Lloyd’s Of London Pulls Out Of European Banks – What This Means For You

Lloyd’s of London, a 323-year old insurance company, the oldest in the world, whose business it is to underwrite the likelihood of calamities, disasters and losses of all sorts all over the world, has withdrawn its capital out of many European banks.

Said the company’s Finance Director, Luke Savage, “If you’re worried the government itself might be at risk, then you’re certainly worried the banks could be taken down with them.” (Newsmax.com December 4, 2011)

Frankly, it is even more likely that the combination of austerity programs, increased taxation and the downward plunge of the various economies throughout Europe already causing deep concern could result in the downfall of many European banks despite what happens with the various governments. The mere fact that Lloyd’s has pulled its cash out of many banks is reason enough to be very concerned about the likely future of these banks and the economy as a whole.

Furthermore, it is impossible to discount the enormous effect this will have not just on Europe but also on the entire world, including the United States, as our economies are all interconnected.

It would be imprudent to ignore this action and do nothing about it personally. The question is, what happens if the downfall of the European banking system does occur? What should you do to protect your business? Such an action will accelerate the downfall of our own financial systems and the loss of commerce and the default of loans will be astronomical.

So what are we to do?

1. Get out of debt, do your debt workouts, be prepared, get liquid and solvent.

2. Get out of the stock market if you are in it. Reel in your accounts receivables as many of your clients will not be able to pay you.

3. Get liquid and put your cash into a safe investment, into a safe bank, into a safe country.

4. Get lean, hunker down, get profitable.

Wait it out and buy when the market crashes.

That’s exactly what Lloyd’s is doing.