Storing silver in non-fungible storage (allocated storage) at a bank or dealer might have the following disadvantages:

  • Disasters: The items stored in non-fungible storage (allocated storage), silver included, are normally not insured against floods, fires, robberies or similar disasters.

  • Accessibility: If you store your silver in non-fungible storage (allocated storage) at a bank or dealer it might not always be accessible, especially during holidays or after office hours. In fact, even in instances where your silver is accessible 24/7 when stored in non-fungible storage (allocated storage), it’s normally only accessible after successfully passing various security tests (correct signature, correct key, correct code, etc.). Now more than one silver investor or holder of silver might not have a problem going through the security tests each time they want to access their silver, but for some it might be downright annoying.   
  • Silver confiscation – By storing your silver in non-fungible storage (allocated storage) at a bank or dealer you increase the risk of government confiscation of your silver at least tenfold. The reason being is because it will be much easier for a hostile government to confiscate the silver of 5000 or more people pooled together at a bank or dealer than the silver of 5 million people spread out in 5 million or more homes. E.g. no less than 7000 safe deposit boxes were confiscated when over 300 heavily armed police raided the vaults owned by Safe Deposit Centres Ltd in the UK in June 2008.

  • More expensive than fungible storage (unallocated storage): Non-fungible storage (allocated storage) is normally more expensive than fungible storage (unallocated storage), but the risks attached to fungible storage (unallocated storage) simply make it worthwhile to pay a premium for non-fungible storage (allocated storage).
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