Palantir Technologies (NYSE:PLTR) just made headlines due to their purchase of $50m in gold. Why on Earth would this barbarous relic of the Stone Age be of any use to anyone in today’s world of Bitcoin which doesn’t exist and no one really knows where it came from? Well according to Palantir, they are hoarding gold bars in anticipation of another “black swan event,” Palantir has spent $50m purchasing the yellow metal.
So who are they, and why is this headline news? Well Palantir provides software to intelligence and defence institutions; however more interesting and relevant is now the company has invited its customers to pay for their products using gold. A la Elon Musk and Bitcoin, instead using the thousand year old most recognised currency.
This is significant for many reasons:
Firstly Palantir is a big, acclaimed name that is putting it out there to the world that they still see gold as the ultimate risk hedge. (They didn’t spend $50m on the yen, dollar or Treasuries – the traditional go to “safe havens”)
Secondly, it shows that that gold has many other accolades, and can be versatile enough to be used as a currency. Many companies have embraced investment backed by actual physical gold, turning it digital and not the hugely leveraged unallocated paper market that is about as real as Bigfoot sightings in the Sahara Desert. Kinesis Money for example give you all sorts of flexibility for digital and online purchases all backed by physical in the vault allocated, real gold and silver.
Thirdly, and possibly more important of all, it has kicked off an opposing payment method to fiat currency by using a tangible asset. This isn’t new of course, as many years ago people were able to purchase property and many other items using physical gold and silver. No big organisation in recent times however has accepted physical gold as a payment method. Legitimately of course.
What will be interesting is whether this is followed through as an idea, and how many other companies are willing to do the same. Given the price volatility in Bitcoin, it doesn’t seem to have detracted other organisations, with gold however relatively cheap in real terms right now, I’m not sure I would want to use mine at present when in a few years’ it could be worth a lot more.