Although many thought that the worst is over for the banks in the credit crisis issue, there have been 279 banks collapsing since September 28, 2008. Washington Mutual was the largest bank failure on that fateful day to start the ball rolling. Many banks followed suit with more collapsing in the last two years than over the last six years where a total of 35 banks collapsed.
What is the lesson from this? Firstly, the banking crisis is not yet over. Although many well established UK banks were financially rescued by the national government, its Treasury is now under much pressure to reduce the huge national debt that is incurred. There does not seem to be much possibility of any cash injections in the near future. Hence, there may not be enough internally to rescue another failing establishment unless it sources outside or become self reliant.
The past economic downturns have always stood on the traditional stance that cash was the top asset. It was king in all situations. When the stock markets rock, or if property prices fluctuate wildly, have your money safe in the bank. No doubt arose over the money in the bank.
But the world changed drastically. In UK, your money is protected only up to £50k in every bank. Should the bank go bankrupt, you will lose all your money. This would seem a ridiculous thought a decade ago but not now; it is very realistic and happening. A previous government investment a few years back, Icesave, gave good returns by the British Government. But the UK Treasury got nothing back although they were sure of being reimbursed by the Government of Iceland.
Money markets are very tight today with bottom low interest rates that give about 1% returns for UK savers who still get taxed! With inflation above 3%, you will find that you actually have lost money on your capital in the bank. There is the risk that the bank you trusted may collapse anytime with your money in it.
Hence, the saying that gold has overtaken cash as king today is getting more rampant.
The better way in avoiding bank risks, Sterling, or counterparty risk, is to transfer a bit of your savings to physical gold. The old mindset of putting your money into the banks for a raining day no longer holds much water; with the changing times, changing strategies apply. It is unwise to put all your eggs into one basket; hence, forget about putting your total liquid assets in paper money or bank accounts.
Are you looking to Buy or Sell Sovereigns? Welcome to Physical Gold to secure your wealth and future. We specialise in buying & selling gold sovereign coins and explain how Sovereign coins can be combined with other gold coins to form a balanced tax free investment.
What is the lesson from this? Firstly, the banking crisis is not yet over. Although many well established UK banks were financially rescued by the national government, its Treasury is now under much pressure to reduce the huge national debt that is incurred. There does not seem to be much possibility of any cash injections in the near future. Hence, there may not be enough internally to rescue another failing establishment unless it sources outside or become self reliant.
The past economic downturns have always stood on the traditional stance that cash was the top asset. It was king in all situations. When the stock markets rock, or if property prices fluctuate wildly, have your money safe in the bank. No doubt arose over the money in the bank.
But the world changed drastically. In UK, your money is protected only up to £50k in every bank. Should the bank go bankrupt, you will lose all your money. This would seem a ridiculous thought a decade ago but not now; it is very realistic and happening. A previous government investment a few years back, Icesave, gave good returns by the British Government. But the UK Treasury got nothing back although they were sure of being reimbursed by the Government of Iceland.
Money markets are very tight today with bottom low interest rates that give about 1% returns for UK savers who still get taxed! With inflation above 3%, you will find that you actually have lost money on your capital in the bank. There is the risk that the bank you trusted may collapse anytime with your money in it.
Hence, the saying that gold has overtaken cash as king today is getting more rampant.
The better way in avoiding bank risks, Sterling, or counterparty risk, is to transfer a bit of your savings to physical gold. The old mindset of putting your money into the banks for a raining day no longer holds much water; with the changing times, changing strategies apply. It is unwise to put all your eggs into one basket; hence, forget about putting your total liquid assets in paper money or bank accounts.
Are you looking to Buy or Sell Sovereigns? Welcome to Physical Gold to secure your wealth and future. We specialise in buying & selling gold sovereign coins and explain how Sovereign coins can be combined with other gold coins to form a balanced tax free investment.
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