www.armstrongeconomics.com
QUESTION:
Mr. Armstrong; Your post of November 16th
where you state that the ECB is looking to freeze accounts in a banking
crisis, does that mean they will no longer honour the claimed insurance
of €100,000 per account?
PH
ANSWER:
No. They will not pretend to eliminate that insurance, they just will
“suspend” it as a bank holiday. But you gloss over another problem. The
insurance of €100,000 is NOT per account, but PER PERSON. So taking €1
million euro and spreading among 10 banks does not thereby
provide insurance for the whole lot.
The same is true in the USA. The
ECB is proposing supplementing it with discretionary powers to suspend
bank withdrawals. To say that the entire program will be terminated is
an exaggeration. Nevertheless, it reflects the realization that the
European banking system is in serious trouble.
I recommend that
Europeans should have a stash of cash, and if you have a lot of cash in
your account, put some into dollars in the States before it is too late.
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