Savings Account? Hardly: You're an unsecured creditor getting zippo interest
It Can Happen Here: The Confiscation Scheme Planned for US and UK Depositors
Posted on March 28, 2013 by Ellen Brown
Confiscating the customer deposits in Cyprus banks, it seems, was not a one-off, desperate idea of a few Eurozone “troika” officials scrambling to salvage their balance sheets. A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland (discussed earlier
here); and that the result will be to deliver clear title to the banks of depositor funds.
The National Government [is] pushing a Cyprus-style solution to bank failure in New Zealand which will see small depositors lose some of their savings to fund big bank bailouts . . . .
Open Bank Resolution (OBR) is Finance Minister Bill English’s favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank’s bail out.
Can They Do That?
Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.” The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills.
The 15-page FDIC-BOE document is called “Resolving Globally Active, Systemically Important, Financial Institutions.” It begins by explaining that the 2008 banking crisis has made it clear that some other way besides taxpayer bailouts is needed to maintain “financial stability.” Evidently anticipating that the next financial collapse will be on a grander scale than either the taxpayers or Congress is willing to underwrite, the authors state:
An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company [meaning the depositors] into equity [or stock]. In the U.S., the new equity would become capital in one or more newly formed operating entities. In the U.K., the same approach could be used, or the equity could be used to recapitalize the failing financial company itself—thus, the highest layer of surviving bailed-in creditors would become the owners of the resolved firm. In either country, the new equity holders would take on the corresponding risk of being shareholders in a financial institution.
No exception is indicated for “insured deposits” in the U.S., meaning those under $250,000, the deposits we thought were protected by FDIC insurance. This can hardly be an oversight, since it is the FDIC that is issuing the directive. The FDIC is an insurance company funded by premiums paid by private banks. The directive is called a “resolution process,” defined elsewhere as a plan that “would be triggered in the event of the failure of an insurer . . . .” The only mention of “insured deposits” is in connection with existing UK legislation, which the FDIC-BOE directive goes on to say is inadequate, implying that it needs to be modified or overridden.
An Imminent Risk
If our IOUs are converted to bank stock, they will no longer be subject to insurance protection but will be “at risk” and vulnerable to being wiped out, just as the Lehman Brothers shareholders were in 2008. That this dire scenario could actually materialize was underscored by Yves Smith in a March 19th post titled When You Weren’t Looking, Democrat Bank Stooges Launch Bills to Permit Bailouts, Deregulate Derivatives. She writes:
In the US, depositors have actually been put in a worse position than Cyprus deposit-holders, at least if they are at the big banks that play in the derivatives casino. The regulators have turned a blind eye as
banks use their depositaries to fund derivatives exposures. And as bad as that is, the depositors, unlike their Cypriot confreres, aren’t even senior creditors. Remember Lehman? When the investment bank failed, unsecured creditors (and remember,
depositors are unsecured creditors) got eight cents on the dollar. One big reason was that derivatives counterparties require collateral for any exposures, meaning they are secured creditors. The 2005 bankruptcy reforms made derivatives counterparties senior to unsecured lenders.
http://webofdebt.wordpress.com/2013/...uk-depositors/
Re: Savings Account? Hardly: You're an unsecured creditor getting zippo interest
Sadly, what is happening in Cyprus right now is just the continuation of a trend. In recent years, governments all over the world have turned to the confiscation of private wealth in order to solve their financial problems. The following examples are from a recent article posted on Deviant Investor…
October 2008 – Argentina’s leftist government, facing a gigantic revenue shortfall, proposes to nationalize all private pensions so as to meet national debt payments and avoid its second default in the decade.
November 2010 – Headline – Hungary Gives Its Citizens an Ultimatum: Move Your Private Pension Fund Assets to the State or Permanently Lose Your Pension – This is an effective nationalization of all pensions.
November 2010 – Ireland elects to appropriate ten billion euros from its National Pension Reserve Fund to help fund an eighty-five billion euro rescue package for its besieged banks. Ireland also moves to consider a regulatory move that compels some private Irish pension funds to hold more Irish government debt, thereby providing the state with a captive investor base but hugely raising the risk for savers.
December 2010 – France agrees to transfer twenty billion euros worth of assets belonging to its Fonds de Reserve pour les Retraites (FRR), the funded portion of its retirement system, to help pay off recurring social benefits costs. No pensioners are consulted.
April 2012 – Argentina announces that its Economy Ministry has taken an emergency loan from the national pension fund in the amount of $4.3 billion. No pensioners were consulted.
June 2012 – Treasury Secretary Timothy Geithner unilaterally appropriates $45 billion from US federal pension funds to help tide over US deficits for the remainder of fiscal year 2011.
January 2013 – Treasury Secretary Geithner again announces that the government has begun borrowing from the federal employees pension fund to keep operating without passing the approaching “fiscal cliff” debt limit. The move effectively creates $156 billion in borrowing authority from federal pension funds.
March 2013 – Open Bank Resolution finance minister, Bill English, is proposing a Cyprus style solution for potential New Zealand bank failures. The reserve bank is in the final stages of establishing a rescue scheme which will put all bank depositors on the hook for bailing out their banks. Depositors will overnight have their savings shaved by the amount needed to keep distressed banks afloat.
Can you see the pattern?
http://conspiracyanalyst.wordpress.c...-global-elite/
Re: Savings Account? Hardly: You're an unsecured creditor getting zippo interest
once you give a bank your money, from the bank's point of view, it is a liability.
just like their other debts.
even after MF Global, Peregrine Financial, and Cyprus, Americans think their bank deposit money is 'safe'.
somehow that reminds me of the old saying, "i don't have to be faster than the bear. i just have to be faster than YOU." ... a reference to getting your money out FIRST.
sort of like the Russians did in Cyprus through that one bank that was mostly Russian owned.
on the BRIGHT SIDE ... if Cyprus banks don't have any money, they don't have to worry about bank robberies ? :)
Re: Savings Account? Hardly: You're an unsecured creditor getting zippo interest
I just love how they're reinventing reality right before our eyes and speak of this new contrivance as if it has always been a matter of fact.
This whole "the banks own your deposits" and "you're an unsecured creditor" is just another attempt to bestow value where none has ever existed and to convert the obligations of the bank and their irresponsibility in meeting those obligations or being held accountable for their thievery as being just a matter of you making a bad investment decision, which is your fault.
It's like saying that when you hire a gardener to take care of your property, the property becomes his to use and dispose of as he wishes.
And it just pisses me off to no end when people start regurgitating these contrived memes as if they've always been a part of the equation.
They didn't default on their obligation to you as you still hold their "stock".
https://encrypted-tbn2.gstatic.com/i...m0SWgIfqKXdW1A
Because they deserve nothing better...
Re: Savings Account? Hardly: You're an unsecured creditor getting zippo interest
Most folk think of cash and money in a savings account as synonymous. Most folk do not look upon a dollar in hand as a stock certificate, a share in the national corporation. They take for granted that the dollar will buy X amount of goods and services - it has fixed tangible value. Perhaps, with the revelations out of Cyprus, some folk will broaden their understanding of what a dollar is and act more "responsibly" with "their" money. I think Cyprus is a sentinel event, a warning to us all. There is a sea change occurring in the halls of power. Before, they discussed outright asset siezure in secret. Today, they begin acclimating the public to the idea with small actions here and words there. Tommorrow? Just extrapolate this out and draw your own conclusions.
Re: Savings Account? Hardly: You're an unsecured creditor getting zippo interest
The FRN is not a stock certificate; it is Legal Tender Money, a receipt for our value that we are coerced into using.
Re: Savings Account? Hardly: You're an unsecured creditor getting zippo interest
The real big mind fuk in all of this is the fact that THERE IS NO MONEY, not even legal tender, in any of those accounts.
IT IS ALL PRETEND!
Re: Savings Account? Hardly: You're an unsecured creditor getting zippo interest
An FRN is not "money", but currency-a medium of exchange, often referred to as a "Dollar Bill". The function of a bill is to be paid. Similar to a bearer bond.
Re: Savings Account? Hardly: You're an unsecured creditor getting zippo interest
Quote:
Originally Posted by
Carl
The real big mind fuk in all of this is the fact that THERE IS NO MONEY, not even legal tender, in any of those accounts.
IT IS ALL PRETEND!
The problem is it doesn't matter what the truth is. What matters is what is accepted by the most people. Most people have faith in the dollar, and therefore it has value.
Re: Savings Account? Hardly: You're an unsecured creditor getting zippo interest
Quote:
Originally Posted by
govcheetos
~ often referred to as a "Dollar Bill". The function of a bill is to be paid. Similar to a bearer bond.
You can play with words all you want to legitimize your point of view but it won't change the fact that what you're espousing is BULLSHIT.
"Dollar Bill"
Geez....
