The next banking crash?

[Black arab]

Recently been looking at articles on the web/you tube regarding the next banking collapse.It apparently happens every 7- 10 yrs last one being 2008. The last time banks were bailed out by tax payers to the tune of trillions of dollars pounds euros .The next time it happens will be different if you believe all you read.The FDIC (Federal deposit ins co.) and the Bank of england have done a deal for a" bail in " . Part if this is to take money to alleviate losses through "unsecured depositers" basically bank acc holders with any money.Advice has been to strip your acc bare and perhaps buy gold, ok. My question is does anyone know if this all real and could a bank also take your emploment/pension payments. Would money say in premium bonds be safe.I am no economic guru by any means im trying to get my head around this and prepare if i have to.

Any thoughts?

[topt]

3 hours ago, Black arab said:

The FDIC (Federal deposit ins co.) and the Bank of england have done a deal for a" bail in " .

Unlikely as two distinct jurisdictions. However ever since the Cyprus crisis this has been promulgated as a possibility in any jurisdiction. 

 

The UK and the EU have government backed guarantee schemes for bank deposits up to specified levels. It is possible that above these levels there could be issues which is why most consumer advisory sites recommend spreading larger amounts over multiple accounts in different banks to be on the safe side. 

 

Pension schemes can go bust but I cannot see any way they could be touched for a "bail in" of the sort you mention.

 

"Unsecured depositors" would also mean the share/bond holders in a lot of cases.

Edit - but that has always been the case.

[Black arab]

13 hours ago, topt said:

Unlikely as two distinct jurisdictions. However ever since the Cyprus crisis this has been promulgated as a possibility in any jurisdiction. 

 

The UK and the EU have government backed guarantee schemes for bank deposits up to specified levels. It is possible that above these levels there could be issues which is why most consumer advisory sites recommend spreading larger amounts over multiple accounts in different banks to be on the safe side. 

 

Pension schemes can go bust but I cannot see any way they could be touched for a "bail in" of the sort you mention.

 

"Unsecured depositors" would also mean the share/bond holders in a lot of cases.

Edit - but that has always been the case.

Hi topt

I ca  only go by what i have seen and read regarding the deal between the two.It was mentioned that the  crash will be alot worse than 2008 therefore insurance levels wont be enough to cover so they will have your acc cleaned out.Apparently they will give liquidity in return ie shares in a failed bank.

[Suradit69]

17 hours ago, Black arab said:

The next time it happens will be different if you believe all you read.The FDIC (Federal deposit ins co.) and the Bank of england have done a deal for a" bail in " . Part if this is to take money to alleviate losses through "unsecured depositers" basically bank acc holders with any money.Advice has been to strip your acc bare and perhaps buy gold, ok.

Sorry, but it's next to impossible to understand what conspiracy you're worried about.

 

Banking crises usually involve problems with liquidity or solvency of individual financial institutions. Systemic financial crises involve widespread failures in solvency or liquidity by a number of the banks deemed "too big to fail."

 

Not sure who you're worried is going to "take your money," the FDIC and Bank of England or the banks themselves. Governments can take your money by taxing you, failing to control inflation, literally or figuratively "printing" more money or borrowing vast amounts that they will never be able to repay.

 

Banks are unlikely to simply "take your money" unless there's a complete collapse of government oversight. Likewise banks couldn't simply take your salary or pension payments.

 

Even understanding what you mean by "money" is difficult. Pieces of colored paper account for a very small part of what we're paid or spend. Most of our financial transactions involve moving numbers around on computers.

 

Uncertain that buying lumps of gold will be useful in a financial crisis. You'd probably still have to trade your lumps of gold for pieces of colored paper if you wanted to buy a loaf of bread at the 7/Eleven.

 

One of the reasons cryptocurrencies like Bitcoin became a thing is because of mistrust of the banking system and of governments, but as has been shown, these cryptocurrencies are as much or more of a gamble than the fiat currencies issued by governments.

 

 

[baansgr]

UK bank balance sheets are are all in the black.  Australia is the place to watch,  40% of mortgage applications were refused,  property prices declining, banks have raised rates independent of the base rate,  looks like those living the high life on equity are in for a shock

[topt]

26 minutes ago, Black arab said:

 so they will have your acc cleaned out.

I have already explained why I don't think so.

 

28 minutes ago, Black arab said:

Apparently they will give liquidity in return ie shares in a failed bank.

This is what would potentially happen with holders of some bonds in banks anyhow should they get into trouble so hardly new.

[1FinickyOne]

or maybe someone wrote that article to get you to put your money into gold because the gold market is going to crash and they will steal all your money that way... 

 

I had money in the bank during the last crash and it was safe... my stock accounts suffered but nobody ever told me that there would not be fluctuations... and in time, they recovered. 

[Suradit69]

41 minutes ago, Black arab said:

I ca  only go by what i have seen and read

Unfortunately a lot of what is available to see and read is complete rubbish.

 

You have to ask yourself what qualification does the author have and what is his/her goal in attempting to sell you what he's writing. Fear mongering is very much a thing these days and it's often designed for political purposes or to try to get you to do something (like to buy gold or Bitcoins, for example).

 

 

 

[davidst01]

26 minutes ago, baansgr said:

UK bank balance sheets are are all in the black.  Australia is the place to watch,  40% of mortgage applications were refused,  property prices declining, banks have raised rates independent of the base rate,  looks like those living the high life on equity are in for a shock

cant wait for things to correct. many australians dont think that property prices can decrease. many didnt live through the 80s with interest rates above 10%

[chicowoodduck]

If I read it on TV I know it has got to be false news.....lol...?

[Black arab]

Thanks for all the replies, some good points to think about.

[Brunolem]

2 hours ago, Black arab said:

 in a failed bank.

You are perfectly right.

 

There are plenty of very serious and reliable authors who are expecting what you describe, sooner than later...and most of them indeed strongly recommend to have some gold, preferably in coins and safely stored with you.

 

What some members above don't understand is that in case of major inflation, or even hyperinflation, which is to be expected, as in some EM now, is that the price of gold inflates simultaneously, so that whatever the prices are, you keep your purchasing power, while those who are in fiat currency cash lose 10% or more every week, or month...

 

It is also very likely that the next crash will be much bigger than the previous one, because the amount of debt is at record levels everywhere, especially in the junk debt market.

 

Where things will start to unravel doesn't really matter since, thanks to globalization, everything is connected to everything everywhere.

 

And yes, bail in, as in taking money out of customers' deposits to refinance a bank, are more than likely...why would they have created the new regulations for that otherwise?

 

Normally, one is safe up to 100,000 dollars or euros, guaranteed by the FDIC or other entities.

 

Yet, it may be prudent to reduce that amount by half.

 

Also prudent is to avoid dealing with the too big to fail banks, which are the most rotten ones (Deutsche Bank, BNP Paribas, HSBC, Italian banks and so on...).

 

If you want more information, I can give you a long list of websites and blogs run by serious people, such as David Stockman, former Director of Budget in Ronald Reagan administration.

 

 

 

 

[Ks45672]

Stay hedged over several major currencys, mixed basket of stocks, property, gold and Bitcoin and cash etc 

 

If they all go to zero at once , we are looking at a mad max situation so the best thing to stock. Up on is  water, tinned foods and plenty of ammunition... ? 

[Krataiboy]

3 hours ago, Suradit69 said:

Sorry, but it's next to impossible to understand what conspiracy you're worried about.

 

Banking crises usually involve problems with liquidity or solvency of individual financial institutions. Systemic financial crises involve widespread failures in solvency or liquidity by a number of the banks deemed "too big to fail."

 

Not sure who you're worried is going to "take your money," the FDIC and Bank of England or the banks themselves. Governments can take your money by taxing you, failing to control inflation, literally or figuratively "printing" more money or borrowing vast amounts that they will never be able to repay.

 

Banks are unlikely to simply "take your money" unless there's a complete collapse of government oversight. Likewise banks couldn't simply take your salary or pension payments.

 

Even understanding what you mean by "money" is difficult. Pieces of colored paper account for a very small part of what we're paid or spend. Most of our financial transactions involve moving numbers around on computers.

 

Uncertain that buying lumps of gold will be useful in a financial crisis. You'd probably still have to trade your lumps of gold for pieces of colored paper if you wanted to buy a loaf of bread at the 7/Eleven.

 

One of the reasons cryptocurrencies like Bitcoin became a thing is because of mistrust of the banking system and of governments, but as has been shown, these cryptocurrencies are as much or more of a gamble than the fiat currencies issued by governments.

 

 

The last point hits the bullseye. The entire monetary system is built on trust which enables enormous debts to be run up by financial institutions. When something happens to destroy this trust, which it commonly does, then lending between banks dries up and we get the kind of credit crisis which sparked the meltdown of a decade ago - from which, of course, we have still not fully recovered.

 

Measures were taken on both sides of the Pond which were meant to rein in bankers' gambling instincts,  bolster bank reserves and, as a consequence,  restore trust in the global financial system. However, many expert commentators believe the new "safety" regulations are insufficient to prevent further crises, irrespective of whether they arise by accident or design.

 

[jippytum]

Some time ago it was proposed that the bank Guarantee on savings accounts in Thailand would be reduced from unlimited to one million baht per account .There was a lot of opposition to the reduction proposal and i understood the reduced limit of one million was never published in the Royal Gazette and deferred.Could anyone please advise the current guarantee applicable .

Thanks    

[Thaidream]

I had never heard of the 'Bail-In' until the Cyprus bank crisis.  The banks simply took over al bonds and deposits over 100,000 Euro's and applied the amount to their sheets - in essence bailing themselves out from their depositors money.  Apparently this is legal for any bonds held in the bank and any amounts over the guaranteed deposit amount.

 

The basic guaranteed amount in the US is $250,000 per account- however the FDIC has a system for large amount depositors called- insured cash sweep- in which the depositor signs an agreement with the FDIC who then places the deposit with other banks and automatically insures the full amount.

 

I would seriously doubt there would be a huge financial crisis bigger than 2008 as Governments and banks are fully aware of what caused the crash of 2008.  Could the banks use bail in- possibly- but  I would imagine if they did in such wealthy countries as the US and the UK- the politicians would pass laws severely penalizing future transactions by banks and regulate them much more than now.

 

I would hope that Governments stop the bank's nonsense of secularization of such things  as mortgages and derivatives as this creates opportunities for  speculation by banks using depositors money.   At one time  AIG during the 2008 crash was so over leveraged that it alone could have taken down the entire economy.

 

Governments need to balance their budgets by stop spending taxpayers money on such things as huge defense budgets and  port barrel projects.

 

Bottom Line- if I had  a large amount of money - I would diversify my holdings and spread the money between dollars and pounds and some easily accessed gold coins and also buy  apartment blocks .

[Brunolem]

12 minutes ago, Thaidream said:

 

Bottom Line- if I had  a large amount of money - I would diversify my holdings and spread the money between dollars and pounds and some easily accessed gold coins and also buy  apartment blocks .

That's basically what is generally recommended by those who want to be ready when the s..t hit the fan.

 

Some farmland is also to be considered...many guys in the US finance industry, those who see from close what is going on, are buying large pieces of land in New Zealand...must be a reason...

[NCC1701A]

I would worry about stuff like this all the time back in the states. It is part of the the American psyche with the constant drumbeat of fear in the media. 

 

Worrying about catastrophe is also a sign of depression. And you are the person choosing to read these stories on the web. Just do what you can and don't worry about it.  

 

I lived in Los Angeles and I had land in Montana, gold and silver, (which i still do) bitcoin, firearms and ammo, piles of Ham Radio gear, a monster four wheel drive truck on stand by 24/7 and huge pile of survival supplies. I am not kidding about this. 

 

I sold it all except the gold silver and bitcoin (for the day)and just party in Thailand now.

 

Let me know when they finally get the suit case nuke into NYC.

[CGW]

Have a look at this? 

 

[simoh1490]

2 hours ago, Brunolem said:

 

Normally, one is safe up to 100,000 dollars or euros, guaranteed by the FDIC or other entities.

 

Yet, it may be prudent to reduce that amount by half.

 

Also prudent is to avoid dealing with the too big to fail banks, which are the most rotten ones (Deutsche Bank, BNP Paribas, HSBC, Italian banks and so on...).

 

If you want more information, I can give you a long list of websites and blogs run by serious people, such as David Stockman, former Director of Budget in Ronald Reagan administration.

 

 

 

 

 

So your advice is to not deal with the biggest banks because they are most at risk and don't take advantage of FDIC et al because they're at risk also....really!

[CGW]

4 minutes ago, NCC1701A said:

I sold it all except the gold silver and bitcoin (for the day)and just party in Thailand now.

To get back to the OP question, what did you put your money into that you now consider safe and allow you to live the lifestyle you choose?

[Brunolem]

1 minute ago, simoh1490 said:

So your advice is to not deal with the biggest banks because they are most at risk and don't take advantage of FDIC et al because they're at risk also....really!

They are those the most at risk of collapsing and resorting to bail in.

 

There are many smaller banks, with clean balance sheets that don't carry tons of junk bonds and exotic derivatives, that can withstand a storm better than the TBTF Titanics...

[simoh1490]

For me:

 

6% in UK property

8% in Thai property

35% in THB deposits

20% in THB investments (SET)

10% in a UK SIPP

18% in global funds in the UK

[simoh1490]

2 minutes ago, Brunolem said:

They are those the most at risk of collapsing and resorting to bail in.

 

There are many smaller banks, with clean balance sheets that don't carry tons of junk bonds and exotic derivatives, that can withstand a storm better than the TBTF Titanics...

I think posters should be clear that what you've written is only your opinion and not necessarily fact or true, there, I've done it for you.

[NCC1701A]

 

29 minutes ago, CGW said:

 what did you put your money into that you now consider safe and allow you to live the lifestyle you choose?

real estate in the USA that is paid for and generating a positive cash flow and my social security payments. My SS pays for everything I do in Thailand and the cash flow from real estate pays for the party.  I also have a pile of cash because I worked for 40 YEARS in a high paying career.

 

gold, silver bitcoin for for the zombie Apocalypse. 

 

And for those of you who don't understand how the Federal Reserve Bank of the United States of America works you should look into it. (because they own you) It is really quite brilliant. And when the house of cards finally crashes, (it won't because we have entered a place where markets no longer function normally) it will lead to massive war because China, Russia and others will want their money, and the USA will come out swinging because the Bank must live. That is why we are building such a huge military. For the day.   

 

https://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/0912986212

 

I have four girlfriends in Thailand. I love the idea of my Federal Reserve Notes making them happy.   

[micmichd]

5 hours ago, topt said:

I have already explained why I don't think so.

 

This is what would potentially happen with holders of some bonds in banks anyhow should they get into trouble so hardly new.

They can manipulate the conversion rate, and cause a slight inflation by doing so. 

[Brunolem]

51 minutes ago, simoh1490 said:

I think posters should be clear that what you've written is only your opinion and not necessarily fact or true, there, I've done it for you.

Obviously, as any form of prediction, what is an opinion can become fact and truth only after the event, in this case a financial crash, has occured.

 

Meanwhile, those who feel comfortable to have all their money at Deutsche Bank or Wells Fargo should keep on sleeping well...for the time being...

[Lacessit]

The response in Australia was to guarantee bank deposits up to $250,000. That guarantee is still in place.

The Australian banks have tightened up considerably on lending, and a lot of interest-only loans are converting to principal and interest in the next 12 months. That's going to flush out the speculators, and make housing more affordable.

While I can't speak for other countries, Australian banks actually weathered the 2008 GFC better than most other banks. They did briefly reduce their dividends to shareholders in 2009, but recovered quickly.

[Brunolem]

24 minutes ago, NCC1701A said:

when the house of cards finally crashes, (it won't because we have entered a place where markets no longer function normally) it will lead to massive war because China, Russia and others will want their money, and the USA will come out swinging because the Bank must live. That is why we are building such a huge military. For the day.   

 

https://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/0912986212

 

Something like that...never mind how you put it, all paths are leading to war.

 

It couldn't be more obvious, since far from hiding it, the powers that be are happily banging the drums of war on a daily basis.

 

They are just waiting...as long as their financial house of cards stands, they keep on building their arsenals, and when it finally collapses, they will blame it on each other and unleash hell...

 

 

[Jimbo2014]

A crash soon is almost certain as most financial indicators point to this including the 'Buffet Index'.  However if you look back at past crashes and read headlines of the time, each one predicts apocalyptic end of the world each time it occurs.  The reality is that shares temporarily go down to about 50% for a while - most recover within 80% of lost value within 12 months.  Some companies with bad debts etc. go under.  Dodgy investors get called on margin loans and loose everything.

The reality is that some banks may go under.  Governments have an endless mechanism called QE by which they can print money and either loan it to banks or take share holding in banks.  In the latter case the owners of bank shares are the ones to suffer not those with bank accounts.  Governments are now so tied into banks that they truly cannot fail however small banks may go under and get brought by larger financial institutions during a crash further polarising wealth and ownership.

So before you buy the baked beans and golden shotguns, consider that when asset prices drop, cash is king.  Or as Warren Buffet says "Be fearful when others are greedy and greedy when others are fearful." ie: some great buys on good stocks when the market does eventually crash... as it inevitably will again and again... make sure you are the one left standing with some cash in your pocket for some great deals.