You may be wonder why, if paper IRAs are so bad, why so many people are use them. The problem with paper-based IRAs is that the financial investments are depend on a fiat based money system - AND the value of fiat currency is dependent on the strength (read economic) of the government that issues it (The US Government), not a physical commodity like gold or silver.
In short, fiat money lacks intrinsic value and its value it determined by the government that issues it. Fiat money is derived from the relationship between supply and demand rather than the value of the material from which the money is made.
Banks and financial advisors claim security. However, the real determinate of the value of the dollar (which effects the value of all paper based IRAs) is how well the economy performs. A single economic downturn can come along and wipe out your whole retirement fund.