Why you might want to convert your bank account to PMs

derryb

Five Banks Account For 96% Of The $250 Trillion In Outstanding US Derivative Exposure

When one goes, they all go.

DrBuster

Was actually talking about this with the missus over Outback steaks on Thurs. We both have Wells Fargo accounts and after the downgrade they got wed/thurs I was wanting to switch over to my credit union and chunk more metal onto the pile. Red no likey for sure.

Downtown1974

Credit unions are the way to go.

roadrunner

The $250 TRILLION number comes about after the BIS allowed the banks to report their contracts based on a marked to maturity model. The change allowed total reported world
deriviatives to drop approx 40% overnight. If one reapplies that accounting gimmick, the $250 TRILL reverts back to $416 TRILL. Approx 80% of all derivatives are interest rate
contracts which are applying unnatural leverage to the entire yield curve. One interesting change earlier this year was when Morgan Stanley added $9 TRILL notional between reports.
It was an astounding increase that must have served the FED/Treasury in some manner. Considering all the oversight that derivatives received in 2007-2008 where Credit Default Swaps
decreased by about $30 TRILL notional, it is incredible that the total # of deriv. contracts has only increased the past few years as the "crisis" blew over. Our biggest banks have been
adding $20-$30 TRILL in new contracts each year. Apparently, Dodd-Frankenberry did not address this minor issue.

When Lehman went bust I recall reading that their derivative's book netted them 9c on the dollar.

roadrunner

Mesquite

Already there.

jmski52

If several of the TBTF banks did default and were shut down, what do you suppose would happen to the money in account holder's accounts?

I don't think about this very often, and I'm not sure that anyone really knows what would come next. Anyone care to venture a guess?

Baley

If several of the TBTF banks did default and were shut down, what do you suppose would happen to the money in account holder's accounts?

I don't think about this very often, and I'm not sure that anyone really knows what would come next. Anyone care to venture a guess?

And if the TBTF banks are shut down, do I still have to pay my mortgage to them? Should we be hoping for a run on the banks so we can get out of debt?

After all, if they can't pay their depositors back, it would be kind of hypocritical to keep asking me for the money I owe them, wouldn't it?

gecko109

<< <i>If several of the TBTF banks did default and were shut down, what do you suppose would happen to the money in account holder's accounts?

I don't think about this very often, and I'm not sure that anyone really knows what would come next. Anyone care to venture a guess?

And if the TBTF banks are shut down, do I still have to pay my mortgage to them? Should we be hoping for a run on the banks so we can get out of debt?

After all, if they can't pay their depositors back, it would be kind of hypocritical to keep asking me for the money I owe them, wouldn't it? >>






Im cool with that. I'd lose somewhere in the neighborhood of $5,000 - $8,000 in cash, but wipe away a $223,000 loan? DEAL!!!!

But on a serious note.....why anyone would keep more than $10,000 in a bank account defies all logic in my opinion. I dont like for my account to get over $5,000, unless im saving cash for a specific purchase in the near future. $5,000 is more than enough to cover about 95% of all unforeseen emergencies. Things like a blown car motor.....leaky roof....sudden loss of a loved one and the expenses that come with it initially. Only the "super dire" emergencies might cost more than $5,000 outright......and even with them, a $5,000 cash downpayment to solve those problems is going to be PLENTY in 99.9% of cases.

My brother keeps an ungodly amount of cash in his savings account. In addition to the devastating cumulative effects of inflation, his nest egg is exposed to bank failure. I have tried many times to convince him to hedge a bit with some PMs...but he is too stubborn and resists my help. I even asked him point blank: "If you withdrew $20,000 in cash tomorrow, and threw it right down the sewer, what would change in regards to your lifestyle, and financial security?". His answer was that nothing would change, and it would be just a big bummer. So why not buy $20k in metals then and put em away and forget you even have them? Kind of like a little insurance policy against complete monetary/banking collapse. He could not give me a reason why to not do that.....just that he wants cash more than metal. Oh well.....I really do feel bad for him and his love affair with the USD.

Wolf359

When one goes, they all go.

Bring it on!

Overdate

<< <i>If several of the TBTF banks did default and were shut down, what do you suppose would happen to the money in account holder's accounts?

I don't think about this very often, and I'm not sure that anyone really knows what would come next. Anyone care to venture a guess? >>


Ben would deliver a few helicopter loads to the FDIC, and all would be well!

goingbroke

"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."- Thomas Jefferson

gsa1fan

Everyone should look at their bank statements good. I had 3 accounts changed on me. All 3 with new inflated service charges

PerryHall

<< <i>And if the TBTF banks are shut down, do I still have to pay my mortgage to them? >>



I hope this is a rhetorical question.

derryb

<< <i>And if the TBTF banks are shut down, do I still have to pay my mortgage to them? >>


sure, just write a check drawn on a bank that is out of business.

PreTurb

Baley still has a mortgage?

Justacommeman

<< <i>
Im cool with that. I'd lose somewhere in the neighborhood of $5,000 - $8,000 in cash, but wipe away a $223,000 loan? DEAL!!!!

But on a serious note.....why anyone would keep more than $10,000 in a bank account defies all logic in my opinion. I dont like for my account to get over $5,000, unless im saving cash for a specific purchase in the near future. $5,000 is more than enough to cover about 95% of all unforeseen emergencies. Things like a blown car motor.....leaky roof....sudden loss of a loved one and the expenses that come with it initially. Only the "super dire" emergencies might cost more than $5,000 outright......and even with them, a $5,000 cash downpayment to solve those problems is going to be PLENTY in 99.9% of cases.

My brother keeps an ungodly amount of cash in his savings account. In addition to the devastating cumulative effects of inflation, his nest egg is exposed to bank failure. I have tried many times to convince him to hedge a bit with some PMs...but he is too stubborn and resists my help. I even asked him point blank: "If you withdrew $20,000 in cash tomorrow, and threw it right down the sewer, what would change in regards to your lifestyle, and financial security?". His answer was that nothing would change, and it would be just a big bummer. So why not buy $20k in metals then and put em away and forget you even have them? Kind of like a little insurance policy against complete monetary/banking collapse. He could not give me a reason why to not do that.....just that he wants cash more than metal. Oh well.....I really do feel bad for him and his love affair with the USD. >>



If you and your brother transformed/merged into one person then you might be on to something. I'm not sure who is more reckless at this point. Both way too extreme in your thinking IMO. Cash can be your best friend lots of times. Last week it was my best buddy. MJ

KUCH

After careful thought, I would think we would look at Greece the past 2 years and going forward. When the implosion happened in Greece, they closed the banks to prevent a run on withdrawing deposits and all transactions had to be done with credit cards. They are back to accepting Euros (I just returned from 10 days in Greece). No one lost their deposits (yet).

If and when we implode, I believe the same thing will occur.

Going forward, keep an eye on the PIGS, we're right behind them.

ricko

The frightening reality of this postulation, is that we may indeed find out exactly 'what happens when'.... Cheers, RickO

jmski52

<<If several of the TBTF banks did default and were shut down, what do you suppose would happen to the money in account holder's accounts?

I don't think about this very often, and I'm not sure that anyone really knows what would come next. Anyone care to venture a guess?>>


And if the TBTF banks are shut down, do I still have to pay my mortgage to them? Should we be hoping for a run on the banks so we can get out of debt?

After all, if they can't pay their depositors back, it would be kind of hypocritical to keep asking me for the money I owe them, wouldn't it?


If the TBTF banks are insolvent, they should be placed into bankruptcy and their officers should be fired, like most failed businesses. There WERE precedents for this and these legal precedents are being re-written by big government socialists for their own political purposes. This is not right, and in fact it is immoral and unjust. It is stealing from taxpayers to allow the officers in large banks and corrupt execs and union officials in companies like GM & GE to continue to pull down huge salaries, bonuses, pensions and benefits (as the case may be) after they have killed jobs, run the business into the ground, and then have been bailed out at taxpayer's expense.

No, you would not have to pay a mortgage to them, but you would continue to pay it to their successor, whoever bought the asset your mortgage was bundled into. Why wouldn't you have to continue to pay your mortgage?

I'm not clear how a run on banks would get "us" out of debt. A run on an insolvent bank should certainly put them out of business, and the damage to their shareholders should be liquidated through the courts according to the laws that have long been established for that purpose. Any insurance should be used to compensate depositors. The problem with bank insurance is that it has been a fraud for many decades, just as the leverage employed by fractional reserve banking has been a fraudulent, free source of income for the banks for almost a century. If an insurance pool can't be established that pays for itself, then the depositors should bear the loss because they took the risk, pure and simple.

Just because the government sanctions this fraud does not make in right. It always involves someone getting something for nothing, while someone else puts in most of the effort. Not equitable.

Further, responding to your comments - asking for your deposits back wouldn't be hypocritical. Why would it? It's a separate contract. Just because one contract is broken, why would that make it ok to break all the other contracts?

This is the problem we all face - are there going to be rules, or not? And do they apply to all, or just some? Think about it. It's not a rhetorical question in a debating society anymore - it's a real question, and we all have to decide where to draw the lines now, because the old lines have been erased. That is fact.

So many people prefer to live inside a cocoon of "protection" that is really only an illusion. That's all too often the case - whether the government, or money, or religion, or gold or anything else is involved. The fact is, our Founders had it right. We ought to have listened to them.

goingbroke

A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain.

derryb

A run on the banks, and their resulting failure, would force them to take the haircut that Washington has thus far succeeded in passing on to the consumer and the taxpayer. Under previously accepted accounting rules (before Washington fiddled with them) most TBTF banks would be insolvent; in reality they still are.

bluelobster

I not sure converting your bank account to the safe haven of PMs is the most pragmatic of ideas, and as crazy as it sounds, having a run on banks to force a "haircut" doesn't seem to me as the best solution for the USA.....color me crazy I guess.

derryb

<< <i>I not sure converting your bank account to the safe haven of PMs is the most pragmatic of ideas, and as crazy as it sounds, having a run on banks to force a "haircut" doesn't seem to me as the best solution for the USA.....color me crazy I guess. >>


Government actions haven't fixed anything, only causing them to keep repeating themselves. Banks have got to be allowed to break before the market can fix them. Bad guys will cease to exist, good guys will fill the void.

jmski52

I not sure converting your bank account to the safe haven of PMs is the most pragmatic of ideas, and as crazy as it sounds, having a run on banks to force a "haircut" doesn't seem to me as the best solution for the USA.....color me crazy I guess.

What would be the best solution for the USA? I'll leave that question open-ended, since I've already spouted off enough on the topic.

cohodk

<< <i>What would be the best solution for the USA? I'll leave that question open-ended, since I've already spouted off enough on the topic. >>




Deflation. Wring the excesses from the economy. Reward savers for their diligence. Narrow the weath gap by enabling the middle class to afford to live while punishing those who overleveraged (the rich?).

derryb

<< <i>What would be the best solution for the USA? I'll leave that question open-ended, since I've already spouted off enough on the topic. >>


The Short List:

(1) Remove government intervention from the markets to include letting interest rates to be set by the market. Artificially low interest rates have benefited only those unworthy to participate in a free market, while punishing those that are the free market.

(2) Reinstate Glass-Steagall Act to separate banks from investment firms. Allowing banks to gamble with multiple times of depositor's funds got us into this mess.

(3) Reign in the power of the FED. Replace Turbo Timmy Geither with Elizabeth Warren.

(4) Outlaw communication between Wall St. and the White House. Outlaw all lobbying.

bluelobster

<< <i>I not sure converting your bank account to the safe haven of PMs is the most pragmatic of ideas, and as crazy as it sounds, having a run on banks to force a "haircut" doesn't seem to me as the best solution for the USA.....color me crazy I guess.

What would be the best solution for the USA? I'll leave that question open-ended, since I've already spouted off enough on the topic. >>




Capitalism needs a solvent banking system, not a middle eastern cash kiosk system that trades pieces of silver in alleys, or street corners. I believe the banks must be forced to deleverage and be forced to raise more capital, small amounts of this has been done, but given the chance, many banks have have releveraged their balance sheet. In essence banks should become like utilities, imo. Like many of you I agree that derivatives need to be more transparent, traded on an exchange and in the case of credit default swaps...writing companies must have the capital to back them up and purchasers should be required to have a insurable interest, or they simply should not be tradable, imo.

All of that being said, I think the only real long term solution for the US, is innovation in industry, service and technology that puts us back to work. Innovation is what we are good at historically, there is no reason we can't do it again.

Of course, I would love to dump many of congress, especially the bombastic demagogues, on both sides of the isle, who feed of the frailty and ignorance of the human psyche in times of stress.

cohodk

Big Mistake

rawteam1

<< <i>Big Mistake >>


As is most everything Dowserb posts...

jmski52

Stronger dollar projected even now?

I suppose we can't rule it out.

derryb

<< <i>Big Mistake >>




<< <i>As is most everything Dowserb posts... >>


Troll1, found you a new avatar.

jmski52

derryb, that's gonna give someone a seizure. I hope it's not me.

rawteam1

Pretty cool Dowserb how you got such a good pic from your mirror...

jmski52

Capitalism needs a solvent banking system, not a middle eastern cash kiosk system that trades pieces of silver in alleys, or street corners. I believe the banks must be forced to deleverage and be forced to raise more capital, small amounts of this has been done, but given the chance, many banks have have releveraged their balance sheet. In essence banks should become like utilities, imo. Like many of you I agree that derivatives need to be more transparent, traded on an exchange and in the case of credit default swaps...writing companies must have the capital to back them up and purchasers should be required to have a insurable interest, or they simply should not be tradable, imo.

All of that being said, I think the only real long term solution for the US, is innovation in industry, service and technology that puts us back to work. Innovation is what we are good at historically, there is no reason we can't do it again.

Of course, I would love to dump many of congress, especially the bombastic demagogues, on both sides of the isle, who feed of the frailty and ignorance of the human psyche in times of stress.

Agree wholeheartedly!


http://www.zerohedge.com/news/2015-03-11/we-have-grandstand-seats-imminent-market-shock-hedge-fund-billionaire-warns">Unfortunately, we seem to be here - "We Have Front-Row Seats To An Imminent Market Shock", Hedge Fund Billionaire Warns.

Talking about illiquidity in the financial system, "stocks are enjoying a six-year bull market but he also hinted at liquidity issues bubbling under the surface".

"I just think that you and I have got grandstand seats here [to an imminent market shock] and my point is having found myself in the second quarter of last year selling a lot of equities and starting to go short, I found out just how illiquid it all was. You never actually see it until people try and get out of these things."

OPA

derryb...I hope your advise from 2011, went on deaf ears....bad timing....It's probably more viable now.

"Why you might want to convert your bank account to PMs"

TwoSides2aCoin

There's a good time to do things that seem smart and a bad time to do things that seem brilliant. As long as the bank loans me money, I will use the credit to float the business. It was never Precious Metals I banked on. However, … I'm bored in the business so I may use this same credit to open up another type of business.

When a guy gets bored, he finds another place to play. But it's work every day, just the same. And if worse came to worse, I could get by easily on minimum wage.

That is, if anyone would trust me to work for them besides the military . LOL

cohodk

Dont shoot derryb.


Since the blog.....JPM $28 to 60. C from 26 to 55. BAC 6 to 18. GS 90 to 190. Gold 1800 to 1200.

Those are facts.

Develop your own opinion of ZH.

cohodk

my point is having found myself in the second quarter of last year selling a lot of equities and starting to go short, I found out just how illiquid it all was. You never actually see it until people try and get out of these things."


Let me guess. This "billionaire hedge fund guy", (I thought we hated those people?), got his rear handed to him as the market kept going up and up.




Question what these clowns say. Im calling this guy out as a phony, a sore loser. Be careful about the opinions you/we wish to respect. As we've seen all to recently on this board, most are not who they seem to be.

jmski52

The debt spiral isn't over.

s4ny

We already saw what happened in 2008 and early 2009 when the US banking system
teetered on the edge. The Fed and US Treasury stepped in and stabilized the system,
earning a profit for their efforts.

No depositor has ever lost a penny in an insured account.

You should really find something else to worry about.

jmski52

They can guarantee anything they want - bank profits, bank bonuses, bank deposits, government pensions, union pensions, social security payouts, welfare, disability, student loans, no manipulation of markets, interest rate swaps, credit default swaps, and free handbags for opening an account.

Sooner or later they will run out of other people's money. Oh wait, that happened long ago. Sooner or later they won't be able to sell Treasuries in the open market. Oh wait, the Fed had to step in and buy Treasuries. Sooner or later, the wrong algorithm will trip the wrong setpoint.

OPA

<< <i>They can guarantee anything they want - bank profits, bank bonuses, bank deposits, government pensions, union pensions, social security payouts, welfare, disability, student loans, no manipulation of markets, interest rate swaps, credit default swaps, and free handbags for opening an account.

Sooner or later they will run out of other people's money. Oh wait, that happened long ago. Sooner or later they won't be able to sell Treasuries in the open market. Oh wait, the Fed had to step in and buy Treasuries. Sooner or later, the wrong algorithm will trip the wrong setpoint. >>



Or sooner or later conspiracy advocates will finally admit and succumb to reality. Let's see what comes first.

cohodk

the Fed had to step in and buy Treasuries

I dont know why this myth continue to perpetuate, but who do you think is buying Treasuries today?

bluelobster

<< <i>
Or sooner or later conspiracy advocates will finally admit and succumb to reality. Let's see what comes first. >>



Ha, good luck with that on this forum

derryb

<< <i>the Fed had to step in and buy Treasuries

I dont know why this myth continue to perpetuate, but who do you think is buying Treasuries today? >>


The FED did step in to buy US treasuries, where you asleep? As of last year the FED owned 65% more US debt than China. The largest holder and buyer of US debt is the US Social Security system. Social Security owns about 16% of the debt followed by other federal government entities (13%), and the Federal Reserve (12%). 65.6% of US debt is held domestically. Foreign investment accounts for only 34.4%. How much of that 34.4% is actually an investment (as opposed to a need for a supply of world currency) is questionable.

While the FED "says" it stopped its purchasing, EuroClear out of Belgium is doing a huge amount of buying for anonymous third parties. At one time EuroClear was operated by JP Morgan. (Once a JPM puppet, always a JPM puppet.) Also of note is that Belgium is home to European Union headquarters.

The fact that the US government moves 29% percent of it's debt through its own agencies reveals that it is in fact a shell game.

cohodk

"did" step in is MUCH DIFFERENT than "had to" step in. English 101

EuroClear out of Belgium is doing a huge amount of buying for anonymous third parties

Fear of the unknown always leads to incorrect assumptions.

And there is ABSOLUTELY NOTHING WRONG with social security owning US Treasuries. Who do you think owns most of the Japanese debt?

derryb

<< <i>"did" step in is MUCH DIFFERENT than "had to" step in. English 101 >>


Somebody obviously felt they had to step in. I'm sure it wasn't because they saw a great investment opportunity.




<< <i>EuroClear out of Belgium is doing a huge amount of buying for anonymous third parties >>




<< <i>Fear of the unknown always leads to incorrect assumptions. >>


Just presenting the "known" facts.




<< <i>And there is ABSOLUTELY NOTHING WRONG with social security owning US Treasuries. Who do you think owns most of the Japanese debt? >>


Nothing Wrong? You sound like Bernie Madoff. US debt held by US agencies is nothing short of a ponzi. When you own your own debt their is no accountability for it.

Yep, let's follow Japan's example on all thing financial.

cohodk

<< <i>

<< <i>"did" step in is MUCH DIFFERENT than "had to" step in. English 101 >>


Somebody obviously felt they had to step in. I'm sure it wasn't because they saw a great investment opportunity.




<< <i>EuroClear out of Belgium is doing a huge amount of buying for anonymous third parties >>




<< <i>Fear of the unknown always leads to incorrect assumptions. >>


Just presenting the "known" facts.




<< <i>And there is ABSOLUTELY NOTHING WRONG with social security owning US Treasuries. Who do you think owns most of the Japanese debt? >>


Nothing Wrong? You sound like Bernie Madoff. US debt held by US agencies is nothing short of a ponzi. When you own your own debt their is no accountability for it.

Yep, let's follow Japan's example on all thing financial. >>




Japan will be in existence for a lot long than you will.

Im not saying its a perfect system, but its what we got and it aint nearly as bad as you wish it be. You're begging to finally be right, arent you?

derryb

I am right about many things, you just don't want to believe it. One day you will know it.

cohodk

<< <i>I am right about many things, you just don't want to believe it. One day you will know it. >>



As they say, I'll believe it when I see it. LOL

derryb

<< <i>

<< <i>I am right about many things, you just don't want to believe it. One day you will know it. >>



As they say, I'll believe it when I see it. LOL >>


Then it's too late.