A run on the bank?

[AL_DA_GREAT]

At what point is it a good idea to run on the bank?

If you run on the bank should you buy gold or just have cash?

I am planning on reducing the amount of money in my bank accounts greatly tomorrow and buying gold.

 

[GoodSarmatian]

I'd eschew gold in favor of weapons and tinned food.

I think this is an overreaction, when was the last time people losst all their money in the bank account ? OK, my parents lost all the money they had in a bank in Yugoslavia in the nineties (an estimated €20.000 adjusted for inflation) but civil war is a special case.

On a related note : Part of the reason for Germany's relatively strong economy at the moment is that the notoriously frugal Germans are spending more than usual because they don't trust the banks with their money any more.

 

[trader/warrior]

When you need cash, I suppose.

What are you using the gold for?

 

[SKILORD]

Convert all of your currency into Yen. Do not buy gold. Gold is a sucker's game in the 21st Century.

If you don't like Yen then find another stable currency, but with Yen, I mean, they are intentionally devalued right now and at some point China will have to lift that and allow the Yen to float. When the Yen floats, you'll be set.

But, the answer is currency trading.

 

[warpus]

Take your money out of teh bank and put it in a credit union.

 

[timtofly]

People forget one thing. You have to have money in a bank, in order to take it out. What are people going to do with the money once they take it out? Most people who have money in the bank may not be easily convinced to take it out, just to terrorize the government.

It is still illegal to take money belonging to others out of the bank.

 

[kronic]

I think this is an overreaction, when was the last time people losst all their money in the bank account ? OK, my parents lost all the money they had in a bank in Yugoslavia in the nineties (an estimated €20.000 adjusted for inflation) but civil war is a special case.

Everytime you get a currency reform. That happens every now and then.

On a related note : Part of the reason for Germany's relatively strong economy at the moment is that the notoriously frugal Germans are spending more than usual because they don't trust the banks with their money any more.

Where do you get that from? German consumption is at best flat. Don't believe the media propaganda or pointless indicators like the GfK. The actual figures are as bad as always. See here for example: http://www.querschuesse.de/deutsche-einzelhandelsumsatze-weiter-im-schwachen-trend/

At what point is it a good idea to run on the bank?

Well, if you think a bank run is possible, it's best to be early. If you panic, panic first. Damn, I wrote the same yesterday.

If you run on the bank should you buy gold or just have cash?

Depends on how threatened you think your currency is. If you think it is going to collapse soon, there's surely no point in keeping lots of cash. Everyone with a considerable amount of money on the bank should own some gold, in my opinion. Otherwise, go for real assets, wait for the next stock market crash and buy quality stocks (no financials ), land, forest, stock up on food that you're going to eat anyway...

I've moved a chunk of my savings out of Euro assets. It's not much but the chances of ending up with either a collapsing currency or a Lira 2.0 disguised as Euro are just too high.

 

[amadeus]

Convert all of your currency into Yen. Do not buy gold. Gold is a sucker's game in the 21st Century.

If you don't like Yen then find another stable currency, but with Yen, I mean, they are intentionally devalued right now and at some point China will have to lift that and allow the Yen to float. When the Yen floats, you'll be set.

But, the answer is currency trading.

Wait. The yen or the yuan? Japan's central bank, unfortunately, is looking again to fiddle with the money supply and try to reduce the value of Japanese people's savings (which they say will help boost exports and fix the flat Japanese economy.)

As far as China, I wouldn't trust any currency they peg to the dollar!

 

[Tahuti]

As far as China, I wouldn't trust any currency they peg to the dollar!

Actually, Skilord's claim is that China will drop that peg soon. Still, I think converting some holdings into Swiss Francs wouldn't hurt either.

 

[amadeus]

I don't know why they'd drop the peg so long as the balance of trade stays the way it does, especially with a weak dollar.

 

[SKILORD]

I understand what you're saying, but this is doomsday scenario stuff, investing in gold and "seed rations" or whatever apocalyptic stuff is getting sold.

In such a doomsday scenario, if you're planning for the collapse of the capitalist banking system, I think I would like to have a bunch of Yuan on hand rather than gold. I'm not going to be making superconductors, I have very little use for gold.

my bad on spelling.

 

[kronic]

I understand what you're saying, but this is doomsday scenario stuff, investing in gold and "seed rations" or whatever apocalyptic stuff is getting sold.

In such a doomsday scenario, if you're planning for the collapse of the capitalist banking system, I think I would like to have a bunch of Yen on hand rather than gold. I'm not going to be making superconductors, I have very little use for gold.

You don't buy gold for the apocalypse. You buy gold as a store of value and as a hedge against currency reform. In the event of total meltdown, neither gold nor yuan(WTH???) are going to buy you anything. But you can change gold in a new currency whereas your yuan will be totally worthless. A big bust in the banking system will kill almost all currencies.

 

[GoodSarmatian]

Where do you get that from? German consumption is at best flat. Don't believe the media propaganda or pointless indicators like the GfK. The actual figures are as bad as always. See here for example: http://www.querschuesse.de/deutsche-einzelhandelsumsatze-weiter-im-schwachen-trend/

I get it from here.
You call it flat, I call it stable. It certainly looks better than the past two years.
I think Germany is looking so good compared to the rest of Europe and the USA right now that we can indulge in a bit of out-of-character optimism for once.

 

[SKILORD]

I will bribe the appointed Governor of the proud Maoist American province with my Yuan and it will bring me much honor and prestige.

 

[Antilogic]

Everytime you get a currency reform. That happens every now and then.

...

Depends on how threatened you think your currency is. If you think it is going to collapse soon, there's surely no point in keeping lots of cash. Everyone with a considerable amount of money on the bank should own some gold, in my opinion. Otherwise, go for real assets, wait for the next stock market crash and buy quality stocks (no financials ), land, forest, stock up on food that you're going to eat anyway...

I've moved a chunk of my savings out of Euro assets. It's not much but the chances of ending up with either a collapsing currency or a Lira 2.0 disguised as Euro are just too high.

Is the krona in danger of collapsing too (OP is from Sweden)? Gah, Europe is a mess.

In general, I'd favor real assets over gold--gold doesn't do well against inflation, and you'd be much better off holding bond- or stock- indexed funds (require less management on your part, less risk as well). If you do decide on gold, buy bullion and not some inflated-value collector's coins. Formaldehyde posted a pretty good article recently on the scam-tastic nature of certain gold companies and what you should try to avoid.

I don't know why they'd drop the peg so long as the balance of trade stays the way it does, especially with a weak dollar.

This.


EDIT:

I get it from here.
You call it flat, I call it stable. It certainly looks better than the past two years.
I think Germany is looking so good compared to the rest of Europe and the USA right now that we can indulge in a bit of out-of-character optimism for once.

Germany has weathered the crisis far better than the US. Would be great if some of our higher-ups took notice.

 

[kronic]

I get it from here.
You call it flat, I call it stable. It certainly looks better than the past two years.
I think Germany is looking so good compared to the rest of Europe and the USA right now that we can indulge in a bit of out-of-character optimism for once.

But see, the article is based on a small increase in that infamous GfK indicator. Look at the actual sales figures and you know it's pure propaganda.

In general, I'd favor real assets over gold--gold doesn't do well against inflation, and you'd be much better off holding bond- or stock- indexed funds (require less management on your part, less risk as well). If you do decide on gold, buy bullion and not some inflated-value collector's coins. Formaldehyde posted a pretty good article recently on the scam-tastic nature of certain gold companies and what you should try to avoid.

Buying bullion goes without saying. The OP is in fear of a bankrun with all possible consequences for government finances. I think it's fairly dangerous to hold bonds or bond funds at a time when half of Europe faces bankruptcy. Your bonds can be become worthless quicker than you can lidquidate your holdings (see Greek bonds). Quality stocks surely are a way to diversify but make sure you get them cheap.

 

[Loppan Torkel]

Is the krona in danger of collapsing too (OP is from Sweden)? Gah, Europe is a mess.

The Swedish krona seems fairly strong at the moment, but if the Eurozone collapses, who knows what will happen? It's probably a good idea to spread the risks..

Formaldehyde posted a pretty good article recently on the scam-tastic nature of certain gold companies and what you should try to avoid.

So.. where did he post it?


Kronic:

Buying bullion goes without saying.

Why would it go without saying? Is this common knowledge?? I've seen these brands:
- Valcambi
- PAMP Suisse
- Australian Perth Mint

 

[Antilogic]

But see, the article is based on a small increase in that infamous GfK indicator. Look at the actual sales figures and you know it's pure propaganda.


Buying bullion goes without saying. The OP is in fear of a bankrun with all possible consequences for government finances. I think it's fairly dangerous to hold bonds or bond funds at a time when half of Europe faces bankruptcy. Your bonds can be become worthless quicker than you can lidquidate your holdings (see Greek bonds). Quality stocks surely are a way to diversify but make sure you get them cheap.

US bonds (remember, you don't have to buy your own country's bonds) are doing shockingly well, despite the credit downgrade. I wish I moved more of my money into them before the debt ceiling debate, but live and learn.

The Swedish krona seems fairly strong at the moment, but if the Eurozone collapses, who knows what will happen? It's probably a good idea to spread the risks..So.. where did he post it?

Sorry, took me awhile to track it down because I forgot which thread it was in. But this is the post I was thinking of.

 

[innonimatu]

In such a doomsday scenario, if you're planning for the collapse of the capitalist banking system, I think I would like to have a bunch of Yuan on hand rather than gold. I'm not going to be making superconductors, I have very little use for gold.

How exactly do you have a bunch of yuan on hand if the banking system collapses? You move to china and open a bank account there? You get chinese paper money? Who'll take your yuan in your country?

Every asset which does not have a physical existence and is under control of the owned can easily be wiped in a systemic crisis. Bonds, stock, accounts in foreign currency, etc are now almost all held through funds belonging to financial institutions, which are the same institutions now feared to be bankrupt. If one such institution does go down, who owned the title to that paper? Does it exist at all, or may it have been fraudulently represented in the balances of the institution?

And, of course, all non-movable property is likely to get taxed to hell.

Thus, I wouldn't be surprised by another run for gold if bankruptcies in financial institutions start happening in slow-motion, instead of a generalized collapse in a single day with immediate state intervention worldwide. But only under those circumstances. It's an unlikely scenario: do expect governments to intervene instead of letting thins snowball.

 

[Leoreth]

Exactly. When everything breaks into chaos, everyone's waiting to buy your gold! You can eat it, too!