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How to protect against a "bail in"?
Posted: Sat Jun 15, 2013 6:55 pm
by miyazaki
It has been discussed for a couple of years, but this week, a law which would make it legal for a "bail in" depositor confiscation in case of "emergency" has been enacted here in Japan. I've heard similar laws are being enacted throughout Europe and Canada, now that Cyprus has set the precedent. I wonder if anyone can explain the details, including implications for the permanent portfolio. Would any confiscation be limited only to cash deposits in the bank, or could it extend to cash held in a brokerage account or even stocks and bonds? Is there any good way to protect against a bail in, or is the pp already protected sufficiently? Perhaps it's time to stash cash AND gold under the mattress?
Re: How to protect against a "bail in"?
Posted: Sun Jun 16, 2013 6:06 pm
by murphy_p_t
Jim Sinclair has been sounding the alarm on this very issue.
http://www.jsmineset.com/2013/06/15/bai ... we-expect/
Re: How to protect against a "bail in"?
Posted: Mon Jun 17, 2013 5:52 pm
by Libertarian666
I would think holding physical metals in a non-bank institution like Global Gold should be fairly safe from a "bail-in", since such institutions don't take any risk that might inspire their being bailed out.
But unfortunately there is no such thing as a riskless asset, so even that is not absolutely safe.
Re: How to protect against a "bail in"?
Posted: Mon Jun 17, 2013 8:42 pm
by Ad Orientem
This strikes me as a good point to recollect that the safest method of holding a PP is to own everything except the stocks directly. Don't use banks or brokerages more than absolutely necessary. And also remember the importance of geographic diversification.
Re: How to protect against a "bail in"?
Posted: Tue Jun 18, 2013 11:00 am
by murphy_p_t
Ad Orientem wrote:
This strikes me as a good point to recollect that the safest method of holding a PP is to own everything except the stocks directly. Don't use banks or brokerages more than absolutely necessary. And also remember the importance of geographic diversification.
Seems this PP allocation would come closest?
-stock index held only as mutual fund (Vanguard...since its customer owned...lower theoretical risk than a for-profit)
-gold coins (held outside financial system)
-stack of Federal Reserve Notes (held outside financial system)
-LTT at Treasury direct
PS...not sure I'd implement this...especially not on board w/ TD
Re: How to protect against a "bail in"?
Posted: Tue Jun 18, 2013 11:50 am
by Ad Orientem
murphy_p_t wrote:
Ad Orientem wrote:
This strikes me as a good point to recollect that the safest method of holding a PP is to own everything except the stocks directly. Don't use banks or brokerages more than absolutely necessary. And also remember the importance of geographic diversification.
I'd basically suggest a level 4 (per the book) permanent portfolio. I like the above but would move the gold overseas.
Seems this PP allocation would come closest?
-stock index held only as mutual fund (Vanguard...since its customer owned...lower theoretical risk than a for-profit)
-gold coins (held outside financial system)
-stack of Federal Reserve Notes (held outside financial system)
-LTT at Treasury direct
PS...not sure I'd implement this...especially not on board w/ TD