Counter-Party Risk is a subject we’ve addressed many times in the past…especially in our “…In Plain English” newsletter.
In its simplest form, counter-party risk is the risk of owning something (stocks, bonds, real estate, etc.) that has someone or something that has a “counter party” associated with it.
Example: When you own a stock or bond, you bear the risk of the issuer of that stock/bond to make good on that promise/piece of paper.
If a company or municipality goes bankrupt, you stand to lose all of your money/ownership of said company/municipality.
Thus, the term Counter Party Risk.
With very few exceptions in today’s world there’s a counter party risk when you invest in something.
The exceptions are Gold and Silver.
I’m talking about physical Gold/Silver i.e. Coins, Bars, Bullion etc. and NOT paper gold.
You see, paper gold – like gold mining stocks – have the same the risk of the counter party making good on their promise to pay you.
We have a special report on our website: Gold, If You Don’t Hold it, You Don’t Own it.
It’s FREE and I encourage you to read it (HERE)…especially if you’re thinking of buying gold and silver.
The point being you MUST take physical possession of any gold or silver you buy.
Once you own it, no one else knows you have it. Unless, of course, you tell them.
There’s no paper trail or monthly statements showing you how much it’s worth. And it keeps away the prying eyes of a desperate government in search of taxes.
You might ask, what if the government confiscates gold like they did in 1933?
First, back then very few people owned gold – unlike today where it’s estimated that there’s 15-20 tons of gold in the hands of Chinese citizens alone. Second, it was a voluntary surrender and undoubtedly there were many people who didn’t part with it.
The real problem with gold today is there’s coming a time soon when you go to buy it, there may not be any available…at any price.
Get up to speed with this by reading our tips and reasons “Why You Need to Own Gold NOW!” in our monthly newsletter.
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