Gold is a great investment for anyone looking to protect their savings. Because gold is one of the first alternatives investors buy when the stock market takes a dip, investing in gold can protect your savings and act as a hedge against losses in the stock market. As new financial regulations come into play, called “bank bail-ins,” gold also offers peace of mind when you’re not certain about the sanctity of your large deposits held in the banking system.
With one of the largest inventories of silver and gold in Canada, Silver Gold Bull always has a large inventory of gold bars and Canadian Gold Coins on hand. We ship them, insured, tracked, and discreetly packaged, as soon as your payment is approved. We also buy gold when you want to recapitalize, so whether you want to put that money in a new investment or you’ve been saving it for your retirement, you won’t have any trouble liquidating your gold. You can also store your gold through Silver Gold Bull at secure third party depository facilities, keeping it out of the banking system and secure, a great solution for large gold and silver investments.
So what is Canada’s new “bank bail-in” regime, and why does it have some investors turning toward gold? In 2015, the federal finance department introduced a bank bail-in regime to protect systemically important banks (i.e., the too-big-to-fail kind, or Canada’s Big Six). A bank bail-in is a system in which long-term, tradable debt obligations are converted into common shares if and when a bank depletes its capital. This will allow the bank to continue to operate without needing a massive government bail-out. Shareholders and creditors become responsible for recapitalizing a struggling bank, however, as a depositor, you are also a bank’s creditor.
After a bank bail-in system in Cyprus resulted in Cypriots’ seeing 47.5 percent of deposits over 100,00 euros turned into equity, essentially, the bank taking money out of your account to save itself, there were rumours that something similar could happen in Canada. The government of Canada had been extremely ambiguous about the wording of its policy, until the Finance Department specified that private deposits (including GICs) would be exempt, though there was no specific reference to unsecured deposits over $100,000. There remains considerable uncertainty among high net worth investors, especially as it remains unseen just how one of Canada’s Big Six banks would run into such trouble. But when former Bank of Canada Governor Mark Carney said that it’s “hard to fathom” banks touching private deposits, he did not say it was impossible.
Keeping your money invested in gold and silver, safely held at an independent storage facility like the ones Silver Gold Bull works with can protect your savings from the bail-in regime in even the worst financial crisis. As Canada’s real estate market heads toward a bust, with major banks carrying large real estate portfolios, the bail-in system may be put to the test sooner than later.
If you’re not interested in bailing out the banks with your own money, or you want to diversify your investment portfolio with precious metals, just give us a call. Your savings are safer when they’re invested in precious metals like gold and silver.