Dear readers,

I haven’t been posting lately as I have been busy reading up on the movements of the global economy. The ups and downs of corporate giants are so exciting that it’s like watch Batman! We’re not just experiencing a stock market crash or anything like that. It’s apparent that the world is going to be hit by a financial crisis and it won’t get better unless an ocean of money is printed to support the market.

In times of crisis mentioned above, where will you put your money? Under your bed? In the bank? Invest in stocks and bonds? Insurance? Commodities?

Putting your money under your bed is perfectly fine as your money isn’t going anywhere. But neither is it going to grow even if you add water and lots of sunlight. In fact, your money may shrink when inflation sets in and prices go up.

How about putting it in the bank as savings? For sure it’ll grow by an insignificant percentage every year. But what if the bank collapse? If that happens, you will be covered for up to S$20,000 per individual under a scheme by the Singapore Deposit Insurance Corporation. I would think it’s reasonably safe if your savings is less than 20 grand.

What about stocks and bonds? We are seeing the shares plummeting on a daily basis without signs of recovery any time soon. I wouldn’t grab a falling knife with my hard-earned savings and neither should you. As for bonds, we are seeing financial giants collapsing onto one another that we can’t be certain which bond is safe. While investors who are holding to bonds guaranteed by Lehman Brothers are starting to panick, others will be praying that their bonds will survive this financial crisis.

We are seeing one of the insurance giants, AIG loan US$85 billion from Federal Reserve Bank of New York to keep it afloat and local insurance policyholders surrendering their policies at AIA (paying penalties) for fear that their policies will swim with the fishes. We’ll never know who’s the next to fall.

Commodities are down as well, though not as much as other investment instruments like stocks and futures. It is possible that investors are selling off their commodities to fund losses incurred in the stock markets. Conspiracy theories are all over the place about how gold and silver prices are heavily suppressed and manipulated by invisible hands.

Here are my thoughts. Paper assets are getting de-valued and only hard assets will stand. Investors with cash are not going to put them in the stock market (at least not for now) to catch falling knifes until they see any possible signs of recovery. That said, I see investors buying cold hard assets such as properties and physical commodities and forgoing paper assets.

As for me, I’ll be investing in more gold and silver, buying the idea of price manipulations though some of the stocks in my watchlist are looking pretty attractive.

So what are you going to do with your money?