Bank Runs and Hyperinflation

[Large Sarge]

http://www.youtube.com/watch?v=qEz_YwOCYAM

[Shami-Amourae]

^^^^


http://www.youtube.com/watch?v=qEz_YwOCYAM

[Carl]

I don't understand why so called experts on this subject continue to insist that unsecured deposits are under risk of confiscation upon catastrophic failure of the bank when catastrophic failure of a bank means all deposits were lost. What this means is; there are no deposits to be confiscated, they're gone, there's nothing there, all of the deposits went "POOF!" when the bank failed. This is a fundamental consequence of the fraud that is fractional reserved banking and the reason behind the creation of the FDIC.

So basically what they are doing is compounding the fraud that is currency creation through fractional reserved banking, which requires backing by an asset of equal or greater value than the credit created, to creating credit with absolutely no backing at all and calling this creation of un-backed credit "Regulatory Capital", which they then use to offset the failed bank's debts to everyone except the original bank creditors, formerly known as 'depositors'.

Credit/debt as currency is going to die hard and fast, and I would hazard a guess that, if there is any justice left in this world, the creators of that currency would soon follow their creation...not that I'm advocating violence against them, I'm just speculating...

[Sparky]

I don't understand why so called experts on this subject continue to insist that unsecured deposits are under risk of confiscation upon catastrophic failure of the bank when catastrophic failure of a bank means all deposits were lost. What this means is; there are no deposits to be confiscated, they're gone, there's nothing there, all of the deposits went "POOF!" when the bank failed. This is a fundamental consequence of the fraud that is fractional reserved banking and the reason behind the creation of the FDIC.
...


I think this might be the distinction: Typically when there's a failure, it means you can't have your money on demand. But your claim remains intact, such that your funds could be restored at some future time if the bank were to ultimately be re-structured or taken over. I think this is what has happened to some MF Global accounts; funds have been restored for withdrawal after a lengthy suspension.

In contrast, confiscation means that the loss of your funds is declared permanent. Even if there is a re-structuring or takeover, your funds may be confiscated to restore the funds of secured deposits.

[Carl]

It just kills me the number of people falling for this new line of bankster bullshit. Typically (meaning 100% of the time) when there's a bank failure, your deposits (unfunded bank liabilities) are gone, they no longer exist as a currency medium, they are rendered into inert digits on a bank debt tally sheet. There is nothing there to be confiscated, there is nothing there to redistribute, there is only bank debt. The only way anyone's bank accounts can be restored is if someone comes along with enough capital or unencumbered assets to provide backing for the creation of new digits to repopulate people's defunct bank accounts. That is/was the function of the FDIC and the reason it was created. Think about it; if everyone's credited bank accounts retained the currency properties after the bank had failed then there would be no need for the FDIC and the 1930's collapse would have never happened.

This notion that they can reconstitute bank debt into functioning credit is akin to you taking an old car note to your bank and using it to pay your current car note; it's not going to happen. Yet, people are readily bending over and letting the banksters blow this smoke up their collective asses...unbelievable.

[Hitch]

This notion that they can reconstitute bank debt into functioning credit is akin to you taking an old car note to your bank and using it to pay your current car note; it's not going to happen. Yet, people are readily bending over and letting the banksters blow this smoke up their collective asses...unbelievable.

Cyprus was a test to see how the masses accept blind theft of their money going poof. The rules changed so that the depositors share the risk of the bad banks decisions, yet none of the reward of good decisions with low if any interested rates. In fact, we pay fees to give them more of their favorite 'drug'. They are junkies that we supply the drugs too.

You can't make this up, yet nobody sees it. People just accept banking and somehow the bank commercials with nice folks getting loans, etc, gets believed. Maybe a stagecoach, and you think banks are honest folks, who provide security.

If I want to share the risks of the banks decisions, I will buy bank stock. I would never recommend that, but by having money in the bank is just a lose-lose situation. Always identify lose-lose situations and don't play the game.

I keep minimal in my bank account, just enough to pay bills for a couple of months.