Tags: banks | Cyprus | gold | deposits

Mistrust of Banks Growing Again

By    |   Monday, 01 April 2013 07:38 AM EDT

I’ll admit I’ve probably never been a fan of banks even though I have one that I use for my checking/debit and short-term savings.

Why do I not like them? When I was younger and needed money in the form of a loan, I couldn’t get it. These days, I own most everything outright and buy things with cash. So I’m able to circumvent the banks for most things these days. The funny thing is now that I hardly need them anymore, they come out of the woodwork to try to give me a loan.

I think many people have had this kind of disgust with a bank from time to time.

However, today, this all goes to a new level as banks pull some pretty wild stunts once again. To be fair, some of these stunts are imposed from their government or central bank through these banks. But here’s some of the recent “madness” that is going on out there.

The first one has been widely publicized lately. It’s where Cyprus’ government and banks overextended themselves and then needed a bailout. Who paid for it? Those with over 100,000 euros in their accounts had their assets frozen and 30 to 40 percent of their money will be taken through a one-time tax (which I call legal robbery). It’s crazy. How can these people ever trust their banks again? Even those who didn’t lose any money this time around should think twice before putting more money in their banks.

Then there’s Russia.

By 2015, Russia plans on making it to where their citizens can’t pay with cash for purchases that cost over 300,000 rubles (which equates to about $10,000). Of course the excuse they give is that they want to bring a halt to their “shadow economy,” which is able to dodge taxation. So they’re looking to bring in more money into their treasury.

However, there are more transaction fees to transact with a debit or credit card and there are 2 to 4 percent fees to transfer non-cash payments too. So once again, the citizen won’t have “say” over their own money. Their government will determine this through the banks.

Another instance of banks doing whatever the heck they decide to with your assets within the bank is this — Dutch bank ABN Amro has told its customers that they will no longer be able to take delivery of their gold that is held within the bank. So they can never get their physical gold back. They can simply choose to sell it and get the money for it.

Now how in the world is it right for them to be able to do this when you put your asset with them for “safe keeping?” It’s insane!

But that’s in other countries. We don’t have anything to worry about here about our money in banks right? Well, as of March 19, there is $25 billion in deposit insurance that is supposed to preserve and protect our deposits here. That sounds like a lot of money initially. But here’s the problem with that. There’s almost $9.3 trillion in deposits that would need to be covered by a mere $25 billion. So there’s over 371 times more in deposits to be insured than there is in the deposit insurance fund.

Now obviously I know they don’t need to have anywhere near “dollar for dollar” held in reserves for what we have in deposits, nor anywhere near that. But when the deposits are a whopping 371 times larger than the insurance, it does concern me if we were to have a huge round of major bank failures here in the United States. It happened in the last recession and it could be worse in the next recession.

What does this tell me? It tells me that even us Americans need to have a “plan B” when it comes to our money.

What you decide is up to you. But you might need some money in a safe somewhere. You might want to hold some gold or silver coins in your possession somewhere (which is NOT at your bank). Additionally, you might want to hold some gold or silver somewhere offshore in a place that can be trusted, like the Perth Mint.

But whatever you decide to do, start thinking about what you need to do in order to protect yourself and your assets from a vicious government and banks that could very well tell you one day what you will or will not be doing with your cash or assets and even how much of it they will take from you.

By the way, all of the instances that I recounted to you above from Cyprus banks, Russian banks and a Dutch bank all happened within the last two weeks!

About the Author: Sean Hyman
Sean Hyman is a member of the Moneynews Financial Brain Trust. Click Here to read more of his articles. He is also the editor of Ultimate Wealth Report. Discover more by Clicking Here Now.

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I’ll admit I’ve probably never been a fan of banks even though I have one that I use for my checking/debit and short-term savings.
Monday, 01 April 2013 07:38 AM
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