No one knows how well prepared the system is to handle potential bank runs and massive demands for cash withdrawals if the system tanks.
And no one knows how much longer the system can hold.
The erratic and unnatural market forces from the Federal Reserves’ zero interest rate are driving things towards an unstable tipping point, and no one knows what will happen if it does.
Millions may be left without a way to access their funds – perhaps for days or weeks – and banks may lose funds that governments are unwilling or unable to repay.
So a top bond fund manager is warning to diversify holdings into things like gold, silver and savings accounts, and to keep some cash on hand in cash everything else comes to grinding halt. The London Telegraph warned:
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 MoneybuilderIncome 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.
“The problem is that people are struggling to work out how to diversify if QE programmes stop,” he said.
That nightmare could happen according to Ian Spreadbury, particularly with markets locked into a damned if you do, damned if you don’t scenario under razor thin interest rates and swelling debt.
The bond expert signaled that the risk is significant and could set off events in the short term, within the next few years:
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.
The elite players are unwilling to play it safe with the money of others, and the market rewards only short term risk.
Global finance is being deliberately pushed to the edge waiting for a tipping point. It is not just the most extreme scenarios that could crash the system, it is a gravity that is pushing everything towards the brink.
Ordinary people are losing out on their savings, their pensions, on fees and handling surcharges, all while the insiders are trying to phase out cash and lock down finance inside a digital grid they alone control.
No one is looking out for the average person at the bottom, and only prepared individuals with cash money and physical assets set aside stand a chance at riding out whatever wave may come.
Prepare for the worst, and hope for an end to this madness before it happens.
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