Updated: Jul 1
Vincent van Wijgerden is Sr. Tax Consultant and co-founder of GVN International Tax Services.
He has a degree in Tax Law (with focus on International Tax Law) from the University of Maastricht and a Masters degree in European Law from Leiden University. He has over 10 years of work experience in the field of taxation.
Vincent started his career working for thede Belastingdienst(Dutch Tax Authorities). Subsequently he worked forKPMG Meijburgas expatriate tax consultant and forVan der Bend Tax consultantsas expatriate and company tax consultant.
In addition to his work at GVN International Tax Services, Vincent is also lecturer in (International)Tax Law at the Erasmus University Rotterdam. He has co-authored a book containing selected texts of international tax treaties for expatriate tax consultants.
【作者介绍】 Vincent Van Wijgerden - 荷兰国际税务服务公司的高级税务顾问 他在马斯特里赫特大学学习（国际）税法，在莱顿大学学习欧洲法律，拥有逾10年税法经验。 Vincent在国税局开始了他的职业生涯， 随后，他在毕马威担任外籍人士的税务顾问，Vincent也在鹿特丹Erasmus大学教授国内和国际税法。 他在为雇主申请和应用30％税务计划提供咨询方面拥有丰富经验，并就跨境劳工、裁员支付和养老金的工资税和所得税方面向雇主和个人提供咨询
Intro and context
The Western stock markets are plunging as a consequence of the Covid-19 pandemic. The virus might have been the needle that popped the "everything bubble". A black swan! The collapse is long overdue. Monetary policies and low/zero/negative interest rates by Central Banks have made false prices everywhere. Stock markets had been levitating in euphoria for too long. There had just been more of the same since the 2008 crisis. But the longer they keep the system alive by kicking the can down the road, the more the pendulum will come back with a vengeance. Now we will see how the next stages of this collapse are unfolding as the Fed and the ECB have just opened up the monetary floodgates.
由于Covid-19新冠肺炎大流行，西方股市正在暴跌。该病毒可能是戳破“一切泡沫”的针头。典型的黑天鹅效应！崩溃是早就该来了。中央银行的货币政策和低/零/负利率使到处都是虚假的价格。股市兴高采烈已经太久了。自2008年危机以来，情况有所不同。 但是他们通过逃避拖延使系统保持活力的时间越长，摆锤就会越有报仇性地回来。 现在我们将看到随着美联储和欧洲央行刚刚打开货币闸门，这种崩溃的下一阶段将如何展开。
But do not panic! On the long run, gold is the perfect diversification tool to protect the value of your portfolio in case of such events like a stock market crash. But not only. Gold is the perfect way of hedging other asset classes. Especially through times of uncertainty and aggravated risk.
但是不要惊慌！从长远来看，黄金是一种完美的多元化工具，可以在股市崩盘等情况下保护您的投资组合的价值。 但不仅如此。 黄金是对冲其他资产类别的理想方式。 特别是在不确定性和高风险时期。
Yes, the price of gold has been going down since the beginning of the crash but make no mistake here. Gold in euros has peaked at €1561 on February 24th and dropped at €1301 on March 16th (-19.9%). Investors who are exposed on the stock markets have to sell liquid assets like gold to meet margin calls and are hunting for cash to cover market losses. This is a paper gold sell off by the weak hands mainly! Wait for the dust to settle and strong hands will have good entry point to initiate a long term physical gold position. From €1301 on March 16th, gold has peaked at €1502 on March 24th (+15,4%).
是的，自崩溃开始以来，黄金价格一直在下跌，但请不要误解。 欧元黄金价格在2月24日达到最高峰1561欧元，在3月16日下降到1301欧元（-19.9％）。 暴露在股市中的投资者必须出售黄金之类的流动资产以满足追加保证金的要求，并在寻求现金以弥补市场损失。这主要是纸黄金被弱手抛售！等待尘埃落定，强手将有很好的切入点，开始建立长期的实物黄金仓位。 从3月16日的1301欧元起，黄金在3月24日达到最高价1502欧元（+ 15.4％）。
The VIX (fear index) is still high. It means that the market remains uncertain. Thus, yes, gold can drop more on short-term. The strong hands will wait for the dust to settle before going back in and buy some more. For they will take advantage of this opportunity that might be the last at these price levels.
VIX（恐惧指数）仍然很高。这意味着实体仍然不确定。因此，是的，黄金短期内可能会下跌更多。 强手将等待尘埃落定，然后再购买一些。 因为他们将利用这个机会，这可能是这些价格水平的最后机会。
The physical market remains strong, the demand is growing. We will observe more and more disconnection between paper and physical markets. Some bullion dealers are reporting higher premiums and delayed order fulfilment already.
Definitely gold is an asset to own in your long term portfolio. That is for sure! You can use the lockdown to prepare your ammunitions and be ready to fire up when windows of opportunity occur.
黄金绝对是您长期投资组合中的资产。 那是肯定的！ 您可以使用锁定来准备弹药，并准备在机会窗口出现时发射。
Why Gold in the first place?
Gold is a real asset. It has an intrinsic value due to its substance and properties. Like oil or real estate for instance. Real assets provide portfolio diversification, as they often move in opposite directions to financial assets like stocks. Yes you will have storage fees to pay but you will be happy to do so for this is a cheap price for enjoying safety and peace of mind.
黄金是一种真正的资产。 由于其实质和特性，它具有内在价值。 例如石油或房地产。 实物资产提供投资组合多元化，因为它们通常跟股票等金融资产向相反的方向发展。 是的，您需要支付仓储费，但是您会很乐意这样做，因为这是享受安全与省心的便宜价格。
Gold is a safe haven. A safe haven protects investors against a possible catastrophe. That's why many investors buy gold during a financial crisis. They seek protection against an economic collapse. As a result of extreme economic uncertainty, gold prices went from $869.75 in 2008 to a record high of $1,920 in September 2011.
黄金是避风港。 安全港可保护投资者免遭可能的灾难。 这就是为什么许多投资者在金融危机期间购买黄金的原因。他们寻求保护以防止经济崩溃。由于极端的经济不确定性，黄金价格从2008年的869.75美元升至2011年9月的记录高点1,920美元。
Gold is a hedge against inflation. Inflation is often understood as being the rise of the prices of goods and services over time. However, this is actually the symptom of inflation. Inflation is the expansion of the money supply. Now we can say currency supply because all the currencies in the world today are fiat and there is no sound paper money anymore. Only fiat currencies! Backed by nothing and that can be printed out of thin air.
This incredible expansion of the money supply has leaked into world economies resulting in price inflation. QE has created asset bubbles in the property market. This is why we continue to see rising prices in goods and services. Unfortunately our incomes do not rise in tandem.
Precious metals preserve purchasing power over long periods of time. When measured against gold, the prices of commodities such as oil are relatively stable. It is a different story if denominated in a fiat currency like the US dollar.
We are tempted to say that gold became more expensive over the years. The thing is you now need more units of fiat currency to buy the same amount of gold. The value of the fiat currency has depreciated significantly over time.
Adjusted to inflation, the price of gold did not reach his previous peak in US dollars from 1980.
Ultimately money printing (QE) will ruin the trust in US dollar and other paper currencies. Even more currency will chase the same amounts of goods and services thus lowering the value of the currency itself. When the people will become aware of that, they will get rid of their currency as fast as they can. The velocity of the currency will grow generating inflation and hyperinflation eventually when the trust in the currency is lost. Then you will want to own physical gold. To secure the value of your wealth on the long run.
"Paper money eventually returns to its intrinsic value -- zero." (Voltaire)
Gold has no/less counterparty risk. One of the beauties of gold is that it has no counterparty risk. Except when someone touches it. This can happen in:
黄金没有/没有较少交易对手风险。 黄金的优点之一是它没有交易对手风险。 除了有人触碰时。 这可能发生在：
- Physical storage. If one stores the gold at home, the ‘counterparty’ one needs to be concerned about is burglars. The same applies in a bank deposit box or specialized gold custodian. Insurance might alleviate that concern, but keep in mind that the insurance company is also a counterparty risk. Some people might choose to not insure their gold opting for an increased level of discretion. And some might choose to take this small calculated risk anyway because the risk is just simply bigger anywhere else.
-物理存储。 如果有人在家中存放黄金，则需要考虑的“对手”就是防盗。 银行存款箱或专门的黄金托管人也是如此。保险可以减轻这种担忧，但请记住，保险公司也是交易对手的风险。有些人可能选择不为自己的黄金投保，而是选择一种更高级别的自由度。而且有些人可能还是选择承担这个小的计算过的风险，因为其他任何地方的风险只是更大。
- Allocated versus Unallocated. Financial institutions in the business of storing gold differentiate between holding gold on an allocated or unallocated basis. Allocated means it is segregated, held on behalf of the client; in the event of a default of the custodian, the gold still belongs to the beneficial owner. In contrast, unallocated gold, also referred to as paper gold, is merely a claim against the assets of the institution. Be sure to own segregated physical gold as an insurance that will go up in value at the peak of the crisis. Paper gold serves price speculation purposes only.
Gold is the one and only money. As we explained earlier, central banks cannot print gold. Today all currencies in the world are fiat and can be printed out of thin air. Gold is a protection against the currency wars, devaluation and ultimately monetary crisis. The big reset of our monetary system is coming. No reserve currency last forever!
黄金是唯一的货币。正如我们之前所解释的，中央银行无法印制黄金。今天，世界上所有货币都是法定货币，可以凭空印刷。黄金是针对货币战争，贬值以及最终的货币危机的保护。 我们的货币体系将大复位。 没有储备货币会永远持续下去！
And if the Fed and the ECB do as they say like "doing whatever they can" to save the system, this will mean unlimited currency printing. Now we know how this ends up anyway. Weimar Republic, Argentina, Zimbabwe... you name it. Loss of confidence and hyperinflation!
Gold is a liquid asset. It can easily be converted to cold cash in your pocket without losing substantial value in the conversion (unlike real estate). Owning the right products that are recognized in many parts of the world will allow you to sell your gold easily. You can use gold to store your wealth in a different jurisdiction than the one you lives in.
Gold can be used as collateral. For many decades, gold was the reserve currency in the global monetary system. When the gold standard was ended, gold’s role as money and collateral faded over time. However, since the Great Recession, gold is increasingly being used as collateral around the world. For example, the new capital requirements implemented by Basel III enhanced the role of gold as collateral. It should not be surprising, given its role as a monetary asset. Indeed, gold is a high-quality and liquid asset. Importantly, the gold market is highly liquid across time zones.
In other words, contrary to common beliefs that gold is not a productive asset, it may be used as collateral, as well as being lent and borrowed. The cost of borrowing gold is the gold lease rate, while the interest rate on a U.S. dollar loan secured by gold as collateral is called the gold forward offered rate.
Also, in 2011, J.P. Morgan Chase & Co. said it will allow clients to use the metal as collateral in some transactions. For example, a hedge fund wanting to borrow money for a short period can put up gold as collateral and use the borrowings to invest elsewhere, betting on making a better return.
此外，摩根大通公司（J.P. Morgan Chase＆Co.）在2011年表示，将允许客户在某些交易中使用这种金属作为抵押。例如，一家想在短期内借钱的对冲基金可以拿出黄金作为抵押品，并利用这些借贷投资到其他地方，以期获得更好的回报。
Another example is the use of gold as a collateral for securing P2P loans. To borrow, you need metals in storage as collateral. For example, the lender’s funds are secured at a 2:1 ratio by the borrower’s metals. So the borrower can use its metal to get up to 50% of its value in cash. The metal is stored within a fully controlled and owned vault and no middleman involved.
Now you can see more clearly why gold is an asset to own. Gold is the best insurance for your portfolio. It is a great diversification tool. It offers protection against economic, financial and monetary crisis. Gold is the foundation of any sound portfolio. Think of your investment strategy as a pyramid. The larger the base, the lower the risk.
现在，您可以更清楚地了解为什么黄金是值得拥有的资产。黄金是您投资组合的最佳保险。 这是一个很好的多元化工具。 它为抵御经济，金融和货币危机提供了保护。 黄金是任何良好投资组合的基础。 将您的投资策略视为金字塔。 基数越大，风险越低。
Gold is the ultimate insurance with an upside potential. And capital preservation mode must be activated NOW!
Gold for Chinese nationals
Chinese nationals prefer owning real assets over paper assets and this is a smart move indeed. Long term, gold is the No. 1 real asset. It is liquid (easy to buy or sell, not like real estate), fungible (interchangeable, not like real estate), and holds value through a long period of time.
If you are a Chinese national investing or living in the Netherlands, then you are most probably exposed to the euro. Then you have to hedge yourself against a monetary risk. And physical gold is a perfect shield against currency devaluation. Remember all currencies in the world are fiat today.
Hedging is a technique used to reduce risk of adverse price movements in an asset. It is like taking an insurance policy. For example, gold is negatively correlated with stocks. Between 2008 and 2011, gold soared by 86% while the Dow Jones dropped 10%. So you buy gold to hedge against a decline in the price of stocks.
Also you buy gold to hedge against currency devaluation caused by money printing as inflation reduces the purchasing power of each unit of currency.
The graphs below show how gold works as a hedge against currency devaluation by holding its purchasing power.
Here below you can see the price of beer in euro and in gold.
Below is the price of oil in gold and in different currencies. You can see that you need approximately the same amount of gold to buy oil but you need more paper currencies.
As a contractor, you can protect a part of your company's money with gold. Then enjoying a great level of protection and liquidity.
Chinese nationals prefer keeping their wealth out of China once investments have been made and gold is an excellent vehicle to do so. Gold keeps its value, is a liquid and movable asset and now in a fresh upleg of its long term bull market since last May.
Due to capital controls in China, it is more difficult to invest in foreign real estate. So why not considering another real asset like gold that is not overvalued and more liquid.
Apart from regular investing, Chinese companies use the Netherlands as EU hub to set up holding companies for EU subsidiaries. Again these holding companies are exposed to the euro and its monetary risk. A wise move would be to use physical gold to protect a part of long term capital from currency devaluation and overtaxation/capture by the authorities.
If you have enough precious metals to be concerned about government seizure/confiscation or capital controls, you should consider jurisdictional diversification. Storing precious metals abroad makes it much harder for a desperate government to seize them.
The main reason why investors would consider storing precious metals internationally is risk mitigation.
And Switzerland is a sound choice as a storing location. Switzerland is the safest and most secure location to store gold. The alpine nation has a long history of democracy, and it is one of the most decentralized and free political systems in the world. The Swiss have a long history of neutrality. When WW1 and WW2 were ravaging Europe, investors from all over the world moved their assets to Switzerland to keep them safe from government confiscation.
On top of democracy and political stability, the Swiss economy has a special relationship with gold. Switzerland refines around 70% of all the world’s gold, and precious metals are a vital industry the Swiss are incentivized to protect. This makes them less likely to levy punitive taxes on gold or even forbid the hoarding like the United States did in 1933.
Chinese businesses, residents or expatriates can buy gold and store it in Switzerland. Your gold will be out of political reach. It might be wise indeed to not store your shiny metal within political reach (at least not all of it). Maybe you can keep a small portion at hand in case of emergency but if your stack becomes too large when accumulating, it is wise to consider storage in another jurisdiction to mitigate risks of confiscation and over-taxation by desperate governments. Especially if you are now a EU resident. Store out of the EU for EU citizens. Out of the US for US citizens. Out of China for Chinese citizens.
Even if banking secrecy has been shattered in recent years, Switzerland remains one of the best locations to store your physical gold.
Better to buy and store overseas in the first place than having to transport your gold.
Buy gold primarily as a safeguard for the future, and secondly as a profitable investment. If you believe the current economic difficulties will continue down the same road for some time to come, then the gold price is likely to remain high and continue to rise. Even if the price does not matter much eventually, value does!
Do not let the bumpy ride scare you off your golden socks! The most important thing to understand is the necessity to own physical gold as the last asset standing. And to store it out of political reach.
Switzerland is the safest and most secure way to store precious metals because of the country’s democratic political system, long history of neutrality, and economic relationship with precious metals.
The time to develop your physical gold strategy is NOW!