Trying not to pre-judge the title as flat out stupid, let’s proceed to the article…
Four safe-haven investments to replace Swiss francs and gold –MarketWatch
Where to park your money until the next crisis blows over
Greece is on the edge of a dramatic exit from the euro EURUSD, -0.09% . The Russians are meddling in the Ukraine again. The oil price CLH5, -0.46% has been hammered, creating an arc of instability across the Middle East. The global economy is, as is so often the case, poised on the edge of another crisis. If it happens, money will start fleeing to safe havens, somewhere where it can be safely parked to ride out the turmoil.
The tension builds…
But where’s it gonna go? For several generations, the answer to that question was easy enough. In a crisis, you parked your cash in the Swiss franc USDCHF, -0.12% , or else in U.S. Treasury bonds TMUBMUSD10Y, -0.97% , or in gold GCH5, +0.22% . The trouble is, none of those safe havens are as “safe” as they once were.
Yes, hello… I’d like to report a casino patron sighting in the MSM? Gold is in a bear market so it is not safe? In other words, because the price of monetary insurance is down during what you claim is a crisis it should be avoided? Hello? Hello? Is there anybody in there? I said hello… can you hear me Joe?
Right now, the market is wide open for some new havens. Such as? Take a look at the Polish zloty USDPLN, +0.44% , the Israeli shekel USDILS, -0.15% the Singaporean dollar USDSGD, +0.32% , agricultural land, and big bundles of banknotes stashed away in a secure place.
Ha ha ha… “some new havens”. You are confusing investment and/or liquidity instruments with safe long-term storage of value. Gold’s assigned value got cut by 40%. But its value remains as it always is. That is because gold just IS and it is all the other stuff that is in motion. Value is not a driver of price over some parts of cycles. Value is value.
There were reasons why a small group of assets emerged as safe havens. They had proved over decades, and preferably centuries, they would maintain their value regardless of what chaos might engulf the world. The Swiss franc, preferably held in one of Geneva or Zurich’s discreet private banks, was always the best example, a reliable store of value through a couple of world wars and a few episodes of hyperinflation. Gold and T-bills were almost as good.
Okay, so those reasons suddenly disappeared because global central banks have managed to get global financial markets under their active management for a phase? The phrases ‘attention span of a gnat’ and ‘casino patron’ come to mind.
But the franc is no longer what it was. The Swiss are now punishing anyone impudent enough to hold their currency with negative interest rates that mean it actually costs you money to keep cash in the bank. Fierce tax enforcement means Americans will now find it virtually impossible to have a Swiss bank account, and so will many Europeans — indeed, so tough has the regulatory climate become that simply opening an account, never mind putting any money into it, looks suspicious.
Gold is trapped in a bear market. Treasury bills yield so little, and the Federal Reserve is eager to buy them itself, they no longer looks as safe as it once did. For a time, bitcoin looked like emerging as an alternative safe haven for anyone nervous of paper money. But has proved so volatile, it can hardly be regarded as reliable even during good times, never mind a crisis.
The Swiss are attempting to keep their currency whole for the long-run. But there is no return for casino patrons. It never was a true safe haven. It was a piece of paper backed by a relatively sound financial entity. US T Bills? Sorry, not in the same class. The US lives by the debt.
As for gold, yes it is trapped in a bear market. But you are a casino patron because you see no value in that. Casino patrons chased gold all the way up to near $2000/oz. and as we noted at the time, that was simply unhealthy. Gold’s supposed investor base became infested with gamblers driven by fear… of crisis! The Euro crisis… the same Euro crisis (3 years on) during which this hair brained article advocates avoiding gold in favor of some outlier currency paper and farm land.
Don’t get me wrong; farm land is probably a good investment. But that is what it is (an investment in a way of life and in property value) and it will be subject to cyclical ups and downs. If deflation’s effects should overcome global real estate values and they come down (incl. farm land), would this land no longer be a safe haven? Well then, it never was a safe have, was it? I am not holding my breath on that, but the article advocates buying an inflated asset to protect from the fallout of a failing global inflation.
As a tool (and it is just a tool my friends, not an idol) over the long-term, gold is monetary and financial value and it was on a 40% sale from its highs, in the 1100’s. It is not an investment.
Subscribe to NFTRH Premium for your 25-35 page weekly report, interim updates (including Key ETF charts) and NFTRH+ chart and trade ideas or the free eLetter for an introduction to our work. Or simply keep up to date with plenty of public content at NFTRH.com and Biiwii.com.
