Monday, January 26, 2015

Protect your money from confiscation

by Bob Livingston

Dear Bob,

In one of your earlier newsletter you mentioned that there is going to be a Bail in to confiscate depositors Bank Accounts in 2015 to pay for all the Bank Bailouts, do you have a time frame as to when this going to occur ? What do you recommend to avoid this?

Jean K.

Dear Jean,

In December 2012 the U.S. Federal Deposit Insurance Corporation (the entity the ensures U.S. bank deposits) and the Bank of England issued a joint report that described the plan by the FDIC, the Bank of England and the Federal Reserve to protect against the “failure of globally active, systemically important, financial institutions.” This plan involved the confiscation of deposits by “exchanging or converting a sufficient amount of the unsecured debt from the original creditors [depositors] of the failed company into equity. In the U.S., the new equity would become capital in one or more newly formed operating entities. In the U.K., the same approach could be used, or the equity could be used to recapitalize the failing financial company itself — thus, the highest layer of surviving bailed-in creditors would become the owners of the resolved firm. In either country, the new equity holders would take on the corresponding risk of being shareholders in a financial institution.”

In other words, any deposits you have in the bank can and will be confiscated to stave off a collapse of the “too-big-to-fails,” should we find ourselves in a situation similar to that we saw in the fall of 2008. This is similar to the action taken in Cyprus in order to bail out the European Union banksters when the Cypriot economy collapsed.

I cannot say when it will occur. Collapses can and do happen gradually. But once the panic sets in, all bets are off. It will be too late to try to salvage your money.

While I cannot give you specific advice, my recommendation has long been to keep in the bank only enough money necessary to cover immediate bills. Keep cash on hand to cover several months’ worth of expenditures. Convert the rest to gold and silver. For silver I recommend pre-1965 U.S. dimes, quarters, half dollars and dollars.

Your retirement if you have a pension, a 401(k) or an IRA is also in danger of confiscation. I long ago took the penalty and withdrew my 401(k) to protect it.

Best wishes,



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