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BFI Bullion
January 27, 2020

A Ferocious War - Now Expanding to Gold!

For quite a few years, a vicious war has been waged right before our eyes. It’s fierce and it matters to everyone. We’re not talking about terrorism. We don’t mean the trade conflict between China and America or the re-ignited tensions in the Middle East. We are referring to the war on cash. The use of cash money is being restricted in more and more countries across the globe. And now, it appears, gold is the next target of governments attempting to control how their citizens save and spend their own money.

Governments around the world have introduced increasingly restrictive rules and measures to make it more and more inconvenient to conduct cash transactions. The most prominent examples are possibly India and Russia. However, this trend also pertains to western countries like Sweden, Italy, France, Spain and even Germany.

Long customer line in front of Cologne branch of German gold dealer Degussa on Dec. 23rd, 2019

It is one of the reasons why cash transport companies like Loomis, Brinks or GS4 are looking to diversify their business into areas such as cold storage of cryptocurrencies and the like. It is also the reason why some consider stocks of digital payment companies amongst the most interesting investment opportunities.

Governments appear intent on restricting their citizens to the use of payment methods that are easy to trace, monitor and tax. Sure, these restrictions can be seen as measures against criminal activities and money laundering. However, they also present serious concerns for law-abiding and freedom-loving citizens.

Many of those citizens have traditionally turned to gold as an alternative form of money. After all, it is widely recognized as a “currency” that has served for thousands of years as a store of value and a ready fallback option of exchanging goods for money, especially during times of crisis.

Recent reports from Germany raised concerns that gold is now being targeted and potentially banned as well. Pictures emerged of long lines in front of physical gold sales locations in Germany in response to legislation that took effect on January 10th, 2020. The legislation has once again lowered the purchase limit of buying gold anonymously with cash, this time from €10’000 to €2’000. Just a short two years ago, the limit had been €15’000.

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