Physical gold and silver: reassuring assets and time-honoured safety nets

Gold and silver are the only tangible assets likely to preserve the value of capital over time and through crises, particularly in a constantly changing world like the one we live in today.

In economic terms, as in a multitude of other domains, everything changed a few years ago, and new technologies are a big part of that. We know that nothing will ever be the same again, that what we learned yesterday will be of no use to us tomorrow. The flaws in certain business models have been revealed, and markets no longer systematically evolve in the ways we expect.

Stability in a now uncertain world

Americans have an acronym which defines this new anxiety-inducing world in continuous motion, where anything can happen in the blink of an eye, for better or for worse. That acronym is VUCA: V for Volatile, U for Uncertain, C for Complex and A for Ambiguous. And in this VUCA world, at a time when everything we held to be certain has suddenly proved extremely fragile, it has become essential to hold onto immutable, tangible and reassuring assets.

In that respect, gold and silver have consistently had a special place in people’s hearts. As symbols of both financial power and security, these two precious metals have always been universally recognized as indisputable economic assets, and even currencies in their own right, and this for at least the last six millennia. They have come through each civilization, supported the development of every empire around the world, and enabled the transmission of wealth with incredible stability, all the way to the present day.

Buying power preserved for millennia

Just compare the buying power of gold over the centuries, and you will realize how much its safety as an investment instrument has remained intact. For example, it took two ounces of gold to buy a cow in Ancient Egypt, and it still costs the same amount today. Closer to home, a 20 franc coin could be used to buy a new bicycle in 1912, and this is still the case in 2018.

This constancy cannot be found anywhere else, and no currency can claim this same ability to preserve the value of capital. This is particularly true since currencies are based on debt and lose their value day after day. For example, the dollar – today’s currency of reference around the world – lost 98% of its value compared to gold over the last 100 years.

As for the stock market, it has experienced such upheaval since 1929, but especially since 1997 (for more than two decades), that it is very difficult to imagine it offers the slightest stability.

Gold and silver: the only solution for the economic troubles of tomorrow

And yet, savers need security more so now than ever, at a time when the outlook for the future is becoming increasingly gloomy. Today, we hear talk about automation, robotization and digitization, all three the visible effects of progress which will unfortunately translate into massive job cuts. 

Not to mention the different scenarios which the media now trot out on a daily basis, in terms of climate change, the exhaustion of natural resources, and geostrategic, political, economic and health risks, all of them sources of concern against which people strive to protect themselves by any means. Their primary worry is to preserve their ability to provide for their subsistence under any circumstance. 

And for that, only safe investments like gold and silver remain stable and reassuring enough to guarantee the preservation of capital, as they have done for millennia despite the countless periods of unrest punctuating human history.