£50 billion of our bank notes are missing…

Paolo Cabrelli | 28 Oct 2020 Checked down the back of your sofa lately? Dear Reader,   The experts are baffled…   £50 BILLION in bank notes has gone missing.   AWOL.   It's money that should be circulating in the UK economy…     But the National Audit Office (NAO) says it does not know where this cash is.   That's a lot of notes to go walkabout: equivalent to over £1,000 for every adult in the UK.   One hundred £10 notes that have 'slipped down the back of every grown up's sofa'!   As reported in the Manchester Evening News, "Some of the missing money may have ended up being stashed overseas… or stocked up for use in the 'shadow economy'".   It's not being saved in banks – a third of Brits have less than £600 set aside for a rainy day.   Then again, giving savings rates are so low, maybe people are stashing their cash at home under the mattress?   According to the National Audit Office, despite the use of cash halving since 2010… demand for bank notes has increased over the past two decades - as public confidence in banks has dwindled since the last financial crisis.   I'm not suggesting you should do the same.   But you might want to consider keeping a small portion of your wealth out of the banks.   You see, thanks to a law passed after that last financial crisis…   If things got really bad - and the global pandemic has certainly highlighted the possibility of severe economic downturns (the worst in 300 years, according to the Bank of England)…   There's another way you could lose control of your money....   And there would be nothing you could do about it.   Here's how the government's explains it:   The Financial Services (Banking Reform) Act 2013 (the 'Banking Reform Act') added a bail-in tool to the Special Resolution Regime (SRR) through amendments to the Banking Act 2009. The bail-in option allows the Bank of England to resolve a bank or building society that is failing or likely to fail by writing down or cancelling certain debt liabilities and/or converting debt into equity. Let me translate that.   Now, perish the thought that your bank could be close to failure (but I don't think we can rule out anything given recent events)…   The Bank of England can declare a bail-in.   If you would like to know what that means……   Plus the steps you can take to help protect a small portion of your wealth NOW, please follow this link.   They're more constructive than hiding cash down the sofa.   Best     Paolo Cabrelli Publisher, Southbank Investment Research

Important Risk Warnings:   Before investing you should consider carefully the risks involved, including those described below. If you have any doubt as to suitability or taxation implications, seek independent financial advice.   General - Your capital is at risk when you invest, never risk more than you can afford to lose. Past performance and forecasts are not reliable indicators of future results. There is no guarantee dividends will be paid. Bid/offer spreads, commissions, fees and other charges can reduce returns from investments.   Overseas shares - Some recommendations may be denominated in a currency other than sterling. The return from these may increase or decrease as a result of currency fluctuations. Any dividends will be taxed at source in the country of issue.   Funds – Fund performance relies on the performance of the underlying investments, and there is counterparty default risk which could result in a loss not represented by the underlying investment. Exchange Traded Funds (ETFs) with derivative exposure (leveraged or inverted ETFs) are highly speculative and are not suitable for risk-averse investors.   Bonds – Investing in bonds carries interest rate risk. A bondholder has committed to receiving a fixed rate of return for a fixed period. If the market interest rate rises from the date of the bond's purchase, the bond's price will fall. There is also the risk that the bond issuer could default on their obligations to pay interest as scheduled, or to repay capital at the maturity of the bond.   The Financial Conduct Authority does not regulate certain activities, including the buying and selling of commodities such as gold, and investments in cryptocurrencies. This means that you will not have the protection of the Financial Ombudsman Service or the Financial Services Compensation Scheme.   Taxation – Profits from investments, and any profits from converting cryptocurrency back into fiat currency is subject to capital gains tax. Tax treatment depends on individual circumstances and may be subject to change.   Investment Director: Boaz Shoshan and Charlie Morris. Chief Strategist: Nick Hubble. Editors or contributors may have an interest in shares recommended. Information and opinions expressed do not necessarily reflect the views of other editors/contributors of Southbank Investment Research Limited. Full details of our complaints procedure and terms and conditions can be found on our website www.southbankresearch.com.   The Fleet Street Letter Monthly Alert is issued by Southbank Investment Research Limited.   Southbank Investment Research is authorised and regulated by the Financial Conduct Authority. FCA No 706697. https://register.fca.org.uk/.    Exponential Investor is published by Southbank Investment Research Limited. Customer Service Please do not reply to this email. This email inbox is not monitored. To contact customer services, please click here. Alternatively, telephone us on 0203 966 4580, Monday to Friday, 9.00am - 5.30pm. Email Reference: EXIDE03 To unsubscribe from Exponential Investor please click here. © 2020 Southbank Investment Research Ltd. Registered in England and Wales No 9539630. VAT No GB629 7287 94. Registered Office: 2nd Floor, Crowne House, 56-58 Southwark Street, London, SE1 1UN.