Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
Page 11
Page 12
Page 13
Page 14
Page 15
Page 16
Page 17
Page 18
Page 19
Page 20
Page 21
Page 22
Page 23
Page 24
Page 25
Page 26
Page 27
Page 28
Page 29
Page 30
Page 31
Page 32
Page 33
Page 34
Page 35
Page 36
Page 37
Page 38
Page 39
Page 40
Page 41
Page 42
Page 43
Page 44
Page 45
Page 46
Page 47
Page 48
Page 49
Page 50
Page 51
Page 52
Page 53
Page 54
Page 55
Page 56
Fear of bail-ins in Europe and the United States is growing. In part this fear developed because the bail-in pro- cess is complex and not well understood. Another reason for these fears is the possibility that governments will fail to keep their word and change the rules in a pinch. Recently when asked if it reserved the right to confiscate gold the US Treasury responded that in fact it reserved the right to confiscate all assets Regulators have also changed the rules on money market funds so that the funds can adjust to a rise in redemp- tions with mark-to-market pricing. This change shifts the burden to investors. Integrity of Sovereign Bank Corporate Credits As debt levels continue to grow so do concerns regarding credit quality. There is significant interdependence between governments banks and corporations and consequently these concerns transcend individual credits. They are also about general systemic issues. Cash and cash equivalent assets are highly dependent on sovereign and municipal government guarantees or insurance. And governments typically invest in sovereign and municipal bonds notes and bills. The weakening of sovereign credit weak- ens trillions of assets and institutions throughout the system. When Standard Poors lowered the US governments credit rating from AAA to AA it was not surprising to see the US Department of Justice target SP for an enforcement action. It is not a good sign when the best strategy of the government is to protect its bond rating with terror. When savers and investors in the US dollar consider their cash options they want to understand the impact of these changes on the value of the dollar versus the value of other fiat currencies or gold. They will also want to understand what a general deterioration in the US federal credit will mean to their cash manage- ment strategies. 10 I. Options For Stashing Cash