According to a reclusive millionaire, the US banking system is going to crash. His name is Bill Bonner, author and founder of Agora Inc., an underground news and research network today with a boasted readership of 2 million people. And he is not alone. The Crux reported that four other super successful billionaires share the sentiment that the credit-based banks of the US will ultimately fail.
The global situation is not very peachy either. In August, the Chinese devalued the Yuan and that effectively wrote off hundreds of billions of dollars. The shock to global markets was so intense that, in the US alone, the worst slide in 4 years happened. Crude oil prices, another indicator of global wealth health, plunged to $40 per barrel.
A 7-year cycle has been observed with regards to market crashes, FX Street reported. Go back 7 years and the 2008 financial meltdown happened. Another 7 years before that, the September 11 attacks happened which caused a recession. It goes on and on. In 1994 a bond market panic happened. The point is that many analysts and investors are bracing for some kind of disruption that happens every 7 years.
The solution could be in precious metals such as gold and silver. While analysts will always bicker which will hold its own better, either would still be better than stocks and other financial assets if the market crashes. If investors start running away from the dollar, then you must hedge your risk.
Gold has always been one of the best counterweights to shocks. And as for silver, this summer saw institutional sellers take a short position on it as Comex and Shanghai silver exchanges got drawn down. This physical shortage of silver bullion from bargain hunters could mean a looming danger in the physical market in the near to medium-term future.
