Submitted by Mark O’Byrne – GoldCore
One of America’s largest companies is preparing for problems in the banking and financial system and another financial crisis.
Online retail giant Overstock.com (OSTK), publicly stated that the company has stockpiled gold and silver coins in preparation for another U.S. financial crisis. Patrick Byrne, its founder and chief executive, is a libertarian who champions crypto currencies, bitcoin and gold and silver bullion as financial insurance against risk in the financial and monetary system.
Overstock Chairman, Jonathan Johnson recently told an audience at the United Precious Metals Association (via Casey Research):
“We are not big fans of Wall Street and we don’t trust them. We foresaw the financial crisis, we fought against the financial crisis that happened in 2008; we don’t trust the banks still and we foresee that with QE3, and QE4 and QE n that at some point there is going to be another significant financial crisis.”
Quantitative easing (QE) is when central banks create billions and trillions worth of fiat currency out of thin air and inject it into the financial system rising currency debasement and inflation in the long term.
Johnson went on to explain the company’s preparations:
“So what do we do as a business so that we would be prepared when that happens? One thing that we do that is fairly unique: we have about $10 million in gold, mostly the small button-sized coins, that we keep outside of the banking system. We expect that when there is a financial crisis there will be a banking holiday. I don’t know if it will be two days, or two weeks, or two months. We have $10 million in gold and silver in denominations small enough that we can use for payroll. We want to be able to keep our employees paid, safe, and our site up and running during a financial crisis.
We also happen to have three months of food supply for every employee that we can live on.”
A further insight into the company’s preparations for a crisis can be seen in the company’s latest 10-Q filed with the SEC:
“Our precious metals consisted of $6.3 million in gold and $4.6 million in silver at June 30, 2015 and December 31, 2014. We store our precious metals at an off-site secure facility. Because these assets consist of actual precious metals, rather than financial instruments, we account for them as a cost method investment initially recorded at cost (including transaction fees) and then adjusted to the lower of cost or market based on an average unit cost”.
Johnson, Overstock’s anti-establishment chairman, told theFinancial Times it holds the bullion coins outside the banking system so the company could pay employees even if banks close for a period of time in a crisis – as was seen in Cyprus and Greece in recent months:
“We thought there’s a decent chance that there could be a banking holiday at some point caused by a crisis and it could last for two days or two weeks or who knows how long, and we wanted to be in a position where we could continue to operate during any such crisis,” he said.
GoldCore is advising companies internationally to allocate capital to gold and silver bullion as a way to diversify their assets. This is prudent given the risks of today and need for financial insurance to protect against bank bail-ins, capital controls, “bank holidays”, currency debasement and other risks posed by another financial crisis