What IF we’re headed toward another market crash?
What IF the economy is headed toward a deflationary depression?
We at Elliott Wave International urge you to prepare for the worse. And we believe holding cash is a great way to prepare. Cash will serve as a bridge over “troubled financial waters”. And if the worse doesn’t happen? Well, you will not have lost anything!
No matter what happens, you’ll be financially safe. But IF financial seas become troubled again, you’ll be in a great position to take advantage of investment opportunities once those seas settle down.
Yes, Robert Prechter says actual greenbacks will have an advantage even over T-bills. He explains in the January issue of the Elliott Wave Theorist:
“Treasury bill yields go negative when the demand for T-bills outstrips supply at a time when nominal interest rates are near zero. Many people have trouble understanding why investors would be willing to pay more than face value for a T-bill. The answer is that the word ‘pay’ is less than meets the eye in a credit-based monetary system. Nobody pays cash for T-bills. They pay with something potentially worth far less: a bank balance, which today is a very precarious IOU. Between 2010 and 2015, most banks will close, and few people who kept their money in banks will be able to buy T-bills. Those who have them already will have value. That’s why some investors recently bid T-bills up past their face value.
“Now think about this: Negative yields make T-bills worth less than cash. In 2010, as deflation returns and accelerates, T-bill yields are likely to become quite significantly negative. Can you imagine a 5% negative yield on T-bills? I can. Rather than join that rush to lose money, a smart investor will instead convert his bank balances to greenback cash and keep it in safe places.”
Where can you keep your wealth safe? If your first thought is the bank, keep in mind: Many banks will likely close during a deflationary depression, and the Federal Deposit Insurance Corporation may become overwhelmed.
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