Cash Will Rule Again

[liveinthemoment]

Why cash will rule again?

Don’t be fooled by the system telling you that cash isn’t worth holding. Central banks are printing trying to create inflation, but the inflation created is only in asset prices of houses, stock, bonds and commodities. This is not going to stimulate an economy, none of the money going in to asset classes that will produce real increases in production, create jobs or give pay rises. In essence none is going to where it needs to.

Everyone is told that so much cash is being printed it will dilute the value of it, but listen all that cash has gone into the asset classes mentioned above, when the world faces up to the mess it is in , all those asset classes will collapse in value and guess what, all that printed cash has suddenly disappeared. Not many people will be left holding any and my god there will be bargains to be picked up.

My advice is to position into cash, if your fear a bank meltdown or currency revaluation move it into gold, it is all the same. In my eyes the result of what will happen could not be clearer, a lot of money is going to be lost by a lot of people, mark my words.

The cash will then pick up a house very cheaply in my opinion.....

[Bruce Banner]

That is how I see it too.

[rantnrave]

I adopted this strategy ten years ago.

Still waiting for it to pay off...

[Fully Detached]

The cash will only disappear if the banks write off the bad debts. Until then it's an asset sitting on their balance sheets, and the liability of the borrower to repay.

[TheCountOfNowhere]

Cash has been okay for me for almost 10 years now.

It's out priced HPI everywhere bar London, but i dont live in london.

Wages rises arent even close but then again my rent has either dropped or stayed static over the last 5 years and now compared to some of the house asking prices I see, its a no brainer to stay put.

My main issue is what level of thievery will they eventually stop at...if they stop at all.

Might as well loose 20% in the bank than 60% in a house as i see it.

Edited August 19, 2016 by TheCountOfNowhere

[TheCountOfNowhere]

Good first post btw, welcome.

[justthisbloke]

I'm not so sure. Cash is government scrip - the value of which is dependant on the government's willingness to protect it. For cash to be safe, the government has to demonstrate that it'll never be expedient to sacrifice the currency to protect jobs, increase spending, benefit banks, etc.

[kzb]

Do you mean physical cash under the mattress or cash in the bank?

Already you cannot buy anything much with physical cash. Money-laundering laws. When they change over to the plastic bank notes there is no plan to replace the £50 note. It's rumoured that each bank note will be micro-chipped and hence traceable. People are being encouraged to pay by contactless payment, even though this is highly insecure. Physical cash is being phased out. At some point in the near future you won't be able to use it.

Cash in the bank is only guaranteed up to £75k, and when the SHTF many doubt this guarantee means anything. We are being softened up for negative interest rates. It's also likely that anyone with more than a certain amount in the bank (£16k is limit for means-tested pensioner benefits) will be classed as wealthy and will contribute to bailing out the banks via money being stolen from accounts.

They really don't want you to have money saved up. They want you to spend it, then get into debt and spend again. Everything is geared towards this.

[Bruce Banner]

I'm not so sure. Cash is government scrip - the value of which is dependant on the government's willingness to protect it. For cash to be safe, the government has to demonstrate that it'll never be expedient to sacrifice the currency to protect jobs, increase spending, benefit banks, etc.

The value of the pound, against other currencies, fluctuates from day to day.

The FSCS deposit protection scheme protects deposits of up to £75K per person (per banking license), and it is advisable to spread your cash around to stay within this limit.

[Dorkins]

It will be time to get rid of cash when the government and central banksters are desperately trying to convince you to hold it.

[ccc]

liveinthemoment - You're not oor wee pal Carney are you ? This a wee diversion tactic whilst you order a few million wheelbarrows ?

[Democorruptcy]

Do you mean physical cash under the mattress or cash in the bank?

Already you cannot buy anything much with physical cash. Money-laundering laws. When they change over to the plastic bank notes there is no plan to replace the £50 note. It's rumoured that each bank note will be micro-chipped and hence traceable. People are being encouraged to pay by contactless payment, even though this is highly insecure. Physical cash is being phased out. At some point in the near future you won't be able to use it.

Cash in the bank is only guaranteed up to £75k, and when the SHTF many doubt this guarantee means anything. We are being softened up for negative interest rates. It's also likely that anyone with more than a certain amount in the bank (£16k is limit for means-tested pensioner benefits) will be classed as wealthy and will contribute to bailing out the banks via money being stolen from accounts.

They really don't want you to have money saved up. They want you to spend it, then get into debt and spend again. Everything is geared towards this.

NS&I money isn't subject to the £75k FSCS

1% beats lots of bank rates (at the moment)

http://www.nsandi.com/income-bonds

Edit : Switch from Direct Saver to better rate on Income Bonds

Edited August 19, 2016 by Democorruptcy

[Roman Roady]

mmm...smacks of deflation to me and it will be fought.

[Bruce Banner]

mmm...smacks of deflation to me and it will be fought.

Of course it will, they've been fighting it for years but they're running out of ammo.

[NuBrit]

Cash is an ok position to be in right now. If you're smart you can spread it around and lose very little in real terms. However, at the same time you would be foolish to take a long-term position in cash. Just about all the governments in the Western World are trying to push higher inflation, sooner or later they will get it, and when they do, I think they will struggle to get the inflation genie back into the bottle once it's released. I have no idea when this day will come, but I do think it will come upon us sooner than people think. I feel gold already has a lot of risk priced into it. However there are other commodities that are totally bombed out that are worth looking at. Personally, I have my eye on a few stocks that are trading as if they have no future (oil, paper, nat gas, coal, industrial metal). When inflation does start to inch up, I will start buying.

[RickyD]

Cash has been okay for me for almost 10 years now.

Hasn't cash performed worse than pretty much anything else in the past 10 years? Unless of course you're some sort of forex wizard?

[FreeTrader]

NS&I money isn't subject to the £75k FSCS

0.8% beats lots of bank rates (at the moment)

http://www.nsandi.com/direct-saver

Not sure why you'd use NS&I Direct Saver instead of NS&I Income Bonds. Rate has been higher on the latter for over three years now.

[Errol]

It's rumoured that each bank note will be micro-chipped and hence traceable.

Not really traceable. People could just set up rings where they take money out of the bank and then exchange notes over and over again, rendering any kind of tracking pointless.

Edited August 19, 2016 by Errol

[crashmonitor]

Hasn't cash performed worse than pretty much anything else in the past 10 years? Unless of course you're some sort of forex wizard?

Nah have you seen what houses in Burnley, Blackpool and Hull have done over the last ten years, probably about -10% if you are lucky...seem to remember alternatively you could hae picked up a 7% fixed rate bond for five years running from 2007.

Cash has actually crucified most stuff over the last ten years, just don't get too hung up over the last 2 or 3 years.

Edited August 19, 2016 by crashmonitor

[FrankCostanza]

Hasn't cash performed worse than pretty much anything else in the past 10 years? Unless of course you're some sort of forex wizard?

Depends where you are i guess.

Australian stock market peaked in 2007, Japan stock market peaked in 89 or 90.

Housing in Ireland peaked several years ago.

[juvenal]

Nah have you seen what houses in Burnley, Blackpool and Hull have done over the last ten years, probably about -10% if you are lucky...seem to remember alternatively you could hae picked up a 7% fixed rate bond for five years running from 2007.

Cash has actually crucified most stuff over the last ten years, just don't get too hung up over the last 2 or 3 years.

That's what I've found. I have dreams about those 7% fixes...

[Democorruptcy]

Not sure why you'd use NS&I Direct Saver instead of NS&I Income Bonds. Rate has been higher on the latter for over three years now.

Good point.

I didn't realise the Income Bonds weren't for a fixed period.

I've edited my original post, in case someone may not see your better one.

[porca misèria]

I adopted this strategy ten years ago.

Still waiting for it to pay off...

Keynes had the answer to that one.

For me, cash pays off nicely. Cycling it through tax-efficient investments helps reclaim my income tax each year, and the tax-free income from those investments pays the rent with something to spare.

[winkie]

Do you mean physical cash under the mattress or cash in the bank?

Already you cannot buy anything much with physical cash. Money-laundering laws. When they change over to the plastic bank notes there is no plan to replace the £50 note. It's rumoured that each bank note will be micro-chipped and hence traceable. People are being encouraged to pay by contactless payment, even though this is highly insecure. Physical cash is being phased out. At some point in the near future you won't be able to use it.

Cash in the bank is only guaranteed up to £75k, and when the SHTF many doubt this guarantee means anything. We are being softened up for negative interest rates. It's also likely that anyone with more than a certain amount in the bank (£16k is limit for means-tested pensioner benefits) will be classed as wealthy and will contribute to bailing out the banks via money being stolen from accounts.

They really don't want you to have money saved up. They want you to spend it, then get into debt default and spend again. Everything is geared towards this.

Corrected for you.....helicopter money is reserved for those who borrow and spend, you can't lose what you have never had ie never had anything worth securing secured debt against......things happen.

[Funn3r]

Good point.

I didn't realise the Income Bonds weren't for a fixed period.

I've edited my original post, in case someone may not see your better one.

Is NS&I like a normal bank, where you have to be careful not to aggregate 75K pounds across their various products?