Pensions Advice, Retirement Planning - Investment Financial Adviser Dunfermline, Fife, Scotland UK

Posted by William on September 26th, 2008 in Investment Advice

As the sun streams through my office window on this almost perfect Scottish September Friday afternoon - everything looks so beautifully peaceful. In fact if you listened to your senses you’d think mother nature didn’t have a care in the world and she probably hasn’t.

For us mere mortals however, boy oh boy there’s a storm brewing - and as I’ve just noticed over at Reuters not even $1TRILLION Dollars may be able to fix it. Has the credit crisis on the other side of the Atlantic just lurched nearer to pushing the entire western world off the edge of the precipice where it appears to be hanging by it’s fingernails, down into complete financial meltdown? Pretty dramatic statement I know… sadly quite possibly accurate though.

Last night as Jeremy Paxman showed the front page of the next day British newspapers on BBC Newsnight - they trumpeted as a ‘done deal’ the $700 Billion dollar bailout for the USA Banking system… it seems that it’s not gone as sweetly as Bush, Paulson and Bernanke were hoping for.

Terrible when you get knocked back for a loan eh gents!

They had hoped that the extreme nature of the crisis the USA (thereby the whole of the West by proxy) would be the ‘Gun to the Head’ to essentially force the hand of Congress to accept their request for this huge loan which will in effect amount to about $1Trillion (by the time other monies have been counted which have been added to shore up industries such as the US car industry etc).

It appears they may have miscalculated the ire of many in US politics - not to mention the growing anger of both rank and file Conservative Republicans, not just Democrats as well as ordinary citizens sick and fed up with some of the chicanery they’ve witnessed over the past three months.

As of today, while I write this, various sources comment that if this US deal doesn’t go through then the FTSE-100 could drop between 600 - 1000 points next Monday. A lot of folks are pulling their investments out and sticking them into government bonds and buying gold etc for safety.

After all, if this thing explodes into widespread panic and begins triggering hysterical market impulse actions then there could be a huge run on the American Banks. Heady stuff…

At the very least analysts are predicting economic woes akin to the downturns of 1974 - 1975 or 1981 - 1982. What seems to be so concerning is the ‘black hole’ nature of the wound they seem to be trying to stop with the money that Henry Paulson is seeking to acquire - there is no guarantee that the $700 Billion is anywhere near enough - and they don’t appear to know what they will be doing with it when they get it either! The chorus being chimed is “‘trust us’… even if we don’t quite know what we will find when we open the lid on this economic tale of woes and look a little closer.” This from the leaders of the US Treasury folks!

If you think I’m exaggerating how serious this has become in the States I wish I was - can you imagine last night Henry Paulson, the US Treasury Secretary was reported to have got down onto one knee to beg Nancy Pelosi the US House Speaker to agree to approve his request for the loan!

Can you imagine that!

At the moment all we can do here in the UK is hunker down, watch and wait - in the US savvy investors are loading up on investments in safe havens such as Treasuries or Treasury-only money funds.

If you’re worried about what to do, give me a call because boring as they may be - solid, safe liquidity rich havens run by managers which have been warning all about this very financial meltdown is where our money is already. I call them boring because your returns are only between 10% - 13% per annum, but a heck of a lot safer than what’s swilling about on the financial high seas just now.

Until next time take care - and I’m serious by the way. If you need help on a proven safe haven for your dropping investments, then call me on 0800 321 3508 - it’s not a time to mess about.