While redistribution of wealth (whatever this means strategically) is certainly an obligation if South Africa is to avoid an inequality gap that may lead to civil war, many South Africans of all races don’t believe that expropriating land is the answer.
Talk of the expropriation of land without compensation makes many people nervous, not because of their lack of interest in the plight of the poor, but because of its ethical and social implications. Can the government be trusted to draw a line in the sand and commit to expropriating only certain types of land (such as empty productive farmland)? Or once some land and farms have been redistributed, is it a matter of time before certain residential and commercial properties will become fair game, too, in the name of addressing inequality? Many ridicule such theorization. But too many laughed 20years ago about the possibility of expropriating land without paying the owner for it.
On the basis of this consideration, many investors are choosing not only to stay away from property (residential, commercial and land) but are actively exiting the property market by selling investment land and properties. So have I. After all, considering the uncertainties about the exact nature of expropriations, having a substantial part of one’s wealth in property is simply too risky. In this context, the value of precious metals becomes rather irresistible.
For those looking for safe-haven assets, silver and gold represent a safe form of wealth-holding relative to land and property. It is wealth that is outside the banking system –and thus, quite literally, it is wealth you can hold in your own hands. Over the years, many of my clients have used the profits they received on the sale of a property to purchase silver and gold as a pre-emptive wealth-presentation tactic. Land can be expropriated, it seems, while silver and gold are not so easy to take.
Article courtesy of Going for Gold: A guide for the South African precious metal investor by Zoltan Erdey
