A six month moratorium has been put on local banks by the Central Bank for mortgage and investment loans. Politicians and business people no longer keep US cash reserves in local banks.
They are moving cash reserves off shore to other countries for two reasons. Since less than one per cent interest is paid on savings it costs them one per cent to withdraw and a host of other bank charges, there is no incentive to keep major cash reserves locally. The second reason is: the 'Gestapo' like tax department can lien their bank accounts at will.
These leans are usually slapped on the accounts just before the weekend. Bank account holders usually realize this when they go shopping for the weekly food supplies on Saturday mornings and must leave embarrassed their full food grocery carts at the cash register when their local bank card comes back declined. Sometimes, after a whole host of insults and headaches liens can take several months to be released, leaving people without money for food and unable to pay their expenses in the meantime.
Most smart business people and the politicians all have their homes and properties held or owned by offshore companies and monies held in offshore accounts. Most of these people also own homes abroad. In this way their assets are protected from confiscation. Most foreigners are now trying to sell their home and condominiums for whatever return they can get on their investments, and move their money offshore.
Property values have declined over 30 per cent in the last three years because of slow and declining business. Front and Back Street merchants are now demanding a 25 to 30 per cent reduction in their rents.
My prediction is that the foreign reserves will in six month be a lot lower than it is now and the mortgage moratorium will be extended. Here is the scary part for locals that have all their money in local banks and property held in their personal names, if the foreign reserves continue to decline, the Central Bank without you knowing any day can hold and freeze your dollar accounts in the guise of saving the Guilder, and only allow you to withdraw limited amounts of your own money at a time.
I have seen this happen several times before in Argentina, Venezuela, Aruba, Guyana, Jamaica and several other countries. Locals beware - use your heads like the business people and politicians do. Protect what you have worked all your life for - your assets. I warned about staying with the Guilder and not dollarizing after 10-10-10.
Peter Gunn
