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The IMF Warns. But Whom Exactly?

In October 2025, the IMF (International Monetary Fund) warns central banks that they are losing trust. They fear that this loss of confidence could turn into high inflation. But that’s not the real warning. It goes far deeper.

Central banks themselves are not living beings. They are buildings, computers, and bureaucratic hierarchies. So how can one “lose trust” in a building, a chair, or a spreadsheet? You can’t.

The real loss of trust concerns the assets and promises that central banks hold. And those promises are nothing but government bonds — the IOUs of states that have promised to pay tomorrow what they cannot afford today: “I owe you” = they owe us

The Core of the Problem

A central bank is nothing more than the guardian of its government’s credit. It sits on mountains of public debt, pretending that this pile of promises has real value. But when people start to doubt the value of those promises, the façade collapses. To lose trust in a central bank is, in truth, to lose trust in government debt itself.

Let’s take the United States—the issuer of the world’s “risk-free” asse —as an example.

• Public debt: $38 trillion
• New debt each year: $2–3 trillion
• Interest payments: $1.2 trillion per year
• Annual tax revenue: $5 trillion

That means the government collects only one-seventh of what it owes — and the gap widens every year. By 2030, every cent of U.S. tax revenue will go to mandatory expenses: interest, healthcare, veterans, social programs.

There will be nothing left. No surplus. No repayment. Only more debt. So what is the value of an asset whose issuer cannot possibly honor it? The answer is self-evident: zero.

The Real Warning

So why is the IMF warning now?
Because its own empire is trembling.

The IMF’s greatest rival has returned — not another institution, but a timeless one: Gold. When the IMF was created in 1945, its purpose was clear — to replace gold as the world’s reserve asset with U.S. government bonds. Gold pays no interest, they said. Bonds do. And for decades, the world believed that story. But reality has a habit of returning. As people rediscover that interest without repayment is an illusion, gold has staged its quiet revenge. In just one year, gold’s global market value has surged by $10 trillion. At $4,000 per ounce as of October 2025, gold has overtaken U.S. Treasuries as the world’s preferred reserve asset.

The IMF is not warning central banks.
It is warning itself.

The Inevitable Future

At 10% annual appreciation, gold will reach $16,000 per ounce by 2040. Not through speculation—through mathematics. The paper promises of governments are dying. The real money of civilization—gold—is reclaiming its role.

As Ludwig Heinrich von Mises once wrote: “There is no means of avoiding the final collapse of a boom brought about by credit expansion”

The IMF knows it.
Central banks feel it.
And the market has already decided.
What about you?

References
[1] Erosion of trust in central banks can boost inflation expectations, IMF warns, Reuters, October 14, 2025

PHYSICAL DELIVERABILITY IN THE GOLD FUTURES MARKET

With gold prices surpassing $4,300 per ounce in October 2025, it is worth examining a structural vulnerability in the precious metals market that many investors overlook. It concerns the extreme imbalance between traded paper claims on gold and the amount of physical gold actually available—a phenomenon that closely resembles the fractional reserve system in banking. This fragility of the “paper gold” market could have dramatic consequences in a crisis. The paper-to-physical ratio covers only a fraction of outstanding claims.

A 100:1 Ratio Between Gold Futures and Physical Gold

Current estimates suggest that trading in “paper gold” (futures, certificates, ETCs, ETFs, and similar instruments) exceeds actual physical gold holdings many times over. Experts frequently cite ratios of at least 100:1—and in certain market segments, even as high as 200–250 to 1. In other words, for every physical ounce of gold, there may be hundreds of paper ounces circulating as claims. Even a study by the European Central Bank (ECB) confirms that the global gold market effectively functions as a fractional reserve system—with more than one hundred paper claims on every ounce of real gold. This discrepancy is worth reflecting on.

The Delivery Question

What happens if even a modest percentage of paper gold investors were to demand physical delivery simultaneously? The math is sobering: If only 5% of paper gold holders at a 200:1 ratio requested delivery, that would amount to ten times more gold than physically exists. In such a scenario, not all claims could be met—some investors would literally be left without a chair when the music stops. Analysts warn that in the event of a broader loss of confidence, many holders of gold ETCs, ETFs, and futures would demand delivery to obtain the metal physically. When multiple claims exist on the same gold bar, some investors might not receive their metal on time—if at all. Storage facilities would first have to recall leased inventory—a process unlikely to run smoothly in times of stress. Ironically, such a delivery run would occur precisely when everyone simultaneously seeks the safety of physical possession—for instance, during systemic crises or hyperinflation.

The Hidden Counterparty Risk

Major gold ETFs and futures exchanges are prepared for such scenarios—though not necessarily to the benefit of investors. The contractual terms of many such products contain clauses allowing for cash settlement instead of physical delivery in exceptional circumstances. In other words, in the event of “market disruptions,” issuers reserve the right to pay investors in cash rather than bullion. This fine print effectively constitutes counterparty risk—precisely the kind of risk that physical gold is meant to hedge against.

No Mere Theory

These risks are not abstract theory. Time and again, market disruptions have provided glimpses of what a delivery run might look like. A striking example was the 2022 nickel crisis: In March 2022, the London Metal Exchange was forced to take drastic measures as nickel prices skyrocketed. Trading was halted, transactions were canceled, and the physical delivery of due contracts was postponed because available inventories could not meet delivery obligations. At the time, one analyst pointedly asked whether this could still be called a “functioning market” if the “market of last resort” could not provide the inventory to deliver [1].

Similarly, in March 2020, the New York gold market experienced a historic shortage. Refiners were closed and transport routes disrupted due to pandemic restrictions, while demand for gold surged. Open interest in the April gold future reached nearly 200,000 contracts (equivalent to roughly 19.6 million ounces), whereas COMEX inventories listed only about 8.7 million ounces as immediately deliverable . The result: The New York futures price soared to the highest premium over the London spot price since the 1980s (temporarily about $67 per ounce above spot)—a clear sign of physical scarcity. Market observers described it as a historic squeeze—“never in a generation” had such a decoupling been seen. It took coordinated efforts among market participants (including the temporary acceptance of 400-ounce bars on COMEX) to stabilize the situation.

Similar tensions were also seen in the silver market. In early 2021, retail investors attempted to trigger a “short squeeze” in silver, resulting in record inflows into the largest silver ETF. The issuer was forced to amend its prospectus on February 3, 2021, stating: “Demand for silver may temporarily exceed the available supply acceptable to the Trust” [2]. In other words, the provider acknowledged that, in the event of continued scarcity, the creation of new ETF shares could be suspended or limited.

The Uncomfortable Reality

Investors—especially those holding gold as insurance against financial market risk—should clearly understand what they actually own. Paper gold offers undeniable advantages: high liquidity, low transaction costs, and convenient portfolio handling. At the same time, it carries distinct risks.

Counterparty Risk and Dependence on the Financial System: The value of paper gold claims depends on the solvency and willingness of the issuers. Paper gold is ultimately a promise—and a promise is only as good as the ability to honor it when it matters. If a broker, bank, or ETF becomes insolvent, the investor is left with a claim, not a tangible asset. The Austrian School of Economics has long emphasized that such reliance constitutes a concentration risk—analogous to fractional-reserve banking, where more claims circulate than reserves exist.

Possible Cash Settlement Instead of Physical Delivery: Exactly in the stress scenario for which gold is meant as a hedge, paper gold may lose its promised convertibility. Contracts allow issuers, under exceptional circumstances, to settle in cash instead of metal. The investor might then receive a payment—but no gold—precisely when physical metal would be most sought after, such as during a currency crisis.

Systemic Market-Structure Risks: The enormous leverage and rehypothecation of the same gold inventories make the system vulnerable to shockwaves. The ECB warns that “in the event of extreme circumstances, adverse effects on financial stability could emanate from the gold market” [3]. A sudden deleveraging—the flight from paper positions into physical assets—could create liquidity shortages and transmit shocks to other markets. A significant divergence between paper and physical gold ultimately undermines confidence in gold-backed financial instruments.

In short, those who believe they are safely hedged against a “crash” through a gold ETF or future should read the fine print carefully. The uncomfortable reality is that many of these structures contain mechanisms that may activate precisely when gold is needed most. From the perspective of the Austrian School, only physical gold fully meets the definition of sound money: it is a real asset, not a promise, and ownership is independent of third parties.

A Final Question

With gold prices soaring and uncertainty mounting, one must ask whether the risk of paper gold being non-convertible into physical metal is adequately priced into the market. For investors who hold gold as insurance against systemic crises, it is worth examining whether their “insurance policy” might include clauses that prevent payout in real assets precisely when it matters most. Put differently: Do you truly own gold—or just a piece of paper that says you do?

To be clear, this is not a call to abandon paper gold entirely—it serves important functions for trading and liquidity. However, a prudent strategy might involve diversifying within one’s gold allocation: keeping a solid portion in physical form (stored securely, ideally outside the fiat banking system) and using paper instruments primarily for shorter-term trading purposes.

References
[1] Reuters (2022): "Nickel Trading Chaos Forces LME to Cancel Trades"
[2] Bullion.Directory (2021): "SLV Prospectus Updated Amid Silver Squeeze"
[3] Kitco News (2024): "ECB: Leveraged Gold Markets Pose Stability Risks"

M&A IN THE GOLD MARKET: CONSOLIDATION, ACCESS TO CAPITAL AND STRATEGIC REPOSITIONING

The European precious metals market is entering a new phase of consolidation. Driven by economies of scale, tighter regulation, digital transformation and growing institutional demand for transparency and liquidity, companies are repositioning strategically. Capital market transactions are becoming a key growth driver.

Five recent examples:

Bullion International Group (MKS PAMP GROUP): Following its majority acquisition of SOLIT Group AG in early 2026, the group secured immediate access to the German market. SOLIT is among Germany's leading physical bullion providers.

FIDEX Metals: The acquisition of NobleGold strengthens FIDEX's trading and processing capabilities. Together with shareholders C. Hafner and Ziemann Valor, the company combines industrial refining expertise with trading and logistics capabilities.

Gens Aurea S.p.A.: The planned Milan IPO values the company at approximately EUR 1 billion, according to Reuters. In 2025, Gens Aurea generated more than EUR 830 million in revenue and EUR 105 million in adjusted EBITDA. Its retail network is expected to expand from 530 to around 830 locations.

Gold.com (NYSE: GOLD): The company acquired a 49.5% stake in Atkinsons Bullion & Coins (UK), with an option to increase ownership to 75% by 2028.

A Global Player: A multi-billion-euro precious metals company known to me is conducting a structured equity process, offering investors up to 40% of its share capital. An Asian Tier-1 investor has already provided a soft commitment for up to a 20% stake, representing a transaction in the mid-hundreds of millions.

Conclusion

The current M&A wave reflects a market-driven selection process. Capital continues to flow toward the most efficient owners, while scale, reputation and access to capital increasingly determine competitive advantage. Against a backdrop of higher public debt, expansionary monetary policy and geopolitical uncertainty, physical gold is reasserting its role as a monetary asset.

Companies consolidating capital, refining capacity, distribution and customer access today will not only gain market share but also secure control over critical parts of Europe's value chain through vertical integration, while continuing to capitalize on long-term opportunities across emerging markets.

LIECHTENSTEIN’S TAX CD 2.0 MOMENT: REGISTER OF BENEFICIAL OWNERS COMPROMISED

The cyberattack on Liechtenstein’s Register of Beneficial Owners (VwbP / UBO) is more than an IT incident. It is a test of the country’s institutional credibility. In 2008, the old promise of tax-related discretion vis-à-vis foreign authorities collapsed. In 2026, the new promise is being tested: combining legally compliant transparency with the effective protection of legitimate privacy.

What matters now is whether Liechtenstein responds faster, more transparently, more consistently and, ultimately, more professionally than competing financial centres. In this business, trust is not a soft factor. It is an economic currency that extends far beyond the formation of a task force.

EXECUTIVE ASSESSMENT

The confirmed facts are serious, but more limited than some headlines suggest. According to the government, copies of records relating to approximately 31,000 legal entities were extracted. This figure does not necessarily represent 31,000 individual natural persons.

The target was a government compliance register; there is no evidence that the banking system itself was compromised. The registry contains, in particular: the names of the legal entities, the last and first names of the beneficial owners, date of birth, nationality, and country of residence. To date, there are no indications that bank accounts, custody accounts or assets were accessed, altered or withdrawn. Nor does being listed as a beneficial owner indicate any unlawful conduct.

The strategic damage arises from the linkages within the data. Names, dates of birth, nationalities and countries of residence can be connected to companies, foundations and trusts. When combined with external data, ownership and relationship networks could potentially be reconstructed in full.

The market will assess the response above all else. Speed, precision, independent investigation and visible consequences will determine whether this security incident develops into a lasting crisis for Liechtenstein as a business location.

WHAT HAS BEEN CONFIRMED SO FAR

According to preliminary findings, an unidentified threat actor gained unlawful access to the Register of Beneficial Owners, or VwbP, during the night of 30 July 2026.

The entry point was the very portal through which legal entities submit their statutory filings. The attackers exploited a technical vulnerability, created their own user account, escalated their privileges and exfiltrated the data not through a single bulk download, or data dump, but over several hours using thousands of individual queries: record by record. Beyond the technical vulnerability and the broader design weaknesses of the overall concept, this points to a third failed layer of control: unusual query patterns, access rates and data outflows were apparently neither detected in time nor effectively blocked.

The Office of Justice detected irregularities later that day. The Office of Information Technology initiated containment measures and took the system offline. The government was informed of a potentially successful attack on 31 July; the first confirmed findings became available on 1 August. A crisis team led by Prime Minister Brigitte Haas and Minister of Justice Emanuel Schädler commenced its work. This timeline is set out in the government’s official statement (1).

The exfiltration of copies of data relating to approximately 31,000 legal entities has been officially confirmed. Based on current information, there are no indications that data were altered or deleted. At the editorial cut-off, the identity of the perpetrators, initial access vector, motive, dwell time and full scope of the incident had not been disclosed publicly. According to SRF’s reporting on the government’s press conference (2), no ransom demand had been received and no known offer of the data had appeared on the dark web.

The VwbP has been maintained since the relevant legislation entered into force in 2021 to combat money laundering and terrorist financing. It implements requirements under the EU’s Fifth Anti-Money Laundering Directive. This background makes the incident politically sensitive: a register created to deliver transparency has itself become a risk to confidentiality.

2008 AND 2026: THE SAME ECONOMIC LOGIC, A DIFFERENT SYSTEM

In 2008, former bank employee Heinrich Kieber stole confidential data. Germany’s Federal Intelligence Service, the BND, acquired the material for EUR 4.6 million. The affair became public with the high-profile arrest of then-Deutsche Post CEO Klaus Zumwinkel and dramatically increased international pressure on Liechtenstein. It culminated in the 2009 Liechtenstein Declaration and the principality’s systematic clean-money strategy.

By 2010, 596 investigations had been initiated on the basis of the bank data. Voluntary disclosures generated EUR 626 million, although approximately two-thirds of that amount was not directly attributable to the bank case. A further EUR 181 million was collected from the cases completed by that point. The bank also made a payment of EUR 50 million. The figures and subsequent reforms are documented by the Historical Lexicon of the Principality of Liechtenstein (3).

The parallel with 2026 lies not primarily in tax law. It lies in the economic nature of data: once copied, they can cross institutions and borders at virtually zero marginal cost. Their use can neither be reliably reversed nor limited in time.

The key difference is even more important. In 2008, the issue was the disclosure of allegedly undeclared assets to tax authorities. Liechtenstein now operates within a system of automatic information exchange and international tax cooperation. The current dataset therefore cannot be characterised indiscriminately as a list of “tax evaders”.

Its risk profile instead ranges from targeted phishing and identity misuse to extortion, physical security threats and commercial or intelligence-led network analysis. These are plausible harm scenarios, not confirmed uses of the data to date.

TRUST IS A CURRENCY

Trust is not the product of a government declaration. It emerges in a decentralised manner through repeated experience, verifiable performance and credible accountability. In financial centres, trust reduces the cost of due diligence, contractual controls and ongoing monitoring. It increases the duration of client relationships and lowers a jurisdiction’s risk premium.

Reputational damage consequently acts like an invisible tax: clients demand additional checks, banks and fiduciaries invest more heavily in controls, insurance premiums rise, new mandates are delayed and mobile wealth considers alternative jurisdictions. The cost rarely appears on an invoice, but it materialises through higher transaction costs and lost new business.

The incident also exposes a classic incentive problem. Beneficial owners are legally required to submit their data, yet they can neither choose the storage location, system architecture and service providers nor price the associated risk. The state captures the regulatory benefits of centralisation, while a significant share of the potential downstream costs is borne by the affected individuals. Where competition is absent as a disciplinary mechanism, it must be replaced by independent scrutiny, clear accountability, measurable security standards and effective liability.

This is not an argument against combating money laundering. It is an argument against the assumption that maximising data collection comes at no cost. Each additional piece of information may increase regulatory insight, but it also raises the value of the target. A central “single source of truth” can become a single point of failure.

European case law also recognises this trade-off. In 2022, the Court of Justice of the European Union invalidated unrestricted public access to UBO data because of the serious interference with privacy and data-protection rights (4). Liechtenstein’s 2025 government report also refers to EFTA case law under which access requires a legitimate interest and must be appropriate, necessary and proportionate (5).

A successful cyberattack bypasses precisely these legal safeguards. The relevant choice is therefore not transparency versus secrecy, but purpose-bound transparency versus uncontrolled disclosure.

EU ASSET REGISTRY: WHEN TRANSPARENCY BECOMES A SYSTEMIC RISK

Against this background, the EU-level project to link transparency and asset information also warrants a stricter cost-benefit assessment. A 2024 feasibility study published for the European Commission examines a single access point through which authorities could reach relevant Member State asset registers, and assesses three operational, legal, IT scenarios.

The potential benefit is faster cross-border asset tracing. The counter-risk is equally real: the more interoperable, comprehensive and centrally queryable the data become, the higher the target value, scope for misuse and maximum loss from a single control failure. Before any further integration, data minimisation, tiered access, strict purpose limitation, independent security testing and effective liability must demonstrably precede technical scaling (6).

FINANCIAL SERVICES: ECONOMICALLY SECONDARY, REPUTATIONALLY DEFINING

Liechtenstein is not a purely financial economy. According to the Financial Market Authority, industry accounted for approximately 42% of gross domestic product in 2022, compared with only around 17% for financial services, including related professional services (7). The International Monetary Fund estimates that the more broadly defined financial sector represents approximately 20% of GDP and 17% of employment. Measured by managed and balance-sheet assets, however, the sector amounts to roughly 100 times the country’s annual economic output (8).

Financial services are therefore secondary to industry in quantitative terms, but they remain the country’s international shop window. A precision tool from Schaan or a dental product from the Unterland rarely generates a global headline about Liechtenstein. A data breach involving a foundation and UBO register does so immediately. The financial centre does not represent the country’s entire economic balance sheet, but it is a disproportionately important carrier of the Liechtenstein brand, extending all the way to the Princely House.

CYBERSECURITY: A KEY PRIORITY FOR THE CURRENT GOVERNMENT

Even before this incident, the FMA had warned that structural and reputational risks were central to the stability of the financial centre and that cyberattacks were becoming more frequent and complex. The Princely House and the government have likewise prioritised cybersecurity during the current legislative term. The attack therefore does not concern an overlooked peripheral risk, but a strategic field of action that has been recognised for years.

WHAT MUST HAPPEN NOW

1. Establish the Facts Within Days, Not Months

The government should publish rolling updates with clear timestamps, specifying:

• which data fields, reporting dates and historical versions were affected;
• how many unique natural persons and legal entities are affected;
• when the initial access occurred and how long it remained undetected;
• whether credentials, interfaces, service providers or additional portals were affected; and
• what volume of data was actually exfiltrated and what forensic evidence has been secured.

Where facts remain unavailable, they should be explicitly labelled as unknown. Precise uncertainty creates more trust than premature reassurance.

2. Protect Affected Individuals According to Risk Category

A standard notification will not be sufficient. Targeted warnings about phishing, identity misuse and social engineering are required, alongside a central point of contact and coordinated monitoring for possible publication of the data. Individuals facing elevated risks of extortion, kidnapping or sanctions exposure require a separate security assessment. By establishing and communicating a dedicated email address during its first media briefing, the government has already taken an initial step (1).

3. Commission an Independent Forensic Investigation

The final report should identify, at a minimum, the attack vector, dwell time, scope of the affected data, control failures, the role of external providers and concrete remediation measures. Sensitive technical details may require protection; the causes, accountability and effectiveness of the controls do not. A state cannot demand transparency from private actors while responding to its own control failure with lasting opacity.

4. Redesign the Architecture

Required measures include data minimisation, short retention periods, segmented access rights, strong multi-factor authentication, separated key management, field-level encryption, immutable logs, effective exfiltration alerts, regular red-team testing and more rigorous supply-chain reviews. Authorities should also examine whether queries can be answered in a more purpose-bound or decentralised manner, or through cryptographic attestations, without unnecessarily exposing the complete raw dataset.

Decentralisation is not an end in itself. It is an instrument for limiting maximum potential damage.

5. Rebuild Trust Through Verifiable Performance

The relevant benchmark is not the number of new strategy papers, but demonstrable improvements in detection time, response time, access discipline and data minimisation. Independent audits, published performance targets and parliamentary oversight would create the feedback mechanism that a state monopoly register otherwise lacks because it is not exposed to competition.

CONCLUSION

1. In 2008, Liechtenstein was forced to shift its business model from tax-related opacity to international compliance. In 2026, the country must demonstrate that digitised compliance does not end in centralised vulnerability.
2. The attack is not yet a second tax-CD scandal in terms of its legal consequences. It is, however, a Tax CD 2.0 moment in strategic terms: it demonstrates that data have themselves become a tradable asset and an attack surface area for a financial centre.
3. Liechtenstein will not be judged on whether it was attacked. It will be judged on whether it centralises responsibility after having centralised the data.
4. Trust is the hardest currency. Trust cannot be legislated. It must be earned time and again in the market.

SOURCES

1. Government of the Principality of Liechtenstein: Unauthorised Third-Party Access to Register Data, 2 August 2026
2. SRF: Cyberattack on Economic Data in the Principality of Liechtenstein, 2 August 2026
3. Historical Lexicon of the Principality of Liechtenstein: Zumwinkel Affair
4. Court of Justice of the European Union: Judgment on Public Access to UBO Registers, 22 November 2022
5. Government of the Principality of Liechtenstein: Government Report 2025
6. European Commission / Publications Office of the European Union: Feasibility Study for a European Asset Registry in the Context of the Fight Against Money Laundering and Tax Evasion, 10 July 2024
7. Financial Market Authority Liechtenstein: Financial Stability Report 2025
8. International Monetary Fund: Liechtenstein 2025 Article IV Consultation