7 ms·

Overstock.com Has $10M in Gold and Silver Hidden Somewhere in Utah

40 points by pmcpinto 11y ago

mywittyname 11y ago
“I don’t know if it will be two days or two weeks or two months. But we have $10 million in gold and silver in denominations small enough … for payroll,” How exactly will this work? Is USD still the unit of account for your salary, or does their employment contract state, "$X or X oz. gold at company's discretion."? How do they expect to pay taxes? Is this even legal? I don't see how this actually solves any perceived problems with the banking industry. Even if the banks go down for a period of time, you can still cut people/businesses a check. That's certainly easier for everyone involved than handing out gold doubloons on payday. " in 2008 we came perilously close to banks not knowing who could accept counterparty risk," This goes to show how deft the Federal Reserve is. Lots of bad shit could have went down in 2008, but didn't.
- cperciva 11y ago
  Is USD still the unit of account for your salary, or does their employment contract state, "$X or X oz. gold at company's discretion."? I think the idea here is that if the banking system has collapsed, employees might eagerly accept gold in place of cheques, no matter what their contract says.
  - jacquesm 11y ago
    The irrational bit of that whole argument to me is that they are effectively trying to keep 'the lights on' when their customers can no longer use overstock anyway. After all, if the banking system collapses your inability to use 'overstock.com' is going to be the least of your problems. Recently Greece went through something like this on a much smaller scale (and with daily limits rather than a total collapse but it got quite close). Paying with gold was never even considered, people switched to cash in stead. It's not as if you're going to buy a bread or fill up your basket at the supermarket and expect to pay with gold, people will not be able to ascertain its value on the spot at the register. Having $10M in cash in various currencies to hedge against the collapse of one currency or banking system would already be quite an act of paranoia, having it in gold is taking that to a completely different level. That's end-of-times level stuff, it means there is no more trust in any currency at all. Merchants in Greece would have been happy to take your cash if you had it.
    - cperciva 11y ago
      Right, I have no idea why it makes sense for an online retailer of non-essential goods to be making that particular hedge. There might be an argument for nuclear power stations and similar critical infrastructure companies to have such a stockpile, although even there (a) the military would probably step in, and (b) it's likely that Bouillon would be a more useful thing to stockpile than Bullion.
      - jacquesm 11y ago
        I think they have the Bouillon angle covered: "Byrne said the company maintains a 30-day supply of food, and has a distribution system to pay and feed employees in case the banking and payments systems collapse."
        cperciva 11y ago
        My point was more that food or other useful commodities might be a more useful form of currency than gold in the complete-societal-breakdown scenario.
        cookiecaper 11y ago
        Food is definitely more valuable than gold when society collapses to the point where people can't get food anymore. Related example: http://www.foxnews.com/us/2013/08/19/american-world-war-ii-pow-prized-gold-ring-comes-home-after-70-year-journey/ http://www.foxnews.com/us/2013/08/19/american-world-war-ii-p... Although the food is artificially scarce in that case, it shows that people value what's necessary for survival above trinkets when they're required to do so. Gold having value presupposes some amount of social cohesion.
    - cookiecaper 11y ago
      >Merchants in Greece would have been happy to take your cash if you had it. That worked in Greece because they used the Euro, which meant that the currency was solvent based on its association with countries that had better credit than Greece itself. If the US had a Greek-style loss of credibility, the dollar would surely take a massive hit, as its value lies solely on our credibility. Since we don't have a Germany to point to as the currency's savior, it's very possible that American vendors wouldn't accept cash (USD) and would prefer something that has value independent of governmental decree (precious metals).
- superuser2 11y ago
  In the kind of societal collapse this might be useful for, taxes are likely to be owned to roving warlords, not the IRS.
  - user24 11y ago
    not entirely sure of the distinction ;)
    - superuser2 11y ago
      The IRS answers to people a majority of your neighbors elected and could remove at any point if they cared to do so.
x5n1 11y ago
Well that's one way to tell the government that they can make 6 million dollars by confiscating your illegal gold stash.
- josephpmay 11y ago
  Gold stashes are no longer illegal
  - jacquesm 11y ago
    That may well be the case but advertising you have one is supremely stupid.
  - cperciva 11y ago
    Yes, but the government doesn't need to prove that you've done anything illegal to confiscate your money as "possible proceeds of crime".
    - deleted 11y ago
      [deleted]
jacquesm 11y ago
So, they believe there is a 1:20 chance that 'the end of the world as we know it' will take place, that having gold will somehow magically insulate them from such an event because they can ride out 3 months to pay their employees a wage? That's prepping. Makes you wonder if they also have a vault with weapons and ammo, generators and a bunker underneath their offices (hm, that might be a good spot for an attempted burglary, if anywhere that would be where the gold is). In other news, Jonathan Johnson taken hostage by criminals that would like to know where he stores his sugar. I really hope they have thought about the implications of putting this sort of knowledge out there for the world to see.
- desdiv 11y ago
  >I really hope they have thought about the implications of putting this sort of knowledge out there for the world to see. I don't think they had a choice in the matter. Form 10-Q[0] are mandatory for public companies, and apparently precious metal holdings have to be listed. (The article links to Overstock's form 10-Q) Sure, it's dumb for them to reveal that the precious metal is physically held in Utah, but then again they're a Utah-based company and gasoline is probably a scarce commodity in whatever apocalypse fantasy they're imagining, so it's not hard to put it together. [0] https://en.wikipedia.org/wiki/Form_10-Q https://en.wikipedia.org/wiki/Form_10-Q
Bluestrike2 11y ago
Trying to meet payroll with gold and silver would lead to some serious problems. Hell, given how little gold there is in public hands outside of jewelry, it'd be a bitch to make change for. As far as weird CEO tendencies go, hoarding precious metals isn't really that big of a deal. Long-term, they aren't really losing money from it. They aren't earning much, either so I guess you can chock it up to a wash. But it beats the hell out of some other habits he could have; at least he isn't freaking out about blueberry distribution across muffins or something like that. https://www.youtube.com/watch?v=Yz_-k9qoYns https://www.youtube.com/watch?v=Yz_-k9qoYns Now, replenishing the food stockpiles as food goes bad would be a huge waste of money unless we're talking about MREs that will last until the heat death of the universe. But if he tries to serve that to his employees, he might have a mutiny on his hands.
- deleted 11y ago
  [deleted]
batbomb 11y ago
If you've been around Mormons in your life, this wouldn't really seem that odd.
DannoHung 11y ago
Who is going to shop at an online junk retailer (and make no bones, that is what Overstock is) after the financial system collapses?
- jacquesm 11y ago
  Precisely. It's not as if people won't have bigger problems than this if and when the financial system collapses, after all, how will you pay for the goods. "Oh, look: 45% off a set of pans & pots at overstock.com, just one moment honey, how do we pay for it, the financial system has collapsed."
  - rtl49 11y ago
    Obviously you pay for it using your gold stash, carefully planned with denominations small enough to purchase cookware. Overstock will accept your payment via carrier pigeon, and the product will arrive via caravan within the next several months.
    - jacquesm 11y ago
      Post apocalypse I think we're going to be down to mail-order rather than that we'll use the internet, unless those carrier pigeons will be used to implement tcp/ip as well. I'm half tempted to figure out what the amount of gold is that a carrier pigeon could carry. Storing $10M in cash would guard against a short duration (3 months?) collapse of the banking system, storing it in gold is to guard against something of a completely different order.
    - jordanb 11y ago
      In the event of the apocalypse I think cheap cookware will be more valuable than gold. Consider all the things you can do with a pot post-apocalypse: * Cook in it, clearly * Use it as a shovel * Sit on it * Drink out of it, or eat out of it * Use it as a toilet (might want two pots) * Use it to collect fruits and berries you gather * Use it to collect rainwater * Conk people/animals/zombies over the head with it * Sharpen the lip by rubbing it against some rocks and use it as a knife * Use it as a helmet during the radioactive hailstorms That's just what I've come up with in a few minutes of thinking. Other than conking you can't do any of the above with a gold brick.
jdoliner 11y ago
It's like this company is being run by Ron Swanson...
- orblivion 11y ago
  Yes, Byrne is a libertarian.
rtl49 11y ago
I find this announcement absolutely bizarre. Even if you believe there's a 5% chance of a banking crisis, there's a much higher chance many investors will think you're insane and unfit to manage a company. I imagine publicly announcing this precaution hasn't done wonders for their stock value.
- Kinnard 11y ago
  I disagree, as an investor and as a CEO, I say— YOU MUST HEDGE!
  - jacquesm 11y ago
    I've become more sensitive to this due to some gaffes recently, is this yet another example of Poe's law at work?
    - wisty 11y ago
      I'd guess a CEO of a bitcoin related startup.
digitalzombie 11y ago
hoard food, cash, and precious metal and bitcoin. If something were to happen I think food and survival gear would be more useful then cash, precious metal and bitcoin... Also CEO is in fear of currency crash, is the cash in another currency? And it's weird to think that in a crazy melt down their employees would care about getting paid versus survival?
n0us 11y ago
In the event of a banking crisis gold has no value because you can do pretty much nothing with it and it's difficult if not impossible to exchange in any meaningful denomination in most situations of a modern economy. Gold has value because of tradition and scarcity, the available supply cannot be diluted. If shit hits the wall with banks it isn't going to be gold that is scarce, it is liquidity.
- adventured 11y ago
  We just went through a global banking crisis, the largest in history. Gold did not lack value during that time as you're claiming. That by itself proves your position wrong. Then you contradict yourself by saying that gold is valuable because of scarcity (true), and then you say that gold won't be scarce if shit hits the wall - shit hit the wall in 2007-2009, gold remained valuable and scarce.
  - hueving 11y ago
    The banking crisis (as big as it was) did not result in people losing access to their normal checking and savings accounts. So at that time people still just traded gold like any other commodity (i.e. with cash).
  - mikeyouse 11y ago
    It's so weird because we just went through a global banking crisis, the largest in history -- and cash had no problem whatsoever. There just isn't a realistic scenario in which USD has 0 value and Gold is useful.
    - aianus 11y ago
      > There just isn't a realistic scenario in which USD has 0 value and Gold is useful. This happens all. the. time. The USD lost 33% of its real value between 1977 and 1981 while Gold increased in value in real terms by 65% during the same time period. USD itself has been reasonably stable since, but there's no guarantee that will continue. I'm not a crazy goldbug, I don't think we should go around trading gold shavings with each other in our day-to-day lives, but it's an indisputable fact that Gold is an excellent hedge against financial and currency crises the likes of which happen somewhere in the world all the time. Hell, right now Russia is in a currency crisis where the Ruble has lost 50% of its value in less than two years.
jsnathan 11y ago
When I read the title I thought they were hosting a huge treasure hunt, and I thought hey, that's a really cool marketing idea..
Animats 11y ago
That's very Mormon. Mormons are supposed to have a year of supplies in storage for emergencies.
giancarlostoro 11y ago
Everyone wants to save gold, but when money is literally worth absolutely nothing, you don't want gold, you probably want to barter food for useful items like ammo, guns, gasoline and car parts, as well as other things that actually are beneficial to your survival. Gold wont really offer much, you can't eat it, if you can make weapons with it then you're (excuse the pun) golden.
- Brotkrumen 11y ago
  History would disagree with you. You need an easy-to-carry, hard-to-replicate and non-spoiling unit of exchange. You also cant sell 1/7th of a cow for a new shoe. Read "the gift" if you are interested. Barter is much rarer than adam smith thought and serious commerce was never based on it.
  - aianus 11y ago
    > easy-to-carry, hard-to-replicate and non-spoiling unit of exchange Wouldn't ammunition check those boxes and be intrinsically useful as well? Would also help defend the gold :)
    - Brotkrumen 11y ago
      Probably. Iirc ammunition was actually used in america at some point. Cigarettes could also fit the bill as prisons, depressions and concentration camps suggest. There would probably a few currencies and exchange rates floating around. One of which would be gold.
  - giancarlostoro 11y ago
    What happens when you get mugged for your gold though? You're going to throw gold ingots at people? I'm curious really, I guess you need a right balance of self-defense gear and currency...

40 points by pmcpinto 11y ago

“I don’t know if it will be two days or two weeks or two months. But we have $10 million in gold and silver in denominations small enough … for payroll,” How exactly will this work? Is USD still the unit of account for your salary, or does their employment contract state, "$X or X oz. gold at company's discretion."? How do they expect to pay taxes? Is this even legal? I don't see how this actually solves any perceived problems with the banking industry. Even if the banks go down for a period of time, you can still cut people/businesses a check. That's certainly easier for everyone involved than handing out gold doubloons on payday. " in 2008 we came perilously close to banks not knowing who could accept counterparty risk," This goes to show how deft the Federal Reserve is. Lots of bad shit could have went down in 2008, but didn't.

cperciva 11y ago
Is USD still the unit of account for your salary, or does their employment contract state, "$X or X oz. gold at company's discretion."? I think the idea here is that if the banking system has collapsed, employees might eagerly accept gold in place of cheques, no matter what their contract says.
- jacquesm 11y ago
  The irrational bit of that whole argument to me is that they are effectively trying to keep 'the lights on' when their customers can no longer use overstock anyway. After all, if the banking system collapses your inability to use 'overstock.com' is going to be the least of your problems. Recently Greece went through something like this on a much smaller scale (and with daily limits rather than a total collapse but it got quite close). Paying with gold was never even considered, people switched to cash in stead. It's not as if you're going to buy a bread or fill up your basket at the supermarket and expect to pay with gold, people will not be able to ascertain its value on the spot at the register. Having $10M in cash in various currencies to hedge against the collapse of one currency or banking system would already be quite an act of paranoia, having it in gold is taking that to a completely different level. That's end-of-times level stuff, it means there is no more trust in any currency at all. Merchants in Greece would have been happy to take your cash if you had it.
  - cperciva 11y ago
    Right, I have no idea why it makes sense for an online retailer of non-essential goods to be making that particular hedge. There might be an argument for nuclear power stations and similar critical infrastructure companies to have such a stockpile, although even there (a) the military would probably step in, and (b) it's likely that Bouillon would be a more useful thing to stockpile than Bullion.
    - jacquesm 11y ago
      I think they have the Bouillon angle covered: "Byrne said the company maintains a 30-day supply of food, and has a distribution system to pay and feed employees in case the banking and payments systems collapse."
      - cperciva 11y ago
        My point was more that food or other useful commodities might be a more useful form of currency than gold in the complete-societal-breakdown scenario.
        cookiecaper 11y ago
        Food is definitely more valuable than gold when society collapses to the point where people can't get food anymore. Related example: http://www.foxnews.com/us/2013/08/19/american-world-war-ii-pow-prized-gold-ring-comes-home-after-70-year-journey/ http://www.foxnews.com/us/2013/08/19/american-world-war-ii-p... Although the food is artificially scarce in that case, it shows that people value what's necessary for survival above trinkets when they're required to do so. Gold having value presupposes some amount of social cohesion.
  - cookiecaper 11y ago
    >Merchants in Greece would have been happy to take your cash if you had it. That worked in Greece because they used the Euro, which meant that the currency was solvent based on its association with countries that had better credit than Greece itself. If the US had a Greek-style loss of credibility, the dollar would surely take a massive hit, as its value lies solely on our credibility. Since we don't have a Germany to point to as the currency's savior, it's very possible that American vendors wouldn't accept cash (USD) and would prefer something that has value independent of governmental decree (precious metals).
superuser2 11y ago
In the kind of societal collapse this might be useful for, taxes are likely to be owned to roving warlords, not the IRS.
- user24 11y ago
  not entirely sure of the distinction ;)
  - superuser2 11y ago
    The IRS answers to people a majority of your neighbors elected and could remove at any point if they cared to do so.

x5n1 11y ago

Well that's one way to tell the government that they can make 6 million dollars by confiscating your illegal gold stash.

josephpmay 11y ago
Gold stashes are no longer illegal
- jacquesm 11y ago
  That may well be the case but advertising you have one is supremely stupid.
- cperciva 11y ago
  Yes, but the government doesn't need to prove that you've done anything illegal to confiscate your money as "possible proceeds of crime".
  - deleted 11y ago
    [deleted]

jacquesm 11y ago

So, they believe there is a 1:20 chance that 'the end of the world as we know it' will take place, that having gold will somehow magically insulate them from such an event because they can ride out 3 months to pay their employees a wage? That's prepping. Makes you wonder if they also have a vault with weapons and ammo, generators and a bunker underneath their offices (hm, that might be a good spot for an attempted burglary, if anywhere that would be where the gold is). In other news, Jonathan Johnson taken hostage by criminals that would like to know where he stores his sugar. I really hope they have thought about the implications of putting this sort of knowledge out there for the world to see.

desdiv 11y ago
>I really hope they have thought about the implications of putting this sort of knowledge out there for the world to see. I don't think they had a choice in the matter. Form 10-Q[0] are mandatory for public companies, and apparently precious metal holdings have to be listed. (The article links to Overstock's form 10-Q) Sure, it's dumb for them to reveal that the precious metal is physically held in Utah, but then again they're a Utah-based company and gasoline is probably a scarce commodity in whatever apocalypse fantasy they're imagining, so it's not hard to put it together. [0] https://en.wikipedia.org/wiki/Form_10-Q https://en.wikipedia.org/wiki/Form_10-Q

Bluestrike2 11y ago

Trying to meet payroll with gold and silver would lead to some serious problems. Hell, given how little gold there is in public hands outside of jewelry, it'd be a bitch to make change for. As far as weird CEO tendencies go, hoarding precious metals isn't really that big of a deal. Long-term, they aren't really losing money from it. They aren't earning much, either so I guess you can chock it up to a wash. But it beats the hell out of some other habits he could have; at least he isn't freaking out about blueberry distribution across muffins or something like that. https://www.youtube.com/watch?v=Yz_-k9qoYns https://www.youtube.com/watch?v=Yz_-k9qoYns Now, replenishing the food stockpiles as food goes bad would be a huge waste of money unless we're talking about MREs that will last until the heat death of the universe. But if he tries to serve that to his employees, he might have a mutiny on his hands.

deleted 11y ago
[deleted]

batbomb 11y ago

If you've been around Mormons in your life, this wouldn't really seem that odd.

DannoHung 11y ago

Who is going to shop at an online junk retailer (and make no bones, that is what Overstock is) after the financial system collapses?

jacquesm 11y ago
Precisely. It's not as if people won't have bigger problems than this if and when the financial system collapses, after all, how will you pay for the goods. "Oh, look: 45% off a set of pans & pots at overstock.com, just one moment honey, how do we pay for it, the financial system has collapsed."
- rtl49 11y ago
  Obviously you pay for it using your gold stash, carefully planned with denominations small enough to purchase cookware. Overstock will accept your payment via carrier pigeon, and the product will arrive via caravan within the next several months.
  - jacquesm 11y ago
    Post apocalypse I think we're going to be down to mail-order rather than that we'll use the internet, unless those carrier pigeons will be used to implement tcp/ip as well. I'm half tempted to figure out what the amount of gold is that a carrier pigeon could carry. Storing $10M in cash would guard against a short duration (3 months?) collapse of the banking system, storing it in gold is to guard against something of a completely different order.
  - jordanb 11y ago
    In the event of the apocalypse I think cheap cookware will be more valuable than gold. Consider all the things you can do with a pot post-apocalypse: * Cook in it, clearly * Use it as a shovel * Sit on it * Drink out of it, or eat out of it * Use it as a toilet (might want two pots) * Use it to collect fruits and berries you gather * Use it to collect rainwater * Conk people/animals/zombies over the head with it * Sharpen the lip by rubbing it against some rocks and use it as a knife * Use it as a helmet during the radioactive hailstorms That's just what I've come up with in a few minutes of thinking. Other than conking you can't do any of the above with a gold brick.

jdoliner 11y ago

It's like this company is being run by Ron Swanson...

orblivion 11y ago
Yes, Byrne is a libertarian.

rtl49 11y ago

I find this announcement absolutely bizarre. Even if you believe there's a 5% chance of a banking crisis, there's a much higher chance many investors will think you're insane and unfit to manage a company. I imagine publicly announcing this precaution hasn't done wonders for their stock value.

Kinnard 11y ago
I disagree, as an investor and as a CEO, I say— YOU MUST HEDGE!
- jacquesm 11y ago
  I've become more sensitive to this due to some gaffes recently, is this yet another example of Poe's law at work?
  - wisty 11y ago
    I'd guess a CEO of a bitcoin related startup.

digitalzombie 11y ago

hoard food, cash, and precious metal and bitcoin. If something were to happen I think food and survival gear would be more useful then cash, precious metal and bitcoin... Also CEO is in fear of currency crash, is the cash in another currency? And it's weird to think that in a crazy melt down their employees would care about getting paid versus survival?

n0us 11y ago

In the event of a banking crisis gold has no value because you can do pretty much nothing with it and it's difficult if not impossible to exchange in any meaningful denomination in most situations of a modern economy. Gold has value because of tradition and scarcity, the available supply cannot be diluted. If shit hits the wall with banks it isn't going to be gold that is scarce, it is liquidity.

adventured 11y ago
We just went through a global banking crisis, the largest in history. Gold did not lack value during that time as you're claiming. That by itself proves your position wrong. Then you contradict yourself by saying that gold is valuable because of scarcity (true), and then you say that gold won't be scarce if shit hits the wall - shit hit the wall in 2007-2009, gold remained valuable and scarce.
- hueving 11y ago
  The banking crisis (as big as it was) did not result in people losing access to their normal checking and savings accounts. So at that time people still just traded gold like any other commodity (i.e. with cash).
- mikeyouse 11y ago
  It's so weird because we just went through a global banking crisis, the largest in history -- and cash had no problem whatsoever. There just isn't a realistic scenario in which USD has 0 value and Gold is useful.
  - aianus 11y ago
    > There just isn't a realistic scenario in which USD has 0 value and Gold is useful. This happens all. the. time. The USD lost 33% of its real value between 1977 and 1981 while Gold increased in value in real terms by 65% during the same time period. USD itself has been reasonably stable since, but there's no guarantee that will continue. I'm not a crazy goldbug, I don't think we should go around trading gold shavings with each other in our day-to-day lives, but it's an indisputable fact that Gold is an excellent hedge against financial and currency crises the likes of which happen somewhere in the world all the time. Hell, right now Russia is in a currency crisis where the Ruble has lost 50% of its value in less than two years.

jsnathan 11y ago

When I read the title I thought they were hosting a huge treasure hunt, and I thought hey, that's a really cool marketing idea..

Animats 11y ago

That's very Mormon. Mormons are supposed to have a year of supplies in storage for emergencies.

giancarlostoro 11y ago

Everyone wants to save gold, but when money is literally worth absolutely nothing, you don't want gold, you probably want to barter food for useful items like ammo, guns, gasoline and car parts, as well as other things that actually are beneficial to your survival. Gold wont really offer much, you can't eat it, if you can make weapons with it then you're (excuse the pun) golden.

Brotkrumen 11y ago
History would disagree with you. You need an easy-to-carry, hard-to-replicate and non-spoiling unit of exchange. You also cant sell 1/7th of a cow for a new shoe. Read "the gift" if you are interested. Barter is much rarer than adam smith thought and serious commerce was never based on it.
- aianus 11y ago
  > easy-to-carry, hard-to-replicate and non-spoiling unit of exchange Wouldn't ammunition check those boxes and be intrinsically useful as well? Would also help defend the gold :)
  - Brotkrumen 11y ago
    Probably. Iirc ammunition was actually used in america at some point. Cigarettes could also fit the bill as prisons, depressions and concentration camps suggest. There would probably a few currencies and exchange rates floating around. One of which would be gold.
- giancarlostoro 11y ago
  What happens when you get mugged for your gold though? You're going to throw gold ingots at people? I'm curious really, I guess you need a right balance of self-defense gear and currency...