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How do you know that the next crash doesn't wipe out cash savings in some way or another?
by new2628 7y ago
How do you know that the next crash doesn't wipe out cash savings in some way or another?
- prewett 7y agoThe only way cash savings can be wiped out is rampant inflation, currency devaluation, or the currency being no longer accepted. Generally "crash" refers to the stock market prices dropping. Stock market prices don't have anything to do with any of the above three, so you can be pretty sure that the next stock market crash won't wipe out cash savings. If anything, crashes tend to produce recessions, which can produce deflation, which makes cash worth more. (But, deflation is really bad, so central banks do everything they can to prevent it.)
- new2628 7y agoLet's revisit this thread in few years.
- rapsey 7y ago> The only way cash savings can be wiped out is rampant inflation, currency devaluation, or the currency being no longer accepted. Also bail-ins. Any significant amount of cash in a bank account is a sitting target if real trouble starts. This is more likely in smaller countries like Greece.
- oceanghost 7y agoYes. This. Greece was the test for the latest wealth-transfer mechanism. Why wait for unreliable governments to bail you out when you can just confiscate deposits?
- nemo44x 7y agoWe’re in guns and ammo territory then. The bigger risk is having a large long term cash position. Large amounts of cash should have a purpose within a year or 2.
- cat199 7y agothis is why just about everyone suggests an appropriately diversified portfolio - stocks, bonds, cash, natural resources, hard assets, etc.
- la_barba 7y agoThat's a bit like asking, how do you know we won't have another world war? If there was a way to know the future, we'd all be doing ___.