As the markets and financial system continue to be propped up by an ever-increasing amount of debt and leverage, precious metals investors need to understand the two most important reasons to invest in gold and silver. While one of the reasons to own precious metals is understood by many in the alternative media community, the more important critical factor is not.

The motivation to write this article is due to the increasing amount of negative sentiment and comments in regards to precious metals analysis and investing. There’s a very interesting notion put forth by many commenters that the precious metals analysts and dealers are the frauds and charlatans, not Wall Street or the Central Banks. I imagine they believe this because gold and silver prices haven’t performed as forecasted or compared to the insanely inflated stock, real estate, and crypto markets.

Before I discuss the two important reasons to own precious metals, I would like to provide some information about the fraud and corruption taking place in the financial industry.

Now, it is true that a few precious metals dealers have defrauded investors, but this is true with all sectors and markets in the financial industry. However, investors frustrated with the precious metals tend to forget the massive amount of fraud and losses that took place as a result of the 2008 Housing and Investment Banking collapse.

For example, according to the article, Financial Crisis Bank Fines Hit Record 10 Years After The Market Collapse:

$150 billion (127.6 billion euros) – that’s how much US authorities have collected in fines from financial institutions for shady dealings with subprime mortgages since the beginning of the credit crisis in 2007, according to research by the British business daily Financial Times (FT).

Of all the banks penalized since 2008, Bank of America (BofA) was hit the hardest by far, as FT research shows. So far, BofA has handed over a whopping $56 billion – more than one third of total fines paid – in settlements to cover the institution’s own mortgage sales as well as the conduct of subprime mortgage lender Countrywide and broker Merrill Lynch, two companies it had acquired.

JP Morgan Chase, the owner of Bear Stearns and Washington Mutual, has paid the second-largest amount with $27 billion.

So, in ten years, financial institutions have paid $150 billion in fines mainly due to the fraud behind the subprime mortgage industry. I would like to remind the reader that the banks don’t pay these fines from their pocket, it comes from their investors.

Then we had the wonderful Libor rigging scandal in which three banks paid $2.5 billion. In the CNN article, RBS Fined $600 Million, More to Come:

Three banks have so far paid over $2.5 billion in Libor fines.

The Royal Bank of Scotland has been fined $612 million by regulators after an investigation found 21 bank employees tried to rig global benchmark interest rates over a period of four years.

Yes, we forgot about how banks and financial institutions rigged one of the largest Interest Rate benchmarks in the world and got off with a few billion in fines. While banks and financial institutions have paid over $150 billion in fines since 2008, how much fraud hasn’t been accounted for by the industry??