I have been advising HNWIs for over a decade on the best strategies to preserve wealth. In this era of debilitating central economic planning and monetary inflation, this has involved buying and storing physical gold and silver bullion, in full privacy, outside of the banking system, in Switzerland and Liechtenstein.

No one knows the future and we don’t even know the truth of our current situation; or in the words of Johannes Wolfgang von Goethe:

It is easier to perceive error than to find truth, for the former lies on the surface and is easily seen, while the latter lies in the depth, where few are willing to search for it.

I have been traveling and studying the world for most of my life. First, as an airline executive. Then, as a Swiss Peace Corp Officer on the Israeli-Syrian border. Finally, for the past 10 years, as an investment manager specialized in precious metals.

Throughout my studies of geopolitics, history, philosophy and macro-economy, the writers who have left me with the longest-lasting impressions are those who spoke of the superiority of liberty over tyranny, who have written about the individual’s natural right to life, and those who have properly shown the utter limitations and immorality of collectivism in all its forms. Among them are Ludwig von Mises, Murray Rothbard, Harry Brown, Hans-Hermann Hoppe, Frédéric Bastiat, Friedrich von Hayek and Alexis de Tocqueville to name just a few.

When I think about gold, I also think about the values associated with it. The most important aspect to me is striving for personal and individual happiness – or the right of every person to pursue happiness in their own way. It is my profound conviction that sound money is fundamental to a healthy and prosperous society. That is why I became a proponent of the Austrian School of Economics, which stands for private ownership, free markets and financial sovereignty, resting on the premise that things are settled into order despite the apparent chaos of individual actions.

My moral and practical motivations for personally owning physical gold and silver are hence quite straightforward; they are as well, I think, just as clear for those who understand the theoretical and philosophical background I have referenced.

The Rational Aspect

John Maynard Keynes turned the world upside down with his argument that saving is not the lifeblood of investments; he maintained that on the contrary, it is a burden for the economy. His opinion was that wise and all-knowing planners (in other words, a pseudo-benevolent politburo) could correct macro economic imbalances by manipulating market signals. The implication of such a system, wholly congruent with Marx’ fifth “commandment”, is that it enables a massive centralization of power. However, as is taught (or should be taught) in every political science 101 class: power corrupts, and absolute power corrupts absolutely!

This central planning precept furthermore contradicts not only common sense and trivial observation, but also the full historical record: indeed the driving force behind economic health are savings, financial prudence and investment; not reckless spending, mindless consumption, and debt.

In the same way that nihilism is a self-refuting ideology (if existence is meaningless, being the prophet of that meaningless is a proof against it), the Keynesian school (and its neoclassical successor) is contradicted reductio ad absurdum: if all that matters is debt, then let’s all stop working, let’s only print paper, and we’ll solve world hunger!

The problem is exacerbated by the fact that paper money used to be a property title, but has become a debt security. These IOUs represent the promise that future generations will pay off their predecessors’ debt via taxes and inflation. In such an environment, the populace is automatically divided between winners and losers: the former being those close enough to the monetary spigot, the latter everyone else. Moral hazard becomes the rule of the game; merit and talent die with it. It is a fraud of gigantic proportions.

Liberty Dies By Inches

Another compelling line of reasoning arises from the aspect of civil liberties. The very institutions responsible for sowing misery and death are presenting themselves as holding the solution to their own misdeeds.

Henry Hazzlit wrote in an article back in 1956, where he says:

The greatest threat to American liberty today comes from within. It is the threat of a growing and spreading totalitarian ideology.

He identified three main tendencies, or tenets, on the slippery slope towards totalitarianism. Principally, he wrote of the pressure for constant increase in governmental powers, i.e. a constant widening of the government’s sphere of intervention. As a natural corollary, this involves ever-growing government spending. In effect, that means the productive individual is decreasingly able to invest the wealth he produces, as it is being looted away by an unproductive ruling class. As government control becomes wider and deeper, individual discretion and the individual’s control over his own affairs necessarily become narrower and shallower.

Geopolitical Power Shift From West to East

Yet another aspect to keep in mind is the ongoing geopolitical power shift from west to east. With unemployment levels at multi-generational highs among the youth in the western world, combined with a deteriorating real economy, the prospects of a sustainable (or at least tolerable) future slowly fade away. We all know from history that when empires collapse, so do their currencies.

Today it seems that the actual monetary central planners are at war with reality, and that currencies are racing with each other towards their intrinsic value of zero. At the same time, ongoing geopolitical proxy wars are being waged, with uncertain outcomes and even muddier motives and interests behind them: in Eastern Europe, the Middle East, Central Asia and North Africa. The past decades of constant conflict especially in the Middle East, along with the accelerating religious wars, have and will lead to further radicalization. Aggression can only bring out more aggression and this will lead to additional tensions in the western world. One therefore needs to consider that by using, saving or investing in the paper money system one is helping the State finance foreign interventions; it thus enables the continuity of conflict, and there exists therefore a strong moral argument against it.

Government-Mandated Education And Propaganda

It might seem like an uphill battle, but it is my personal view that true change will come through education, information and free debate. Thomas Jefferson once said:

Educate the masses – they are the only sure reliance for the preservation of our liberty.

Unfortunately, it is my impression that his advice is not properly heeded. Ideology has taken hold over economics, finance and political science; a “one-size fits all” system, which is dominated and controlled by a plethoric government construct certainly isn’t what Jefferson had in mind.

The fact that six conglomerates in the US nowadays control the whole media landscape does not augur well for the propagation of truth and cognitive diversity. Edward Bernays, the Father of Propaganda, once said:

The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in a democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country…We are dominated by the relatively small number of persons, who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.

The Silver Lining

One should not underestimate the power of the Internet as the modern equivalent of the Gutenberg press. A gigantic information and knowledge ecosystem is now at our fingertips. The days of government-controlled radio and television are over, which is allowing ideas to compete freely once more. A new emergence of sound money, I believe, will be one of the clear victories in such a new world.

Gold and silver should not be seen as a trading vehicle, but rather as an insurance in a highly uncertain world, a protection against the insanity of central planners, and a safety net against a possible forthcoming crash of the monetary and financial order.

Although it is impossible to determine when it will happen exactly it should be obvious by now that the coming years, especially in the western world, will be dominated by a declining real economy, higher unemployment rates, financial repression measures such as higher taxation and government restrictions. Interest rates, which are kept artificially low, are causing low or even negative real return on investments. In such an environment, gold is a high-yield asset!

Direct and unencumbered physical ownership of precious metals stored outside of the banking system is therefore essential, if you are interested in a real and practical insurance against the ongoing problems in our monetary system and the uncertainties in our world today.

Claudio Grass, Precious Metal Advisor in Switzerland, and Ambassador of the Mises Institute in Auburn (AL), USA

The greatest and most robust contributions to knowledge consist in removing what we think is wrong.

 

— Nassim Taleb (or paraphrased: we don’t know what might work in a future and uncertain world, but most of us know for sure what cannot and does not work: printing wealth out of thin air is destructive nonsense).