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“Dyson’s idea of burying money in the garden doesn’t seem so strange anymore…”
That’s a quote from Mega Trends Investing Editor Teeka Tiwari. He just forwarded me a disturbing news story out of Greece. The Associated Press tucked the details into a piece on the recent Greek elections.
For decades, the U.S. Federal Deposit Insurance Corp. (FDIC) insured all U.S. bank accounts up to $100,000. If the bank collapsed, the taxpayer-funded FDIC would backstop depositors’ funds up to that limit. (It now insures deposits up to $250,000.)
But in Greece, something different awaits depositors with more than 100,000 euros in their accounts…
“Bail-ins.”
If the bank collapses, depositors are now on the hook to keep the bank solvent. That means the bank will issue a one-time “levy” on its largest accounts.
In other words, it will take—and use—its depositors’ money as its own. It already happened in Cyprus in 2013.
Here’s what Teeka said about the measures…
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How is it possible depositors are having ownership risk foisted upon them? It’s not like they’ve been enjoying a stream of royalty earnings from these banks like an equity owner would. This is straight-up, state-sanctioned theft. It boggles my mind that a bank can make a string of awful decisions and then legally steal its depositors’ funds to pay for its mistakes. This is truly “heads, I win; tails, you lose.” Owning a bank is now a completely risk-free business… as long as it’s a “too-big-to-fail” bank. Either the depositors or the taxpayers—or both—will pay for the bankers’ mistakes. |
Bottom line: Banker bail-ins are one more reason we “pound the table” on intelligent asset allocation. Never concentrate your wealth in one single place… including your bank account. If you haven’t done so already, review our 2015 Asset Allocation Guide, right here.
Banker bail-ins in the U.S. may sound far-fetched to some… But, don’t forget: We’re not even a decade removed from the largest taxpayer bank bailout in American history.
Teeka Tiwari’s research team recently uncovered a startling government program designed to supply top Wall Street banking executives with “doomsday” survival kits. A former CIA officer confirmed the “hushed” program’s existence.
Click here to learn the disturbing details… and see what it means for your own wealth-protection plan.