Over the last couple of months, it has become clear from conversations with friends and partners from the gold industry that there is a marked increase in retail demand for physical gold from Swiss investors. The most interesting thing about this development is that the bulk of new orders is coming from smaller accounts, showing that it’s ordinary savers and citizens that are driving this trend, rather than professionals, speculators or larger investors.
The Swiss mentality
Given all that we have seen since the pandemic began, all the government excesses and all the economic devastation on a global scale, it is not at all surprising that the average Swiss citizen would turn to physical precious metals to prepare for what lies ahead and to protect their wealth. This attitude is a core component of the Swiss culture and mindset, and it goes a long way in explaining the stability, prosperity and predictability that the country is known for across the world.
The main idea behind this is the concept of personal responsibility, independent thought and action and self-sustainability. In other words, it is essential to think for oneself and to plan for the future, regardless of what the majority may think at the time or what any centralized authority might promise. We’ve been seeing this in full swing throughout the covid crisis. The Swiss government, much like all governments everywhere, has repeatedly sought to reassure the public, claiming all the restrictions and the measures taken were in the people’s best interest and for their own good, while officials have also tried to assuage the very legitimate concerns over the economy, by insisting that everything is under control and that the recovery has already started.
As opposed to so many of their Western peers, the Swiss tend to look at all these promises and assurances with a very healthy dose of skepticism. They understand well the need to hedge their bets and to take their own measures to protect themselves, their families and their savings. No matter how confident the central planners may sound, direct, personal action and planning ahead is clearly a much more viable strategy than simply trusting the government blindly, waiting and hoping for the best.
Direct democracy: a decisive advantage
Of course, the Swiss also have a unique and invaluable tool at their disposal with which they can carve out their own fates and retain control over their lives and their future, that other Western citizens do not. The Swiss system of subsidiarity and the frequent referendums that take place in the country ensure that the state’s powers remain in check and that the people ultimately have the last word on any and all-important issues.
Under this system, it is much more challenging for central planners to expand their reach and influence over the citizens’ lives, as the Swiss Constitution guarantees that those citizens will have their voices heard. The culture of open debate and free dialogue that also comes with the heritage of direct democracy also ensures that ordinary people they can defend their rights and their liberties directly, peacefully and effectively.
This idea of peaceful dissent and the ability to “agree to disagree” in a practical way is essential to any functioning political system and it is precisely what is fading in other Western democracies. There, we see pressures mount for ideological compliance, censorship and repression of free speech and free debate becoming the norm, a trend that has been accelerating for years and increasingly polarizing the body politic. Tensions escalate, as there is no way for opposing views to calmly and independently coexist, or for dissenting citizens to simply “opt out”, to separate themselves peacefully.
The key takeaway here for investors and for ordinary citizens alike is that one doesn’t need to live in Switzerland in order to embrace and benefit from the core ideas that make it stand out. One can adopt this mentality on a personal level, focus on personal responsibility, on planning ahead and on acting decisively and independently, on speaking their mind freely and on respecting their neighbor’s right to do the same.