Tuesday, March 19, 2013

Banks and Bailouts

So Cyprus banks were declared healthy very recently. Then we learned that they need a large bailout and that the deposit insurance agreement, which guaranteed safety of deposits up to 100,000 euros was a pipe dream. OK. This likely means that FDIC insurance is the same scam as the European banking insurance.

Are the Bank of America, HSBC, or Chase banks holding on to the same toxic assets, that the Bank of Cyprus held? Do they need a bailout?  Where will they get their collateral money from?  Keep in mind, that our justice department recently went after Standard and Poor over giving unjustly high rating to our own securities. Heh, there is that Orwellian terminology again: "securities."  That also, was a desperation move.

The answers to above questions are: yes, yes, and you. Now let me ask another question: does the US need a bailout? What will the US government give as collateral to the Chinese? Answer this one, yourself.

I don't know what the short term solution here is. It may still be a better decision to keep your money in the bank, rather than stuffed into your mattress. After all, this paper money can just as easily be "taxed" via the federal printing press. Metals may seem like an answer, but who are you going to sell your silver and gold to? If you go to some "cash for gold" store, you'll get only 50 cents on the dollar. If you use papers to buy these metals, you'll pay a premium. Furthermore, the government can simply declare possession of gold bullion illegal, like it did under Roosevelt. And lastly, unless you know how to protect your stash, this money is not any safer in your possession, than it is in some bank. Those who want it, will come and take it.

Scary times.

1 comment:

Anonymous said...

Invest in arms.