in a serious manner, but once again avoided any hard decisions.
Late Tuesday, Congress passed a bill to “solve” the “fiscal cliff” plunge by raising taxes on high earners and allowing the payroll tax cut to expire. Spending cuts were next to zero and the Congressional Budget Office said the bill will increase budget deficits by almost $4 trillion over the next 10 years. With little change being made by governments and central banks, it is hard to believe that the historic bull market in precious metals will not continue in the coming years.
Investor Insight: Currency Wars Expand Their Battlefield
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Disclosure: Long EXK, AG, HL, PHYS