Taking charge of your future

Posted | 09/12/2014 / Views | 2632
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The financial press has been focussed these last 2 days on the outcomes of the much anticipated Financial System Inquiry headed by David Murray.  Murray delivered 44 recommendations but there are a few key messages you may want to consider in terms of gold and silver.  Firstly he delivered a clear warning that our banks are exposed and need to raise an additional $20b in capital to withstand the next “inevitable crisis”.  We’ve said before how much more our banks are tied to the global financial system now (we comparatively cruised through the GFC) and Mr Murray agrees.  Secondly he was scathing on the expensive, uncompetitive and inefficient options in Australia’s $1.8t super industry.  

These same lazy super funds usually stick to a heavily weighted equities, as well as bonds and cash recipe and don’t allow investment into the one asset that will withstand the next global financial crises, physical gold and silver.  In establishing your own SMSF you can do exactly that.  Murray also warns on going ‘all in’ on property in your SMSF stating SMSF’s have contributed to an inflated housing market that “is a potential source of systemic risk for the financial system and the economy”.  He makes strong overtures about the inappropriateness of tax concessions and SMSF borrowing on housing (negative gearing and CGT concessions) and shares (dividend imputation).  Should the Government act on these it will be a big leveller, likely see a correction in housing prices, and potentially see investors looking at alternatives like precious metals.  Finally he supports the G20 outcome of worldwide moves to “bail in” legislation that sees banks shareholders and creditors (depositors) on the hook to save a failing bank, not the taxpayers.  This is another stark reminder about holding large cash deposits and even storing your metals in a bank.  Somewhere independent like Reserve Vault looks more and more appealing.