Sunday, May 15, 2011

Savers May Flee U.S. Banks: The Dominoes Are Starting To Fall

Eric Sprott, the Canadian money manager who in 2008 predicted banking stocks would collapse, says U.S. savers will eventually pull their money out of banks that are carrying too much leverage on their balance sheets.
Banks are leveraged 20 to one and their portfolios are mainly composed of government bonds and mortgages, the founder of Sprott Asset Management Inc., said Friday at the SALT, or SkyBridge Alternatives, conference here.
"House prices keep going down, the number of people under water keeps getting worse," said Sprott, 66, who is chief executive officer of the Toronto-based firm.
"That leverage is going to work massively against anybody whose lender is in that area. The dominoes are starting to fall."
Sprott said the "ultimate event" is that savers will take their money out of banks and invest in precious metals such as gold, which he says is now the world's reserve currency.
Sprott, who earlier this month predicted gold may climb to $2,000 US an ounce before year's end, said he started buying the metal in 2000.


  1. OT - IMF chief being framed for ridiculous rape attack - supposedly running naked down a hallway after a maid in a hotel - yeah right!

    Translation - he did something that pissed off our owners and was framed.

  2. Yes I know many people already pulling their money out of the Bank.

    When the US Dollar crashes is could crash very hard and very fast ... in minutes. Probably while you are sleeping and wake up poor. Hopefully this will not happen.

  3. I think I will go to the bank tomorrow and take out 25% of it.

  4. I'm gonna take 25% out, as well.
    Then I'm gonna take a dump right in the bank waiting area. Sons-a-bitches.

  5. If the dollar is worth anything...ANYTHING...the banks will not fail, because the government won't let them. Just make sure that your account is with JP Morgan or BoA. Those two are given full protections.

    Now if you believe in the dollar becoming totally worthless, then get silver. It just pulled back. Get the physical silver and hold onto it.

    But don't just withdraw the useless FRNs and keep them at home. If the banks fail, they won't be worth the paper they are printed on.


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