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Financial Times/Paul Tucker/1-19-2021
“Last March and April, the fabric of our financial system was stretched almost beyond endurance. Only intervention from the north Atlantic central banks seems to have averted some kind of disaster triggered by markets grasping the pandemic was serious.”
USAGOLD note: The most important lesson from that brush with disaster is that the financial authorities did not even bother to disclose to the public (and the investment community) just how dangerous the situation had become until months after the fact. It was labeled, you might recall, a “liquidity problem” that the Fed was addressing – no need to worry. Such circumstances argue strongly for having a hedge in place at all times just in case the wheels actually do come off. Those who are all in, that is, lacking the benefit of a hedge, are the most vulnerable, and that observation does not come just from us, but from a long list of notable investment gurus cited regularly on this page. Paul Tucker is chair of the Systemic Risk Council. His article is worth a visit at the link above.
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