First Stages Of The Civilization’s Collapse

This article was first published in 2024 but recently updated.

In the history of the world, nations and even empires have risen, then declined and were lost to time, leaving only artifacts behind for archaeologists to piece together what happened.  From our vantage point, it’s easier to see what happened, the slow decline in so many areas that finally led to a collapse.  Fortunately, we understand today many of the factors that have to be in place.  Unfortunately, even knowing these signs of decline may not be enough to slow or stop the momentum of your nation’s collapse.  In this video, we will lay out the eight signs of imminent collapse.  You may recognize one or all eight in your country’s recent history.  Having them all doesn’t guarantee that a collapse is inevitable, but it makes it more probable, especially if you have them all to a high degree. 

1. Financial Decay

One of the most visible outward expressions of a collapse is the bottom falling out of the financial system.  From double, triple, or higher-digit inflation pricing people out of basic necessities to dramatic market declines evaporating a lifetime’s accumulated wealth instantly, economic collapse can aggravate other conditions that can domino into a full-on failure.  Many market collapses actually have a long build-up.  The housing bubble, the commercial real estate bubble, trade wars, and the loss of faith over time in a single fiat currency all happen slowly over the years and then reach a tipping point.  In some cases, the ultra-wealthy cheer on the decline in some ways as they profit off selling short and feel that they can maintain profits by shifting their money to other assets or more stable countries.  However, that doesn’t always work as assets are often frozen, withdrawal limits are established, or the currency becomes so devalued that it doesn’t retain any fluidity.  Nobody wants it nor transacts in it anymore.

The financial decay is often preceded by a growing income gap, enormous corporate profits at the same time everyday consumer goods become luxury items for the masses, and wages that fail to keep pace with the nation’s prior growth.  Economic inequities breed resentment in the citizens, resulting in high crime, fraud, and eventually protests, looting, rioting, and even revolutions like the French Revolution.  You may recognize several of these indicators of financial decay in your nation.  While it’s not a guarantee of a coming collapse, you must continue to monitor.  Your insulation from it starts with recession-proofing your life. Still, it continues with increasing your skills and abilities to sustain yourself independent of the commerce system, like growing your food instead of expecting to purchase it at the grocery store after having traveled 5,000 miles from where it was grown.

2. Agricultural Decline

The rise of agriculture also gave rise to cities, states, and nations.  Without harnessing nature in agricultural practices, thereby increasing yield and concentration of food sources, nations would have never formed out of nomadic, hunter-gatherer groups.  While weather patterns may be perfect for agriculture in a particular area for several centuries, they can change.  The lack of floods in the Nile contributed to a dramatic decline in food production in the 13th century.  Excessive rain in 14th-century Britain caused massive crop failures that resulted in massive food shortages.  The Irish Potato Famine, also known as the Great Hunger, began in 1845 when a mold caused a destructive plant disease that spread rapidly throughout Ireland.  While the Egyptians, British, and Irish survived the downturn, they all suffered through what can only be described as a period of collapse.

I often point out that while some plants have thousands of varieties, societies tend to gravitate to the most prolific single cultivar.  They then also open themselves up to large-scale crop failure when disease or blight strikes that monoculture.  There are 1,000 different types of bananas worldwide, but we only mass-produce one variety- the Cavendish.  What happens when the Cavendish succumbs to a plant fungus that the Blue Java banana has resilience against?

Sometimes agricultural decline isn’t a result of weather or blight but merely a result of economics.  As the Great Depression took hold in the United States in the late 1920s, many farmers saw their milk prices drop, and by 1933, prices were less than half what they had been just three years prior. Farmers reacted with milk strikes, and the protests often turned violent.  Raiding parties stopped trains laden with milk and dumped it into the ground.  A cheese factory was attacked, and the angry mob poured kerosene on 600 pounds of cheese.  An even more extreme impact on agriculture can be war.  From scorched earth to land left fallow as wars rage to starvation of the masses and even cannibalism, a more significant societal collapse could be imminent when agricultural output is threatened or in decline. 

3. Health Decline

The health of a nation can also be measured by the health of its people.  There are obvious factors like plague, disease, wars, and pandemics, but more subtle indicators like lifestyle and environmentally induced illnesses exist.  From lead pipes used in Rome to cancer-causing pesticides to industrial, even nuclear waste, there are several environmental factors that lead to medical issues that sap a nation’s resources and workforce.  There are also lifestyle choices that can contribute to a more significant decline in overall health.  Refined sugars, preservatives, highly processed foods, smoking, excessive alcohol consumption, and all those other things we now know have to be taken in moderation or not at all lead to health issues like obesity, diabetes, fatty liver, cancer, high blood pressure, and the list goes on from there.

Increased health issues overburden the established medical care system.  Diseases, famines, and wars can completely obliterate any national healthcare system.  As people turn to blame the established government for their problems, they can sometimes riot against the established order and plunge their nation deeper into a spiraling decline.

4. Decline in Birth Rate

A decline in the birth rate indicates a nation’s decline.  While environmental and social factors can impact fertility and fertilization rates, it is more indicative of a general lack of faith in the future.  The future may appear too uncertain, chaotic, or rife with conflict that raising a child is just too difficult.  Or, the future’s financial prospects are so dismal, and the current economic situation would only result in poverty for anyone trying to raise a family.  Birth rate and fertility rate are helpful in analyzing and understanding a nation’s replacement rate.  Populations that increase can put a strain on economies and infrastructure.  Populations that don’t replenish themselves can experience slowed services, a decline in transactions and commerce, or even be left unable to defend themselves from foreign adversaries.

Birth rates are falling in the U.S. after experiencing a high with the Baby Boom in the mid-20th century and a low from the Baby Bust in the 1970s, birth rates were relatively stable for nearly 50 years. That all changed with the Great Recession, from 2007-2009. Birth rates have declined sharply since then.  Russia’s birth rate has declined since 1994, just after the official fall of the Soviet Union.  Obviously, there is a correlation between societal collapse and birthrate in Russia’s history.  China reported in January that its population had fallen for the first time in 60 years. In 2022, there were just 6.77 births per 1,000 people in China.  India’s General Fertility Rate has declined by 20% over the past decade.  Japan’s birthrate is so dire that the Prime Minister warned, “Japan is on the verge of whether we can continue to function as a society.”  With all these superpowers and super economies experiencing declining birth rates, they cannot replenish their aging populations and maintain their traditional systems.  This can contribute to a more significant societal collapse.

5. Misinformation & Rumor As Fact

There are signs of decline that are less obvious than a financial collapse, unhealthy people, and declining birthrates.  Sometimes it’s what you know, don’t know, or think you know that can destroy a population.  During the First Inquisition, created by religious courts to combat heresy and witchcraft, Pope Gregory IX ordered the witch’s familial animal, the cat, especially black cats, to be burned and killed with the witch.  Hundreds of thousands of cats were killed, leading to the rapid proliferation of rodents, particularly a bacterium carried by rats.  That bacterium was ultimately the source of the Black Plague.  From prescribing opiates for crying babies to sanitized tapeworms to lose weight, it’s often the misinformation informing medical practices that can cause death rates to go up in society.  

Rumors that lack substantiating facts can also erode accepted norms that cement stability in culture.  When one class or group of people labels another an enemy or dehumanizes the other, and rumors and stories, and a whole narrative spring up to support that contempt, a society loses its unified sense of forward progress and erodes from within.  Misinformation and assumptions about race, ethnicity, religion, politics, caste systems, and even governing philosophies between rural and urban areas can all foment contempt among people.  When people act upon or react to this misinformation, false narratives, and pseudo-facts, societies move from a desire for unity to a culture of discord.

While these society-altering flare-ups have led from the extremes of concentration camps to minor confrontations in communities, we collectively live now in a time where complete false narratives can be established and erroneously supported through word-of-mouth, the internet, doctored images and photos, deep fakes, and even Artificial Intelligence.  Often, you can see governance based on misinformation or an assumed interpretation of data and information.  Often you see a dismissal of data and facts because it conflicts with the more extreme narrative.  Even state-sponsored propagandists, internet trolls, and sensationalist pundit entertainers profit from spreading controversial misinformation.  All of it signifies a lack of cohesive unity in a society, which is a sign of a possible more significant collapse in the future.

6. Infighting

By extension of the misinformation and rumors, the next sign of imminent collapse is uncontrolled infighting.  Scapegoats are sought for failures ranging from the response to natural or industrial disasters to inflation and financial market collapses. One group elevates itself and blames the other.  Looking even casually at parliaments and congresses worldwide, you can see this play out in real time.  If you look at the struggles of the oppressed or have-nots and the ruling classes and wealthy elite, history is littered with examples of infighting.  That fierce infighting, inflamed rhetoric, and scapegoating often translate to the neighborhood level.  Eventually, people don’t trust their own neighbors, family, or friends.  Distrust is the first stage of infighting.

Typically, both parties claim and play the role of victim and aggressor. There is a rise in conflicts and expressive exchanges. The opposing side is seen as the enemy. Often dehumanization labels are ascribed to the opposition.  Eventually, neither the government nor neighbors can work together for the greater good of society.  With no forward progress or planning and absent the feeling that we are all in this together, society erodes from within and is one step closer to collapse.

7. Enemies Foreign & Domestic

Even as the enemies within are formed anew, the enemies of other nations continue.  Right now, there is a rising and outward expression of disdain for heavy-handed Western diplomacy.  Europe and America are seen as imperialistic forces that have for too long reigned over and dictated the policies of other countries.  Russia, China, Iran, and many others condemn the tactics of the US even as they deploy autocratic, harsh, and heavy-handed tactics of their own, dominate and invade smaller nations, and commit human rights violations.  In the big picture, neither side is right. They simply try to bend the world to support them while profiting from the resources.  These differing philosophies label each other enemies.  They seek to dismantle and deconstruct the other.  Wars are fought from nation to nation, and civil wars are fought within nations.

This gives rise to proxy wars, wars, invasions, cyberattacks, state-sponsored terrorism, sabotage, and conflicts that range from the battlefield to the boardroom.  When a country erodes from the other warning signs mentioned, it is more vulnerable to foreign and domestic enemies.  Russia and its predecessor culture by geography have been involved in 185 wars and armed conflicts that range from the Mongol Invasion to the War in Ukraine.  America has been engaged in conflicts ranging from the Bay of Pigs to the Contras to World Wars, a Civil War, and even a Revolutionary War that created the country.  Every society and nation has a history of armed conflict fighting enemies from within and without.  For each overt and extreme conflict we can see, there are thousands of more minor and unnoticed wars being waged.  All combined, they erode the structure and peaceful state of a unified society, and as they pick up momentum and intensity, they may also indicate an imminent future collapse.

This final push of foreign and domestic enemies facilitates all collapses. Foreign influences have always been there, but in a global market with instantaneous communications, enemies can attack from computer screens thousands of miles away from computer screens. Domestic vigilantes and those emboldened by a “cause” or purpose-driven philosophy, dogma, or idealogy like accelerationism or anarchy actually seek to hasten the downfall of order by attacking others or infrastructure.  Foreign and domestic enemies come in many forms and are always lurking in the wings to give that final push into societal collapse.

8. Resource Depletion

One of the most significant indicators of an imminent collapse is resource depletion.  When a river changes course or runs dry, when wells and aquifers are depleted, and when energy can’t be produced to control the extremes of hot and cold weather, life in some areas becomes untenable.  Forced migrations, immigration, and emigration create imbalances and competition for resources that may not have existed before.  

We collectively live in an agrarian society like we are still nomads, often using the last of every bit of local resources without considering replenishing those resources.  When we run out, instead of moving on like our nomadic ancestors, we take from some other region where we care even less about replenishment or conservation, or reduced consumption.  Any resource imbalances from water to food to raw materials can only be compensated for for just so long.  Eventually, society is so far removed from something like growing its own food that when the delivery system fails for long enough, the people starve, and society fails.  Watch for signs of resource depletion from drought restrictions to poisoned water from crop failures to fossil fuel prices rising.  All of these are indicators of resource mismanagement, if not also a sign of a future possible collapse. 

You likely see one or all of those signs of an imminent collapse in the country you live in right now.  That doesn’t mean collapse will happen overnight.  Based upon the intensity and frequency of these eight signs, you may just see a gradual decline from your nation’s pinnacle of perceived greatness.  Societies change, and the past is often longed for as “the good old days,” though it was a different time with different thinking, problems, solutions, and resources. There is still a city called Rome, though the Roman Empire has long ago receded to the pages of history books.  It could be that your nation has seen its pinnacles, and the eight signs of imminent collapse are picking up overwhelming speed.  You can still weather that coming storm.

When you endeavor to prep, learn skills, grow your food, source food and water locally, learn to become more self-sufficient, and lessen your dependence upon national and global supply chains and governance, you take back control of your world.  Be sure to check out our playlist on gardening and water harvesting which I’ll post at the end of the video.  Don’t look to others for help or to assign blame when you control how much you will feel the rise or fall of your society.  That’s not to say these conflicts won’t appear at your doorstep.  They might.  Your ability to survive them, however, is greatly enhanced.  When you lessen your dependence on external systems that are genuinely beyond your control and focus on the things you can control in your own environment and life, the rise and fall of nations are less impactful on your day-to-day.  You will still feel the effects but will be better equipped to survive them.

The NY Times cleans up Mexico's image; AI has already replaced jobs and you didn't even notice; 'therapeutic suicide' now a solution for Canadian military veterans.

In an opinion essay this week, The New York Times swooned over Mexico City’s transformation from a smog-choked, crime-ridden mess into a “pulsing center of global culture” that’s supposedly outshining the US as a migrant magnet.

Columnist Lydia Polgreen gushes about the city’s reborn parks, viral taco stands, and thriving economy — factories, tech startups, even a booming film industry. Once a springboard for Mexicans fleeing north, she describes how Mexico is now pulling in tourists and expats from the US, while still absorbing migrants from poorer ones. Her clear pitch is that Mexico is embracing “the welcoming values the United States has abandoned,” making it a shiny new beacon of opportunity.

The picture she paints is a globalist wet dream: a borderless wonderland where tech bros, digital nomads, and economic migrants all blissfully coexist under the glow of chic Edison bulbs at repurposed brick factories-turned-coffee shops. It’s a nice fantasy — but it’s just that. A fantasy.

Yes, Mexico has its charms. But it’s important not to confuse a curated Instagram reel with reality. The cartels still run the show, terrorizing the population on a daily basis. Mexico City isn’t an electrical vehicle Mecca, so air pollution is very much a thing. Corruption hasn’t magically evaporated, and the economic boom hasn’t lifted all boats. Try asking a working-class Mexican if they’re living the dream and the answer probably isn’t “claro que sí.”

But that’s the sleight of hand in these types of essays coming out of the ‘curated lifestyle’ laptop class. Polgreen conveniently sidesteps the gritty realities of daily life to instead lean hard into the narrative that, as Trump destroys America, Mexico stands ready to steal the spotlight.

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The photos we’ve been posting on social media for 15 years are now being used by AI to create real-looking people who aren’t actually real.

Remember when Australia was a charming land of didgeridoos, kangaroos and the affable Crocodile Dundee? Australia has come a long way, baby! If you happen to live in Sydney, you may have been duped into thinking you were listening to a human on the airwaves, but Workdays with Thy (that’s the host, pictured above) on the Australian Radio Network (ARN) is fully AI. For the last six months, no one noticed.

ARN project leader Fayed Tohme subsequently acknowledged the use of AI to create the voice of Thy, writing in a since-deleted LinkedIn post that Thy “sounds real” and has real fans, despite not being a real person. “No mic, no studio, just code and vibes,” he wrote in the post, which was shared by Mediaweek. “An experiment by ARN and ElevenLabs that’s pushing the boundaries of what ‘live radio’ even means.”

Where do you even start with that? Underhanded, undeclared, unreal. The next time you hear some talking head try to placate you with a line like “AI isn’t going to replace people, it’s going to improve their lives,” please smack them. Hard.

As venture capitalist, Victor Lazarte, recently said: “This is bullshit. It’s fully replacing people.”

Don’t say you haven’t been warned.

For more on life in dystopian Australia, don’t miss our latest podcast episode:

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If you’re struggling with depression, anxiety, or post-traumatic stress, would you consider ‘therapeutic suicide’? That’s what the Toronto Sun is calling euthanasia now.

The Sun tells the story of David Baltzer, who served two terms in Afghanistan with an elite branch of the Canadian Armed Forces, where he says his experience was like a scene from the movie ‘Black Hawk Down.’

Like many veterans, Baltzer struggled with trauma when he returned to civilian life and turned to alcohol and substance abuse to cope. At a low point just before Christmas in 2019, he sought help from Veterans Affairs Canada and was offered medically assisted suicide.

“He says to me, ‘I would like to make a suggestion for you. Keep an open mind, think about it, you’ve tried all this and nothing seems to be working, but have you thought about medical-assisted suicide?’”

Canada’s MAID program (Medical Assistance in Dying) is already one of the world’s most permissive. It was recently expanded to include non-terminal conditions, raising fears of misuse — especially for vulnerable vets who Baltzer says deserve care, not a death pitch.

Baltzer’s story isn’t an outlier. It’s a signal of what happens when the best solution to suffering our society can come up with is elimination.

I also invite you to take a look at this site- www.whatfinger.com

Gold Storage in Banks: Hidden Risks and the Case for Private Vaulting

For informed investors who have successfully traversed the tired Bitcoin vs. Gold debate and recognized the critical importance of owning physical (as opposed to paper/ETF) gold as an obvious antidote to globally debased currencies and openly systemic financial and banking risk, you have, thankfully, recognized precious metals as historically unmatched safe-haven assets. Gold storage, however, presents more questions that must be addressed by investors.

For years, we have bluntly explained why precious metal ownership is so essential to the far-sighted wealth preservation objectives of sophisticated investors, both individual and institutional. But on the wise and hence contrarian road to precious metal ownership, what good is the journey if the destination itself is unsound?

That is, does it make any sense if your safe-haven assets are then stored/held in un-safe institutions (i.e., commercial bullion banks and/or other precious metal dealers) who are themselves integral parties to the very broken system (and systemic risk) you originally set out to avoid?

Below, we therefore look at the many and all-too real (yet all-too carefully hidden) risks of storing gold within a fractured banking system, and underscore the need to select only the safest private vault options for serious gold storage and liquidity.

Bullion Storage in Big Banks—Anything but Safe

As our recent report on the Basel III regulations suggested, the world’s major commercial banks are virtue-signaling the need to avoid (or more likely, prepare for) another banking crisis.

Imagine that?

Specifically, the latest regulations require (among other things) that banks hold greater percentages of safe, “allocated” tier 1 gold (i.e., physical gold) on their balance sheets and reduce their levels of unsafe (i.e., fake) “unallocated” tier 3 paper gold.

Imagine that?

But if you think the recent regulatory lipstick on the pig of big-bank balance sheets makes such name-brand institutions safer in general (and for gold in particular), we’d humbly suggest you think again.

Decades ago, we created Matterhorn Asset Management to protect our own (and partners) wealth preservation assets, developing the safest system in the world for precious metal acquisition, handling and storage.

Only a few years later, we extended our services to outside investors. The evolution of Matterhorn came not from being gold bugs, natural pessimists nor even anti-bankers.

Instead, we were simply clear-eyed witnesses to real events in global debt, currency, risk-asset and banking markets; for this reason alone, private metal vaulting, done correctly, is not a niche opportunity, but an absolute necessity. Period.

We further understood and accepted the powers of collective thinking, even collective madness.

Toward this end, there is an understandable sense of safety in numbers as well as faith in the familiar, which includes the leading commercial banks and their highly-credentialed big brothers—from the Bank of International Settlements and the IMF to national central banks.

But it’s also worth noting that those very same banks have been disappointing and mismanaging their clients (and global financial systems) with tragic consistency for years, as the Great Financial Crisis (GFC) of 2008 is only one of so many recent reminders.

In short, for those trusting familiar banking names (rather than blunt banking facts) for storing their precious metals, we feel they are doing so at great and quantifiable risk.

Here’s why.

The Allocated vs. Unallocated Shell Game

Many well-meaning and high-ticket private bank clients will be warmly welcomed to open bullion accounts at Bank A or Bank B, C, or D etc.

In fact, the private bankers will often sweeten the deal by charging only a “general fee,” yet foregoing any gold storage fees, because, hey, you’re such an important client, right?

Well, not really.

First, it’s important to understand that modern banks are not in the silver and gold storage business—they are in the credit and fee-churn business; they make their margins executing paper transactions.

Gold storage, however, is a lower margin business, which means hardly any big banks manage their own vaults; instead, they sub-contract out the work, smile and then lever client assets.

The reason there’s no storage fees for such “bullion accounts” is largely because there’s no actual gold or silver to store within that glossy-brochured and well-known bank account.

–The Unallocated Bullion

This is because the banks are placing your precious metals in “unallocated” paper/transactional (i.e., levered accounts), which despite Basel III, are still very much in vogue.

Within the fine-print of the offering documents to these “unallocated” bullion accounts is the buried reality that the precious metals are not in fact individually owned by the client, but by the bank first.

Stated otherwise, there are no gold bars or coins with your names assigned to them waiting for delivery when needed.

This makes the client an un-secured creditor to the bank, not a direct owner of the gold that bank is allegedly “storing” for him/her.

Thus, should another banking crisis, bank holiday or depositor-freeze occur for any number of likely reasons/scenarios, bullion clients will be standing in line behind other bank creditors rather than taking immediate delivery of their gold and silver.

And if the bank tanks, well, they’re really out of luck, aren’t they?

If this seems unimaginable, then just imagine Morgan Stanley’s “silver program,” which had no silver precisely when clients needed it the most.

It took clients a lot of lawyers and a lot of months to finally get the very metals they “owned.”

Or imagine HSBC.

In 2008, clients suddenly asked for delivery of the metals they’d hitherto thought they’d never need, until, of course, an actual banking (i.e., liquidity) crisis reared its inevitable yet ignored head.

During the GFC of 2008, HSBC closed its retail vaults, requiring gold clients to wait months for actual delivery.

Imagine that?

–The Allocated Bullion

For those aware of such unallocated account risks, the same banks will admire your sophistication and offer a better option, namely “allocated” bullion accounts in which clients are promised specific ownership of specific physical metals.

Good stuff, right?

Well, not so fast…

Even these allocated bullion accounts are riddled with risk.

That is, the bankers will likely overlook mentioning the various 3rd-party custodial vault contracts and intermediary middleman agreements they are often tied to in the long daisy-chain between your precious metal master account documents and the final resting place of your actual gold and silver.

The ubiquitous use of such middlemen and third-party custodian/vault services in even allocated bullion accounts creates a number of problems.

First, there is the inherent counterparty and operational risks associated with the potential failure, insolvency or mismanagement of any of the intervening middlemen, custodians and sub-custodians—from outright fraud to inadequate (i.e., loophole-heavy) insurance coverage.

By the way, if 2008 taught us anything, it’s that the big banks are loaded with middlemen, counterparty and operational risks…

Secondly, the number of intervening parties between your account name and the final vault (which can change without your knowledge) means as a bank client, you cannot speak to (or access) your vault (i.e., your stored gold and silver) directly; only your bank or its contractual middleman can do so.

But what if that banker or middleman is not picking up the phone in the midst of the next banking crisis, assuming you recognize that such crises are anything but extinct?

Thirdly, even in an “allocated bullion account” wherein you are promised direct ownership of say 100 ounces of gold, your 100 ounces are likely part of (i.e., comingled with) a 400-ounce bar of which you only own a ¼ interest/claim.

How long do you think it will take to get that shared, 400-ounce bar refined to ensure your immediate delivery/liquidity of the 100 ounces you own and need?

In short, if you are concerned about unallocated and even allocated bullion accounts in a big bank near you, what better options are available?

Fair question. Here’s a fair answer.

Segregated Bullion Accounts—The Superior Option

For sophisticated (i.e., serious) precious metal investors seeking direct ownership of the highest-grade precious metal assets in specified sizes, owned entirely in their names (and with direct access to the private vaults that store their silver and gold), segregated accounts held outside of this openly fractured and highly risk-heavy banking system are the superior option.

That said, not every private and segregated bullion account service or vault is the same, and a number of critical due diligence concerns need to be addressed and confirmed.

First, most bullion banks, especially in the EU, don’t even offer segregated bullion accounts.

Again, their primary goals are high fees and high margins, for which gold storage is not compelling enough to their bottom-line.

When selecting segregated bullion accounts in private vaults, the key and primary considerations to tackle first are jurisdiction and vault reputation.

1. Jurisdiction

Precious metal owners understand that such wealth preservation assets shine brightest in times of crisis.

They also understand that in times of crisis, banks (and the governments with which they collude) will throw out the old rule books and create new rules mid-game—typically at the expense of their clients.

In times of crisis, money and metals “on deposit” at traditional banks will be the most at risk.

Even if the bank stores your bullion in their own vaults, we have seen many examples of the gold not being there when the client wanted to transfer the same to a private vault.

So far, the banks have always replaced the missing bars with other bars but in the event of bank insolvency or other “shocks,” that would obviously not happen, meaning delivery, at best, would be blocked for months, and at worst, totally lost.

Thus, when selecting a jurisdiction for private gold vaulting outside of the banking system, one must select a jurisdiction with the best available laws and historical reputation for investor protection, be they foreign or domestic.

Given that many precious metal realists hope for the best yet prepare for the worst, they further recognize the admittedly real possibility of confiscation risk in the otherwise unwanted yet real event of a shock to the global monetary system.

In the event of such confiscation, be it physical or via tax methods, holding actual precious metals outside of government-controlled banking systems provides added time and protection to segregated bullion account holders.

Toward this end, client privacy is an equally important component of the jurisdictional choice.

In superior bullion jurisdictions like Switzerland, for example, physical gold storage in Swiss-owned vaults represented by Swiss-originated wealth managers is not considered a “financial account” subject to tax reporting under IRS rules or the Common Reporting Standards of the OECD.

In short, client privacy is fully and legally preserved in such a jurisdiction.

Such privacy, however, must not be confused as an open-door to (or assistance for) nefarious clientele.

The most credible offshore vault management services strictly adhere to all necessary compliance laws, namely: KYC (Know Your Client), AML (Anti Money Laundering) and full source-of-funds declarations.

In this way, private clients can be confident that their precious metals are held in fully compliant (i.e., “clean company”) vaults.

Finally, in times of equally unwanted but equally possible social chaos, one needs a vault jurisdiction which provides reliable access to a major international airport, as well as, ideally, similar access to a private air strip.

2. Private Vault & Service Reputation

As to private vaulting services, no two are alike and informed investors must carefully consider the following factors.

– Security

Once jurisdiction is determined, it’s equally critical to select a private vault service which has the most reputable gold storage history as well as military-grade security systems, addressing everything from fully safe-guarded (backed-up) client data, direct 24/7 metals access and IT protocols against malware to protection against natural disasters or even EMP threats.

Investors, moreover, should ascertain that the private vaults and service providers are storing actual metals as opposed to mere “contracts on demand” for the same.

– Focus and Ownership Structure

Unlike banks, the most reputed client managers for segregated private, vaulted gold storage are exclusively engaged in that service, and that service only.

In fact, such singular yet professional focus on private vaulting for gold storage and other specified client assets was once the sole domain of the classic banking services of the past, before modern banking became distorted by leverage, derivative desks, fractional reserve banking and other such high-risk, high-profit and high-consequence behavior.

In selecting segregated, private bullion services, investors should also confirm that the wealth advisory service is fully-owned and independent, as opposed to being a subsidiary of some larger, and potentially compromised entity.

Again, the entire aim of segregated bullion ownership is to avoid the very counterparty and operational risks otherwise attendant to commercial bank bullion accounts.

– Liquidity Options

For larger accounts, you will also wish to work with private bullion storage providers who offer instant liquidity options for two-way transfers in all major currencies in the event you chose to liquify all or a portion of your metal assets into actual currencies when and if needed.

-Enterprise Solvency

When selecting the best private bullion vaulting services, it is equally necessary to consider the same insolvency risks which prompted similar concerns for avoiding the traditional banks.

That is, what if the private service itself becomes insolvent?

Toward that end, it is critical to first understand and confirm the service’s own, and hopefully robust, balance sheet. Ask and you shall (or should) receive.

Additionally, any onboarding documentation must be explicit that all segregated bullion is held in the client’s name, not the service provider; thus, even in an event of facility insolvency, this would in no way impair the client’s vault access, given that the precious metals are always stored as the client’s asset, not the service provider’s.

-Fully Insured or Just “Insured”?

Fully insured bullion is the only bullion worth holding in private vaults, but look carefully at the fine print. Is the bullion insured against mysterious disappearance? Are you, the client, added as a loss-payee, which means are you (or just the vault or client representative) the ultimate insured party?

What are the coverage exclusions? The coverage maximums? Who are the underwriters? Lloyd’s or someone you’ve never heard of? Is the transporting of the metals to or from your vault fully insured as well, and if so, by whom and how much?

-Metal Quality

Traditional bullion banks may seem like the safest source of authenticated precious metals with clean chains of integrity, but counterfeit gold is an issue that even JP Morgan, for example, is all too familiar…

Sophisticated bullion investors should work only with private vaults and services that acquire client precious metals directly from the most reputed sources and refiners; greater than 70% of all gold bars worldwide are in fact refined out of Switzerland.

Not only must such metals be marked, recorded and warehouse-receipted in the client’s name from inception, but acquired in the bar size selected by the client.

-Transport

Secure delivery of client precious metals is an integral component of any credible private vaulting service, and the premier services will engage only the most reputable and fully-insured carriers (i.e., Brinks, Loomis etc.).

Regardless of one’s domicile nation, your private vault service should also possess the full logistical sophistication to arrange pick-up and delivery (as well as all cross-border protocols covering any applicable duties or Value Added Tax) of your metals to any location in the world upon immediate request.

–Bullion Storage Fees

For the manifold reasons discussed above, superior private vaulting of segregated bullion is typically priced higher than the fees of traditional bullion banks.

Each private bullion service will charge based upon the extent of its services (vault quality, logistical sophistication, transportation services, liquidity capabilities, insurance range, refiner relationships etc.).

Although it’s often true that “you get what you pay for,” the slightly higher fees for higher security and superior service can only be justified if the foregoing service advantages are verified.

Superior vaulting and security are costly; anyone charging nominal fees is either skimping on these two critical areas or subsidizing the cost from a trading activities rather than gold storage.

Given the immense importance of wealth preservation via carefully owned precious metals, higher fees more than justify the higher service and security of the premier vaulting services.

A Summing Up

Despite a long and sordid history of client mismanagement (deposit freezes, illiquidity, non-transparency, counterparty risk, operational failures, “tainted” assets, bank emergencies, changing regulations etc.) and the open systemic distortions in the global financial system, traditional bullion banks remain the go-to choice for many bullion owners for no other reason than they “trust the TBTF names.”

Naturally, this perplexes but does not surprise us. Pack-thinking, even among bank clients, is nothing new.

Should the major global banks experience another “emergency,” no one can foresee its length or depth with certainty, but what we can say with certainty is that the banks will own these bullion assets ahead of their customers—and will do their best to hold (restrict) them as long as they can, as that… after all, is what banks do.

What will the tomorrow’s banking rules be? How long will the next “emergency” last? What liquidity limits will be imposed? Will delivery be partial or full?

For those wishing to avoid such known and unknown risks, the clear path forward is one that leads investors away from commercial bullion banking pitfalls and toward the most transparent and trusted private vault services in the safest jurisdictions.