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Greg McCoach, editor of Mining Speculator and President of AmeriGold, likes owning the physical metal. In this article, the second of a three part interview (see Part I) Greg tells us why. In Part Three Greg will discuss his top choices for equities.

TGR: Going to gold, what would you recommend our readers buy?

MCCOACH: I think people have to decide for themselves if they want to own the physical gold or paper representations of the metal, and they clearly need to understand what the differences are so they can make an intelligent decision for themselves. The paper representation would be gold ETFs or the Central Fund of Canada Ltd. (CEF AMEX). The mining stocks would also be paper representations. They don t represent physical gold themselves they represent a stock.

I own AmeriGold.com. I set that up back in 1999 so that my clients could have a safe and reliable place for trading buying and selling physical gold and silver, platinum and palladium with very low transaction costs. AmeriGold has done very well, particularly in the last six to eight months, when we ve had a ton of people who suddenly want to own the physical metals.

I like owning the physical metals it s just my opinion. Some people don t like it because it gets messy dealing with the physical metals you have to store it somewhere. You incur storage charges if you re putting it in a private safe or vault or depository or if you try to keep it in a safe deposit box of course, you ve got to pay for that. For myself, I just get a good fireproof safe, bolt it in from the inside into a concrete floor, and store it myself. Buy your physical metals.

When you pay cash for them, you own them. Right? There s no counter party risk. In other words, you own the metal outright. You re in control of your financial destiny your investment is not based on someone else s promise. ETFs and stocks they are all based on someone else s promise. Are those promises going to come through in this environment that in? It could be very difficult for us to have an investment that suddenly the promise fades away or disintegrates, and what are we left with?

It s not very easy or comfortable taking delivery of physical precious metals, but I think it s in your best interest to do that at this point. If we were in a different time, back in the mid 80s or early 90s, when things were going better, paper markets were performing. There was not as much interest to do buy physical gold because paper promises were being maintained for the most part.

Well, now I see that we re going to go through a period of a lot of broken paper promises and disintegrating paper currency, and that s really a problem for investors. The more money you have, the bigger problem you have. Twenty percent of my portfolio is in physical metal at this point and growing quite nicely. I have been buying metal for seven years now. I keep adding to that portfolio every year, and it s done very, very well. It s outperformed the Dow and the NASDAQ in the last six years. There s very little downside risk to owning the physical metals.

How high could it go? Nobody s got a crystal ball, but obviously $1,000 gold is still very cheap in real terms. If you look at the Dow Gold chart for the last 150 years, one share of Dow and one ounce of gold have been on par multiple times, and it looks like we re going to go to that level again. What does that mean for the Dow? And what does that mean for one ounce of gold? Does that mean it s going to $7,000 is it going to $9,000? I don t have a crystal ball I don t know, but I m betting they will be one on one before this is over. So, where do you want to put your money? Do you want to put your money at this point or in gold? It s gold for me.

TGR: Going back to gold, let s talk about physical gold. Let s assume our readers are American citizens, so what sort of coins or bars or what would you recommend?