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What would occur within the occasion of a monetary Ice Age? I don’t imply with this a literal Ice Age. No worries, it should come lastly, because it has been occurring the final 1000’s of years. I don’t imply anything than an enormous occasion the place our financial institution accounts are frozen in a worldwide extension.
Simply think about a state of affairs the place your capacity to make (and obtain!) funds is instantly halted. Not as a result of there is no such thing as a energy. Not as a result of a nuke exploded. Not due to an EMP attack. Not even a lethal virus spreading (once more).
Your playing cards change into little plastic thingies in your pockets in a single day, and our cash, even when it’s within the account and visual, we are able to’t use it. It has change into a frozen asset inside an unbreakable glass exhibitor. And I embrace myself as a result of I personal a checking account up there, albeit being a non-resident.
The fashionable Ice Age
A world-scale checking account freezing is a hypothetical state of affairs that may have important penalties for all of us. People, huge and small companies, autonomous staff, farmers, NGOs, and all types of establishments and governments all around the globe. Whereas such an occasion is unlikely, it’s paramount to know the potential implications of such an incidence. As a result of the percentages of such horrible occasions are there.
In recent times nobody might consider that an emergency state could be declared due to the migrants moving into the US by way of the southern border. Look what has been occurring within the latest months. So, I’d say, as a foreigner, as a bystander, as a easy outsider and exterior observer…sure, it may possibly occur. With none earlier warning.
What could cause this?
The freezing of financial institution accounts can happen for a number of causes apart from a world battle. This consists of authorized or regulatory motion, fraud investigations, or safety breaches. In a global-scale occasion, there may very well be loads of components resulting in such an occasion, together with a serious cyber-attack on a big banking system. Which, in case you ask me, is the most certainly identifiable menace. And sure, I’m positive it has occurred before, nevertheless it was coated as much as keep away from panic. As a result of if panic ranges climb up past a threshold, the catastrophic occasions following may very well be a lot worse than the implications of the banking system going to a halt.
The financial institution run, or the funds freezing may very well be the outcome as nicely of a coordinated effort by governments to fight cash laundering or terrorism financing, or a monetary disaster that necessitates excessive measures to stabilize the worldwide financial system.
Logically, the primary and rapid affect of a global-scale checking account freezing could be a disruption to day by day life for people
and companies that depend on their financial institution accounts for transactions and monetary administration. Many individuals use their financial institution accounts to pay payments, obtain salaries and make purchases, and a sudden freeze might depart them unable to entry their funds or conduct essential transactions. The results of impeding entry to those actions for simply two weeks or one month could be unthinkable in a lot of the cities of the developed world.
Who could be impacted by this?
Companies, significantly small and medium-sized enterprises, could be significantly susceptible to the consequences of a checking account freeze. They could not have the monetary sources to climate a protracted disruption to their money circulation and may very well be compelled to shut or lay off staff. Massive firms may very well be severely impacted, as they might have important quantities of money reserves tied up in financial institution accounts that may be inaccessible throughout a freeze. Frankly, it needs to be right here the place we should always consider how susceptible we’re to a scenario like this.
The freezing of financial institution accounts might even have a major affect on the international monetary system. Banks depend on the belief of their
clients to perform, and a widespread lack of religion within the security and safety of financial institution accounts might result in a run on banks and a
broader monetary disaster. This may very well be significantly damaging in international locations with weak or unstable monetary methods, the place a lack of
confidence within the banking system might have dire penalties for the complete financial system.
Governments would even be affected by a global-scale checking account freeze. They depend on tax revenues and different types of earnings to fund public companies and infrastructure tasks, and a freeze on financial institution accounts might considerably disrupt their capacity to gather income. This might result in austerity measures, diminished public companies, and doubtlessly unparalleled social unrest.
Everybody downstream could be affected. One thing comparable occurred right here, as our major earnings (oil industry) is destroyed, and no matter little cash will get into the nation is straight away deviated to international accounts of the mobsters, in Spain, Andorra, and different international locations sponsoring the looting. Consequently, no person desires to make enterprise with the federal government, not even native authorities.
What are the percentages of it actually occurring?
You will need to word {that a} global-scale checking account freezing could be an excessive and unlikely state of affairs. Nevertheless, a world pandemic was an “unlikely state of affairs” for most individuals again in, say, 2005, proper? The world banking system would by no means deliberately take motion to generate such a scenario. Nevertheless, some hypothetical situations might result in a global-scale checking account freeze.
One potential state of affairs is a serious cyberattack on the banking system. As extra monetary transactions transfer on-line, the danger of cyberattacks on banks and monetary establishments has elevated. Compromising the safety of buyer accounts could be a motif to the widespread freezing of financial institution accounts to forestall additional injury. To forestall such a state of affairs, banks and monetary establishments have to spend money on sturdy cybersecurity measures to guard in opposition to cyberattacks and strengthen their threat administration protocols.
Right here’s what the federal government may do.
One other state of affairs that might result in a global-scale checking account freeze is a coordinated effort by governments to fight cash laundering or terrorism financing. As odd as this might sound.
Governments around the globe have change into more and more involved about using the worldwide monetary system for illicit actions, and there have been efforts to tighten the regulatory framework for banks and monetary establishments. In excessive circumstances, governments might take coordinated motion to freeze financial institution accounts suspected of getting used for cash laundering or terrorism financing. Nevertheless, such actions would have to be fastidiously focused and balanced in opposition to the necessity to preserve the integrity of the monetary system and defend the rights of harmless clients.
A monetary disaster might additionally result in a global-scale checking account freeze. Within the wake of the 2008 monetary disaster, many governments took excessive measures to stabilize the monetary system, together with freezing financial institution accounts and imposing capital controls to forestall a run on banks. Whereas such measures have been essential to forestall a collapse of the monetary system, additionally they had important financial and social prices. To forestall a future monetary disaster, governments and monetary regulators have to strengthen their threat administration not solely on the monetary degree however within the cybersecurity space, oversight banks and monetary establishments, and take steps to make sure that the monetary system is extra resilient to systemic shocks.
There are a number of insurance policies that governments and monetary establishments can implement to mitigate the dangers of a banking system collapse. Some examples are:
- Ample capitalization necessities: Governments can require banks to take care of satisfactory ranges of capital to soak up losses and preserve their solvency. This may also help be certain that banks have enough sources to climate financial shocks and surprising losses.
- Sturdy regulatory oversight: Governments can set up and implement sturdy regulatory requirements for banks and different monetary establishments. This could embrace necessities for threat administration, inner controls, and transparency. Regulatory oversight may also help determine and mitigate potential dangers to the banking system earlier than they change into systemic.
- Deposit insurance coverage: Governments can set up deposit insurance coverage applications to guard depositors within the occasion of a financial institution failure. Deposit insurance coverage may also help forestall financial institution runs and preserve public confidence within the banking system.
- Liquidity assist: Central banks can present liquidity assist to banks in periods of economic stress. This may also help be certain that banks have entry to the funding they should meet their obligations and preserve their solvency. If this liquidity is sufficient for purchasers to maintain up with their duties, so significantly better.
- Disaster administration and determination frameworks: Governments and monetary establishments can set up disaster administration and determination frameworks to handle financial institution failures and different monetary crises. This could embrace plans for the orderly decision of failed banks, mechanisms for coordinating with different regulators and stakeholders, and provisions for recapitalizing or restructuring troubled banks.
- Stress testing: Governments and monetary establishments can conduct stress checks to evaluate the resilience of the banking system to varied financial and monetary shocks. Stress testing may also help determine potential vulnerabilities and inform coverage responses to mitigate dangers.
These are only a few examples of insurance policies that may be applied to mitigate the dangers of a banking system collapse. In observe, a complete strategy to threat administration could contain a mix of those and different measures, tailor-made to the particular circumstances of every nation and banking system.
What can we do?
In abstract, whereas a global-scale checking account freezing is an excessive and unlikely state of affairs, there are potential situations that might result in such an occasion. To forestall such a state of affairs, banks and monetary establishments have to spend money on sturdy cybersecurity measures, governments have to steadiness the necessity to fight illicit actions with the necessity to preserve the integrity of the monetary system, and monetary regulators have to strengthen their oversight of the monetary system to forestall future crises.
Money is king, then? It appears it’s. Particularly after all of the push for digital foreign money. If this initiative proliferates, simply by ticking a field in a database, ANYONE may very well be blocked from “The System”. It may be carried out proper now, however in a world with out money, anybody topic to this remedy could be left stranded on web site. The concrete bases for a totalitarian world regime are slowly being poured as we’re right here sitting down…
Are you able to see this occurring? Is all of your cash within the financial institution? What do you assume we are able to do to organize for this? My plan of action might be to make an additional effort to enhance my place, pray to the Lord, and hold my chickens dry!
Keep secure, and hold tuned!
About Jose
Jose is an higher center class skilled. He’s a former employee of the oil state firm with a Bachelor’s diploma from probably the greatest nationwide Universities. He has an outdated however in good condition SUV, 150 sq. meters home in a pleasant neighborhood, in a small however (previously) affluent metropolis with two center measurement malls. Jose is a prepper and shares his eyewitness accounts and survival tales from the collapse of his beloved Venezuela. Jose and his youthful child are at present again in Venezuela, after the intention of establishing a brand new life overseas didn’t go nicely. The SARSCOV2 re-shaped the labor market and South American financial system so he determined to present it a attempt to homestead within the mountains, and make a residing as finest as attainable. However this time in his personal land, and surrounded by household, pals and acquaintances, with all of the gear and tools collected, because the preliminary plan was.
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