A major fund manager has warned investors and savers to have an allocation to “physical cash,” “including gold & silver” to protect against “systemic risk”…which he foresees as likely to happen in “the next five years rather than ten”.
The above edited excerpts, and those below, come from an article* by Mark O’Byrne (goldcore.com) originally entitled Hold “Physical Cash,” “Including Gold and Silver” To Protect Against “Systemic Risk” – Fidelity which can be read in its entirety HERE.
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Ian Spreadbury, who oversees the investment of over £4 billion of clients money in bond markets as a fund manager for Fidelity, one of the largest mutual fund and investment groups in the world, believes that:
- the record debt that has been ballooning since the crisis of ’08 is due to interest rates being forced down to near zero by central banks.
- This debt, particularly where mortgages are concerned, will likely become unsustainable if, and when, rates rise to realistic levels and,
- in such an environment, banks will be unable to sustain the losses caused by defaults on unserviceable debt which will lead to a systemic crisis….
- The unravelling is more likely to happen in “the next five years rather than ten”.
To deal with these risks Spreadbury advocates a well diversified portfolio:
- Cash should be spread out in different banks.
- Savers should hold physical cash outside the banking system – a remarkable suggestion coming from somebody so well acquainted with the workings of the financial system and he also suggests that
- investors should hold gold and silver.
Mr Spreadbury concludes:
“The message is diversification. Think about holding other assets. That could mean precious metals, it could mean physical currencies.”