There has been a lot of news about economic experts being concerned that the market could be on the verge of another crash once the Federal Reserve begins raising interest rates. Now big businesses are beginning to prepare for the worst.
Overstock.com is making headlines after their CEO Patrick Byrne told Buzzfeed News that the company has begun stockpiling food, precious metals, and even digital currency “in preparation for a disaster scenario that could cripple lesser online retailers.”
“I want a system that can survive a three-month freeze,” Byrne said. “If the whole thing collapses I want our system to continue paying people, we want to be able to survive a shutdown of the banking system.
Byrne referred specifically to the two-week banking freeze that followed the 1929 market crash and the near-freeze that happened in 2008. As well as taking a few jabs at the Fed’s quantitative easing policy of injecting billions of dollars into circulation through its bond-buying program, that has since been adopted by many other central banks.
“I think we’re living in the final days of the theory that the Keynesian magic money tree can deliver actual wealth and growth,” said Byrne.
Byrne first revealed his plan during a call with analysts back in 2013. He was adamant about making “Overstock robust in the face of that fragility and that includes owning some precious metals and maybe some Bitcoin.”
Many investors like to own precious metals like gold and silver since their value is not directly tied to paper currency. In fact, history has shown that when markets go down, precious metal values tend to go up. Gold prices also tend to rise when currencies lose value, making it useful as a hedge against inflation. Overstock.com and its leadership seem to subscribe to this philosophy.
Byrne is quick to point out that this plan is simply being used as an insurance policy and they are not hoping for a crash.
“We’re not rubbing our hands together gleefully waiting for it to happen,” Byrne said.
In the interview with Byrne, BuzzFeed News pressed him to reveal the location of the gold. Byrne claims “It’s in a safe space in Utah. Utah has a lot of safe places.”
Overstock had disclosed its investment in gold and silver before, but it has recently resurfaced as news after the company’s former President Jonathan Johnson spoke about it in a speech to the United Precious Metals Association. He is currently running for governor of Utah and he was asked for his thoughts on the state of the nation’s economy. His response made it clear that he believes that it is not a matter of if, but when the bubble will burst.
“I don’t know if it will be two days or two weeks or two months,” said Johnson. “But we have $10 million in gold and silver in denominations small enough…for payroll. In a deep sense, I do not trust the central banks and I don’t trust major institutions.”