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Danger in bank accounts

 
The thinking behind GoldMoney’s business model was that there might come a time when prudent savers would want to protect themselves from the twin risks of a global banking crisis and a loss of purchasing power of paper currencies. The first of these two risks is now upon us, and it is important that everyone with savings to protect is aware of what is happening to banks and their bank accounts. By the time this is fully understood by the media it may be too late to act.

It has been obvious for some time that banks in many jurisdictions are insolvent and that they are simply too big for governments to rescue. Furthermore, while some governments feel they have a reasonable chance of muddling through, they are all aware that a crisis in one major nation, such as Spain or Italy would most probably lead to a chain of defaults beyond anyone’s control. It should come as no surprise that central bankers have been considering how to deal with this problem and that they have resolved a solution.

That solution, as we saw clumsily applied in Cyprus, is for central banks to use creditors’ funds to rescue banks in difficulty, which includes uninsured deposits, instead of taxpayers’ money. What this means is that if you have deposits greater than the level guaranteed by your government, the unguaranteed portion (in the eurozone, over €100,000) is free to be used to recapitalise the bank.

This is a major departure from past assumptions, that central banks would do their utmost to rescue banks without raiding any deposits. As many ordinary savers in Cyprus found to their cost, this is no longer true. The new approach has been agreed at the highest levels, at the Bank for International Settlements, the central…

Read the complete article at GoldMoney here.

# Here you can see WHY it’s crucial to own physical gold & silver now, and HOW you can buy [and sell] it.

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Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

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