Some thoughts - Some Headlines - Must Reads

1. Big US Banks to Be Required to Write 'Living Wills'

2. Fitch warns of downgrades for China, Japan

3. Biggest French Banks May Have Ratings Cut by Moody’s on Greek Holdings

 

For a average man on the street - most probably he would know that the countries in west are in position to default against the countries in east, most probably - will get their ratings downgraded. The mechanism os our monetary system has an underlying component called confidence and credit. This system has enabled countries like India and China to grow at breakneck speeds since the credit was freely available inside these countries as savings by individuals and companies and moreover the entities could go our and take on more debt.

Usually the safest of debts/ credits are considered to be that of governments themselves. This is surprising considering that they never pay their debt in the same amount of currency as they usually debase or default outright in some form or the other. Like US did with Gold standard in 1971. What we see today is again a process initiated where we are seeing confidence in the governments fall and thus their currencies too. Central banks are no longer independent anywhere and are debasing the money in arms with governments. Soverign debt crisis are almost always followed by currency crisis. Once we have a crisis of USD, where would other currencies stand?

Hence, preserving your capital for the next 5-10 years should be your goal. Having money in cash wont serve the purpose. Let your coming generations remember you for being able to understand whats going on around the world right now and take action to preserve your hard earned wealth.