Dawn Bennett, CEO and founder of Bennett Financial Services and host of Financial Myth Busting with Dawn J. Bennett, recently wrote an article debunking Janet’s Yellen view that our economy is on solid ground. Titled “Yellen’s ‘Solid Ground’ and the War on Cash”, Bennett questions how Yellen and the Federal Reserve aren’t seeing the signs of financial instability, such as overvalued asset prices, high leverage and rapid credit growth, and are instead asserting that our economy is on a solid course.
According to Bennett, we are experiencing an all-out war on cash. She writes, “Interest rates are negative in Japan and several European countries, and we seem to be trending toward that possibility in the United States. Central banks keep printing more and more money, but that money isn’t tied to any real value. The assumption is that these negative rates will force banks to lend their reserves, and that lending will boost aggregate demand and help struggling economies, but it just isn’t happening. No one’s buying into it. Meddling with interest rates creates an increasing disconnect between supply and demand over time, and the wider that disconnect gets, the more risk there is when things eventually and inevitably realign to reality.”
Even if we were to keep cash out of banks, it continues to get more and more discouraged by governments and financial institutions, according to Bennett. Central banks are setting inflation targets and restrictions on the use of cash and that’s yet another way they are taking away people’s savings, she says. We are continually told that gold isn’t currency, despite it being a reliable source of wealth. So, if gold isn’t money, then why is the Federal Reserve keeping physical gold as an asset on their accounting ledgers?
Bennett says, “The system runs to benefit the system, and the notion that the government is going to protect us in the next crisis is groundlessly optimistic. It comes down to notion of individual liberty, really. With that liberty comes personal responsibility, and the expectation that we need to act to protect ourselves. Investors must examine all the options and choose carefully those that leave us less exposed to the whims of ‘too big to fail’ banks, government bureaucrats, and politicians. Precious metals are one way to do that.”
To learn more about the war on cash, view Dawn Bennett’s complete article here.