Rising Canadian Insolvencies Highlight the Need for Financial Resilience: The Protective Power of Gold and Silver
In a sobering update from the Canadian Association of Insolvency and Restructuring Professionals (CAIRP), new data reveals that Canadian consumers and businesses faced a surge in insolvencies during the year's second quarter. This unsettling trend underscores the pressing need for financial resilience, particularly in turbulent economic times. Fortunately, for those seeking a safe haven, history has consistently shown that gold and silver can be robust protectors of wealth.
Surge in Insolvencies: A Wake-Up Call
According to CAIRP, 35,082 Canadian consumers filed for insolvency in the second quarter, marking a 12.4% increase from the previous year and reaching a four-year high. The pressures of high living costs, elevated debt servicing expenses, and the lingering impacts of inflation have created significant headwinds for many Canadians. André Bolduc, a licensed insolvency trustee and chair of CAIRP, emphasized the gravity of the situation:
“Consumer insolvencies have reached their highest level in over four years, underscoring the significant headwinds many Canadians are still facing…”
He noted the obvious that allocating more income to basic necessities leaves less available for debt servicing, often resulting in missed repayments, increased reliance on credit for daily expenses, and heightened financial stress. This stress is usually unspoken and less than desired in terms of its public acknowledgement, instead being swept under the rug in a staggering amount of homes beyond the 35 thousand that filed to those who are mere hundreds of dollars away from insolvency. This is a wake-up call to strategize for those seeking to protect their principal and ensure their existing wealth strategy.
The second quarter saw 1,541 insolvencies on the business front, a staggering 41.4% increase from the previous year, although a 23.1% decline from the previous quarter. Bolduc suggested this decline might reflect a potential stabilization as businesses adapt to shifting economic conditions. We do not think so. This will worsen without further government intervention in the U.S. and Canada. If you throw in the rest of the G20 and already sensitive economies producing lacklustre data, paved over by central bank headlines on the slightest of positive immediate short-term news, it comes as no surprise that we will have contagion possibilities all over the place running from Asian economies through the Eurozone and into North America.
The Historical Resilience of Gold and Silver
As the economic landscape grows increasingly uncertain, it's worth revisiting the historical performance of gold and silver as safe-haven assets. These precious metals have a well-documented track record of protecting wealth during turmoil.
2008 Financial Crisis: During the global financial crisis, gold prices surged as investors sought safety from collapsing stock markets and volatile currencies. From 2008 to 2011, gold prices more than doubled, while silver prices more than tripled, highlighting their value as stable stores of wealth during economic instability.
Eurozone Debt Crisis (2010-2012): The European crisis saw gold reach record highs as fears of sovereign debt defaults gripped the markets. Silver also experienced substantial gains, reinforcing its role as a complementary safe-haven asset. Gold Central Bank buying in the region stayed net positive and continues to do so today.
COVID-19 Pandemic: The onset of the pandemic in 2020 triggered unprecedented economic disruptions. Gold prices hit an all-time high in August 2020, driven by investor anxiety over the global economic outlook. Silver, too, saw significant price increases, reflecting its dual role as both an industrial metal and a store of value.
Recent Economic Uncertainty (2023-2024): Amid rising inflation, geopolitical tensions, and economic slowdowns, gold and silver have again proven their worth. With central banks worldwide adopting more accommodative monetary policies, these metals have continued to attract investors seeking to hedge against currency devaluation and economic uncertainty. Gold has hit numerous all-time highs in the past 12 months, while silver has once again risen into the high twenties, having touched the low $32 range in what many analysts are predicting a healthy stop along its path to a new all-time high above $52 spot, which many predict could be this year or next.
Embracing Opportunities in Precious Metals
For those feeling the financial pinch and seeking ways to safeguard their wealth, the current economic conditions present a compelling case for investing in gold and silver. These precious metals offer a proven hedge against inflation, currency fluctuations, and economic instability.
Gold: Known for its ability to retain value over millennia. It can easily be a cornerstone of any diversified investment portfolio and wealth strategy. It provides stability and acts as a counterbalance to more volatile assets. Its 20-year gain stands at over 510%
Silver: Often referred to as "poor man's gold," offers unique advantages, including affordability and industrial demand. Its dual role as a precious and industrial metal makes it a versatile addition to any wealth strategy. Its 20-year gain stands at over 320% and represents one of the most undervalued assets on the planet. The argument can easily be made that we cannot survive without it. It is both a long-term wealth insurer as well as a speculator's dream.
Delta’s Call to Action
In light of rising insolvencies and economic uncertainty, exploring avenues that offer financial protection and growth potential is crucial. Gold and silver have repeatedly demonstrated their resilience and value during turbulent times. By owning these precious metals, individuals and businesses can fortify their financial positions and navigate the challenges ahead with greater confidence and the ability to know they own something tangible, real and intrinsically valuable.
At Delta Harbour Assets, Canada's premier bullion dealer, we are committed to helping you secure your financial future. Whether you're new to precious metals or a seasoned investor, our team is here to provide expert guidance and support. Don't wait for the next crisis—take proactive steps today to protect your wealth with the timeless security of gold and silver. Please speak to the experts you trust with your wealth and seek their opinion, and once you have researched and determined that gold and silver are for you, contact us at 1.877.323.4653 (GOLD) or visit www.deltaharbour.com to learn more.
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