Anyone who has cash has better hang on to it. In a credit collapse, when vast amounts of “money” suddenly disappear from the system, Cash is King, and Real Property is Queen. If the system hits the canvas, your stock options won’t buy you groceries, and all the commercial paper in your portfolio won’t keep the rain off your head if your bank goes under and takes your spending money down with it.
There have already been bank runs in the UK. It can happen here. To pretend that it can’t is to whistle past the graveyard of history. Of course, I’m hopeful that we can somehow get through this crisis, but let’s not throw out prudence in our distaste for panic.
well I have some cash, decent credit, and my parents have a low interest fixed rate mortgage. I really need to cash out all my bonds though.
Can we expect rampant inflation? If that is a danger, wouldn’t it be better to put your assets into precious metals than cash? That is why gold is so high now, isn’t it? Because of the decline in the value of the dollar and expectations of increasing inflation and declining dollar value.