Rethinking ‘Safe’ Investments (Part II) – OpEd


For those of us who have studied history, these Ingenuous beliefs and expectations likely bring a smirk to our face. However, these are entirely reasonable assumptions for most citizens, as the majority of the population is blissfully unaware of the numerous real-life examples that clearly demonstrate just how capable and how eager the government is to do these things – to fail, or to lie, or much more habitually, to do the latter to cover up the former. 

This is the point where my sympathy and my compassion and all my excuses run out though. Unlike the “good old days”, in recent years, the folly of trusting government debt has been quite obvious. It has been demonstrated in painful detail, repeatedly and consistently for years. Even if common sense, basic critical judgement, or even more bluntly, the very evidence of one’s own eyes, are not enough to convince someone of the need to revisit and reassess their position on this, then surely the unambiguous verdict of the market itself should have.

It should be plain as day at this point that there are unmistakable, brazenly transparent and readily discernibleproblems, apparent drawbacks and clear and present dangers that come with the decision to place one’s faith in the State. Anyone who still sees government debt as a safe investment or as a secure and reliable alternative to a savings account is either too naive, too uninformed or too politically fanatical and willfully blinded to be taken seriously. 

Recent events serve as pertinent and convincing examples. What was the market response to the breaking news and the first official declarations of a global pandemic and the public announcements of the relevant measures (lockdowns, business shutdowns, house confinement, “emergency” government powers and suspension of individual and civil rights)? How did investors react in the immediate aftermath of the Russian invasion of Ukraine? Which asset class exhibited the most notable moves right after the surprise attack on Israel? 

If it were true that government debt was still indeed the safest of safe bets for the ordinary saver, we would have seen a completely different picture in the markets and we would have noticed wholly different movements and reactions in the charts. Instead of what the official / state-sanctioned narrative predicted, however, we saw something else entirely. Every time, without fail, people flocked to gold – just like they did every single time before, whenever fear, uncertainly and instability took hold.

No matter your personal beliefs, your political, religious or philosophical stance, your individual assessment of the current state of the world, your understanding of it and your reaction to it, I believe that we can all agree that there is something different, something distinctively wrong and something uniquely worrying about this particular moment in our history. 

I cannot describe it more accurately or precisely, yet I don’t think I need to. I’m sure that regular readers, partners and clients know exactly that uneasy gut feeling I’m alluding to. I bet that physical gold investors also understand. 

Especially those precious few of us that hold our positions for the right reasons, who don’t even bother checking daily price moves because we understand that it is only the long term that matters and those of us who recognize the true value of our investment –  the peace of mind and the certainty that owning real, sound money offers.. 

The current environment is self-explanatory and it looks like it could very soon turn into the kind of scenario that we have precisely been preparing for. Obviously, it is near impossible to pinpoint in advance the exact moment or the precise trigger of the coming systemic crisis, but as I am sure most readers already know: predicting when it might happen, is nowhere near as important as confidently knowing that it will happen.

And for those that carry this knowledge, with absolute certainty, with confidence and conviction, there is no excuse for failing to prepare and to plan for it, to defend and to protect their savings and their assets and to ensure the future of the next generation.

Claudio Grass

Claudio Grass is a Mises Ambassador and an independent precious metals advisor based out of Switzerland. His Austrian approach helps his clients find tailor-made solutions to store their physical precious metals under Swiss and Liechtenstein law. He is the founder of and recognized as an expert on monetary history, economics, and precious metals. A financial and economic speaker and publicist. He writes about global markets, international finance, geopolitics, history and economics. Claudio is a passionate advocate of free-market thinking and libertarian philosophy. Following the teachings of the Austrian School of Economics, he is convinced that sound money and human freedom are inextricably linked to each other.

Leave a Reply

Your email address will not be published. Required fields are marked *