A hundred-ounce gold bar, when you hold it in your hand, is surprisingly small and even more surprisingly heavy. It’s somewhat longer and fatter than a Hershey bar, but it weighs six-plus pounds—as much as your old calculus textbook. Its color is unforgettable. Pure gold is gold. It’s not like your wedding ring or your grandmother’s bracelet. It’s a deep, dense yellow, the way the ocean is deep blue, and it sparkles. You can understand at last why the Bible says the streets of heaven are paved with it.
On the day I held the gold bar in my hand, it was worth nearly $100,000. My companion—an established, accomplished, affluent businessman of retirement age—had bought it as a hedge against the sinking Dow and his fear that Obama’s stimulus package will inevitably trigger wild inflation. We had picked it up in the basement of an HSBC bank branch in midtown Manhattan. When I handed it back to him, he put it in his briefcase. We went upstairs, past guards, through metal doors. Out on the street, we said goodbye and I watched him go, a tall, thin man carrying a $100,000 briefcase. He doesn’t want me to tell you his name—or, really, anything about him—because he’s keeping the gold in a safe in his basement. His friends, he says, are doing the same thing. “There is an increase in the number of wise, reasonable, well-read, well-intentioned people who are buying some gold and putting it aside,” says Dennis Gartman, editor of The Gartman Letter, a daily analysis of financial news.
John Wynocker, a hydraulics inspector, lives in Cincinnati and has been buying gold and silver coins and bars for 15 years, but since the passage of Obama’s stimulus bill, he has been motivated to buy more. He is hiding the precious metal in places where not even he can find it, he jokes. Are you burying it? I ask. “Perhaps,” he says. “Our country is so far in debt, it’s staggering. I’d like to retire someday. What else am I going to do to protect myself?”
Is this madness? Here is a respectable and buttoned-down suburbanite, behaving like an end-of-the world paranoiac. Here is Wynocker, a working man, trying to get a grip on his own financial future with a shovel. The price of gold is near an alltime high—it topped $1,000 an ounce on March 13—yet the number of Americans who are taking delivery of gold coins and bars is rising. According to the World Gold Council, Americans bought 600 tons of gold bars and coins in 2008, a 42 percent increase over 2007. That’s not as much as in Europe, where gold mania has become epidemic—but significant given the metal’s high price. An uptick in the U.S. economy, and buyers are likely to find they’ve been part of a giant, golden bubble.