Overstock Chairman Stockpiles $10 Million in Gold for Financial Crisis

overstock johnson goldOverstock.com is not your average corporation. They have been ahead of the curve on a number of issues and were one of the first major online retailers to accept Bitcoin. Chairman Jonathan Johnson is an intelligent and interesting individual to study. He is a vocal opponent of the fiat monetary system, advocate for State’s rights, believes the Federal government has too much power and doesn’t trust the banks.

He joins the long list of successful individuals that are concerned about the sustainability of the current monetary system and he recently announced his candidacy for governor of Utah. The State of Utah is one of only a handful of states to make gold and silver legal tender. They did so in 2012.

In a recent interview, Mr. Johnson told the audience at the United Precious Metals Association (UPMA) that Overstock.com has stockpiled $10 million in gold outside of the banking system. He believes there will be another significant financial crisis with bank runs and wants his company to be able to access funds, pay employees and keep the business running.

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.

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 2 days, or 2 weeks, or 2 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.

He also talks about creating a depository for gold and silver that can be linked to a form of payment card, so that people can spend smaller denominations easily. This is precisely what GoldMoney Inc (CVE: XAU) is doing. We wrote about the stock shortly after they were listed and still believe it is a sound  investment. The share price is up nearly 50% in the past month, after correcting sharply over the Summer.

Many people will ridicule these steps from the Chairman of Overstock.com, but he will end up having the last laugh. And in the meantime, he is likely to gain a number of new customers whose principles are aligned with his own. Voting with your money is vastly more impactful than ticking a box on a Diebold voting machine.

ZH broke the story and one commenter chimed in: Something of a dying breed… A CEO that actually considers the well-being of his employees and makes tangible plans to ensure their safety in event of a crisis… A far cry from the usual wall-street types that would lay-off employees, liquidate assets and buy back shares… Kudos… 

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The Federal Reserve left rates unchanged today, again. We have long forecasted that the FED would not be able to raise rates as early or aggressively as most people were expecting. Precious metals have been rallying over the past few months and were up strongly again this morning, before correcting a bit after the FED decision was announced. In our current backwards bizzaro financial world, the FED leaving interest rates unchanged instead of raising them, has caused the USD to spike higher and gold to decline. This is the new normal and this type of knee-jerk reaction is usually followed by a move in the opposite direction in the following days.

At any rate, we remain bullish on precious metals and believe this is an excellent time to be accumulating both physical bullion and undervalued mining stocks. You can view all of our stock picks and research by becoming a premium member here.

The following 10-minute video highlights Mr. Johnson’s comments at the UPMA event:

By | 2017-03-23T14:06:14+00:00 October 28th, 2015|Gold & Silver Commentary|

About the Author:

Jason Hamlin is the founder of Gold Stock Bull and has been investing in precious metals for over 20 years. Jason spent nearly a decade in analytics for the world’s largest market research firm, before finding success investing full time. He launched Gold Stock Bull in 2005 and turned his focus from helping fortune 500 companies to helping individual investors. Jason is a student of Austrian economics and a proponent of cryptocurrencies such at bitcoin.