I’ve been hearing bad news from the banking sector with increasing frequency and urgency, and basically, it goes like this:

• an increasing number of banks in America have been delaying payments and showing symptoms of having insufficient funds available

• there’s been increasing talk about bankruptcies and bail-ins

A bail-in is, essentially, when a bank says “sorry, but we either go bust and nobody gets anything because we have nowhere near the money required to cover the customer funds, or we take a big chunk of customer funds, restructure our finances with it, and continue doing business, pay our management bonuses for doing a good job, and the customers get a “haircut”.

I was talking to Božo about this just yesterday and told him that my guess is that they will just close the doors one day and say they are “investigating potentially illegal activities”, which means all funds frozen, and within a week they’ll give everybody an “allowance”, permitting $500 of pocket money per month per customer so that people can buy food, and then negotiate the terms of a bail-in with the state and the state will tell them to just disproportionally target the big accounts, and leave the small ones alone, because this will avoid voters to get angry and do something about it, and everybody will be glad because they fucked the rich people. Božo replied that the legal framework for this is already in place, they planned this years in advance. This will have dual function – the people will be so pissed at the banks they will be ready to accept the state-controlled CBDC without much opposition, and they will also be much poorer, and poor people don’t have choices so they are easy to control.

My recommendations are known for years already so there’s not much use in repeating them, but basically separate your funds in 3 basic categories:

• cash, in amounts necessary to buy basic stuff in case of a banking system event; doesn’t have to be much, but don’t go below $200 per person; also, value of one ounce of gold in cash per person would be the upper limit I would not exceed;

• bank account, in amounts necessary for monthly costs and immediate liquidity; see how much you spend per month on food and bills, and keep that much in the bank at the beginning of the monthly cycle;

• put everything over this amount in physical gold (and some silver); this means all your savings and emergency response money.

Basically, you need liquidity, so drying up your bank account would be impractical and inefficient, but keep it at the necessary minimum. Cash reserves are also essential, for when the banks don’t work, but you don’t yet have the opportunity or desire to convert precious metals into operational cash. As for buying the precious metals, stick to physical only, because everything else will be too tempting for governments and banks to steal. What kind of physical? Stick to the stuff that’s of the most popular, recognizable and practical kind where you live. Don’t buy exotic, overpriced bullshit just to make it interesting. It’s money, it’s not supposed to be interesting. See what has the least amount of premium over spot, and what is the most popular kind where you live. Intersection of those two sets is what you want. I mentally divide bullion into stuff that’s for buying real estate, which means big bars with the least amount of premium and/or 1oz gold coins, and the stuff for possibly trading small amounts for survival; for this I have the 1oz silver coins. Also, I don’t buy questionable shit from questionable sources; I have a good relationship with a local bullion dealer and this reduces all kinds of unnecessary trouble to a minimum. Always try to connect with the actual physical person who is doing the trading because that’s something you might depend upon if there’s no Internet or telecommunications.

In case of a big economic event, you’ll have to prioritise spending, which means you won’t be able to pay rent in time, which means you’ll have to negotiate something with the landlord in order not to get evicted in the worst possible time. Also, you won’t be able to pay the bills in time, but since nobody will be paying the bills, the government will have to do something so that the utilities keep working. If you have loans or leases, you’ll have to suspend payment of those, too. You need to develop some kind of a plan so that you don’t find yourself in a situation where you don’t have food, heat, electricity and similar essentials, because you continued paying all the bills as if it were business as usual, and you ran out of liquid funds. Have in mind that everybody will have the same problem and short-term non-payment will have to be tolerated. Be very careful if you own real estate, because in that case it would be very dangerous to have any kind of unserviced debt, because the banks will jump on the opportunity to seize your real estate as compensation, and I’m sure the legal framework for this will be quite accommodating.

As you can see, I’m a ray of sunshine again, just bursting with optimism. 🙂 It’s not only the looming economic collapse, but also the looming nuclear war, combined with an already present totalitarian democratorship.