As Europe’s debt crisis deepens, as commodity and stock prices gyrate, as the U.S. budget breakdown increases the risk of holding treasuries, the debate over where investors should put their money has intensified.
Wall Street money-guru Greene Stockman told Bloomberg News:
“With growing volatility in every market, nowhere on the entire planet is without excessive risk.”
Chicago economist Martin Twambles posted the following advice on his financial website:
“Investor exposure to international shocks, and each other’s mistakes, make it difficult to find a safe place to put your money.”
California-based market analyst Howard Wayne sent investors the following advice:
“Given the sharp volatility of commodity prices, the best place to put your money is in a white envelope marked with the label “beans”; placed inside a desk drawer next to your bed. Assets markets have become so precarious that a lower right side desk drawer is better suited for money-investors than an upper left side one.”
Dr. Twambles disagreed by responding:
“The Greek debt crisis has spread to Italy. Across the Atlantic the U.S. Congress refuses to bring budgets under control. Given the pressure this puts on real interest rates, the best place to your money, is in a shoebox in the bottom right -side of your favorite sock drawer. “
Dr. Twambles added:
“Do not put your money next to your underwear; unless Europe’s inter-bank rates of interest fall below ten percent.”
Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner met to discuss ways to encourage investor confidence. Off the record, Bernanke expressed concern that unscrupulous financial advisors were pressuring Americans to mix money and “beans” and store their savings, and vegetables, next to their bed. The Fed Chairman maintained that the economy would be better served if people put their money in a small satchel and deposited it on top shelf of their bedroom closet.
In contrast, Secretary Geithner argued that Americans should put their money into water proof buckets; located under a bathroom sink. The Treasury Secretary said that the America’s dismal saving rate would improve if consumers were forced to crawl on their hands and knees next to a stinking toilet when withdrawing money from their personal saving bucket.
Stanford University economist John Taylor—a leading critic of Obama’s stimulus package, weighed in with an “other-handed tweet”.
“To prevent the economy from overheating, both consumers and investors must put their money inside a shoebox and place it in their hallway closet, away from the home vacuum cleaner.”
IMF economists warned, through a series of peer reviewed tweets, that emerging market growth and increased euro-zone tensions meant that investor should be depositing more money in old soup cans, located within twenty feet of a kitchen appliance.
IMF economists said that heat generated by the “home” appliances would keep the money-cans warm enough to retain value should world asset markets freeze up.
Under pressure from European banking officials, IMF economists admitted that underlying market risk—might require that investors keep a few rolled-up wads of paper bills—inside a crumpled, dirty, pants pocket, placed beneath an unused mattress.
At an investment forum in Hong Kong Chinese banking officials took issue with the Western advice. Speaking through interpreters, the Chinese reiterated their belief that to keep the world economy expanding, both consumer and investors should put their money in plastic piggy banks. The Chinese recommended that piggy banks be stored—inside a rice basket kept hidden under a bamboo mat, next to a used kitchen cooking pot.
Chinese banking officials also criticized Western financial advisors who encourage investors to store “bean-labeled” envelopes of money next their sleeping beds.
The Chinese said only beans should receive the bean rating and added that mixing up money and beans could be inflationary; particularly if exceptional weather increased next year’s soybean’s crop.
Furthermore, Chinese officials said that foreign investors—who have a poor understanding of Wall Street English— may be tempted to plow their gardens and plant their bean-money envelopes. Chinese officials said that they learned, during the Cultural Revolution, that planting envelopes of fresh cash under the soil does not cause money to grow.
The G7 group of nations said they would discuss options for the financial system at their upcoming meeting in Ontario, Canada. Government economists, in general, recommended that investors diversify, putting some of their money in their wallet, a portion in shoe box, and perhaps, bury a few paper bills in their garden; next to a Chinese watercress plant.