The world is going to have another banking crisis but the next time around, the banks are going to take depositors' money via a "bail-in." This is the latest theory from respected market watcher, David Morgan of The Morgan Report.
Morgan tells our Daniela Cambone, "The bailout situation is over. It will be bail-ins next time, which means you become an unsecured creditor of the bank. This means that if you don't hold it, you may not own it. If we were to have a bail-in, they may not take all of your currency, but they would probably take part of it."
Morgan compares the situation to Argentina; "All the money in their banks was still yours, but you were limited to what you could take out."
Related Articles:
#banks#financialcrisis#investing
ICYMI, check out Daniela's latest interviews here! - sbry.co/n4L3R
Be sure to sign up for exclusive content and interviews from Daniela that you can't find on YouTube! - sbry.co/SRE79
______________________________
Follow us on Facebook: https://www.facebook.com/StansberryRe...
Follow us on Twitter: https://twitter.com/stansberry
Follow us on Instagram: https://www.instagram.com/stansberry_...
Follow us on LinkedIn: https://www.linkedin.com/company/stan...
See Full Interview Transcript Below
Daniela Cambone: Hi I'm Daniela Cambone welcome back to StansberryInvestor.com my guest today says that get ready for a new banking crisis but it's not like one that you may have in mind please welcome back to the show David Morgan of the Morgan report David good to see you thanks for joining us from your car
David Morgan: Well I am parked safe and sound but pretty busy schedule and we wanted to get this out to the public so thank you
Daniela Cambone: Exactly you were gracious enough to accept it I said we got to get you on you said I'm in my car I'm like I'll take it and yes for the folks back at home David is safe not driving all right let's talk business here you've been very vocal lately about a banking crisis now David we know you as the silver guru, you don't really you know talk outside of you know silver a lot but when you do we have to pay attention here I certainly did when you said that we are going to see another banking crisis but this time it involves bail-ins tell us about it
David Morgan: Yeah well basically I do look at the big picture I consider myself to have a macroeconomic view and then silver is just a subset but regardless the bail-ins really bother me because after the last bailout there's legislation passed in the senate and house that it's illegal to do bailouts which means bail-ins and that's kind of nod at me for some time Daniela so I started looking at the very basics the fundamentals and one of the main fundamentals is what is money and of course there's theories about money that's commodity money which you know most of your viewers are most familiar with gold and silver ancient times voted by the people and then there's like legal money which is money is anything that we say it is or money is anything that the government edicts or fiats that's money and then there's others but the one that really hasn't got much recognition is the ownership theory of money and the ownership theory of money resonates with almost everybody that's seen you in Stansberry which means if you can't touch it you don't own it, very common sense, very logical but we've never really applied that to the fiat system so I started thinking about it more and more and I really kind of had I wouldn't say an epiphany but something that really provoked me to ask Greg if we could explore this and of course it obviously resonated with you somewhat because the idea that you have money in the bank everyone takes for granted but they don't read the fine print to realize they're an unsecured creditor talking about the United States now an unsecured creditor to the bank and it's really the bank's money believe it or not and what that means in a banking crisis and let's say that there is a bail-in then they have the right legally to take what you consider to be your money, so there's two thoughts on this, number one is the ownership theory of monies you take out physical currency from your bank account and you could do it any you know way that's best for you in other words you don't have to withdraw your entire you know bank account in cash but I would certainly consider owning some cash for a lot of various reasons you know electronic failures cyber attack, bank closure, you know terrorist act who knows I look more toward electrical problems with the grid perhaps or cyber attack is the main two that concern me and the other part is that I didn't really say to Greg and that's you know if you have a large sum in the bank and you're really just getting acquainted with the precious metals one of the easiest ways to move money quote-unquote money is to move it via a check or a wire and take X amount from your account move it into physical metal and that's what a lot of savvy people have done over the years that have listened to you and Stansberry it's like look I need some protection I need some what we call monetary insurance some wealth protection and I've got a lot of cash but I don't have any metals so that's one way to do it the other part again I'll give it back to you Daniela is does it make sense to take some cash out of the bank and he answer is absolutely after the fact I mean once people wake up to the idea that uh-oh and just one more comment it's kind of funny but it isn't and that's when we had the 2008 crisis guess who was running down the ATMs the Wall Streeters, not the man on the street, the Wall Streeters knew what the heck was going on scared to death and worried about a ultimate collapse and they were draining the ATMs at the time so back to you
Daniela Cambone: Yeah I have a lot of questions because I've known you for a very long time and you're not one to just come out with warnings so the fact that you had this epiphany is what really resonated with me or concerned me and when you mentioned Greg that was your conversation with Greg of USA Watchdog so it did resonate with me and I want to dig a little deeper here, so how much currency do you think is sitting in the banking system that can be tapped
David Morgan: Probably about one percent of what the cover ratio is in other words the math shows about five percent half of that or more sixty percent is overseas so that drops you to about two and a half percent but at two and a half percent I cut it in half again because half of the currency, the physical you could touch it and own it money we'll call it is in grocery stores, casinos, liquor stores, places of business that do cash business so it's not in the bank it's scattered out all over the United States in various businesses so how much is actually in the bank when you owning a bank account go in there and say hey I've got $10,000 in this bank I want it in cash the chances of you getting it might be good, the next person okay and the third person they're out of cash I'm being a bit facetious but you get the idea it's a very, very small cover ratio
Daniela Cambone: I've been doing this for a very long time I don't think I've ever seen a trend like this year where I have so many experts coming on more and more people coming on telling me they're getting completely out of the banking system so how you know what's your exposure now David if you don't mind sharing I know you mentioned you should have cash at home to make sure you can pay rent and whatever your basic expenses but are you completely out of the system now
David Morgan: I'm not you know I have to have an account the business account to pay you know people that work with me so not completely out, but no I think there's really two methods here that most people are familiar with one is the traditional privately held money gold and silver and the other of course it's been at the forefront for some time now and that's the crypto world, so between the crypto world and gold and silver there are a lot of people that have opted out I mean I don't know Michael Saylor personally but obviously a smart guy and the guy that is pretty much on the bitcoin baptized system which I you know is a way to take large sums of money outside of the system and secure it and more and more people again are waking up I'm not as favorable to the crypto world as some I'm more favorable to the traditional method of physical metal but nonetheless I think he could be overexposed and I don't want to scare anybody I did an update for my paid members last night Daniela I'll just share a little bit of it this is an educated guest if a bail-in is to occur I think it would go along the lines of everything that's guaranteed by the FDIC Federal Deposit Insurance corporation will be left alone and for US people that is $250,000 so that's a fairly good sum of money, it's pretty tidy, some most Americans don't have that sum and some have more than that so the bail-in would likely go anything above $250,000 gets bailed in and anything below that is a touch so that's my take on it David said it does that make it true no that's my idea about it but I want to keep people calm I don't want people to think they've got you know (i.e.) $12,827 dollars in the bank and during the bail and it's all going to blow away it won't I'm 99 sure it won't but for those that got to me in march and going back to the start of the illness Daniela if I could digress just for a moment to make a very important point a lot of people called me in march 2020 a lot for this caliber person David I've got a million dollars in the bank David I've got two million dollars in the bank David got four million dollars in bank I have never bought gold I'm very concerned how do I do it I'm brand new I don't want to make mistake can you help me out, never had that quantity of people in that position during one month period in my life, call me up and say I'm really concerned about how much money I have at a bank I want to do something about it can you help me
Daniela Cambone: I can second that I've been getting a lot more calls about that too people are new to the precious metals and don't know how to start or why and I'm not an advisor like you are David but you know hopefully I can help point people in the right direction that said I you know when you say it's not that your money will just disappear I guess when you're talking about a bail-in what I imagine when I first heard about your reservations is that you just won't have access to your cash is it frozen in this scenario for you
David Morgan: I think that's the most likely scenario I do that based on historical presidents if you go to Argentina for example Daniela what you find is that the accounts were there you didn't lose a dime but your access to it was limited so for an example you had a million dollars in the bank but you're only able to withdraw $300 per week so wow what if you're expenses are $5,000 a month and you're only able to get $1,200 a month what happens then so this is the kind of things that really concern me
Daniela Cambone: So let's take it one step further here with all the talk about central bank digital currencies and we've been talking about it a lot here on StansberryInvestor.com does it eliminate that risk is that why central banks are moving in that direction
David Morgan: You can make that argument the other side of that coin is do you accept peer-to-peer in other words someone is owed currency they're not familiar with Bitcoin or Ethereum or whatever and the person's willing to make good on their debt in a cryptocurrency but the receiving party doesn't really know how to accept or whatever which isn't that hard I mean you can get a wallet someone could talk them through it and they can accept it but you know in a contract basis there has to be agreement on both parties and I can see a situation I'm just being on the taking the negative side of it right now could be difficult in some instances but that is a way or you know out I mean there's a big fight going on I mean it's pretty clear that the Defi the decentralized finance block is getting take they're really having an issue because of the central banks coming in with their cohorts in the regulatory bodies and say we've got to regulate these things and they're seeing more and more regulation plus just one step further give me feedback it's what's a security and what isn't and you know I'm pretty well versed in the legal aspects not a lawyer would have been in the field I studied pretty hard that a lot of these things you can make the argument are securities which puts it under a whole different jurisdiction or a different body of governance than most people are aware of
Daniela Cambone: Let me ask you this David comparing it to 08' what you envision again this is David's theories, David's thoughts what's the straw that breaks the camel's back here
David Morgan: Well it's the amount of currency that people are aware of it's a psychological phenomenon more than a math issue but with the Reverse Repo being in like the trillion dollar range having to suck money in and out of the system every night the amount that the government of the United States and others that are following that are inflating at an unbelievably unprecedented rate and still the US becomes still remaining pretty much the strongest currency and the most trusted it's when the trust and confidence in that breaks and it's breaking as we speak is when you're going to see these problems and one of the solutions that is at law is a bail-in whether or not it will take place or not I do not know what I do know is it's my duty, my moral obligation to warn people how I see it and whether they agree with me or not that's their choice
Daniela Cambone: And I had a very in-depth conversation with George Gammon recently about Reverse Repo so the folks out there are interested I urge everyone to check out that interview my final, well second to last question for you David why are you more concerned now than two years ago is it because of the liquidity that's in the system now that's way more than two years ago or why the epiphany now
David Morgan: Feedback, paying attention to what's called sentiment it's the amount of people that have awakened to the truth that you can't print yourself wealthy to the fact that there's something drastically wrong with the financial system, it's broken and it has no real relationship to the physical economy, so the economy is what we do to eat, to live, to build, to grow all those things that are physically tangible to the human experience the financial markets are supposed to reflect the actual economy and it does not you keep seeing a stronger and stronger number in the stock market but that would indicate if they were correlated to one of the best economic situations ever and it's not we have people that are hungry we have people that are unemployed we have people that have lost their businesses we have people that are struggling we have people looking for a second job to put food on the table so there is absolutely no correlation this upsets me greatly and so again it's my duty I mean I feel like I've been called to the business I'm in and I you know I get to say that, that's how I feel about it very strongly and that it's important and to thank you for asking me to come on and give this message out again you know I'm the messenger, the message is pretty clear something stressed wrong and what do you want to do about it I'm just giving you that message it's up to you to you know accept it deny it or think about it
Daniela Cambone: Really well said last point on the on your point about an old only gold and silver it's not just for a bail-in situation but you've been writing a lot about how there's probably the best protection in these inflationary times you could just talk a little bit about it
David Morgan: Yeah I think one of the main things that have been lost among especially the precious metals people is what the function of gold especially is and what it's done you know the subset of the Morgan Report is to build and preserve wealth gold has preserved wealth from 2000 to present day gold has had a compounded annual rate of growth of 10% per year so it has maintained wealth how can I say that with authority if you go to shadowstats.com and you look at the true inflation rate it's been about 9% a year so gold's function to preserve your wealth not make you wealthy but the preserved growth has been stellar over a 20-year period but most gold bugs and you know maybe I'm guilty of it have been waiting for the "Big Explosion" you know when's gold going to $10,000 and it probably will because there's going to be an overreaction to the demise of the current financial system, so gold will react or maybe overreact but as far as has it done its job it has silver hasn't been too bad either on a on the same metrics a compounded annual rate of return of silver is about 9% which matches the inflation rate now silver's more volatile and it's also a smaller market so in the event that we get this explosion in gold we'll see silver really explode in my study view because there's so many people that at the last minute will buy it no matter what the paper price is because they feel that the currency is going to fail and so if it's $50 or $60 or $70 or $100 silver they're very willing to pay that because they're worried that we're going the way of Zimbabwe and the currency is going to have no value I don't think that's going to happen I think that the idea of it happening will take hold to the some of the populace that will take action and I think before it's worth zero we'll see a re-enactment of another financial system and I think it'll be right now the best guess would be the SDR because that's what's coming to the fore right now Special Drawing Rights are going to be you know pervasive here pretty soon and if that step doesn't work then you could see a central bank digital currency
Daniela Cambone: It looks like it's coming sooner than later and I'm happy well on the note about silver you saw what people were willing to pay on premiums earlier this year
David Morgan: Yeah that's a foretell of what you know the silver market's really capable of I mean I don't like to see people pay high premiums but the market's the market and if you've got to pay a high premium to get silver people are willing to do it
Daniela Cambone: And I'm happy you mentioned that about gold because just yesterday I was you know debating with someone on twitter you know I get a lot of emails like you do David saying you know I'm so disillusioned I'm expecting more from gold and my answer you know was really well what were your expectations you know what were you expecting gold to do and what has it not done and like you said yeah it's not at that $5,000 or $2,000 price yet as we speak but like you said it has it has done its job
David Morgan: It has done its job
Daniela Cambone: David Morgan of the Morgan Report thank you so much for joining me from your car appreciate it thank you so much
David Morgan: My please Daniela
Daniela Cambone: Sense of urgency here folks and thanks so much for watching we'll have much more for you on stansberryinvestor.com in the meantime don't forget to register free at DanielaCambone.com for premiere content and special reports you can't get anywhere else thank you for watching I'm Daniela Cambone
Disclaimer:
This article is solely for informational purposes only and it should not be construed as a solicitation or offer to buy or sell on any financial securities/instruments, etc. nor anyone should take the content as an investment advise, any opinion expressed in this article are subject to change without prior notice, eurymanthus.wordpress.com and its author is under no obligation to keep current of the information herein and accepts no liabilities for any gains, losses of any kind arising from any of the material presented on any post/s and/or article/s published.
Archive posts
WordPress.com
No comments:
Post a Comment