Time to convert cash in bank deposits into material assets

Editor, RE: “The right medicine for Greece” (The New Times, December 29). Meantime people everywhere (including our central bankers with much of our reserves parked in western banks and other western financial assets) should begin trembling at what will happen when (not if) the next—and far worse than 2008—financial meltdown hits. Under the new rules introduced under by Bank for International Settlements Basel III to resolve bankruptcies of systematically important banks, rather than governments having to foot the bill of rescuing such too-big-to-fail financial institutions (governments have already maxed out their own resources and credit to prop up the financial system following the 2008 Great Financial Meltdown), those institutions’ creditors including ordinary bank depositors (who are considered ordinary unsecured junior creditors) will be the ones left to hold the bag. Depositors—unlike banks’ over-the-counter derivatives counter-parties (really gamblers) and other ordinary bank creditors will be forced to bail out (or bail in) the failing banks as their bank deposits (savings, checking account balances, etc.,) will be compulsorily converted into shared of those bankrupt (i.e. valueless) banks. In other words, you keep too much cash in western bank accounts at your risk; better convert your spare cash into teal physical assets. And better do it sooner than later as financial authorities everywhere make it more and more difficult for people to withdraw cash in order to lock people into the financial system the better to make easy to eventually use your cash to bailout banks that have bankrupted themselves by gambling in the global casino called financial markets even as they make it impossible for precipitate mass customer withdrawals of their deposits that can induce bankrupts on already extremely fragile bank systems. Better convert your cash in bank deposits to real material assets while you still can. And that holds for our central bankers vis-à-vis our reserves. It is only a matter of time before the Ponzi Scheme that is the global financial system comes crashing down with people’s hard-earned savings in bank deposits turn to useless shares in bankrupt financial institutions. Mwene Kalinda

Opinions

Time to convert cash in bank deposits into material assets