‘Your Money Isn’t Safe Anywhere’

In an article I just turned in for Dow Jones Marketwatch (it will be published in March) I wondered about the safety of Caribbean Banks — the ones that promise “ultimate privacy” for discerning clients.  Basically, they’re banks where you go if you …

A) think you’re going to get sued and want to shelter some money from potential creditors.

B) Have a mistress/illegitimate child that you want to take care of and don’t want your family to know about.

C) Want to invest in seemingly lucrative, “can’t-lose” investments like those promised by fraudsters Allen Stanford and Bernie Madoff.

D) Have various other reasons that would require you to fly or boat offshore to do your banking.

These banks may be rock solid. On the other hand, they may also be especially vulnerable to the kind of financial shenanigans that Madoff and Stanford are known for.  I wrote:  “When the tide goes out, we’ll see which of the Caribbean banks are swimming naked.”

Maybe we should expand that to other Latin American banks.  I had Panamanian banks in mind of course, but it turns out Venezuelan banks may be particularly vulnerable to Stanford’s shenanigans as well.

Here’s a quote that reflects the mood of bank customers …

“I never thought this would happen, much less to a bank like Stanford with a good name,” said Celia Daniel Metta, 48, who was among 20 clients standing outside a Stanford affiliate in Mexico City yesterday. “Your money isn’t safe anywhere.”

It turns out, Bloomberg reports, that Venezuelans may have had as much as $3 billion invested with Stanford, who the U.S. charged with running an $8 billion fraud. In Argentina, savers probably channeled $400 million to accused $50-billion-Ponzi schemester Bernard Madoff.

Will things get worse? What do you think?  I know what the Antigua and Barbuda’s Bankers Association thinks.  It warned that: “if customers continue to withdraw funds from Bank of Antigua, this could destabilize not only Bank of Antigua, but the entire financial system.”

So is your money safe anywhere?  I think it is, in gold and silver.  Physical gold and silver.  And a good buying opportunity maybe coming up.

In charts I sent my premium service subscribers yesterday, I showed daily charts of gold.  There is plenty of support on those charts. This chart, a weekly chart, shows other support for gold.

I expect that support to hold somewhere along the line.  And that will likely be a major buying opportunity.

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