Gold In Swiss Vaults – The Ultimate Form Of Wealth Protection

In a confession released by Bloomberg, Swiss gold and silver trader Pro Aurum explains how demand for gold bars has boomed right after the financial crisis in Cyprus in March of this year. The article unsurprisingly points to the increasing value amid declining precious metals prices:

As the euro-area went through a record-long recession, and only edged back to growth last quarter, demand for storing gold bars and coins in Swiss vaults has been rising. Even as the price of the metal has declined more than 20 percent this year, some investors see gold as less risky than other assets such as bonds, where debtors may not be able to pay, or equity in a company that may go out of business.

Although it is hardly a revelation for readers of this website, we thought it was forth mentioning because it’s Bloomberg writing this.

The article points to the investment qualities of physical gold stored in financial haven Switzerland. The country allows investors to preserve wealth because of Swiss neutrality, its stable democratic system and the opportunity to keep assets outside the banking system. It’s the ultimate form of wealth protection.

Financial safe haven

For the last three centuries Switzerland has been the place to be for safe storage of money and precious metals. Julian Phillips wrote earlier:

Not only is Switzerland a nation with an impossible terrain for armies, it has an army (mainly reserves) of over a million soldiers ready for action at any time in a well-trained state of readiness. Its complex of bridges and tunnels, which link it with all the different parts of Europe and allow its own people to travel through the nation, is mined with explosives that will make it impassable should it be invaded. As a result its refuge for capital is 300 years old and its banking industry 5 times the size of its own GDP stretching all over the world. It has been tried and tested in war and in peace like no other nation. It’s this testing that is critical for investors. If they feel another country would be a better place to store wealth out of reach of their authorities, then they would have to question the robustness of its resolve against any other country’s attempts to dominate their sovereignty.

Allan Finn, global commodities director at logistics company Malca Amit, said that “Switzerland is a neutral country and always has been. It’s a safe haven which is perceived to be exempt from political interference.”

Amazingly, Switzerland was even able to stand the political pressure of the US. Just a month ago, we wrote that “the lower house of Switzerland’s parliament voted against adopting a plan for banks to step around the Alpine nation’s banking secrecy laws and hand information about their dealings with suspected American tax evaders to U.S. authorities in an attempt to reach a sweeping resolution. The proposed plan would have many of the country’s roughly 300 banks start providing details to the U.S. Department of Justice about their past relationships with American clients and the employees who assisted those clients.”

It is really no coincidence that we keep on repeating to own physical gold and silver outside the banking system in Switzerland.

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