(Communicated)
The month of March 2023 was decidedly particularly violent for the banking system, to the point of reminding some of the dark hours of 2008. Admittedly, the current scale of the turbulence still has nothing to do with that which succeeded the crisis of subprime, but we can’t help but see some similarities.
First a fire started in a secondary bank in the United States (SVB), then another, yet another before the threat of the fire began to spread throughout the sector, including in Europe (Credit Switzerland, Deutsche Bank) despite the firewall plans whose relative reactivity we can see, it’s true, but also and above all the limits.
Under these conditions, investors concerned about preserving the value of their capital may naturally be led to consider reallocating their assets outside the banking system. And this debanking, generally partial, almost always takes place in the same way, again almost always favoring the same investment choices. Starting with the purchase of gold.
Indeed, we notice that each time the financial markets go through periods of uncertainty and volatility, many investors turn to gold as a safe haven. Because it may be said, even if it has not been the ultimate monetary reference for five decades now, gold has nevertheless proven its value as a store of wealth throughout human history, a means to freeze and protect the purchasing power of its capital during economic or political crises.
The price of gold not very sensitive to central bank policies
The precious metal owes this particularity to its very nature, an intrinsic value which owes nothing to the various monetary policies of central banks, which cannot therefore alter or depreciate it, contrary to what happens with fiduciary currencies subject to inflation and devaluations in the event of a crisis. This is why, even now in 2023, gold remains an effective source of diversification that can help reduce risk for investors. Not to mention that the price of gold is relatively uncorrelated to other asset classes, such as stocks and bonds, which makes it an effective way to reduce the volatility of a portfolio, even when the markets are choppy. .
Debanking, okay, but how?
Above all, there is no question of suggesting a pure and simple abandonment of the banking system. Firstly because it seems at the very least improbable that anyone today can do without a bank account, if only for their relations with the State or even the management of their professional activities, even if many companies today offer payment, collection or even investment services without a bank. But also because the bank is still the simplest and most effective means of streamlining the economy through the monetary exchanges it allows between all individuals, companies and institutions, in a practically universal way. The debanking, necessarily partial, should rather be seen as a diversification of its investments outside the traditional banking system.
Why buying gold in particular?
Of course, savers have long understood that they can place part of their savings in securities accounts, for example, through which they can buy and sell shares, bonds or other financial products, without having to by a bank. Life insurance also allows the investor to place his money in different types of funds outside the banking network. And how not to mention real estate, a tangible and solid investment by definition, which remains the obvious secure alternative to more uncertain financial investments.
But all of these options, except perhaps life insurance to a lesser extent, have at least two drawbacks.
The first lies in their entry ticket: not everyone has the means to buy real estate or to deposit a sufficient sum in shares on the stock market for the operation to make sense, knowing that in the latter case said sum may also be lost. On the other hand, contrary to popular belief, anyone can buy gold from a few euros (a gram is currently trading at around €59). And the value of this gold can remain entirely available, depending on whether you have chosen to go through an intermediary who will associate a payment card with the account on which the value of the precious metals purchased will be recorded (VeraCash for example) .
Because this is where the second drawback of the usual means of debanking lies: the lack of liquidity. Indeed, it is difficult to quickly recover all or part of the sums invested in securities accounts, in life insurance or in a building. A minimum of a few weeks is often required.
If we add the almost infinite inalterability of gold and its preservation even in the event of an economic collapse (yes, even real estate ends up deteriorating, even falling into ruin after a certain time), the yellow metal seems to be the most interesting option for savers looking to protect their assets. Moreover, it is no coincidence that this method of saving has been favored for centuries, in all strata of society.
Until we persuade people, starting with the most modest, that their capital would be better protected in the banks…
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