The Super Rich Are Preparing For A Crash…Are YOU?

October 6, 2014

Market crash and goldWe are getting clear signals from the “smart money” that something bad is looming on the horizon.

The most obvious signal comes from the ultra-wealthy (those worth $20 million or more) who are rapidly moving out of paper assets and into real assets.

For this reason, I want to draw your attention to the fact that the super-wealthy are currently moving their money out of paper assets like stocks and into real assets such as Gold.

The super-rich are looking to protect their wealth through buying record numbers of "Italian job" style gold bars, according to bullion experts.

The number of 12.5kg gold bars being bought by wealthy customers has increased 243pc so far this year, when compared to the same period last year, said Rob Halliday-Stein founder of BullionByPost.

"These gold bars are usually stored in the vaults of central banks and are the same ones you see in the film 'The Italian Job'," added David Cousins, bullion executive from London based ATS Bullion.

The bars which are made from pure gold and are worth more than £300,000 each at today's prices of $1,223 (£760) an ounce.

This is a global phenomenon. Both Russia and China have seen a massive increase in gold bullion purchases. While a percentage of this has been due to the general population (Chinese and Russian consumers are less prone to investing in stocks than their American counterparts) you can safely assume that in countries where 40% and 11% of the populations live off of less than $2 per day respectively, the larger purchases of bullion are driven by the wealthy.

The super rick are also moving into cash.

Billionaires are holding mountains of cash, offering the latest sign that the ultra-wealthy are nervous about putting more money into today's markets.

According to the new Billionaire Census from Wealth-X and UBS, the world's billionaires are holding an average of $600 million in cash each—greater than the gross domestic product of Dominica. That marks a jump of $60 million from a year ago and translates into billionaires' holding an average of 19 percent of their net worth in cash.

Indeed, billionaires' cash holdings far exceed their investments in real estate. Their real-estate holdings average $160 million per billionaire, or about one-fifth of their cash holdings.

Do not let the above article fool you, some of the super-wealthy are moving out of stocks and into real estate. For this reason, we’re seeing a massive boom in ultra-luxury real estate around the globe.

Finally, the super wealthy’s move into real assets is driving luxury art prices through the roof. Unlike homes or real estate, artwork can be easily stored or moved around. And if you need to park $10+ million into a single item, it’s a relatively easy way of doing it.

The contemporary art market experienced a record-breaking year in 2013/14, smashing through the $2 billion mark for the first time, according to new figures released on Tuesday.

In the year from July 2013, sales of contemporary art at public auctions reached $2.046 billion dollars, up 40 percent on the previous year, Artprice's annual report said            

All of these developments beg the question… what do the super-rich, the so called “smart money” know that we don’t?

The simple answer:  Stocks are in an epic bubble and a CRASH is coming.


If you’ve yet to take action to prepare for the second round of the financial crisis, we offer a FREE investment report Financial Crisis "Round Two" Survival Guide that outlines easy, simple to follow strategies you can use to not only protect your portfolio from a market downturn, but actually produce profits.

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Phoenix Capital Research

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Graham Summers is Chief Market Strategist for Phoenix Capital Research, an independent investment research firm based in the Washington DC-metro area with clients in 56 countries around the world.

Graham’s clients include over 20,000 retail investors as well as strategists at some of the largest financial institutions in the world (Morgan Stanley, Merrill Lynch, Royal Bank of Scotland, UBS, and Raymond James to name a few). His views on business and investing has been featured in RollingStone magazine, The New York Post, CNN Money, Crain’s New York Business, the National Review, Thomson Reuters, the Glenn Beck Show and more.

Gold is still being mined and refined at the rate of almost 2,600 tonnes per year.