Dick Bove says – the search for a new safe haven is on | FT Alphaville

Dick Bove says – the search for a new safe haven is on

Gold? Pffft.

The euro? Too euro-trash.

The dollar? Puh-lease.

Rochdale banking analyst Richard Bove reckons the search is on to find a new global safe haven. Because even if this US debt debacle gets sorted by lifting the ceiling, the cat’s out of the bag when it comes to the country’s place in the global financial system. Things are really about to change.

Here’s what he says:

Once some resolution is arrived at, it seems highly unlikely that the global financial system will simply settle back to the structure and functions of the pre “Great Debt Debate” era. A new configuration will emerge. Investors worldwide may actually be horrified that the only safe haven at the minute is short-term Treasuries and bank deposits backed by the FDIC. The contradictions here are enormous.

A new safe haven is needed:

  • * Gold is not the answer. It is too illiquid and there is not enough of it.
    * Swiss francs are not the answer because the government of Switzerland needs to stop the inflows to that nation to protect its economy.
    * The Euro is not the answer because the problems in the United States are the same as those of Europe.
    *The dollar is not the answer because the United States can no longer be counted upon to be fiscally or financially responsible.

Therefore, the quest is on to find a new global safe haven. Many options are likely to be experimented with until the new global financial configuration is arrived at. Investors must be attuned to how this new financial era will be shaped and invest accordingly. Right now, however, they must protect themselves by remaining liquid.

Got some (safe haven) suggestions for old’ Dick? Leave ’em in the comments section below.

Related links:
Risk off, with nowhere to go – FT Alphaville
Alternatives to the USAAA – there’s not much – FT Alphaville
Bob’s on bear alert – FT Alphaville