Wealthy Swiss Hold Cash and Gold on Fears of the Euro’s Doom

From CNBC,

If you want proof that the world’s wealthy are worried, consider this: Swiss banking clients have nearly a third of their portfolio in cash. And one in five believe the Euro will collapse.

The findings are included in a new report from LGT Group, the Austrian banking company, conducted with Austria’s Johannes Kepler University. The study found that wealthy Swiss and Austrian private-banking clients remain highly risk-averse and fearful of inflation, sovereign debt defaults and the unstable financial system.

In Switzerland, 58 percent of private banking clients have lost confidence in the financial system. Forty-four percent worry about inflation.

Fully 22 percent expect the euro zone to collapse. The number was the same for Austrian clients. Only 15 percent of Swiss and 16 percent of Austrians say the lessons have been learned from the euro crisis.

The study also said clients are reducing their diversification strategies and retreating to gold, cash and their home markets. Only a small fraction of clients are out to get better returns than the broader market.

I sympathize with the position of these affluent Swiss banking clients. The financial system has indeed been unstable and has become too dependent on political steroids

And I think that the present concerns goes beyond the Euro crisis as current woes seem multipronged: the BRICs (especially China) and the US too.

Yet geopolitical events, which has been holding the global financial markets hostage, has been very fluid and can move very swiftly and dramatically which would likely incite even more volatility in the financial markets from what we are seeing today.

Uncertainty prevails.