How to prepare your family to survive and thrive in todays uncertain world

Category Archives: Financial Preparedness

If You Aren’t Worried, You’re Not Paying Attention

If You Aren’t Worried, You’re Not Paying Attention

cypress-bulldozerA slight digression from the 90 day plan series today.  Over the weekend something major happened and I wanted to touch on it a bit.

As you may have heard, Cyprus decided to arbitrarily confiscate 10% of all money in all of their banks.  They have announced a bank holiday, initially just for Monday, but it has now been extended to Tuesday and potentially even Wednesday.  All interbank money movement has been stopped.

Sure, they didn’t call it confiscation, but that’s essentially what it is.  Pure unadulterated theft.

There’s two things that are concerning here.  First, this was done primarily by the European Central Bank.  No, they can’t legally do it, but the pressure to sieze the cash came from them.  Rumor has it they wanted 40%, not 10%.

They flat out said over the weekend that Italy is next on their radar.  It’s reasonable to think that Greece won’t be that far behind.

That’s a worrying thing for sure.  But a side comment by one of the guys involved in Cyprus caught my eye a little more.  He said (paraphrased) that if they get away with this, then everyone’s going to do it.

In other words … if they get away with stealing money from their folks, then none of us are safe because those Bankers will look at it and see $$$.

I’ve mentioned credit default swaps before.  Basically, it’s insurance for losing money.  Except everything is so overleveraged that estimates of global CDS liabilities are over 600 TRILLION dollars.  The gross WORLD product (all the economic activity in the world) for 2011 was 70 trillion.

Rudy’s Note:  Credit Default Swaps are crazy.  In terms we all understand, it’s as if you loan your brother cash to buy a house.  Then you go and get insurance for the house in case he can’t pay.

Except you don’t insure the house you insure the debt.  And you insure it twenty times.  So that $100,000 loan just turned into a potential windfall to you of $2,000,000 if your brother doesn’t pay.  Except that money comes from somewhere.  So that $100k loan to your brother turned into $2 million in potential liabilities for the 20 insurance companies if he doesn’t pay you.

Take that up to a global scale and you can understand how you get to over 600 trillion in liabilities.

If that snowball starts rolling, nothing is going to stop it.  And major defaults in Europe could push that snowball over the edge.

I try not to ring alarm bells all that often.  I find it counter productive.

But if you don’t have cash on hand for a month or two, fix that.

If you don’t have food on hand for a few weeks, fix that.

If you can’t protect yourself, fix that.

My gut tells me that we’ll end up as a safe haven for cash fleeing the Euro Zone if they start cascading confiscation and we’ll be ok for the time being.

But I wouldn’t bank on it.  Best to be prudent here and realize the dangers of massive disruption.

Have a great week…

Woah!  Silver is Crashing!

Woah! Silver is Crashing!

Silver is doing something interesting over the last couple days, and I thought I’d comment on it. For those of you familiar with technical chart analysis terms, it’s toying with major support around $26.50/oz. In non technical terms, if silver goes below $26.50, there is a good likelyhood that it will continue to go down.… Continue Reading

The Dominoes Begin To Fall…

The Dominoes Begin To Fall…

So I’ve talked many times before about the ramifications of the choices that our government and financiers are making. We’re seeing some of those consequences begin to play out more rapidly in Europe. Plainly put, they’re screwed. Government officials throughout Europe are talking openly to the press about forcing Greece out of the EU and… Continue Reading

Alternative Currency Standards

Alternative Currency Standards

I don’t know about you, but when I hear the words ‘Alternative Currency’ I think about monopoly money. After all, we all know that currency comes from the government and is good for ‘all debts, public and private’ … right? Not so fast… If you have read some of my other articles on what money… Continue Reading

Musings On Resiliant Income Streams

After my grandfather died last year, I ended up thinking quite a bit about the future of my family.  I had the usual thoughts of mortality but when it got down to brass tacks I accepted something that I’d known all along. The modern model of life is broken in so many ways.  We live… Continue Reading

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