Since the “Crash of 2008” and subsequent recession, it seems as though many more people are joining in the idea of moving towards a money-free world. For those of us that support that concept, it is a dream we are actively working towards achieving. But, very soon we may get exactly what we asked for, and in a not-so-nice way. See, back in 2014 during the G20 in Brisbane, there was a wheel set in motion that allows banks to invoke what is being called a “Bail-in”. If you haven’t heard of it, you should be concerned.
Perhaps most concerning for those in the United States is that there are whispers and shouts of another recession just around the corner. If it is anything like the one in 2008, we are bound to see more ugliness go down in the financial sector. Do you recall much about the economic problems in Europe back in 2017? The prophesized economic crisis unfolded right in front of our eyes as we watched senior shareholders escape bearing the burden of failed banks, at the cost of the government. And, it wasn’t without consequences, as Bloomberg reported:
The theory appeared to work when Spain’s fourth-biggest lender, Banco Popular Espanol SA, was forcibly sold to a bigger competitor in June 2017, wiping out shareholders and about 2 billion euros ($2.3 billion) owed to bondholders. It was heralded as a victory for European Union regulators, since no taxpayer funds were used. But investors are suing, saying the deal was arbitrary and could have been avoided. ~ Bloomberg
So, what happens if that scenario comes into play in the USA? Especially with Trump as President…. Most of us know how he feels about Dodd-Frank which will likely soon be completely rolled-back. And, when it is gone, many of the lending restrictions currently imposed on banks will disappear and we will be heading right back towards the cliff of economic disaster. Depositors & pensioners, beware! As one HuffPost article states:
• What was formerly called a “bankruptcy” is now a “resolution proceeding.” The bank’s insolvency is “resolved” by the neat trick of turning its liabilities into capital. Insolvent TBTF banks are to be “promptly recapitalized” with their “unsecured debt” so that they can go on with business as usual.
• “Unsecured debt” includes deposits, the largest class of unsecured debt of any bank. The insolvent bank is to be made solvent by turning our money into their equity — bank stock that could become worthless on the market or be tied up for years in resolution proceedings.
So, are you going to get caught holding the bag when (not “if”) the next recession hits? The time to begin preparing for this is now!One thing that really got my curiosity alarms ringing recently was the fact that George Soros announced his fund management firm would begin trading Cryptocurrency. A quick Google search about his effect on economies around the world reveals headlines such as “Here’s how George Soros broke the Bank of Thailand”, “The Trade of the Century: When George Soros Broke the British Pound”, “Soros: Republic Enemy #1” and “Soros enjoys taking countries down”.
Well. That is thought provoking indeed. We are left to ponder if his move has the intent of “taking down” cryptocurrency, or if it is because he knows the US dollar is going to tank soon, along with banks and he is safe-guarding himself from the coming firestorm. After all, his signature move in crashing the British Pound was by making a huge bet AGAINST the currency. And, in one day he added a billion dollars to his wealth. So, what comes next? Will we soon see the day where our bank accounts are wiped clean to prevent a bank’s failure? A day when cryptocurrency becomes the greatest hedge against financial ruin? It seems to be more of a probability than just a possibility. So, how do we prepare the masses for such an event? It would be wise for people to take this scenario into consideration when deciding their long-term financial goals and career paths, especially the younger generation.