Rickards: It’s important to allocated part of your portfolio to physical assets

by James G. Rickards
07-Sep (DarienTimes) — Only one person has ever been director of both the National Security Agency and the Central Intelligence Agency. That person is retired Four-Star General Michael Hayden. Recently I had the chance to talk to Mike Hayden on Capitol Hill. We were both there as part of a conclave to discuss the status of Iran-U.S. negotiations on uranium enrichment. We had a chance to talk one-on-one about my specialty, which is financial warfare, and the potential impact on investors.

…For investors, the implications of this new age of financial warfare are profound. Stock and bond markets have always been affected by wars. But the wars were fought elsewhere – stocks and bonds merely adjusted in price to the new state of the world. Today, markets are not bystanders; they are ground zero. It’s fascinating to meet brilliant military and intelligence officials like General Hayden who are rapidly absorbing the fact that wars are now fought in financial markets rather than on physical air, sea and land.

The military and intelligence communities are absorbing the new reality, but most investors are still behind the curve. Traditional stocks and bonds are digital assets that can be hacked, wiped-out or frozen with a few keystrokes. It’s important to allocated part of your portfolio to physical assets that cannot be wiped out in financial warfare. These assets include silver, gold, fine art, land, rare stamps, cash (in banknote form, not bank deposits) and other physical stores of value. For the portion of your portfolio that is in stocks, it is helpful to consider venture capital and start-up companies where your ownership is in the form of a written contract, not a digital account.

My conversation with General Hayden reinforced my already strong view that financial warfare is here and digital assets such as brokerage accounts and 401(k)s are in the line of fire.

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PG View: We here at USAGOLD have always viewed it as an imperative to hold a portion of one’s wealth outside the traditional banking and financial services realm. Rickards’ op-ed drives home the point.