What Would You Do If You Couldn’t Get Money Out of Your Bank Account?
What would you do if the bank suddenly froze your account and you couldn’t access any of your money?
Perhaps this sounds a little farfetched, but it certainly isn’t unprecedented. In fact, Chinese customers of some Spanish banks recently faced this exact scenario.
Three of the country’s biggest lenders – BBVA, Caixabank and Bankia – froze accounts belong to Chinese residents of Spain for up to two weeks. These bank customers said they didn’t have access to their accounts for as long as three months. Some of the account holders were Spanish citizens.
The banks locked down the accounts under Spain’s anti-money laundering laws. BBVA reportedly froze some 5,000 accounts. According to a report on Wolf Street, many of those customers were Spanish born children of Chinese parents. They said they were not even warned their accounts were about to be frozen.
Hundreds of Chinese residents took to the streets of Spain to protest the policy. Spain’s Association of Financial Users (ASUFIN) announced it would assist customers whose accounts were frozen with legal proceedings. ASUFIN President Patricia Suárez said, “These are normal people, without risky movements or suspicious operations. They are angry and have even protested, something quite unusual among the Chinese.”
All of this stems from a tightening of money-laundering laws in the wake of a 2017 scandal that ensnared several Spanish banks. According to Wolf Street, they were accused of laundering hundreds of millions of euros in illegal funds from tax fraud and smuggling by “Chinese criminal organizations.” The recent rash of frozen accounts appears to be a backlash from the scandal. According to a source quoted by Wolf Street, a spokesman for the Spanish banking association insisted that the rules are being applied regardless of nationality. “But since the law’s passage, most of the focus appears to have been on Chinese nationals. And many apparently innocent bank customers have been caught in the resulting trawl.”
This reveals how quickly things can go sideways when somebody else controls all of your money and why you should always have direct access to liquid assets. Barter metals are one option.
Just last fall, many Iranians turned to gold in the wake of massive currency devaluation. Iranians have traditionally saved gold coins for major purchases such as weddings, but they have had to gold for more mundane transactions. Some landlords started collecting rent in gold instead of rials. As the Middle East Eye put it, “The downward spiral of the rial has led some landlords to try to safeguard their income by turning to gold.”
Barter also spread through several European countries after irresponsible government spending led to a debt crisis and bailouts a few years ago. In 2012, Spain saw a noticeable increase in barter exchanges, as Spaniards sought alternative ways to do business with each other in an economy on the verge of a major debt crisis. Greeks also became fluent in barter and alternative means of trade when their financial system effectively collapsed in 2010. Greeks had their access to cash severely restricted during their country’s recent economic turmoil. It got so bad, a robust barter economy developed out of sheer necessity, as everyday Greeks had to find ways to cope with cash withdrawal limits and currency shortages.
Junk silver is an excellent way to hold barterable metal. The term refers to quarters, dimes, and half-dollars, minted before 1965. Actually, we should be calling modern coins junk because that’s about what they’re worth. Up until 1965, quarters and dimes were minted from 90% silver. That makes them perfect for buying basic goods during times of hyperinflation – or if banks start freezing accounts.
The bottom line is that you shouldn’t assume you will always have access to your money just because you have a bank account. You never know what might happen and you should always be prepared.
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