People have been asking me as of late about holding cash, at least those that are reading the writing on the wall. Besides the fact that there is a war on cash and a cashless society coming soon, there are other reasons as to the perils of cash. With the talk of a global financial reset, coupled with the stock market gyrations and the unsustainable debt, many people have gone to cash. It used to be known as “cash is king”. Well today, I say “cash is trash”. So what are the perils of holding an excessive amount of cash?
Perils of Cash
Low Interest: Cash and cash equivalent accounts these days are paying perhaps about 1%-2% at best, often times less than that. If you are not keeping pace with the real rate of inflation, you are falling behind in purchasing power and may run out of money down the line.
Inflation: The government reports the inflation rate today to be at around 2%, but like the unemployment numbers, this is not really the case upon further inspection. You see back in the days of Bill Clinton, changes were made to just how it is that the government reports the inflation rate to the American people. It is known as the Boskin Commission. The Boskin Commission, formally called the “Advisory Commission to Study the Consumer Price Index”, was appointed by the United States Senate in 1995 to study possible bias in the computation of the Consumer Price Index (CPI), which is used to measure inflation in the United States. How To Rewrite Economic History? Here’s how.
The real rate of inflation as reported by Kirk Elliott, PhD, is at 6.12% today. Based upon Trump’s weak dollar policy and the Fed’s raising of interest rates, we can expect inflation to be on the rise. Interest rate cycles run 28 years on average. We just finished a 30-year declining interest rate environment and as of November 2016, we have embarked upon a rising interest rate cycle. So cash for now is trash. Hold some in the bank and perhaps some at home for emergencies and opportunities.
Global Financial Reset: What exactly is being reset? The debt is being reset and the value of the dollar will decline over time until sound money is restored. Easier said than done. Stay tuned. So once again excess cash may not be wise at this particular time in history. President Trump is now taking on the Federal Reserve, Rothschild World Banking Dynasty and the IMF as a move to restore sound money in order to MAGA. We will more than likely see a gold backed currency. So, buy gold (and silver). There is a reason you hear and use the expression, “it’s as good as gold”, own some. The signs are there indicating the reset is in motion. President Trump takes on the Fed.
Bank Bail-In: We learned all about the bank bail out in 2008-2009. How about the bank bail-in? A bail-inand a bailout are both designed to prevent the complete collapse of a failing bank. With a bank bail-in, the bank uses the money of its unsecured creditors, including depositors and bondholders, to restructure their capital so it can stay afloat. How much of your funds do you want caught in the bail-in? Again, right now cash is trash. Oh yeah, FDIC barely covers a fraction of the trillions on deposit. Take note. So what to do?
Get Out of the System: Well you cant really get out of the system unless you leave the planet. But there are alternative asset classes to consider in this paradigm shift of global economic and monetary policy to consider. I have a proprietary model which is truly a paradigm shift in thinking offering a new sound, superior, proactive approach to protecting and preserving wealth, utilizing both alternative paper assets as well as tangible assets. Follow the trend. The trend is your friend. The goal as wise and prudent investors is to identify and minimize risks and maximize returns keeping pace with inflation.
Does Wall Street have Main Street’s best interest in mind? I think we know the answer to this. While so many others will continue to operate in the deceitful and flawed modalities being advised by an industry they no longer trust. A great change is now upon us. The time for action is now. Better a day early than a day late. Request a copy of the Global Financial Reset Report here. To be continued…
EDITORS NOTE: This John Michael Chambers column with images is republished with permission.