We’ve written much about the precarious situation banks are in. The risks inherent in the derivatives market could leave the global economy in shambles.
If you deposit $10 in a bank, the government allows banks to loan out $9, and in fact gives them incentives to do so. Obviously this is a problem from the Great Recession meltdown that has yet to be corrected.
Banks realize they are at risk, therefore we see banks like the Bank of Albuquerque creating disaster preparedness plans to practice for bank runs, bank holidays, or bank closures. Click here and here to learn more.
Last week HSBC, a bank in the UK, was caught limiting withdrawals from its clients.
The BBC reported that HSBC customers had to prove that they needed to withdraw the cash in their accounts.
The article reports that a customer went to his local bank to retrieve £7,000 (equivalent to $11,414.20 US). He intended to pay back a friend who had loaned him money, but the bank would not give him his money. This is called Capital Controls and it’s happening right here in your city too.
We’ve had clients go to their local North Carolina banks to cash out bank CDs and be told they would have to put in an order to get their money. And these are not large amounts.
As the financial situation deteriorates, it can lead to outcomes like we saw in Cyprus last year when banks closed for weeks on end.
There are viable alternatives to leaving your money vulnerable in banks and credit unions. We can help build you a plan that will allow you to have peace of mind. Worrying about losing your money is no way to live.