Wednesday, December 7, 2011

UBS Analyst: In the Event of a Eurozone Breakup, Buy "Precious Metals, Tinned Goods, and Small Caliber Weapons"

UBS analyst Larry Hataway has released a shocking recommendation for investors in the case of a Eurozone breakup: the TBTF sell-side analyst recommends stocking up on "precious metals, tinned goods, and small caliber weapons".
Note that this is not The Doc or even Jim Sinclair sounding this warning, but an analyst at a major sell-side European bank!  When have you ever heard a major bank analyst recommending stocking up on precious metals, food, and guns!?!
The reason?
Apparently Hataway believes the breakup of the Eurozone could usher in WW3.
It is time to panic!?!

Simply put, linear thinking doesn’t work in a non-linear world. And break-up is likely to produce a very non-linear set of outcomes.
Which brings me, lastly, to the question I sometimes get about what is the ‘right’ asset allocation in the event of break-up.
I suppose there might be some assets worthy of consideration—precious metals, for example. But other metals would make wise investments, too. Among them tinned goods and small calibre weapons.
Break-up runs the risk of becoming one wretched scenario. Sadly, however, it can’t be ruled out, just as it would have been improper to rule out the horrors of the first half of the 20th century before they happened.
But it is very hard to see break-up as a solution. Let’s hope Europe’s politicians and policymakers agree and take action this week to fix what is broken before it all really breaks up.
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