Is Switzerland still a safe jurisdiction for precious metals investors?

by
Claudio Grass
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Over the last two years, we’ve all witnessed state abuses of power and extreme overreaches the likes of which many average citizens had never imagined they’d see in their own lifetimes. This caused a great part of the body politic in many Western nations to revisit their previously held beliefs about what is and isn’t possible for their governments to do and to question whether there really is such a thing as going “too far” or whether anyone in the political class is subject to the same rules as them. 

For the majority, this was a lesson learned the hard way and a very surprising one at that. But even for those of us who understand the lessons of history and who never harbored any delusions about the nature of the State and the character of anyone who claims to know what’s best for anyone else, it was still quite an “awakening” experience. This applies best perhaps to conservative, long term investors, who are concerned about protecting and preserving their hard-earned wealth and keeping it safe for the next generation. 

For people who fit that profile, the answer has been quite simple for many years. Physical precious metals held outside the banking system in a safe and predictable jurisdiction was always the best way to ensure their wealth would be kept at a safe distance from the greed and the whims of whomever happens to be in power in their own nation at the time. Out of all possible candidates for such a safe place to store one’s metals, Switzerland also was the clear, straightforward choice, especially as time went on and all the other candidates began to show clear signs of moving toward more centralized and authoritarian systems of government. 

Thanks to the nation’s strong and long tradition of respect for property rights, its constitution, its economic and political stability, and most importantly of all, its governing principle of subsidiarity, investors knew they could sleep easy knowing their gold was secure, no matter how dire things got in their own countries. Wars, recessions, regime changes, all kinds of crises and emergencies came and went, nations saw incredible shifts and our way of life changed dramatically over the decades, but Switzerland remained safe, stable and relatively unscathed. 

Now, however, there are some investors who are, justifiably, wondering whether this time might be different. Could it be that the covid crisis and the vast economic destruction that the governments’ response to it unleashed might have changed the way we should think about Switzerland too? Could it be that this historic shift, all the power abuses and all the unprecedented measures that we have witnessed and continue to witness, may have “corrupted” the small alpine nation as well? Is it still a safe jurisdiction for precious metals investors or might it be that even this “last bastion” of individual liberty and financial sovereignty has also fallen?

Well, the simple answer is no. But there’s really nothing simple about all these questions and concerns. Of course, as a proud Swiss, some might think me biased, but those familiar with my beliefs, my speeches and my writings will know that I very vocally criticize state abuses, no matter where they take place, and I do so even more fiercely when they occur in my own country. 

And there have been quite a few attempts here too over the last years, and especially since the emergence of the pandemic. The rest of the West has certainly gone off the rails politically, but it is true that we saw a number of power grabs of own in Switzerland too. The virus served as a great excuse for the political minorities and all the megalomaniac fanatics (we do have a few of them in this country too) to launch fear mongering campaigns and to do their best to divide the people and to get them to vote against their own interests. 

But that is what differentiates Switzerland from its peers; always has and always will: it is a nation defined by its own will, founded upon a history of independence and armed neutrality. Because of its decentralized structure (e.g. 7 Presidents and not only 1), different languages, different cultures, different religions all coexisting on a very small territory, it was always known as a place of tolerance and more than that, as a place that welcomes and entertains different ideas. This is why one can still find here free speech, the non-aggression-principle, the right to vote with your feet, competition on municipality level, even during times of collective madness. This is why even the founders of intellectual idiocy such as Marx and Lenin lived freely in our country. 

No centralized government or king ever stood over the people. Instead, we always governed ourselves in municipalities and cantons. It is only on this small scale that Democracy can actually work, where each vote affects directly each individual voter. As a result, up to now, despite all the influences and the pressures to accept a move towards centralization, Switzerland still managed to preserve a much higher level of trust and social cohesion among its people than its neighbors. 

And it was because of this long history and the decentralized cultural and political structures that quite a lot of people in Switzerland were shocked to see how the federal politicians violated our Constitution during the covid crisis. And now they are trying to do so again, by attempting to conduct negotiations that are not aligned with sovereignty and unconditional armed neutrality. However, actions have consequences and one of them is that the number of people who now realize that these central government actions are not in their best interest is growing. As a result, local groups are already forming to join the competition of ideas in the future, looking for ways to prepare for the coming global economic crisis. The number of these people in Switzerland is impressively high. This, combined with the still high level of trust within the population compared to surrounding Western countries, enables the peaceful detachment from the simple-minded ideas of the Federal government. They not only have the will to do so, but also the means: they can vote with their hands, and if that fails, they can vote with their feet. Therefore, I am convinced that Switzerland will continue to respect private property. The State in this nation is not as powerful as abroad and it knows it.

This doesn’t mean that we should grow complacent, or that we shouldn’t be alarmed at the shift we see in this nation too. After all, the nature of the State is the same everywhere and even if its small and contained like our own, the dangers of overreach are still present. However, what is important to remember is that there is no place on earth that is perfectly safe. It just so happens the Switzerland, as a jurisdiction, is by far the best of all the bad options. 

Claudio Grass, Hünenberg See, Switzerland

This article has been published in the Newsroom of pro aurum, the leading precious metals company in Europe with an independent subsidiary in Switzerland. 

This work is licensed under a Creative Commons Attribution 4.0 International License. Therefore please feel free to share!

Picture: Die drei Eidgenossen beim Schwur auf dem Rütli (Ölgemälde von Johann Heinrich Füssli, 1780)