Today one of the wealthiest people in the financial world spoke with King World News about what they can expect from the financial system going forward, and it may surprise a great many readers around the world. Here is what Rick Rule, who is business partners with billionaire Eric Sprott and the CEO of Sprott USA, had to say about Cyprus and what investors should expect going forward:
“We spoke last week about deposit guarantees which failed in Cyprus, and how this was symptomatic of social promises made to individuals by overreaching governments around the world. People have to understand that those promises, while they may have been well-intentioned, were lies.
So we need to watch out for ourselves and that realization is going to come as hard news to people who believe the state can and should do that. The coming market unrest and social unrest that is a consequence of people coming to realize they have to be self-reliant will be very troubling…
“On a forward-looking basis what you try to do is anticipate what happens next. Where will the next shock come from? When you look at the incredible success that Japan has had in depreciating the yen through their own quantitative easing, this is really the about the 20th shot fired in a global war to devalue currencies.
This is a shot that has to be answered by the United States, Western Europe, and China. The Chinese clearly have an export oriented economy and they have also clearly grabbed market share from Japan. The problem for the Japanese is they can’t afford to have that market share taken from them.
American investors need to take a look at what happened in Cyprus and they need to pay attention to the limits of deposit insurance. They should have less than $250,000 in each bank account and maybe less than $100,000. The bulk of people’s assets also need to be in things they can’t print. So while I have very, very large cash holdings, my definition of cash includes bullion, and I have been increasingly shifting my cash holdings to physical bullion.