Precious Metals Are “Best Defence” Against Bail-ins In Economic Crisis

John Adams/Daily Telegraph AustraliaGold Seek/7-6-2017

“Globally, household, corporate and sovereign debt are at unprecedented levels. They are also linked through a fully integrated global ­financial system and an array of complex financial derivatives.

Given the scale of the system, the probability of a global stock, bond and real estate crash, coupled with a wave of corporate, bank and sovereign ­defaults via rising interest rates, ­increases dramatically.

Worryingly, the monetisation of government and corporate debt, nominal or real negative interest rates, “helicopter money” (issuing freshly created money directly to citizens), bank bail-ins, capital controls and the eradication of cash through financial digitisation are all being contemplated by American and other international central bank officials.

Such measures seek to, in effect, trap citizens to keep their money in the financial system and to allocate their money into particular asset categories, thus preventing bank runs or hoarding which can occur when confidence in political, economic and ­financial systems collapse. . . .

Thus it is up to individuals to think about what they can do to mitigate their own risks. Eliminating all forms of debt, ­improving personal cash flow and maintaining cash reserves to guard against bouts of unemployment or to purchase cheap assets is best under a deflationary scenario.

Alternatively, acquiring real (or physical) goods or assets such as precious metals is the best defence to offset any loss of currency purchasing power, noting that the Governor-General has the legal power to confiscate personal gold holdings via Part IV of the Banking Act 1959.

Nevertheless, Australians must ­remain vigilant in the coming months and years ahead, conduct their own independent research and prepare themselves for a volatile unstable economy.”

MK note:  This article is directed at Australians but the message applies to Europeans and Americans as well.  No one is immune.  Extreme measures, like those mentioned above, are now acceptable courses of action among economic officials globally.  If one were to improve the strategy offered by The Daily Telepraph’s John Adams (quoted above), it would come via the ownership of historical bullion items like old British sovereigns (pictured below), Swiss Helvetias, Dutch 10 guilders and the like.  These are a worthy diversification for those with concerns about capital controls, and you do not have to pay extremely high premiums to include them in your portfolio.  In fact at the present, these items generally speaking are trading at historically low premiums.

Governments traditionally are loathe to confiscate, quarantine or slap trading restrictions on items of historical value (though obviously there are no guarantees).  Such was the case in the United States when the federal government confiscated gold bullion in 1933 but exempted gold coinage dated prior to 1933.  Along with whatever protections age and collectibility might confer, owners of this type of item will benefit from any increase in the price of the gold and open the door to potential premium appreciation as collector items, since their availability is limited.  Buy the right items and they are also very liquid globally.

Talk with one of our representatives about the possibilities if you have an interest [1-800-879-5115 Ext #100].

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