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Ask Olivier

Are My Precious Metals Safe from the Government and Bail-Ins?

I am assessing the security of my investments, which is the reason I’m investing in physical gold and silver. However, I still do not feel confident that my precious metals are safe, so I have some questions. First, since my cash in the Hard Assets Alliance account is held by a commercial bank, is it safe in case of a bail-in? Second, if I store precious metals with you, can the government confiscate it? Lastly, in the event of a financial crisis, are there any risks or obstacles I should be aware of with respect to accessing my precious metals? —A.G.

Thank you for being a valued member of the Hard Assets Alliance. These are excellent questions, which I’ll answer one at a time.

“Since my cash in the Hard Assets Alliance account is held by a commercial bank, is it safe in case of a bail-in?”

In theory, your cash is at risk in case of a bail-in. For this reason, I do not recommend keeping more cash in your SmartMetals® account than what you need to cover storage fees or immediate purchases. It is much safer and more convenient to hold your cash in several FDIC insured bank accounts. Just make sure you don’t exceed the FDIC insurance limit.

“If I store precious metals with you, can the government confiscate it?”

As for storing precious metals with us, I can assure you that your precious metals are safely stored in non-bank vaults. As such, a bail-in type of seizure would not affect your precious metals holdings.

In theory, the US government could specifically target non-bank vaults and seize your gold there. It has the power to do virtually anything with your assets. However, it’s highly unlikely.

If the government wants to seize its citizens’ assets in a fiat monetary system, the easiest legal and least controversial way is to debase the dollar. And that’s exactly what the government has been doing—since 1971, the dollar has lost about 97% of its purchasing power.

Further, the risk of gold confiscation today is much lower than it was in the 1930s when the US was on the gold standard. Back then, gold represented a much greater portion of the nation’s wealth than it does at present. As such, confiscating precious metals today might not be worth the trouble.

If you want to mitigate this risk even further, store your precious metals in one of our non-US vaults. It is a lot harder for the government to confiscate assets held abroad than those held in the US.

Another option would be to store some gold yourself. While I am a big proponent of having a small amount of precious metal and cash on hand in case of emergency, I do believe that having too much (especially at home) could put your life and your family’s lives at risk.  

I know of people who were forced to turn over their precious metals holdings at gunpoint because their kids blabbed about the secret stash to their friends. The information eventually made its way to a thug.  

The worst part is that insurance did not reimburse these individuals for their stolen precious metals because there was no proof or declaration of them. Of course, you would not want to tell your insurance agent that you have $100,000 worth of gold hidden in your basement either.

“In the event of a financial crisis, are there any risks or obstacles I should be aware of with respect to accessing my precious metals?”

None that I know of.  

We have a disaster recovery plan in place that includes a 24/7 alternate back-up site to handle orders and requests in the event of a natural disaster.  Our vaults have maximum security and full power backups.

If the crisis is severe enough and you want to take delivery of your metals, you can call us and we will arrange the delivery within a couple of days using Fed-Ex or Brinks, depending on the size of the delivery order.  

To golden opportunities,

Olivier Garret

Olivier Garret, CEO
Hard Assets Alliance

 

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Why I Founded the Hard Assets Alliance

11 years ago, I became the CEO of Casey Research, a leading publisher of investment newsletters. Like me, many of our subscribers where precious metals investors, and we shared the same challenge: How do I safely buy and store precious metals? Read More...

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