Is a Liquidity crisis on horizon?

[cuban_assassin]

Should an individual be considering moving cash assets into physical bullion and liquidating stocks other than those in the mining and resource sector? Cash in traditional savings instruments seems risky due to inflation and government over reach like we seen here recently in Canada.
Why are most central banks (for the exception of Canada) been accumulating physical gold since 2008? What do they know that the majority of us do not? Also many self made billionaires who will actually share there current holdings information are also investing in gold and silver as well as mining, oil and gas stocks.
If a liquidity crisis occurs I don’t think the federal reserve has any cards left to play, like they did in 2008, to prevent it from spiralling out of control therefore causing a run on the banks.
Will skyrocketing inflation combined with record high commodity prices and looming food shortages caused by Ukraine war be the catalyst for the perfect economic storm?
Is it possible if the US dollar collapses that the central banks will return to the gold standard and reset or revalue gold to a much higher level?
Thoughts?

[blackpowder]

All I can contribute is to say that my retirement plans changed a little.
My concern in moving everything to cash is that the dollar I squirrel away today will buy half in 10-15 yrs what it does today. I feel I need to continue in a revenue generating program of some kind.

[jazz]

Inflation is no match for farmland. You have seen what they can do with a flip of a switch to truckers and russia. I think I would opt to have assets closer in the future. I think moving to a CU provides some protection, but hard assets sitting on that home quarter is about the best protection we can get in Canada.

I would not hold any cash. I have stocks and they cant be sold for bail ins by the govt, but in a liquidity crisis they would be hammered pretty hard.

[furrowtickler]

A good video on this issue..

https://youtu.be/AZwjMAs4WbQ

[cuban_assassin]

Very interesting video furrow. I look forward to part 2.
Is it reasonable to assume that when a collapse or reset of the financial system occurs, that deposits in financial institutions may be frozen to some degree by the bank? As deposit holders in a bank we are essentially creditors of that bank. Therefore, if they encounter liquidity issues we may not be able to get our money. I’m not implying they will seize it or steal it, they simply don’t have it and may only be able to allow us to remove a set amount per day or month as liquidity allows. Essentially we would have to play along and either agree to it or end up with nothing. Now is this a result of fractional reserve lending?

[furrowtickler]

Very interesting video furrow. I look forward to part 2.
Is it reasonable to assume that when a collapse or reset of the financial system occurs, that deposits in financial institutions may be frozen to some degree by the bank? As deposit holders in a bank we are essentially creditors of that bank. Therefore, if they encounter liquidity issues we may not be able to get our money. I’m not implying they will seize it or steal it, they simply don’t have it and may only be able to allow us to remove a set amount per day or month as liquidity allows. Essentially we would have to play along and either agree to it or end up with nothing. Now is this a result of fractional reserve lending?

Some very valid and and concerning questions, this is territory I am unfamiliar with but need to learn asap .

[checking]

If the government seizes our bank accounts, would it at least be considerate enough to apply it against future farmland capital gains owing that they were responsible for creating through their money printing?

[Old Cowzilla]

Just feed cattle . You can stare at your money walking around (with awe ) everyday and any excess in your bank account will be taken by the feed or fuel truck. Nothing for Justin to take !!!!

[Austrian Economics]

If central banks insist on pushing up interest rates, a liquidity crisis is inevitable. In an economy like Canada's this would also result in a currency crisis. PMs would be a good hedge, as well as a physical asset like real estate. But I would not sell my stock portfolio or empty my bank account just yet. Central banks will reverse course on interest rates and buy up whatever bad debt they need in order to refloat bankrupt banks. Stock prices will rebound in time. The bigger question is how long it will take before central banks themselves become insolvent. I think they have one more kick at this can. Negative rates will eat up capital at a tremendous pace. Then all bets are off.

[jazz]

Major countries are talking about food and gas stimmy cheques for citizens.

That doesnt sound deflationary to me.

[ajl]

Buying expensive fertilizer to produce cheap wheat will produce a liquidity crisis. Markets are down on India wheat exports and the likely cessation of hostilities in the Ukraine.

[jazz]

Buying expensive fertilizer to produce cheap wheat will produce a liquidity crisis. Markets are down on India wheat exports and the likely cessation of hostilities in the Ukraine.

Looks like reality will eventually hit the clueless virtue signalers.

I mean when a country controls 40% of the food, 10% of the O&G, 25% of the fertilizer, 50% of the uranium not to mention Nickle, neon, palladium, you STFU and go talk to them.

And if you dont want to talk to them, then develop your own.

[Taiga]

Looks like reality will eventually hit the clueless virtue signalers.

I mean when a country controls 40% of the food, 10% of the O&G, 25% of the fertilizer, 50% of the uranium not to mention Nickle, neon, palladium, you STFU and go talk to them.

And if you dont want to talk to them, then develop your own.

I don’t know if reality will hit these Liberals, they seem intent on ramming full steam ahead.
Enviro policy being released today.
Minister says it is in fact her job to censor the media.
Carbon tax which affects rural Canada disproportionately increasingly rapidly.
Etc etc

[AlbertaFarmer5]

Looks like reality will eventually hit the clueless virtue signalers.

I mean when a country controls 40% of the food, 10% of the O&G, 25% of the fertilizer, 50% of the uranium not to mention Nickle, neon, palladium, you STFU and go talk to them.

And if you dont want to talk to them, then develop your own.

That sounds familiar.
So if you live in a city which produces nothing. And truckers are responsible for bringing in 100% of the necessities of life which makes life in a city even possible. And furthermore, they pay the taxes which pay your salaries. They literally hold your life in their hands. Perhaps talking to them wouldn't be a bad idea .

[jazz]

I will ask this question, what is the US biggest export?

Is it oil? Soybean or corn?

No the US largest export is the US dollar. They use that reserve currency to flood the world with USD denominated debt and force transaction in that currency.

And yes there are benefits to a reserve currency and smooth flow of trade, but that status can be weaponized as well.

Thats the whole reason the US doesnt want to make anything at home anymore, because they would rather get it from another country and export the USD.

Now that has a down side too, because it depends on low rates. Now that Putin has made some dents, the US will be forced to raise rates to defend the USD. And that in turn will export inflation around the world and the goods coming back to the US with it.

And other central banks are in on it too. US fed sends USD to Japan, Canada, EU which is then payable pack in USD and those banks convert it to their currency and feed it into their economies. Nobody in Canada including our own central bank could buy $1T in Canada govt bonds. The US fed reserve owns those.

Globalization is not your fathers economics 101.