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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

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