Why South Africans invest in silver & gold: State Capture
The sheer magnitude and brazenness of state capture activity under Zuma’s presidency makes the average South African distrustful of the rosy picture most government officials paint of the future and their general commitment to improving the economy through job creation, controlled inflation, and addressing poverty and inequality. Fulfilling those promises while looting the state offers is like putting tithes in the offering basket at church with one hand but taking them out with the other hand (plus a little extra). Investors in precious metals know this, and through the purchase of silver and gold hope to bypass any possible exposure to the theft of their money through economic transgressions. Article courtesy of Going for Gold: A guide for the South African precious metal investor by Zoltan Erdey
Why South Africans invest in silver & gold: Push towards a cashless society and declare war on cash
Most world governments and central banks support narratives that paint cash as suspicious. The plot may be assumed up along the lines of the belief that only criminals, money launderers and drug dealers need cash, while honest citizens simply use their debit or credit cards for any transaction they wish to make. By reasonable inference, anyone who has cash, or deals in cash, is suspicious of government and banks. In South Africa, it is no different: fees on the transaction are exorbitant, and deposits or withdrawals over R25 000 from your bank initiate a cash-threshold report that is sent to the Financial Intelligence Centre (FIC). Some of my clients have expressed their belief that an outright ban on cash will become a future reality, as go government set up systems by which every single financial transaction is trackable. The crusade against cash is clear for all to see. Those who wish to minimize the fallout have recognized the important role silver and gold will play. In a cashless society, the government has the ability to simplify cut off citizens from the economy and freeze bank accounts, if it decided to do so – preventing someone from purchasing even a loaf of bread. The consequences for personal finance and social liberties are immeasurable. As an aside, while cash transaction is declining from year to year, admitted not all of this is a direct result of shady government scheming. There are various other reasons that account for this decrease in the cash economy: e-commerce (Link PayPal), mobile payments such as Apple Pay and Samsung Pay), International adoption of digital payment (for example QR code technology) and cryptocurrencies (such as Bitcoin, Ethereum and Litecoin). Precious metal investors are convinced that silver and gold – real money, historically speaking – which represent the sole alternatives to fiat or digital currency and wealth outside the banking system, will become enormously important and valuable. I cannot overstate the wisdom of owning real money in a cashless society as insurance against disappearing cash. As Rickards observes, thankfully the value of silver and gold is not affected by the digitization of the other forms of money or currencies. Article courtesy of Going for Gold: A guide for the South African precious metal investor by Zoltan Erdey
Why South Africans invest in silver & gold: Fiscal Foolishness
The South African government’s fiscal management of the economy leaves much to be desired. As things stand today, for every rand you pay in tax, 58 cents go towards public-sector salaries. This figure is likely to increase. The South African government is indebted to the tune of billions of Rands, and this figure is also likely to increase. While the latest borrowing is Covid-19 related, the truth is that the 2020 downgrade by Moody’s was inevitable and remains one of the biggest economic blows to South Africa in decades. Peter Spina, president of GoldSeek.com, rather astutely quipped that gold doesn’t need a credit rating. Precious metal investors have realized that gold and silver are a hedge against an unfavorable and weakening rand. Silver and gold investments can ensure that even if the international spot price of precious metals remains unchanged, the rand value of the metal will remain consistent. Each ounce of silver and gold is essentially a bet that the rand will depreciate. This is not unpatriotic – on the contrary, it is a smart financial step in the right direction of economic security and wealth preservation. Land can be expropriated, mines may be nationalized, retirement funds might be misappropriated, and the value of the rand could be destroyed and entire states captured, but ownership of silver and gold carries no counterparty risk. They represent real wealth that can hold in your hands. ‘Gold is the primary storer of value for choice for most people because it is cheaper and more accessible. Article courtesy of Going for Gold: A guide for the South African precious metal investor by Zoltan Erdey
Why South Africans invest in silver & gold: A desire to leave an inheritance
What form should a financial inheritance take if, for example, parents pass away before their children are able to stand on their own two feet financially? Less morbidly phrased: What financial legacy do you wish to leave behind when you are no longer around? Do you wish to leave behind money in the bank? Or wealth in the form of various policies and trust funds? Or property that your children can later sell at a profit? Perhaps even a business? While all of these are valid and prudent choices, I have found that a significant number of my clients want to leave a portion of their wealth in the most honest form of wealth there is: physical silver and gold. Banks could close and be liquidated; the South African rand may lose value; trust funds must be mismanaged (not to mention the exorbitant fees you may be paying to have them managed), and property might be reclaimed or occupied. But physical silver and gold are known specifically for their resilience and for providing protection against such contingencies. They are also safe and private wealth in your hand. They anchor your wealth and provide a measure of security against many eventualities. Also, protecting the wealth you built over years of arduous work and prudent living means having the pleasure and opportunity to pass down an inheritance. A simple wish, yet important to me and important to my clients. Those who purchase silver and gold think beyond mainstream financial instruments for wealth preservation, especially since wealth, if properly managed, may be inherited by our children and possibly even our grandchildren. The goal of handing down a legacy of hard work in the form of precious metals is highly motivating for the typical precious metal investor. Article courtesy of Going for Gold: A guide for the South African precious metal investor by Zoltan Erdey
