Hi Everyone:


Well the summer heat has finally arrived, but that just gives me more confidence that all that wood I’ve split is going to be adequately seasoned for this winter’s burning.


Because I’ve included so much good financial information in this email, I’m going to just step back a bit and address a subject that I was reminded of earlier today.  Although this topic may not be on your personal “TOP 10” check list……….trust me………… IT SHOULD BE!


PLEASE, just stick with me for a few seconds!  I’ve been sending out my email letters for going on 9 years now (when precisely you were personally added I can’t say), and about 99% of them have addressed something political, financial, economic, or health oriented.  But since I try to give it to you as straight as I’m humanly capable of doing, the following must be said.


We are spiritual beings (we all have a soul that continues to exist when our physical body dies).  This is not a subjective point, it is a simple statement of fact.  For those of you that are thinking “Whoa, hold on there a minute Jose, lets not get carried away here”, I’ll just say that there are many, MANY cases of people who have had life after death experiences that are medically unexplainable, but tell of spiritual experiences individuals have had during a time when their physical bodies have medically “died” while their soul has entered another “dimension”.  I actually have a personal, long time friend who had this very experience and told me about it.  I’m not asking you to take my word for this, do the research yourself.  Trust me, IT’S THAT IMPORTANT!


But besides the question of “am I on to something here”, is probably the question of “why am I addressing this issue in this venue”?


Well without getting all “preachy” about this, my goal has always been to share with you the best, most important, pertinent information that I have discovered that could be helpful for your future well being.  I’ll quickly admit that this goal has most always been laser beamed in on the circumstances relating to that “blink of an eye” time when our souls are coexisting with our physical bodies.  BUT PLEASE UNDERSTAND THISWe are spiritual beings, living ever so briefly in a physical world.  We might think of it as a “proving ground”.


So regardless of how seriously we may take our seemingly important current circumstances, I assure you that there is a future beyond our immediate existence that should, and must COMMAND the focus of our immediate actions if we have any hope of a SUCCESSFUL SPIRITUAL “CAREER” after our bodies “retire”.


OK, that was my spiritual “heads up”.  Not my strong suit (not that I really have one), but knowing it, I would have been horribly remiss not to have let you know how critically important it is for all of us.


Today’s email subject title is taken from one of the Hat Trick Letter paragraphs which I found very interesting and have copied directly below.  There’s a wealth of other info included below, so I hope you have the time to take advantage of it.  Take care, and stay focused.






"When you see that trading is done, not by consent, but by compulsion; when you see that in order to produce, you need to obtain permission from men who produce nothing; when you see money flowing to those who deal not in goods, but in favors; when you see that men get richer by graft and pull than by work, and your laws do not protect you against them, but protect them against you; when you see corruption being rewarded and honesty becoming a self-sacrifice; you may know that your society is doomed." ~ Ayn Rand




A note is offered from a connected Hat Trick Letter client Down Under where mining is king and kangaroos roam wild. He wrote the following. "I have just received confirmation from a family friend in the mining industry who has contact with members of the Reserve Bank of Australia. He runs with in Asian business and financial circles. He stated firmly that the international RESET is not only coming, but will arrive sometime between the end of the US presidential elections and shortly after the new year. This would confirm everything that you and your colleagues have been saying. But more surprisingly, is the fact that the central bankers have not only confirmed that this is going to take place, but they have told my friend to pile into Gold & Silver. He was also told, that this would coincide with the paying out of war bonds from WWII."




Last February 2016, the Jackass had a very encouraging, stimulating, and enlightening coversation with a man from the United States. He prefers to be anonymous, hence named BBB. He has attended several Global Collateral Accounts (GCA) meetings, which have been contentious, but recently productive. The meetings had representatives from several key nations, which each plan a new gold-backed currency, some aiming to share in regional currency usage. The USGovt has been obstructing their progress at every step. BBB and his colleagues have personally observed the progress and conflict for the last 18 months or more. In the last year, it can be said that the Washington crime syndicate has relented in attempts to murder the bond holders and their attorneys, instead to work cooperatively since the outcome is clear. The Washington figures suffered some casualties as well in the hidden war. The USDollar will go away, as known in its present form. What will arrive on the global tables will be gold-backed currencies, perhaps a raft of them to serve the different regions in global trade and banking. He stated the following, with almost no edits. The question posed to him was a status update on the RESET and new global currencies in store. He has no direct connection with the Intl Monetary Fund and that bastard Special Drawing Rights (SDR) child in planning from the Lord Basel devil house. Nonetheless, the GCA solution proffered includes a connection to the Special Drawing Rights, the formal IMF currency basket. BBB wrote last week to the Jackass, as follows.


I think the perspectives will be better after our meeting in Hong Kong next week, when details on the GCA are complete. The date on the bill was 2009. Fixing the fiat was attempted in 2012. It was stopped before it was successful. They were going to use IGA. It was not until 2014 that they determined to go with another mechanism. The Federal Reserve was foreclosed on in March of 2015, after they lost the court case at The Hague. There had been a massive ramp-up time over the past 18 months to get this entire settlement legal and ready.


All currencies will be gold-backed. Also, paper dollars are not the same as digital dollars. My personal opinion is silver will climb as well. The RAINBOW basket concept has been floated, but there are plenty of gold-backed GCA accounts which do not really require silver in the currency. When they go to expand the monetary base, the next gradual progression is to add the rainbow concept and to include other monetary metals. The new formula being floated for the SDR basket will have a major bearing on silver. The new amount of SDR allotted per country is rumored to be according to official reserve holdings, country natural resources, and national GDP (economy size).


My (GCA contact) understanding is the world will be divided into areas, as in five regions. It is part of the reason for the pre-engineered BREXIT. The United Kingdom will have a greater control in the region than otherwise possible, if it had been tethered tied to the EU. The British Pound has been negotiated to be a strong gold-backed currency from day #1, and London will become very prominent in the finance world. Silver will strengthen with or without currency status, but eventually it will be in the rainbow basket to expand the currency base, in my opinion. This is all going down very soon. The Jackass adds, not soon enough. Also, if the United States has a staggering $20 trillion in debt, with ample natural resources, then it should be a prime target for commercial coloniziation in a capture of the supposedly large economic size. The US must be re-industrialized at a time when it lacks the capital required.




Over three times the amount was reported missing when Bush, Cheney, and the Mossad brought down World Trade Center towers to cover up a smaller loss. The gold bullion, bearer bond, and diamond heist at the WTC, worth $600 billion was a side benefit, to exploit the situation. Maybe another eye catching inside job attack will make the problem go away, which takes another 2500 innocent lives, including 100 USArmy accountants just doing their jobs. The standard shtick for the Pentagon is to sell Israel weapons systems for the cost of scrap metal, thus the misappropriation funding. The brass pocket the funds appropriated by the USCongress. All parties win, except the USGovt debt tally. The Jackass refuses to call the US taxpayers victims, since the tax bills fall about $1 trillion short of the budget. In 2008, the Jackass made a forecast of $1 trillion annual deficit for each year on an indefinite basis extending into the future. That has happened. The defense budget is the biggest expense in the USGovt spending. It is also the site of the highest volume of fraud, misappropriations, kickbacks, bribes, costs over-runs, and lately failed weapons systems such as the F-35 Lockheed Martin fighter jet aircraft.



Pentagon on day after 9/11


One of the motives for the 9/11 attacks was to cover up the Pentagon fraud. The missile that hit the Pentagon was aimed squarely at the USArmy Accounting Office, a direct hit. Now we find the United States in the same position again, the massive fraud gap three times larger. The criminal leadership might require another grand distraction from a phony foreign attack, called a false flag. The public and the political spheres are far too distracted by economic degradation, job cuts, wars, terrorism, internal domestic violence, laced vaccines, and the political campaign to care or even to notice the Pentagon $6.5 trillion fraud. The USGovt and USFed have morphed into the biggest criminal organizations and fraudulent arenas in the history of mankind. But few care or could argue the case. See Fiscal Times (HERE).





The movement from money market funds could be a prelude for the movement from pension funds, forced by federal regulations into Special USTreasury Bonds as trash to be devalued. The helmsmen speak of protection and capital preservation, when the real motive is much better described as funding the annual $1 trillion ($1000bn) USGovt debt. In the last few years, it has been abundantly clear that the world has no interest in funding Washington’s gargantuan federal debt. Its primary beneficiaries are big bank welfare and booty from aggressive predatory wars. In a matter of months, expect to see pension funds directed into the same type of special bonds. First likely will be the 401k, IRA, Keough plans, then the corporate pensions.

Thanks to NathanC, a Hat Trick Letter client. He surmises that "It appears there will be new, forced demand for government USTreasurys soon. Additionally, they have the power to suspend withdrawals in certain circumstances involving extreme market duress and impose a 2% fee on the withdrawal per Vanguard." It seems fascism is hitting the funds sector gradually. The following refers to the Vanguard Fund and their money market cash management.


Dear College Saver, We are writing to let you know about changes that will affect The Vanguard 529 College Savings Plan. Later this year, changes are planned for Vanguard’s overall money market fund lineup to comply with new Securities & Exchange Commission (SEC) rules, also known as Money Market Reform. While we do not expect a significant impact on our management of money market funds, it will impact some of the portfolios available to investors in The Vanguard 529 Plan.


How this affects the plan: As a result of the new SEC rules, Vanguard Federal Money Market Fund will be replacing Vanguard Prime Money Market Fund as an underlying fund in Vanguard Income Portfolio and Vanguard Interest Accumulation Portfolio within The Vanguard 529 Plan. The Federal Money Market Fund has the same objective as the Prime Money Market Fund, which is to provide current income and preserve principal. But the Federal Money Market Fund invests solely in USGovt securities.


The following refers to the TIAA/CREF and their money market cash management. It serves as a parallel story on the theme. The gigantic fund manages pensions for US-based universities, colleges, and research institutes, covering the faculties and primary staffs. They cover the pension to the father of the Jackass, who is a retired literature professor of 38 years, who is listed in Who’s Who. He is a spry 97 years of age, and has collected his pension for the last 30 years. He loves his certificates of deposit, held at several mid-sized banks. He also owns a very small gold fund, to satisfy the Jackass and to shut him up.


To help provide greater protection for investors, the Securities & Exchange Commission (SEC) has made rule changes that require all money market mutual funds and variable annuities to be designated as one of three fund types: government, institutional, or retail. It also requires that changes be made by October 14, 2016. TIAA’s funds are being designated as government type, which feature a stable net asset value, full liquidity under all economic and market conditions, and a focus on capital preservation. Keep in mind that the value of the CREF Money Market Account (a variable annuity) is calculated differently than mutual funds and may experience a difference in performance. In nonchalant manner, they also state that lower returns might be seen, once the funds are designated as government type. They must be referring to the near 0% rate, which could go negative at any moment.






It was once sold as genetic modification to eliminate pestilence and to increase crop yield. It all sounded good on the sales brochures and press reports. However, the Monsanto research is directed toward altering human chromosome makeup, rendering sterility more common, and preparing the human body for virus delivery systems of a truly evil purpose. The GMO food movement is part of Agenda-21, the Rockefeller Foundation plan to reduce the earth’s human population by well over 50%. The Western Elites are deeply committed to human genocide on a mass scale. The giveaway is the sterile seed concept, which means the crop bears no seeds for the farmer toward the next seasonal crop output. The farmers must purchase all seeds from the Monsanto criminal genocide den. The next-gen seeds might be even more pernicious and deadly to the human species. The objections to GMO (genetically modified organisms) foods has become an international movement. The USGovt sponsored trade unions have provisions to eliminate obstacles for GMO foods to be distributed, and to prevent GMO details in food labels.


In a shocking twist, the Chinese Govt has decided to suspend the issuance of permits for the importation of animal feed produced in America that is made with corn. China is not known for having exceptionally high standards. They clearly are following the Russian Govt lead, as they talk to each other on high level matters. Three trading executives discussed the turn of events with Bloomberg Business Week in recent weeks. Dried distiller grains, also known as DDGS by industry professionals, can no longer be exported from America to China. The reason for this puzzling decision is due to Chinese Govt concerns that MIR 162 corn, a genetically modified strain that the Chinese have not approved. They claim it carries a high risk of contamination. They might use this pretext to block entry of GMO elements into their food system and population’s chromosome base. This is war, just like with weather modification using HAARP, just like in island disputes with paid demonstrators.


China was once the largest buyer of this American corn byproduct, which is produced in the process of making ethanol. More than 40% of the corn grown in the United States is used to make ethanol. In 2013, China bought 34% of the US-made DDGS exports. All is changing, as the Beijing officials smell a rat in the human machinery of a vile nature. Some precedent has been seen. Beijing officials not long ago rejected a 1.1 million metric ton shipment of Syngenta corn that was tainted by MIR 162. Earlier, they turned away 758 tons of corn in a shipment. Finally China has become wise to intentional contamination by evil US corporations. Monsanto is responsible for widespread dissemination of glysophates in pesticides (e.g. Roundup) that has polluted vast tranches of the Western world environment. China is concluding that the United States is purposefully trying to contaminate their food supply with GMOs. They are not to be blamed. The USGovt has contaminated our own food supply with such advanced technology to alter human genetics, and not in a good way. Sterility and virus delivery from vaccines form the basis of the next chapter in genocide from the furthest deepest depths of Western Elite depravity. One must hanker for the gold ole days 20 and 30 years ago, when China rejected a wheat shipment from the United States for excessive mold or rot.


On the bright side, AG Web reports that a class action lawsuit has been filed against Syngenta, the MIR 162 creator and manufacturer. The lawsuit was made on behalf of American farmers. The corn was genetically engineered to be more resistant to insects, and was approved by the USGovt in 2010. The corn strain, also known as Agrisure Viptera, was marketed and promoted before it had received import approval from China. The ensuing turmoil over China’s rejection of the product en masse has left farmers badly cheated and defrauded. They were not diligent or thorough.


James Pizzirusso is from the Hausfeld law firm in WashingtonDC. He stated, "Syngenta must be held accountable for its blatant misrepresentations to US corn farmers. By promoting and marketing a genetically modified corn seed before the seed had received import approval from China, Syngenta placed its own profit margins over corn farmer livelihoods." The attorney quantifies some of the damage. The Chinese rejection of the MIR 162 corn has caused losses equating to more than $1 billion. Perhaps the banks plan on buying up many millions of acres of farmland upon foreclosure, at a sweet 90% discount. They can own the farms, just like they own the residential property.


Syngenta has also been sued by both Cargill and Trans Coastal Supply Co for their losses due to China’s rejection of products contaminated with MIR 162. Cargill has sued for a cool $90 million, while Trans Coastal Supply blames Syngenta for $41 million in losses. Naturally, Syngenta believes that it is not at fault. In fact, they heap huge praise upon themselves for providing farmers access to their new technologies. They are cold psychopaths. See News Target (HERE).




The Jackass expects the Great US Isolation will be focused on bond fraud, GMO foods, oil/gas fracking contamination, laced vaccines, and more. The isolation will be accelerated by blame for a toxic USDollar, propagated fraudulent USGovt debt, and predatory bank actions (like FATCA rules and criminal prosecutions). Mention of chemtrail poisons and HAARP destruction will also be prominent in accusations. Blame will be directed at the Wall Street fascist banker teams, NeoCon warmongers, and Langley assassins with their terrorist mercenaries. The movement to obstruct laced vaccines toward propagation of dangerous diseases has already begun, with blame given to the US health & drug outfits. The United States will be painted as a rogue nation, accused of war crimes in several theaters, and dealt with accordingly after the Global Financial RESET. The Chinese will become the global police, in just a matter of time. In fact, the United Nations has become a sickening US tool, like many other international agencies. The UN is actively involved in white woman trafficking, child trafficking (for Satanist sacrifices), and human organ trafficking. Therefore, the Chinese are building a new United Nations in Asia, probably to be located in Beijing.




Mike Savage


"A man of courage is a man of his word."


Worth taking the time to read because this story is starting to leak out from FBI agents and others "who are in the know" inside the Washington beltway! The agents at the FBI are livid that Comey did what he did. They are claiming there was more than sufficient evidence to bring several indictments against Hillary Clinton. It wasn’t a slam dunk case, but it had more than a good probability of a conviction for Hillary Clinton.

Lynch and Obama made it clear to Comey that if he pressed for an indictment, he would be taking the Democrat nominee for president out of the election. If he failed to get a conviction he would be facing charges of tampering with and changing the outcome of a federal election, to which he would be facing the rest of his life in prison, and Obama and Lynch, as well as others, would see to it that he did. Now you know why he presented his case the way he did and why it was so obvious he was reluctant to not press for an indictment.


Hillary’s statement to the FBI was intentionally given without a court reporter present or without any recording of her testimony to prevent her from having any further exposure to legal charges like perjury. If she lied to Congress, they have no written FBI deposition to confront Hillary with. This was set up to let her walk without fear of being charged with giving False Testimony or being charged with Obstruction of Justice. This is what those in the "legalese world" call a "Straw Man" legal charge. (It is a charge designed to make someone appear innocent of the charges!)

EXAMPLE: Bill beats up Shirley at their home. Bill is arrested for "Felony Spousal Abuse" . Bill’s lawyer gets the charges dismissed because Bill is not married to Shirley! (They are only "live in boyfriend and girlfriend".) Bill walks out of court totally exonerated of the charges thanks to a technicality! The twist in the case is the arresting officer knew all along Bill was not married to Shirley because the officer and Bill are old fraternity brothers. The officer intentionally charged Bill with something he knew would not stick. Bill would easily have been convicted of Assault and Battery, but he was not charged with that! This is what is known as the "STRAW MAN" charge. It is how you make a guilty person appear innocent.

This is exactly what was done with the Hillary Clinton case! If she had been charged with "Destruction of Government Documents", she would have easily been convicted, because she admitted to doing this! Instead, she was charged with "Mishandling Classified Documents" which has wiggle room for reasonable doubt regarding Criminal Intent!

I think citizens are finally fed up with the Clintons and the cesspool of corruption that is our current government. Real Americans are ready to take our country back. All of these years of corruption have taken a toll on American lives. Citizens opinions of a lying White House, a corrupt Congress, the "pay to play" politicians, the legalese lawyers and lobbyists, big overspending "welfare mentality" government, the "looking for a loop hole" justice system, the lying media, and our censored educational system with an agenda to dumb down the next generation, is at the lowest point ever. Hillary is on the wrong side of every issue. The British Exit from the EU (Brexit) is just a small sign that real citizens of civilized nations are ready to take their country back. They are sick of the results of open borders and globalization led by power hungry elites.

Hillary Clinton has no character or integrity. She is an arrogant, condescending political elite who is only interested in lining the Clinton pockets with donations to the Clinton Foundation (wink, wink) from PACS, lobbyists, and foreign nations that buy access and favors. The Clinton Foundation is nothing more than an operation used to launder money for the Clintons and other politicians involved in illegal activities. The Clintons are able to use the information of those participating to obtain cover for their activities, or blackmail those who are laundering money through them.

Just count the number of politicians who arrive in Washington with nothing, but leave as millionaires and billionaires. Did their votes serve in the best interest of their constituents or did they only benefit themselves? If the representatives of your state fall in this category, then I suggest an investigation be launched.
  This is fairly long, but YOU MUST READ this article about the research of The Hills Group (an oil engineering firm), who believe the rapidly collapsing EROI (Energy Return On Investment) will have a disintegrating effect on the oil industry and therefore life in America as we now know it.   

The important thing to understand about this information is that the situation will likely unfold in a way that is extremely hard to predict.  However, we can make some common sense assumptions:

1.The Standard Investing Practice of putting 95-99% of one’s wealth in Stocks, Bonds & Real Estate will be DEAD FOREVER.


Entire sections of cities and suburbs will experience a 75%+ decline in economic activity.  This will destroy the value of most forms of Real Estate.

3. No longer will investors be concerned about earning a YIELD or GROWING their wealth.  Instead, investors will protecting wealth as best they can.


4.Big Investors such as Warren Buffet will watch as their wealth evaporate, never to return.

5.Whole Service Industries & Employment Careers will disintegrate.  Watch as Restaurants and Retail stores close doors by the thousands forever.

6.The Highly Complex Supply Chain System that delivers goods will breakdown considerably.  Trade will move to more regional or local systems.


There are so many more things that could be added to that list, but you all get the point here.  Things will start to fall apart more rapidly over the next few years.

Physical Precious Metals Will Offer Much Better Options In The Future Than Most Assets Today  To me this is a very important article, probably because it confirms my concerns about the absolute security and privacy of Bitcoin and other “digital” currencies.  I base my concerns on several factors: first, being simple of mind and slow of foot, I just don’t really get the technology that makes them work (so that makes me skeptical), second, too many people are now getting supportive of the concept (even government types) and (that ALWAYS makes me skeptical), third, it just seems to me that anything digital is vulnerable to entities that AREN’T simple of mind and slow of foot (so that makes me skeptical), fourth, if something works too good, you can bet that somehow the government will get it’s big nose and sticky fingers mixed up in it (so that makes me skeptical), and fifth, did I mention that I’m not nearly smart enough to comprehend how they work? (and that always makes me skeptical). 

Anyway, here’s the first paragraph from the above linked article confirming at least my third reason for being skeptical:

“Last week’s sharp, 30% plunge in the price of bitcoin (and its latest competitor, ether), after news hit that 119,756 bitcoins, or about $70 million, had been stolen from the Hong Kong-based bitcoin exchange Bitfinex, demonstrated once again the biggest risk with digital currencies: despite claims to the contrary, outside hacks remain a key threat and risk to anyone holding  (obviously, we use the term loosely) digital currencies”.  Gerald Celente sees a trend toward “It’s virtual reality, robotics and artificial intelligence.  The Industrial Age is dead.  This is now the Robotic Age — from industrialization to robotization and artificial intelligence.”  This is a VERY SCARY thought to me.  I just wonder WHAT THE HECK ARE 7 BILLION PEOPLE GOING TO DO FOR JOBS???  A short but interesting interview with Dr. Stephen Leeb by King World News.  This article addresses the unsolvable math of the public pension system, in simple terms, with the ZIRP (zero interest rate plan) ANNIHILATING retirement funds’ earning ability, THESE BABIES ARE GOING DOWN.  Another fine piece by Egon von Greyerz.  While the IRS demands full accountability of every nickel American citizens earn, in the sheer height of folly, the Federal Government has no interest in holding the Pentagon accountable for TRILLIONS OF DOLLARS of Army general fund transactions and data.  IS IT ANY WONDER THE GOVERNMENT CAN’T BALANCE IT’S BUDGET???  This article has some very interesting data on inventories of domestic gasoline.  Worth reading.  Another in a long line of Obamacare success stories.

It started with an illegal wiretapping scandal. After spending nearly 18 years in office as Prime Minister of Luxembourg…


Company Logo


August 9, 2016

London, England


It started with an illegal wiretapping scandal.


Jean-Claude Junker, after spending nearly 18 years in office as Prime Minister of Luxembourg, was forced to resign in 2013 after evidence surfaced of his complicity in a domestic spying operation.


So what does a disgraced politician who resigns in shame do?


Why, receive a promotion, of course.


Less than a year later, Junker was appointed to the most powerful political office in Europe– President of the European Commission.


(I say “appointed” because Junker was selected by the reigning political establishment, not by voters.)


Aside from being one of Europe’s most prominent unelected policymakers, Junker has become legendary for his bizarre quips and daft behavior.


(Here’s some incredible footage of an intoxicated Junker marching in place and slapping around other world leaders at a press event.)


Among Junker’s most famous quotes are perhaps the truest eight words in politics: “When it gets serious, you have to lie.”


That was from 2011 when Junker was caught lying about a secret meeting about Greece’s debt crisis.


On the surface, the politicians insisted that Greece was just fine.


Yet all the while they were lying to the public, they were preparing for an emergency behind closed doors.


I was reminded of this quote recently when the European Central Bank published results of its bank “stress tests”.


The ECB conducted these tests to prove that Europe’s biggest banks were just fine and would be able to withstand another major crisis.


Surprise, surprise, nearly every bank in Europe passed with flying colors, as if the ECB were saying, “Nothing to see here people…”


One of the ECB’s primary missions, after all, is to maintain stability in the financial system.


And when your financial system is this toxic, the ECB can’t maintain stability by telling the truth about their insolvent banks.


“When it gets serious you have to lie.”


Here’s the reality: Europe’s banking system is toast.


Wholesale interest rates on the continent are already negative.


Negative interest rates essentially penalize any bank that tries to be responsible and hold extra reserves


What an unbelievably stupid policy.


Rather than encourage banks to be conservative with their customers’ deposits, the ECB is practically forcing them to make as many loans as possible.


So it’s not exactly much of a shocker to find out that, in their haste to loan out almost 100% of their customers’ money, many of the loans went belly-up.


EU data showed that by the end of September 2015, 17% of Italian loans were non-performing. The non-performing loan rate is a shocking 43.5% in Greece, and 50% in Cyprus.


(That data is nearly a year old, so the numbers are worse now.)


This is a huge problem. Banks have lost a big chunk of their depositors’ savings.


There’s a lot of talk now about government bail-outs. And some of that has already taken place.


In Italy, the government already had to step in with a 150 billion euro guarantee just to forestall a potential bank run.


But the Italian government is one of the most bankrupt in the world, with a debt level that exceeds 130% of GDP; they’re in no position to bail anyone out.


That’s why, as of January 2016, European “bail in” legislation has taken effect.


The rules are already in place whereby depositors can be held liable for the idiotic financial decisions of their banks.


If the bank goes under, they can take your money down with it.


It’s already happened.


In 2013, the government of Cyprus froze EVERY bank account in the country, locking every single depositor out of his/her savings.


These risks are very real.


Banks are illiquid and overleveraged. They’ve made far too many bad loans with their customer’s savings.


The governments are in no financial position to bail them out. And the bail-in legislation already exists to steal from depositors.


What’s the point of holding money in this kind of system, especially when the biggest benefit you could hope for is about a 0.1% yield on your savings account?


When you step back think about the big picture, the conclusion is pretty obvious: don’t hold money in such a precarious banking system.


And yet, it’s very seldom that anyone really thinks about his/her bank.


Chances are most people put more thought into what they’re going to have for dinner tonight than where their money should live.


A bank is your silent financial partner. This is an incredibly important decision.


Especially given that once you turn over your hard-earned savings, it’s not even your money anymore. You become an unsecured creditor of the bank.


A decision of this magnitude deserves more analysis. And anachronistic features like a bank’s location shouldn’t factor into the calculus.


Geography is totally irrelevant in the 21st century. You shouldn’t hold your money somewhere just because the bank is near your house.


Rather, your money should live where it’s safest and treated best.


Just in the same way that you would choose your neighborhood based on its safety or quality of schools for the kids, you can choose your bank (or at least banking jurisdiction) based on safety and quality.


For example, avoid banking in countries that have already adopted bail-in rules that allow them to steal depositors’ savings.


This includes Canada and the EU.


(The US Dodd-Frank legislation is conveniently opaque on this issue– more on that another time.)


Also, avoid banking in countries that are heavily-indebted; those are the places most likely to run into serious problems, and you don’t want your money anywhere near them.


Again, this rules out most of Europe.


Last, consider other options. You don’t need to hold 100% of your wealth in a bank, especially one that is in questionable health.


Physical cash and precious metals can be an excellent substitute for bank deposits, especially as interest rates continue to slide below zero.


Until tomorrow,

Simon Black





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