When The Store Is Closed

Oh, see the fire's sweeping
Our very street today
Burns like a red coal carpet
Mad bull lost its way
--Rolling Stones

Following up on yesterday's post, when cash is no longer a store of value, then by definition risk builds in the financial system. There is no risk-free paper asset. Calling T-bills risk free in this environment is a misnomer. Either there is default risk or inflation risk with all sovereign debt backed by printing presses.

When cash is not a store of value, then paper assets tilt toward excessive risk. There is no pressure relief valve that bleeds off risk and offers sanctuary.

Storing value requires investors to leave the paper financial system. That system collapses in favor of hard assets--gold and other shelters for production.

position in gold