Hi all, Was just reading my email from Money Morning. It covered Australian house prices falling and that they are being bet on by a US hedge fund manager to fall further. It also covered a little bit about the markets and the debt ceiling. Was a good read. Anyway towards the end the edtior of MM mentions to keep holding Pms and holding CASH. My question is when someone says hold CASH which ive also heard Maloney and kiyosaki say do they mean physical cash notes under your mattress or just have funds in the bank?? thanks in advance.
Geez lucky the word cash is a dirty word around here cant wait to see the response to this question. Cash is one of my favourite things i always have some handy. I think either way is good but theres nothing like actual cash not electronic cash because you dont actually have it ...but in saying that i have a bit of both because it doesnt earn interest under your mattress !!!
Physical notes of course. When there is a bank run then your 1s and 0s in the bank aren't gonna be much help. Although I say that, I don't see it happening in Australia so I am a 1s and 0s person, barely have $20 cash on me (which lasts me weeks).
Yeah wasnt sure if it was physical or digital? Physical in case of a bank run......digital with out the fear of a bank run for buying things when the price falls.
Cash in the bank to pay bills and EFT payment for metals. Cash in hand for daily living expenses and the possiblity of a run on the bank. This is how I operate lately anyway.
Many speculate that there will be a short deflationary period between now and hyper inflation. Holding onto your PMs during that time will be hard (due to cost of living, payments on loans etc...) and it is speculated that this short period would be a great buying opportunity for people with cash in hand i.e. before the great hyper inflation. My issue with this is that delivery time normally for bullion is ~2-4weeks and during this proposed time period I would be VERY nervous having to wait between payment and collection.
Yes. Agree. A thousand or more under the bed to account for a 3 day ATM glitch or general disaster ($50,$20,$10 denominations. Digital dollars for ATMs and bills. High interest at call net bank for another few weeks expenses. Always do cash out at the supermarket to keep the bank fees they charge for withdrawals. Use digital whenever possible and keep your day to day cash in your purse. The negative to this is that when you pay cash you actually know what you're spending. Digital is just credit and forms that mindset. The only thing I worry about is the 3 day ATM glitch.
Just remember that in holding any sum of cash, it'll devalue at roughly 5-10% in real terms of buying power on a yearly basis. It's advantage is high liquidity. The choice is ultimately yours. But in the context of the broader discussions by economic forcasters, they talk about larger sums of cash in which you can take advantage of a market that's broadly reliant on credit. Once the credit tap turns off, CASH becomes the only trade commodity with the liquidity required to service the needs of the system. The lack of easy credit doesn't negate the need for economic wheels to remain turning, hence you get deflation (less fiat in the system) and with cash being the only trade commodity available, you gain a somewhat exclusive foothold in the market to barter for goods and services without credit based competition. That is assuming of course that you're not in an inflationary depression, which is where the US is right now and that's the caveat many don't care to mention. Less dollars in the system because of the deflationary cycle, but the buying power of the cash remaining is less against commodities because of the printing process. In such an environment liquidity of wealth certainly is king, but the window of opportunity remains brief before the inevitable rush to commodities to protect personal wealth and value. You can hold cash in that short window to take advantage of the declining market, or you can skip this aspect of the market cycle and go directly to commodities.
Consider devaluation as a cost of insurance. I would never have more than six months worth of living expenses in cash, three months' worth is probably sufficient; and cash is a very different thing to bank account credits/debits.
