Author Topic: Banks: how safe is our money?  (Read 757 times)

Offline Gamer

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Banks: how safe is our money?
« on: June 03, 2019, 12:21:16 PM »
Money and economics etc is not my strong point, but I've often wondered if anybody can grab our money from our bank accounts?
I don't mean scams, I mean for example in a time of national emergency or SHTF Armageddon or whatever, could the government freeze everybody's accounts and ban all cash withdrawals in case mass withdrawals by everybody would wreck the national economy?
(For example after the Wall St crash of 1929 people were queuing up to withdraw cash, only to find the banks doors were locked in their faces.)
Likewise, in court disputes that go against us, could the judge order our bank accounts to be seized to pay off legal fees or fines or alimony etc?
In short, is there any situation in which we could be prevented from getting at our cash, or any situation in which our cash could be seized by the Authorities?

Online iam4liberty

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Re: Banks: how safe is our money?
« Reply #1 on: June 03, 2019, 01:19:50 PM »
Money and economics etc is not my strong point, but I've often wondered if anybody can grab our money from our bank accounts?
I don't mean scams, I mean for example in a time of national emergency or SHTF Armageddon or whatever, could the government freeze everybody's accounts and ban all cash withdrawals in case mass withdrawals by everybody would wreck the national economy?
(For example after the Wall St crash of 1929 people were queuing up to withdraw cash, only to find the banks doors were locked in their faces.)
Likewise, in court disputes that go against us, could the judge order our bank accounts to be seized to pay off legal fees or fines or alimony etc?
In short, is there any situation in which we could be prevented from getting at our cash, or any situation in which our cash could be seized by the Authorities?

Sure.  In fact it happens pretty regularly.  Last time we discussed it here was when Greece limited bank withdrawls.  That lasted three years when it was lifted in September.  They were only allowed to take about $75 out of their accounts each day.  They still have limits on withdrawing cash abroad and transfering money out of the country.

Offline Gamer

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Re: Banks: how safe is our money?
« Reply #2 on: June 03, 2019, 02:43:45 PM »
Sure.  In fact it happens pretty regularly.  Last time we discussed it here was when Greece limited bank withdrawls.  That lasted three years when it was lifted in September.  They were only allowed to take about $75 out of their accounts each day.  They still have limits on withdrawing cash abroad and transfering money out of the country.

Thanks, so is the best safeguard to draw out all our cash and keep it in a cashbox at home?

Offline Mr. Bill

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Re: Banks: how safe is our money?
« Reply #3 on: June 03, 2019, 02:47:39 PM »
Thanks, so is the best safeguard to draw out all our cash and keep it in a cashbox at home?

No, nothing will give you perfect safety, so you shouldn't put all your savings in any one form.  Cash at home protects you from bank accounts being seized, but not against burglars (or civil forfeiture, courtesy of police who think your cash stash proves you're a drug dealer).

Diversify.

Offline Gamer

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Re: Banks: how safe is our money?
« Reply #4 on: June 04, 2019, 08:34:19 AM »
No, nothing will give you perfect safety, so you shouldn't put all your savings in any one form.  Cash at home protects you from bank accounts being seized, but not against burglars (or civil forfeiture, courtesy of police who think your cash stash proves you're a drug dealer).

Diversify.

Thanks, yes it's a tricky situation, but personally I've decided banks are out and am withdrawing my cash to keep it at home because I get a warm fuzzy feeling knowing my mazooma is in my possession, safe from Big Brother and computer hackers/scammers..:)

PS- Of course, in an Apocalypse where everybody's starving we won't be able to eat money as this chap in a 'Survivors 1975' episode found out..;)-

 

Offline Smurf Hunter

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Re: Banks: how safe is our money?
« Reply #5 on: June 04, 2019, 10:06:12 AM »
There are two motivations involved, that could seem related, but are also distinct.

1) Bank holidays protect banks.  Ever see the Jimmy Stewart Christmas classic, "It's a Wonderful Life", where the depression era people run into the bank to withdraw cash?
Basically the bank tips over and fails if they are unable to keep a certain ratio of liquid cash (not necessarily physical currency).  Closing the bank, or rationing daily withdrawal amounts is a way to protect a bank or banks.

2) Government funding crisis - in the USA, the federal government will not drain your personal account to fund theirs.  Not because they are honest or decent, but because they can just print more.  Now, if we are in some failed state like Venezuela, or 3rd world dictatorship - they may confiscate whatever assets they can use to support their power.  e.g. steal precious metals from the local population to fund their military.  It's possible that the position of the US dollar could shift with time and not being the world reserve currency.  In that scenario, the above could change.

Offline David in MN

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Re: Banks: how safe is our money?
« Reply #6 on: June 04, 2019, 01:16:40 PM »
Any number of crazy things can happen. Us Americans live in a country where the president declared a weeklong bank holiday and banned gold in 1933.

In 2008 the London Interbank Overnight Rate (LIBOR) went nuts as the housing crises erupted and banks had trouble finding payroll liquidity for client businesses.

But there could be a massive all-gold meteor that ironically lands on Mr. T's neck or the space aliens could show us how to turn our poop into silver using common household items.

I'm being a little silly but bank runs and emergency holidays have happened. There is no 100% safe place to put money. That's why most of us end up with a massive mess of cash, bullion, multiple bank accounts, brokerages, IRAs, Roth IRAs, 401s, 403s, Bitcoin, and moon real estate and after 7,000 pages of bank statements and 14 pots of coffee still can't figure out where all our money is or what our estate is worth.

If all this seems goofy just imagine my mom who did the "correct" thing and took all her silver dollars to the bank in the 60s. Now in hindsight she lost a lot. but there's no real way to know. As I write this my kid is playing with my collection of Franks and Bundesrepublik Deutschmarks.

As usual with economics, clear as mud. But as others have said that's why we diversify.

Online iam4liberty

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Re: Banks: how safe is our money?
« Reply #7 on: June 04, 2019, 03:15:12 PM »
For sure, anything can happen.  I donated $100 to a catholic charity for Zimbabwe relief.  In appreciation they sent a stack of 100 $100 Trillion Zimbabwe currency.  "Neat" I thought back then.  It shows craziness of inflation.  Now I find out they are one of the hottest currency collectibles and each one is worth $50.  So a $100 donation turned into $5,000.  The world of fiat is crazy.