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Create a Financial Safe House

Large corporations have been hoarding unusually amount of cash since the Great Recession however their cache is far and beyond what would be considered a normal financial cushion. They have invested sparingly this overwhelming cash hoard into development and the creation of quality jobs, let alone maintaining jobs. Their financial restructuring has benefitted primarily the shareholders through the sale of operations and laying employees off to increase shareholder returns.

The nation’s financial structure has not been overhauled because these same large corporations’ powerful lobbying groups prevent the introduction and implementation of stronger financial supports. Any changes are aesthetic akin to the application of fresh paint on a wobbly building.

And because of their lack of transparency and heavy government control, no one, not even Chinese insiders, know the true values of these investments. This means that two economic superpowers which are dangerously highly dependent on each other, face enormous risks simultaneously. And finally the shadow market, a world in which billions of investments are conducted legally but are off-the-blocks with no oversight, compound the problem.

For this reason, it’s prudent to allocate considerably more into cash and any other investment instrument which can be converted quickly into cash such as short-term government bonds and money market accounts. When the next economic avalanche occurs most people will get buried under the rubble.

I certainly encourage consumers to continue to invest in those fields with stock purchases which they have researched so diligently and feel will provide solid returns. However for the purposes of greater financial security as an insurance buffer and overall peace of mind, consumers should boost their cash allocation or any quick-to-cash financial instruments such as government securities to be available during any future economic meltdown.