The War On Cash

A little-known fact is that Greeks who had prepared for bank runs by withdrawing cash and buying gold and silver bullion and then lodging that bullion and indeed cash into safety deposit boxes have also been caught up in the draconian capital controls. “Greeks cannot withdraw cash left in safe deposit boxes at Greek banks as long as capital restrictions remain in place,” said Nadia Valavani, a Deputy Finance Minister.  

 

The only reason to put access to safe deposit boxes under capital controls – measures which were agreed between the government and the banks – is because the banks and governments wish to retain the option of confiscating the contents of those boxes should the crisis deepen.

 

As the Greek situation demonstrates, the convenience of ease of access to a local safe deposit box can be offset by the fact that governments and banks can lay claim

to their contents at the stroke of a pen.

 

It would be unwise to view Greece as an exceptional case. Such complacency is not shared by respected economic historian Marc Faber who recently warned in Bloomberg that “Greece is coming to your neighborhood very soon” because “the world is over-indebted.”

 

This view has been echoed by many well-placed observers from HSBC, Goldman Sachs and Fidelity in recent months. Most recently Fidelity’s Ian Spreadbury made the highly unorthodox recommendation that savers should keep some precious metals and cash “under the mattress.”

 

I suggest if possible you put away a few month's living expenses in cash (and perhaps some small gold and silver coins) where you have 24/7 access without have to ask anyone’s permission. That won’t cost you a penny, but you just might be glad you did.