Big moves in markets often look random. They are not. When gold falls close to 9% in a month and silver drops more than 26%, it can be a sign that stress is spreading across the financial system. Felix Prehn, founder of Goat Academy, explains that sharp drops like these can connect to debt problems, forced selling, and rule changes that most people do not watch.
One key worry people talk about is “confiscation” of gold and silver. Confiscation means the government takes an asset from people. Felix Prehn argues that a direct repeat of old-style, door-to-door gold seizures is unlikely today. Gold is spread out across homes and private vaults. It is also not needed to “back” the dollar in the same way as decades ago.
But he highlights modern risks that can feel like confiscation without anyone taking the metal.
Risk 1: Stealth taxes on gains
A windfall tax is an extra tax placed on profits that the government calls “too high.” If gold or silver rises a lot, a windfall tax could reduce how much a seller keeps. This does not take the metal. It taxes the profit so heavily that the result can feel similar.
Risk 2: State-level wealth taxes and exit taxes
A wealth tax is a tax on what someone owns, not just what they earn. Some places also discuss exit taxes, which charge people when they move away. Some plans even target unrealized gains, meaning profits on paper that were never cashed in. That can force people to sell assets just to pay the tax.
Risk 3: CBDCs and “permissioned” money
A CBDC is a “central bank digital currency.” It is government-issued digital money. Felix Prehn warns that digital money can be more trackable and controllable than cash. If rules tighten, selling gold for digital money could involve delays, reviews, or automatic tax collection. The gold may still be owned, but using it could become harder.
Another pressure point is private credit. Private credit means loans made by non-banks like private funds and asset managers. The market is large and can be hard to see clearly. “Opaque” means not transparent. Felix Prehn notes that banks can still be linked to this world through lending and derivatives. Derivatives are contracts whose value depends on something else, like a loan or a price. One example is a credit default swap, which acts like insurance against a borrower failing.
If private credit weakens, banks can be pulled in. In extreme cases, depositors may face a bail-in. A bail-in is when a failing bank uses customer deposits or converts them into bank shares to stay alive.
Felix Prehn also explains why some investors consider mining stocks. Mining stocks can move more than gold itself. This is because many mining costs stay similar even if gold rises. So profits can jump faster than the metal price. But the risk is higher too.
To evaluate miners, he suggests a simple checklist:
- AISC (All-In Sustaining Costs): the full cost to produce one ounce, including ongoing expenses. Lower is better.
- Production growth: growing output can help when metal prices rise.
- Jurisdiction risk: where the mine sits matters. Some countries have higher political or legal risk.
- Balance sheet strength: low debt and solid cash can help a miner survive downturns.
- Producer vs developer: producers are already mining. Developers may be years away and often need funding.
Readers who want more background on Felix Prehn and the mission behind Goat Academy can review this page: Felix Prehn Goat Academy.