Last night I had dinner with a good friend who is a broker with one of Wall Street’s top retail brokerage houses and he told me for the first time in his short ten year career he’s really nervous. He said people are usually calling freaking out by now asking to sell when this kind of news comes along, but not this time, not a peep even from the overly nervous nellies. Usually when there is such extreme complacency in the market, it means we’re in for a big fall.
This guy, much less of an alarmist than I, is seriously considering taking a significant chunk of cash out of the bank and putting it in a safe deposit box. While gold might be a better play, the old hoarding dollars under the mattress strategy might not be a bad play as well since physical paper dollars may end up fetching some kind of premium over the digi-dollars that the world’s central banks are injecting into the inter-bank system. Unlike the German hyperinflation of the 1930’s there’s not going to be much physical paper to carry around in wheelbarrows looking for food. This time it may very well mean that paper cash ends up being king, with digi-dollars not worth the megabytes they’re printed on.
2:44 pm on August 16, 2007
