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[ The manager of one of Britain’s biggest bond funds has urged investors to buy gold n silver and to keep cash under the mattress. Is the wolf really at the door this time??]
“It’s Time To Hold Physical Cash”, Fidelity Manager Warns Ahead Of “Systemic Event”
Tyler Durden’s pictureSubmitted by Tyler Durden on 06/21/2015 20:30 -0400
As Jamie Dimon recently noted while discussing the perils of illiquid fixed income markets, the statistics around “tail events” can no longer be trusted.
In other words, 6, 7, or 8 standard deviation moves that in theory should only happen once every two or three billion years may now start to show up once every two to three months. Evidence of this can be found in October’s Treasury flash crash, January’s fantastic franc fuss, and last month’s Bund VaR shock.
Why is this happening? Simple. There’s no liquidity left and the idea of efficient markets facilitating reliable price discovery is an anachronism.
Today’s broken, “mangled” (to use Citi’s descriptor) markets come courtesy of: 1)frontrunning, parasitic HFTs, 2) the post-crisis regulatory regime which, to the extent it’s well meaning, was conceived by people who never had any hope of evaluating the likely knock-on effects of their policies, and 3) central banks, who have commandeered sovereign debt markets, leaving a trail of illiquidity and shrunken repo in their wake.
Meanwhile, equity and fixed income bubbles continue to inflate on the back on central bank largesse and the only two options for rescuing a highly leveraged world are writedowns and/or inflating away the debt.
So what is a savvy investor to do in this powderkeg environment? Simple, says Fidelity’s Ian Spreadbury: own gold, silver, and physical cash.
Via The Telegraph:
The manager of one of Britain’s biggest bond funds has urged investors to keep cash under the mattress.
Ian Spreadbury, who invests more than £4bn of investors’ money across a handful of bond funds for Fidelity, including the flagship Moneybuilder Income fund, is concerned that a “systemic event” could rock markets, possibly similar in magnitude to the financial crisis of 2008, which began in Britain with a run on Northern Rock.
“Systemic risk is in the system and as an investor you have to be aware of that,” he told Telegraph Money.
The best strategy to deal with this, he said, was for investors to spread their money widely into different assets, including gold and silver, as well as cash in savings accounts. But he went further, suggesting it was wise to hold some “physical cash”, an unusual suggestion from a mainstream fund manager.
He pointed out that a saver was covered only up to £85,000 per bank under the Financial Services Compensation Scheme – which is effectively unfunded – and that the Government has said it will not rescue banks in future, hence his suggestion that some money should be held in physical cash.
He declined to predict the exact trigger but said it was more likely to happen in the next five years rather than 10. The current woes of Greece, which may crash out of the euro, already has many market watchers concerned..
Mr Spreadbury’s views are timely, aside from Greece. A growing number of professional investors and commentators are expressing unease about what happens next..
“The problem is that people are struggling to work out how to diversify if QE programmes stop,” he said.
Mr Spreadbury added: “We have rock-bottom rates and QE is still going on – this is all experimental policy and means we are in uncharted territory.
“The message is diversification. Think about holding other assets. That could mean precious metals, it could mean physical currencies.”
As The Telegraph notes, this is “an unusual” piece of advice coming from “a mainstream strategist” and it suggests the “serious people” are starting to realize that a certain tin foil hat fringe blog — which can already count LIBOR manipulation and HFT proliferation as examples of conspiracy theories turned world-changing conspiracy facts — may be correct to warn that if the current state of affairs persists for much longer, the “market” may one day be halted and simply never reopen.
Rpw up in gold
the reverse point wave up in gold made in March is still good. The comex gold market has been in a sideways trading range since then. The longer the consolidation, the sharper the move when it comes out.
rno, who’s infinite patience with the finite resource is being sorely tested!
Who has the most guns
Didn’t even know this about my state although wasn’t taking count. Calif almost has as much guns as China alone. I know I have three of them and one a WW11 rifle never had to be registered although Brown changed that law for future purchases mines already in possession so if we have a Katrina martial law I wouldn’t be left unarned. That’s goes for many others.
This one is worth exposing!! A little expletive language toward the end
Facebook Blocking YouTuber Dutchsinse from Sharing Video About Current Earth Changes
https://www.youtube.com/watch?feature=player_detailpage&v=aKmCq9iWSqg
ipso facto @ 22:31 re your THE GOVERNMENT WILL SPEND IT
That’s not the kind of spending we need. The Gov’t won’t buy antiques, used wooden boats, used cars, rent apartments etc. When I was a kid, many others around me put adds in the Buy lines Press. You could buy and sell anything to other young people with money.
One by one, various small individually owned businesses have gone out of business over the past 45 years. My neighbors owned the gas stations, the drug stores, small kitchen cabinet factories, TV repair shops, the small lumber yards etc etc. We even had a feed supply and dairy or two.
Now a days you have to go to publically owned (communist) stores, CVS, Home Depot, Oil company owned gas stations etc. You can’t argue cash price with seller, (bar code) and you can’t make your spending money stay in your neighborhood, or neighboring area.
When the Gov’t spends money, they spends the money on themselves, and their “friends” increasing gov’t payrolls with tax payer gleaned funds, driving taxes higher on tax PAYERS.
The Gov’ts needs and wants, generally are not the same as tax PAYERS needs and wants, unless the tax PAYER wants to get a cushy gov’t job or gov’t contract. I don’t know anybody in my circle that wanted to spend money for Iraqi Freedom for example.
Pirate Coffee
First Day of Summer…. everyone must be at the beach.
Jade Helm
Always a different story but this is more in line of what I was thinking, they want information. One person said its just a exercise and that each of these states represents a Mid East state. That some of the soldiers are from these states. I can’t remember in which order, who’s Iraq or Pakistan etc but Calif who was deemed cooperative was Isreal. How that goes along with the border in red or deep southern Calif I don’t know. But this is what the soilders are led to believe apparently and taken aback by the response as some of them it’s their home towns. If so that its for information I guess they can’t get enough by spying and recording everyone so hard to say what their up to other than a future martial law which they would be more effective.
http://washingtonweeklynews.com/breaking-jade-helm-mystery-solved-heres-whats-really-going-on/