Banking

[philehidiot]

Deutsch Bank is being "restructured". Which is a fancy way fo saying they are broke. The principles which were put into place by the Allies when Germany was rebuilt after WW2 (were they called Bundesbank principles?? It has been a while) were cast aside by the EU. The end result is fractional reserve banking gone absolutely wild.

The bank has 1.8% of the assets required to meet it's liabilities and when derivatives are taken into account that's 0.1%. Their assets can only pay off 0.1% of their liabilities. It's insane.

Advice from someone who warned about this many years before it happened is that this is just a warning sign (like Northern Rock) and the whole European System of Central Banks and most of the international banks are in this kind of state (although not all quite as bad yet). Under the new bail-in leglisation they'll be issuing junk bonds when the banks go bust to keep them solvent and your cash will be replaced with that.

So the question is, what do you do if you're not rich enough to be putting cash into non-liquid assets but have enough money to not want it to disappear? I was considering putting it into posh second hand guns as they don't tend to depreciate but I'm guessing if we have another recession, it'll have to be near catastrophic for people to want to buy my guns off me. Anything less and they'll probably just not be saleable as people have less disposible income. The upside of buying guns is that the cops have a vested interest in responding to any break ins at your property with due haste. So the cops protect your investment. Handy.

https://www.gov.uk/government/consul...implementation

[smargh]

Buy toilet paper. People will always want to buy or barter toilet paper. You can then trade the TP for whatever the future currency happens to be - bottlecaps, bitcoin, cubits or whatever.

[philehidiot]

Buy toilet paper. People will always want to buy or barter toilet paper. You can then trade the TP for whatever the future currency happens to be - bottlecaps, bitcoin, cubits or whatever.

I already have enough Venezuelan currency, ta.

[Saracen999]

....

So the question is, what do you do if you're not rich enough to be putting cash into non-liquid assets but have enough money to not want it to disappear?

I'd say there's no easy answer, and certainly no "guaranted" safe method.

You can, and probably should, spread the risk a bit. Split your money between ultip,e banks (and not part of same grouo). That way, a failure in one exposes only a fraction of your funds to a haircut. The FSCS provides some protection, but don't assume it necessarily protects against systemic failure. It gives some protection from early liability, over uninsured deposits, but how much depends on how much political pain governments are prepared to face

Of course, one obvious solution .... hold cash. Downsides are foregoing even tbe modest interest banks pay, abd having inflation eat into tbe real value.

You can also buy something like gold. In normal times that's risky as the price is volatile, but if there's a banking crisis severe enough for deposits to be at risk during a bail-in, it's a safe bet gold, silver, etc, will go up in price.

However, with either cash, gold or some other similar assets, there s also the risk some thieving scumbag finds it and nicks it. So hide/secure it well.

Finally depending on your circumstances, you may be able to spread risk by keeping either valuable items or a bank account abroad. Oh, and if you keep cash, consider which currency/currencies to use.

[Andeh13]

Buy toilet paper. People will always want to buy or barter toilet paper. You can then trade the TP for whatever the future currency happens to be - bottlecaps, bitcoin, cubits or whatever.

I'm with this guy^ He know whats what!


Surely most of the 'super rich' in the world - people, corporations, countries etc are running massive shortfalls when it comes to their asset to liability ratio? It's all numbers on a computer screen.

Just look at the global debt levels held between countries etc?

[TeePee]

I already have enough Venezuelan currency, ta.

I have some Iraqi dinars I can sell you for a very good price!

[DanceswithUnix]

You can put up to £50K into premium bonds. That's basically government sponsored gambling, you can get your stake back at any point and the winnings give you a tax free income.

OFC normally having something treasury backed is pretty solid, though looking at the candidates for next prime minister perhaps there is some risk.

[philehidiot]

You can put up to £50K into premium bonds. That's basically government sponsored gambling, you can get your stake back at any point and the winnings give you a tax free income.

OFC normally having something treasury backed is pretty solid, though looking at the candidates for next prime minister perhaps there is some risk.

But.... Boris would never do that to me?

Premium Bonds actually sounds like it could be a good idea. I did consider gold but it's the liquidity thing - I'd need it to be instantly turned into cash if there was a problem.

[Saracen999]

But.... Boris would never do that to me?

Premium Bonds actually sounds like it could be a good idea. I did consider gold but it's the liquidity thing - I'd need it to be instantly turned into cash if there was a problem.

Gold is something I'd strongly advise against unless you have enough cash to put part of it into gold, that being part you won't need in a hurry. Same goes for shares, etc. Also, of course, prices can collapse, at least, short-term.

I'd say there is no strategy that completely eliminates risk, but judicious spreadjng it about even if just in 2 or 3 banks, cuts it down, and pretty much eliminates all risk other than bail-in liability.

Part of that spreading ought to include a cash reserve. In the event of a bail-in type event, the first thing banks will do is restrict or even prevent withdrawals. At that point, a cash float comes into play. Just be sure to keep it somewhere safe, and non-obvious.

[DanceswithUnix]

But.... Boris would never do that to me?

He wouldn't even know he was doing something bad. I'm not sure if that is better or worse than the likes of Gordon Brown when he just brazenly stole our pensions.

OFC the downside of premium bonds is that you can only cash it in for Stirling. Compare that to my car which is an appreciating asset that I could readily sell in lots of countries, not that I would recommend investing in a car but it is a lot of fun in the meantime

[ik9000]

So the question is, what do you do if you're not rich enough to be putting cash into non-liquid assets but have enough money to not want it to disappear? I was considering putting it into posh second hand guns as they don't tend to depreciate but I'm guessing if we have another recession, it'll have to be near catastrophic for people to want to buy my guns off me. Anything less and they'll probably just not be saleable as people have less disposible income. The upside of buying guns is that the cops have a vested interest in responding to any break ins at your property with due haste. So the cops protect your investment. Handy.

https://www.gov.uk/government/consul...implementation

I know that is probably an exaggeration but be careful before buying old guns. New laws recently came into effect and they now have to be decomissioned to such an extent that they are utterly devalued and ruined before they can legally be sold. Value = depreciating not appreciating and you may get stuck with something you can't sell on without ruining it to the point of devaluing it entirely. If you buy one that isn't like that then you, and the seller, are breaking the law and the penalties are not trivial.

[Zak33]

Deutsch Bank is being "restructured". Which is a fancy way fo saying they are broke. The principles which were put into place by the Allies when Germany was rebuilt after WW2 (were they called Bundesbank principles?? It has been a while) were cast aside by the EU. The end result is fractional reserve banking gone absolutely wild.

The bank has 1.8% of the assets required to meet it's liabilities and when derivatives are taken into account that's 0.1%. Their assets can only pay off 0.1% of their liabilities. It's insane.

Advice from someone who warned about this many years before it happened is that this is just a warning sign (like Northern Rock) and the whole European System of Central Banks and most of the international banks are in this kind of state (although not all quite as bad yet). Under the new bail-in leglisation they'll be issuing junk bonds when the banks go bust to keep them solvent and your cash will be replaced with that.

So the question is, what do you do if you're not rich enough to be putting cash into non-liquid assets but have enough money to not want it to disappear? I was considering putting it into posh second hand guns as they don't tend to depreciate but I'm guessing if we have another recession, it'll have to be near catastrophic for people to want to buy my guns off me. Anything less and they'll probably just not be saleable as people have less disposible income. The upside of buying guns is that the cops have a vested interest in responding to any break ins at your property with due haste. So the cops protect your investment. Handy.

Shotguns are a relatively good idea if you know what you're doing and buy the right ones and ghet lucky and keep them 30 odd years with documents to prove their newness when you finally sell them........ but you're gonna need a lot of gun cabinets to spread the risk and buy a lot of shotguns.... and obviously a shotgun license renewed every 5 years. The Police don't come running when your house is broken into, any faster than if you don't have a gun cabinet though. The whole idea of a cabinet is that it's damn near impossible to get into in a short period of time and in that time they'd get there for a called brake in anyway.

forget rifles for your idea. Every rifle and every silencer needs a reason for ownership and without regular use, you have little chance of your local FAO giving permission. And of course you need a permission in the first place to shoto them over. I'd give up on that idea tbh.

[Kanoe]

Don't forget the Financial Services Compensation Scheme (FSCS). So if the bank fails, you'd get back up to £85,000 per person, per financial institution. Just need to make sure that if you have more than that amount that you split it across different banks to be under the limit in each one. And I think you need to make sure they are totally separate banks as like RBS and Natwest count as the same one.