How safe are banks?

[ROE]

Thats the point though - another way of looking at it is your better off holding gold or a gold backed currency than the failed fiat currency that is now worthless.

Holding gold if you are 100% sure paper based money will collapse and even then there is no guarantee what gold will be worth.... what if these predictions never eventuate? you are losing an income stream each day you holding gold, your only hope is someone willing to pay more for it than you...

Holding income producing business or housing guarantee you an income regardless of how the system turn out .... If the current paper money collapse, I can accept new money, If no paper money, I can accept gold for my rental property and I can accept gold selling ice cream and coffee

Gold is not an investment, it has very little utility use unlike silver or copper
it doesn't produce an income, it costs you to hold...all it does is probably give you
temporary safety in a complete melt down of the system in country like Zimbabwe

that system unlikely to happen here in Australia

it is unlikely to happen here so holding gold has so many negative with little positives ... high risk low return scenario ...

I have lived through that system melt down as a kid in another country and believe me the guys that has a business do hell a lot better than the guys holding gold....

local paper collapse they start accepting US currency and gold as alternatives so they keep working around the system and continuously generate an income...it matter little for them what the medium of exchange people use..

 

[Garpal Gumnut]

Any sector that gives out $50 notes at Luna Park, instead of $20 ones is inherently risky.

gg

 

[Julia]

Do you mean once they withdrew it? That's a good question, I guess under the bed? I think people thought that because it's not one of the big 4 and/or because it's foreign owned, that the government wouldn't bail them out if need be.

The foreign owned banks were also covered under the government guarantee, as were the smaller local banks. I have deposits with Rabodirect and these were fully guaranteed. Still are, I think.

One of the more irritating suggestions during the GFC was that the banks should be immensely grateful to the government for offering the guarantee. In reality, the banks paid a pretty substantial fee to the government for this guarantee.

 

[Starcraftmazter]

Holding income producing business or housing guarantee you an income regardless of how the system turn out ....

What happens if there is major civil unrest and rioting during some transitional period, and your business gets trashed and all assets stolen/broken/etc?

 

[ROE]

What happens if there is major civil unrest and rioting during some transitional period, and your business gets trashed and all assets stolen/broken/etc?

and people cant steal your gold or rob you when this happen?

I mean some of the imagination people use are ridiculous ...

Anything is possible but people has to use common sense ...

I will bet 99% of my wealth on that that will never ever happen in Australia.

so we have a system collapse and you own some Woolies shares you think the decent people in this country will just let it happen and becomes an anarchy ?
and Woolies will be in a stage where it is completely destroyed???

people do have some wild imagination.

I can tell you a time when there is new currency exchange I been through it ...

nothing close to your wild imagination ... yes people panic, yes people do get scare
and yes some people will lose a lot of their money ...

but as long as you have strong arms force in place ...the process was painless..
no rioting or people destroyed your business and if you want to be the first
they will shoot you

PS: Look at the US 1929 Great depression, there is some serious problem there
heaps of people starving and wealth destroyed, people sleep on the street etc..
anything major happen?

PSS: if you want some imagination listen to George Soros, he talk about buying a farm, taking up machine guns
etc.. I have respect for the guy but that stuff is pure entertainment

 

[Starcraftmazter]

and people cant steal your gold or rob you when this happen?

Well, there are some options here, you could for instance burry it somewhere in the wilderness. Or maybe in your back yard if you're a wee bit lazy.

I mean some of the imagination people use are ridiculous ...

Anything is possible but people has to use common sense ...

I will bet 99% of my wealth on that that will never ever happen in Australia.

Not an imagination so much as accounting for every possibility. These sorts of things can and do happen in our modern world. Not so much in Australia - but that could quickly change if our economy deteriorates significantly.

so we have a system collapse and you own some Woolies shares you think the decent people in this country will just let it happen

I admire your spirit, but the flaw in your thinking is a denial of the possibility that it will happen - and that if it does, the possibility that nothing can stop it - at least not for the short-term, and I emphasise short-term. Just think if for some reason our money system collapsed. It could take only two weeks for the people at the top to come up with a new one, but in that space of time, what exactly do you think will happen to all the businesses and what will people do to all the shops in order to obtain the goods which they would have otherwise been able to buy but cannot?

I hear some people go nuts without their coffee


I like to explore every possibility. And think very long-term.

 

[basilio]

It is very hard to imagine the fallout of a financial collapse in the current economic world. A few points that come to mind are :

1) At least in the Western World we have never been so dependent on financial institutions to hold and transfer monies. In simpler times and in simpler countries a stronger non market economy is more resilient to collapse of financial systems.

2) I think the debts of countries has never been higher in terms of GDP. I just can't see how these will be ever "paid" and I struggle to see where the failure to pay these monies will end. Someones loan is someone else's "assets" - I think..

3) Our Western economies have never been more complex. In the case of a financial collapse I could see all sorts of economic activities grinding to a halt. One simple example. The failure of electricity systems in modern cities would bring them to collapse in a matter of days. Thats roughly how long it would take for sewage systems, water supplies, fuel supplies and food supply problems to escalate out of control.

Perhaps we don't want to think about these possibilities ?

______________________________________________________________

One thing I do remember was the impact of financial collapse in Russia in the mid 90's. Quite horrific and all that kept people going in most cases was the vast informal non market economies of home grown food and barter.

Back from the future collapse
by Ugo Bardi

With his book "Reinventing Collapse", Dmitry Orlov reports to us from a collapse that he has actually experienced with the fall of the Soviet Union. Russia's past is our future and Orlov's book is a time machine to there.

Back in the mid 1990s, during the darkest time of the Russian economic crisis, I was often in Russia. Once, I came out of a train station in Moscow to face faced a long line of people standing along the wall of the building. Each one had something on sale in his or her hands: a pair of shoes, a shirt, a bottle of vodka, or something like that.

http://www.energybulletin.net/node/46674

 

[Starcraftmazter]

^ Interesting stuff mate. I wonder how 20 years info the future (ie. now), in a world where farming would produce far less without oil and phosphorous based fertilizers, how people can even barter to obtain the same goods - which cannot be produced without the inherent complexity lost in the collapse

 

[basilio]

^ Interesting stuff mate. I wonder how 20 years info the future (ie. now), in a world where farming would produce far less without oil and phosphorous based fertilizers, how people can even barter to obtain the same goods - which cannot be produced without the inherent complexity lost in the collapse

We will learn to live simply and sustainably because there won't be a choice.

Or else we won't.

 

[Starcraftmazter]

We will learn to live simply and sustainably because there won't be a choice.

Or else we won't.

Sure, but what happens with all the humans we are unable to feed in the meantime? How is it decided who gets the food?

 

[RandR]

Sure, but what happens with all the humans we are unable to feed in the meantime? How is it decided who gets the food?

wealth, wealth will decide.

but ... big arms and a weapon could tip tip the odds in your favour

i think were pretty safe here in australia (in terms of food and energy security) but i sure wouldnt want to be in a country that doesnt have energy assets, and doesnt have agricultural ability.

 

[Uncle Festivus]

Ditto basilios comments in post 27.

It would be the domino effect that we should be afraid of. We should at least be concerned, because the big 4 have approx 60-70% of their 'assets' in real estate. There is a concerted effort at all levels to keep housing prices at unsustainable levels ie through the various freebies & grants given out, because they know that a protracted property downturn would have severe negative flow on effects for the rest of the economy. Average property prices have been falling for the last year and we have a retail recession - no coincidence?

Seeing that we know don't have anything to export other than commodities, and that China is showing signs of slowing, then it would be reasonable to assume we will have some sort of slowdown as well?

How safe are they? If you did the sums you would realise that the government deposit guarantee is simply a confidence trick - they simply wouldn't have the money to do it.

Actually, the whole global financial system is a con job - a ponzi scheme - continually needing new funds to 'grow'.

While ever the banks can still get their funding from OS then we keep going, but if the Euro or USA or China implode then all bets are off - get your money out before they freeze withdrawals.

It's getting to an interesting stage, so anything is possible, so we should at least plan for any eventuality?

 

[Glen48]

Banks are safe if you are shorting them should work out well.

As for Gold and Pm's when shooting starts do you run towards the firing or away from it in other words once paper paper money proves to be a dud you look for some thing else for security PM are the only ones.
And Gold when up again last night as we get close to 2 Aug it should continue to rise proving it has legs.
We will do the same as USA once housing starts to die support the banks and get deeper into debt.