Bank

Bail In’s

Coming to America?

Protect Your Savings With Gold: ECB Propose End To Deposit Protection

– Protect Your Savings With Gold: ECB Propose End To Deposit Protection
– New ECB paper proposes ‘covered deposits’ should be replaced to allow for more flexibility
– Fear covered deposits may lead to a run on the banks
– Savers should be reminded that a bank’s word is never its bond and to reduce counterparty exposure
– Physical gold enable savers to stay out of banking system and reduce exposure to bail-ins

 It is the ‘opinion of the European Central Bank’ that the deposit protection scheme is no longer necessary: 

‘covered deposits and claims under investor compensation schemes should be replaced by limited discretionary exemptions to be granted by the competent authority in order to retain a degree of flexibility.’ 

To translate the legalese jargon of the ECB bureaucrats this could mean that the current €100,000 (£85,000) deposit level currently protected in the event of a bail-in may soon be no more.

 

DYI:

The Federal Deposit Insurance Corporation (FDIC) would be unable to handle a major banking run especially if it is among the top 25 New York centered super banks.  This in turn would snow ball bringing down regional banks along with a host of small town banks as well. 

So…What to do?  First and foremost is to be debt free.  What I tell young people before you can have a life you must be debt free.  Everything stops until the debts are retired including the house.  Be honest with yourself if you have purchased a home greater than 2.0 times your income the budget is being stretched AND the capacity to retire the debt early (down size).  Also purchase a mortgage no longer than 15 years and if you can swing the payments many Credit Unions have 10 year mortgages.  The savings in interest expense as compared to 30 year mortgage is astounding. Build 2 years worth of savings.  Sounds difficult?  Remember ALL of your debts are retired your 2 years of savings is at a much lower cost basis – very doable.  After that 50% of the money that went to the retired debt payments is to be invested in a diversified portfolio of stocks, bonds, gold, and cash the other 50% go have a life and have some fun you earned it!

DYI