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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/
“We Never Thought We Would Have A Problem With Deflation, Because We can Print All The Money We Want” Alan Greenspan.
What stupid asses him and his banker partners are, to think that way. It’s mostly the young people 18 years old, fresh out of high school, that have needs and wants, and no fear to spend every penny they earn.
No older person would be brave enough to buy an old wooden cabin cruiser, but young guys will. They used to buy GTOs 442s corvettes etc. Many rented an apartment, got married at 18-20 years old, and had two kids.
Suppressing the base standard wage, combined with off shoring work, has resulted in abnormally low, entry level starter wages, which in turn held down all other wages too. (pecking order) So, bottom line, less young and many older people, can’t spend as much as they would like to.
So, if the entire private sector working class is making 25% less inflation adjusted income, in 1960-’70 dollars, the result is similar to a 25% unemployment rate. Public employees paid with tax money earn very adequate wages and benefits, which drive up taxes on the under paid.
TPTB are stuck in a catch 22 situation, and are in panic mode. Note all the “wage deflation” “wage stagnation” news lately. Back in the day, before 1980, the businessman wanted lower wages, and succeeded.
Now, the same businessman (and gov’t) is getting negatively effected by the situation.
It’s time to gloat, laugh, and be happy. They will have to raise taxes on THEMSELVES to keep the “ball” rolling. 🙂
Raising the Min Wage is the same as a tax increase, because lowering the minimum wage over decades was the same as a tax break or subsidy for a business.
Treefrog
do some research on economic cycles, weather cycles and cycles of war. Astrology was always too deep for me but I always thought it had cycles as the basis. Continuous military action is not a war. When a county’s economic base is in war materials and invasion is a possibility , that’s a war. In earlier times, food shortage caused war. Then food and plunder and land grab. Then the printing press was invented and big changes happened.
food is no longer a life or death situation except in isolated instances. Nobody wants the land if someone else will work it and sell for fiat. Plunder is now at a level unimaginable just a few years ago. The bounty of war used to be individual slaves. The whole world and future generations are now enslaved in debt while the fiat is being plundered and converted to real wealth. The tables scraps of real wealth are all that’s available to us. When the fiat is gone, the big boys will have control of food, fuel and whatever else they want, including government.
then the war starts for further consolidation. The printing press and fiat paper have altered the cycles, but just like the weather, that averages always revert to the mean. I was rudely reminded when the drought here ended in record flooding.
rno
OOPS I think we printed too much. Hehe
Meanwhile, Greece Is Quietly Printing Billions Of Euros
http://www.zerohedge.com/news/2015-06-20/meanwhile-greece-quietly-printing-billions-euros
End of the World? Maybe it’s already started.
Signs Of Financial Turmoil In Europe, China And The United States
As we move toward the second half of 2015, signs of financial turmoil are appearing all over the globe. In Greece, a full blown bank run is happening right now. Approximately 2 billion euros were pulled out of Greek banks in just the past three days, Barclays says that capital controls are “imminent” unless a debt deal is struck, and there are reports that preparations are being made for a “bank holiday” in Greece. Meanwhile, Chinese stocks are absolutely crashing. The Shanghai Composite Index was down more than 13 percent this week alone. That was the largest one week decline since the collapse of Lehman Brothers. In the U.S., stocks aren’t crashing yet, but we just witnessed one of the largest one week outflows of capital from the bond markets that we have ever witnessed. Slowly but surely, we are starting to see the smart money head for the exits. As one Swedish fund manager put it recently, everyone wants “to avoid being caught on the wrong side of markets once the herd realizes stocks are over-valued“.
more http://sgtreport.com/2015/06/signs-of-financial-turmoil-in-europe-china-and-the-united-states/
end of the world?
each day, each week, each month, i continue to be amazed at the ability of the powers that be to kick the (ever growing) can down the road.
end of the world? Posted by treefrog – Thats a question a lot of us have been asking.
I do know one thing and that is that a lot of pundits have pencilled in 2015 as the year the TSHF and have their credibility on the line if nothing happens. Two that I can think of, off hand, are Jim Willie and Martin Armstrong!
Treefrog
If you can see it be ready to be all out or able to move to tangibles out of bonds and alternative currency. Don’t know if it will happen yet. Like everything else it “probably” has to form a top or bubble first. If we’re lucky enough to see that be prepared.
Wanka’s buying!
The perfect club car for the gold train. Sleeper, diner, dome club with satellite internet acess. Life just doesn’t get any better when you are riding the gold train.
http://www.railpictures.net/viewphoto.php?id=45687
treefrog @ 10:39 – How the world ends
My comments in BOLD.
“I have been expecting this for a year and a half now. And nothing. I have had my ass handed to me shorting this market and been buried by gold mining stocks that were supposed to already be in a bear market with “little downside”. “
Welcome to the matrix. I have been waiting for over ten years. What I have learned is there is no “sure thing” to how they will manipulate things next. Control is absolute and total.
“I get it. Stack and stack. Be prepared. Okay.”
It is all we have left… personal control outside the paper realm.
“But can someone on this site write a clear or short sketch how all of these things are supposed to end in a crisis? “
In a word… Badly.
“I mean simply, like a football play with x and o’s. Can the process even be distilled to something that simple? What actually gets this feces vortex whirling?”
If that could be so easily determined by an outside observer, they (insiders) would certainly change the rules yet again to hide the control processes. All we can do is wait…. for that time when control is finally lost and things collapse. “HOW” it happens does not matter. That it WILL happen at some time is a virtual certainty. So we wait… and watch… and stack…. and be prepared in the best way each of us is able to do.
It has been a long time coming. Many have lost patience along the way. They wear us down with the delays.
Treefrog
the logic behind stacking is no matter what happens, when and if you come out the other side, you will have something of value that is also portable. Even though I advocate food independence, land is really tough to move. On the other hand, it may be easy to move the machinery to other land.
the swirling is already going on. We just haven’t gone down the drain yet. The “event” may be as simple as a debt default that triggers that mountain of derivatives that exist worldwide. I used to worry about the “event” but I don’t even think about it anymore. The simple solution is to be upwind of the fan! Be out of debt, have a stockpile of food and fuel and the resources to protect it, and the ultimate barter material. I can’t control the event but I can control the fallout around me.
dont worry about the event, take action against the fallout.
rno, who’s taken the brunt of a few dirty fans!