Back in 2013, the banks in Cyprus were facing a liquidity crisis. Reckless lending of the same type that led banks across the world to face bankruptcy, requiring bail outs in the billions to prevent total economic collapse, meant that they didn’t have enough money for depositors to take out. Withdrawals were rationed and the Cypriot government didn’t have the money to bail out its banks, unlike the U.S., which did spend $700 billion saving its banks. What the banks did was cause for major alarm across the world – as part of a bail out deal with the EU and the ECB, banks implemented a “bail in,” in which they confiscated depositors’ money. Nearly half of all deposits worth €100,000 and more were confiscated to cover the bank’s liquidity crisis.
That’s when Canada announced it would introduce its own bail-in system, to prevent a U.S.-style bank bail out that would cost taxpayers billions. Despite assurances that depositors would not be affected, it’s unclear whether the same can be said for deposits over $100,000, and that has gold investors paying attention.
Any sign that large deposits could be confiscated to cover a bank’s liquidity would cause a huge surge in prices for precious metals, as high net worth investors sought the safest place to store their wealth. As many Silver Gold Bull clients understand, one of the safest places to store your wealth is gold, especially at home or in allocated storage. Gold keeps your wealth safe from financial crises, confiscation, stock market collapses, and inflation. It’s money that maintains its value, whereas currency is money that is constantly losing value.
Whether or not a bank bail-in would play out in Canada the way it did in Cyprus, gold is an investment that should be part of every portfolio. But with the 2007-8 financial crisis still fresh in many investors’ minds, even risk-taking investors have a conservative streak and plan for the worst.
Whatever your investment goals, the gold experts at Silver Gold Bull can help match your strategy to meet them. If you’re a high net worth investor, you will get an account executive assigned to you who will help you fit gold into your portfolio to achieve your aims. In addition to help from an assigned account executive, Silver Gold Bull also makes buying gold secure and simple. At other gold dealers, you might have to wait for them to raise the capital to purchase gold bullion from the mint. With our deep liquidity, we can satisfy orders in less time, and it means we can buy gold, too. Deep liquidity helps us better serve our customers.
As online dealers, we also serve all of Canada and beyond. Whether you want to buy gold or silver in Vancouver or Halifax, you can buy it from us. Get your gold orders faster and pay lower premiums. You can also contact us about allocated storage – there’s no safer place for your gold!