Double Jeopardy

[beauanderos]

Having read (and trying to keep up with) several pieces on the Cyprus Effect... I've reached a conclusion that is more than just an extension of my mind set for the last decade... that being that one should store the bulk of their wealth in the form of metals, and only sell when fiat is needed. It seems not even our bank deposits are sacrosanct. Even if YOU trust the banks to continue the status quo, maintaining "business as usual" if there's enough people who fear that their assets could be seized, then the banks will topple anyway. More and more I am reading that if banks are in jeopardy, that your deposits could be confiscated. While this is certainly alarmist, if there's even a hint of verity to it, then I want to take heed.

So... how to protect the small balances that one must maintain in their bank accounts to finance day to day check writing... if one truly suspects that assets could disappear in a flash from those accounts if your bank needs a bail-in... and they opt to seize your assets? That's the template going forward for the Eurozone banks, according to sources in Belgium, and if it can happen there there is NOTHING to keep it from happening here.

I see problems here, for instance, if I have to maintain several thousand in my balance to cover taxes due the IRS, while the checks are in transit. I know everyone feels "it could never happen here" but what if you've got the money (in the bank) to pay your taxes... and then those funds are taken? Do you really think the IRS is going to forgive you your debts if you try explaining "but the check would have been good yesterday!!!"

So here's the plan, and I feel it's a small price to pay (inconvenience and cost) to protect your hard earned money and be able to sleep at night. It may never come to pass that we get Cypressed, but if it does, you won't be out your check-writing maintenance fund.

Money orders. If losing your checking account or savings account balances could wreak a devastating effect on your personal finances, then drain your accounts down to the MINIMUM balance needed to avoid additional fees. Then, if needed, purchase money orders for everything that require anything but cash payments.

What this means... hmmm, I guess I'll have to start asking for money orders instead of personal checks, for payment of items I sell, and using money orders myself for items I buy. And my direct deposits into two banks? Those puppies are history, will be drained immediately upon deposit. I'll have to go in person to the post office and buy money orders (time inconvenience and slight cost) to pay bills by mail, but at least I won't face double jeopardy by already having paid a bill and then having it bounce in transit because of a bank robbery!

Thoughts?

[Diggin4copper]

I think if you only keep 2k in the bank you will be ok.. They wont screw with the government assistance class, and that is about the top end of the takers accounts..

[Engineer]

I think if you only keep 2k in the bank you will be ok.. They wont screw with the government assistance class, and that is about the top end of the takers accounts..

+1

For the money I do need to keep in the bank, I've started spreading it around into smaller piles, which (hopefully) will stay under any confiscation limits. Doing it this way also allows me to pull money out of many banks rather than just one if withdrawal limits are put in place...and bonus funds are given to banks that sell bags of coins.

Even if they're rationing the FRNs, they may not have a problem letting a couple grand in coins go out the door.

[beauanderos]

I think maybe my first impulse was an over-reaction... but you gotta remember I woke up in the middle of the night, was groggy as I read a Gerald Celente piece posted by Z00, and just ad-libbed that response.

Still, it's not a bad idea for someone who wants to go the distance with this one... but a partial remedy I might employ is just to move most of my money from B of A to my much smaller regional bank (Union Bank), which I'm pretty sure is a much safer (less derivatives exposure) bank... and just write checks from that account.

HOWEVER...

if the dominoes do ever start toppling, the BAD banks will take the good banks down with them, contagion will infect all

Let's keep our fingers crossed that it never comes to that. Heck (pardon my French ) if the worst thing that happens is that JPMoregain continues to suppress the metals prices for another five years to help keep the system patched... well then we'll have five more years to stack and prep.

[DTEJD1997]

Beauanderos:

I am so very let down with you! You maintain an account at BOA?

If it weren't for the government bailouts, this bank would have declared "Super Duper Bankruptcy"!!! Many times over!

Seriously, the "Too big to fail" banks NOW control MORE deposits than they did before the financial crisis! WTH? The lesson of the financial crisis was to pare down banks & their assets so that nobody is "too big to fail".

The word on the street is that the amount of toxic mortgages largely from CW was more than was even publicly discloses, a real mess...I would not trust BOA's books at ALL

I urge EVERYONE on this board to withdraw deposits & accounts from the TBTF banks and move them to credit unions OR small local banks.

As to banks seizing depositor's accounts. I don't think that will happen in USA...if it does, you are going to have a lot more to worry about than money.

Move $ to credit unions & small banks. Open multiple accounts. Diversify your assets, keep plenty of gold, silver, lead & cash.

Invest in a business(es). Put capital to work with people that you trust & are capable people. Don't put all your eggs in one basket....

[beauanderos]

Beauanderos:

I am so very let down with you! You maintain an account at BOA?

If it weren't for the government bailouts, this bank would have declared "Super Duper Bankruptcy"!!! Many times over!

Seriously, the "Too big to fail" banks NOW control MORE deposits than they did before the financial crisis! WTH? The lesson of the financial crisis was to pare down banks & their assets so that nobody is "too big to fail".

The word on the street is that the amount of toxic mortgages largely from CW was more than was even publicly discloses, a real mess...I would not trust BOA's books at ALL

I urge EVERYONE on this board to withdraw deposits & accounts from the TBTF banks and move them to credit unions OR small local banks.

As to banks seizing depositor's accounts. I don't think that will happen in USA...if it does, you are going to have a lot more to worry about than money.

Move $ to credit unions & small banks. Open multiple accounts. Diversify your assets, keep plenty of gold, silver, lead & cash.

Invest in a business(es). Put capital to work with people that you trust & are capable people. Don't put all your eggs in one basket....

Good reminder I can start using my old Fire Dept Credit Union to hold funds, and local bank for cashing/issuing check payments.

[68Camaro]

Here:

Smallish accounts spread among 6 banks and 1 credit union in such a way as to create no fees.
(Getting harder to do, I'm grandfathered in at several of them).
But for one, the average balance under 3k (most less than that). The larger is my credit union, which I still don't let get too big. Another exists only for purpose of direct deposit for mortgage payments, but that balance peaks at end of month, gets depleted with the auto-debits, then starts to re-fill. Another exists primarily as my dump bank to allow for free dumps, but also (being TD) gives me a loose tie to the Canadian banking system. Etc. Each has a purpose.
I move money between them to keep them somewhat balanced.

[beauanderos]

Here:

Smallish accounts spread among 6 banks and 1 credit union in such a way as to create no fees.
(Getting harder to do, I'm grandfathered in at several of them).
But for one, the average balance under 3k (most less than that). The larger is my credit union, which I still don't let get too big. Another exists only for purpose of direct deposit for mortgage payments, but that balance peaks at end of month, gets depleted with the auto-debits, then starts to re-fill. Another exists primarily as my dump bank to allow for free dumps, but also (being TD) gives me a loose tie to the Canadian banking system. Etc. Each has a purpose.
I move money between them to keep them somewhat balanced.

If you told regular people (outside of the forum) of all the trouble we go through... they'd laugh at us.

But one of these days, when American depositors get Cypressed themselves...

We'll be laughing all the way FROM the banks

[wheeler_dealer]

In the past year when I accumulated excess funds in any bank accounts, rather than park it in the bank I would prepay phone, utilities, rent. I even send extra to mastercard. No they don't pay interest but they are safe as banks and I can sleep well knowing I'm ahead on bills.

[Engineer]

In the past year when I accumulated excess funds in any bank accounts, rather than park it in the bank I would prepay phone, utilities, rent. I even send extra to mastercard. No they don't pay interest but they are safe as banks and I can sleep well knowing I'm ahead on bills.

That's a great use of your "emergency fund", and, saving a few stamps pays better than keeping the money in the bank these days. Back when I had a mortgage, I prepaid six months of full payments in addition to making extra principal payments. It was nice getting statements in January's mail with a July due date...and knowing that I was paid up let me throw every available cent to knocking down the principal.

I still pay my bills up front, but for companies which bend over old customers to subsidize new ones, I only prepay for as long as they'll lock me into a decent price. When a bill shows up in the mail, that's my reminder to call their customer retention department.

[barrytrot]

What this means... hmmm, I guess I'll have to start asking for money orders instead of personal checks, for payment of items I sell, and using money orders myself for items I buy. And my direct deposits into two banks? Those puppies are history, will be drained immediately upon deposit. I'll have to go in person to the post office and buy money orders (time inconvenience and slight cost) to pay bills by mail, but at least I won't face double jeopardy by already having paid a bill and then having it bounce in transit because of a bank robbery!

To me this seems a wee bit TOO preemptive. You are doing a lot of extra leg work when just reducing your exposure gets you close to the same level of protection and doesn't waste your precious time.