We have all been conned, hoodwinked, bamboozled into thinking that “money in the bank” is a good thing. It is not. Remember Cyprus? Money in the bank potentially makes YOU a potential loser.

The ‘guidance’ of the BIS, BoE, and Fed regarding the Cyprus situation was purposely vague, misleading, and overly technical because to plainly cite the legal situation would send everyone running to their bank with their hair on fire to immediately withdraw their funds. In summary, this is exactly how “money in the bank” works:

- When you deposit YOUR money in the Bank, you transfer ownership of that money to the Bank. It becomes THE BANK’S MONEY and as a depositor you instantly become an unsecured creditor.

- You have a ‘claim’ on an equal sum of money and can ask for it back.

- If the Bank won’t return an equal sum to you, it can be sued under tort law, so long as the Bank is solvent… providing you ask for your money back.

- If the Bank is broke then as an unsecured creditor you wind up with pennies on the dollar or even zero since secured creditors of the Bank get paid first.

This is the British LAW. For reference, it was established under UK law in 1848 by ‘Foley vs. Hill.’ Once a deposit has been made into a Bank, the Bank becomes a debtor and the depositor a creditor. You have pointed out similar precedents in US law.

The Bank has NO trusteeship or fiduciary duty to depositors, and cannot be prosecuted under criminal law (a) Eric Holder was RIGHT on this point, and (b) not surprised that he did not cite the exact legal reason in his statement – Banks cannot be held liable to depositors for gambling (think ‘OTC derivatives’ the same known as swaps) or misusing (think risky loans, bad investments, sovereign bonds like Greece, or huge bonuses to themselves).

Almost universally, depositors think that money in the Bank is THEIRS. It is NOT. Almost no depositor thinks of themselves as a creditor, much less an unsecured creditor. This is the Bankster game in plain sight. It’s almost as funny as the saying ‘sound as a dollar.’

In closing, with a respectful hat tip to Mr. Jim Sinclair, it’s time to start getting out of the system.

As Bank depositors learned in Cyprus, that money IN the Bank isn’t really there for them when things go South. How many of them do you think now wish they had their assets outside the system before it blew itself up?

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In Cyprus the money was never in the bank. It blew up a long time ago. The statements depositors received were cartoons that could only function as long as the Ponzi plan worked. The losses ripped through the bank’s capital a long time ago, and hammered the banks cash position which is the depositor’s accounts.

The money was already far gone well before the supposed blockage and confiscation

of over 80% of the deposits of large accounts over 100,000 EU.

There was a minor bail out in Cyprus but not of major depositor’s money.

Does this situation exist elsewhere or everywhere?

Rogers (Jim Rogers, investor, author, economist) cites a previous exchange between Ron Paul (former congressman from Texas, presidential candidate) and Fed chief Ben Bernanke, in which Bernanke outright declared that gold is not money, further cementing his reputation as nothing more than a monetary charlatan:

The present head of the central bank does not understand economics, he does not understand finance, he does not understand currencies. All he understands is printing money. His whole intellectual career has been devoted to the study of printing money. And, as you know, we have given him the printing presses.

That strategy, of course, will be disastrous. It’ll further impoverish Americans by reducing wages relative to rising prices for essential goods, while increasing the national debt to unmanageable levels.

What comes next, according to Rogers and Paul, will take the majority of the population by surprise because most people simply can’t fathom the possibility of such a thing ever happening in the Land of the Free:

Rogers: They will take our retirement accounts. They will take our 401k’s. They will say, ‘you’ve all been having such a hard time earning money in your 401k’s, so what we’re going to do is we’re going to save you.’

Paul: I don’t doubt it for a minute. They’ll do what they think is necessary. and they’ll use force, and they’ll use intimidation, and they’ll use guns. Because, you can’t challenge the state and you can’t challenge the State’s so-called right to control the money… I think that’s very possible at that time when things get a lot rockier than they are now.

There are well informed students of economics, financial markets and history. They understand that global governments, especially in Europe and the United States, have bitten off more than they can chew. And they see a continuation of the same policies that have led to the worst economic conditions since the Great Depression.

http://www.shtfplan.com/headline-news/watch-its-a-worldwide-phenomenon-a-lot-more-chaos-yet-to-come_05032013

When the Columbia University professor Jeffrey Sachs unloaded at a Philadelphia Fed conference in April, telling attendees that most of the daily business of Wall Street is “prima facie criminal behavior,” he set off a small storm, but not exactly in the way one might think.

MoneyBeat caught up with Professor Sachs, who talked about the reaction to his appearance, the lack of Wall Street prosecution, the effects of big money on the political system, and the shortfalls of Dodd-Frank and regulatory reform.

When I really started to count in fact and keep track of the number of lawsuits, and the number of settlements, and it’s amazing actually how many there are, of course. Libor, Abacus, other financial fraud scandals, money laundering, insider trading. The list is actually extraordinary. The frequency of new cases, new settlements, new SEC charges, is stunning. And the lack of any apparent remorse from leaders of the industry.

[There hasn't been one] major figure in the industry acknowledging this rot, and also calling upon the industry to clean itself up. And I find that amazing because I would’ve expected at least one or two voices that would’ve have played that role and that hasn’t happened yet.

Why the lack of prosecution?

The legal defenses are very powerful, the lobbying is very powerful, the government in general is completely squeezed even if it would like to regulate. But we also have a revolving door of senior regulatory officials, congressional staff, congressmen and senators. Everyone’s in on this. So the question is how is this going to be cleaned up, what will it really take to get this under control? We just haven’t seen glimmers of that yet.

What will it take to change the system?

I think that the public is utterly disgusted, of course, and that is a major start.

There’s going to be a massive backlash. But some thought, and I thought at the beginning, that Obama was going to bring in control, that’s essentially what he promised, but he actually essentially brought in Wall Street to do the clean up. Perhaps the next government, or perhaps the next crash, it’s hard to say. But what one does feel is that the extent of abuse, the stench of it, is reaching such a high level that we’re not in an equilibrium, political or social, right now.

This is explosive stuff (scandals like Abacus and insider trading). It’s unbelievable. So far it hasn’t stopped the practice, but it can’t get more in your face than this actually.

I think in the end the question will be for our politics in general, whether a political movement not based on mega-donations can win political control. I believe that it can actually.

Some movement like the populist movement or the progressive era of the past is going to rise and say ‘we don’t need contributions, we’re not taking them, and if you the American people want a way out of this that doesn’t involve politicians bought for big money, we’re the ones.”

But short of that I don’t see a way out. Our politicians are not heroes, to say the least, and they seem to have no taste for this.

Will Dodd-Frank be effective?

It’s clearly being eaten alive and at critical points — of too big to fail and the control of derivatives — I doubt that it’s going to have any real effect as it is right now. The lobbying is just simply so overwhelming that I doubt that it’s going to have much sticking power.

What about Brown-Vittner?

This is on the right track, that basically we need more capital in the banks, fractional reserve banking by itself is an underlying structural problem, it’s then made vastly worse by the dismantling of regulations, by the intermixing with the so-called investment banking and basically the hedge funds, investment banks and commercial banks all being one party now, but reducing the amount of leverage is I think on every economist’s, near the top or at the top, of every economist’s list.

I would put criminal enforcement number one, statesmanship number two and reduction of leverage as number three.

Jim Sinclair’s Commentary

www.jsmineset.com

Stay in the system, and prepare for the shock of your life.

Bail-out Is Out, Bail-in Is In: Time for Some Publicly Owned Banks
Posted: 05/02/2013 12:41 pm

The crossing of the Rubicon into the confiscation of depositor funds was not a one-off emergency measure limited to Cyprus.  Similar “bail-in” policies are now appearing in multiple countries.  (See my earlier articles here.)  What triggered the new rules may have been a series of game-changing events including the refusal of Iceland to bail out its banks and their depositors; Bank of America’s commingling of its ominously risky derivatives arm with its depository arm over the objections of the FDIC; and the fact that most EU banks are now insolvent.  A crisis in a major nation such as Spain or Italy could lead to a chain of defaults beyond anyone’s control, and beyond the ability of federal deposit insurance schemes to reimburse depositors.

The new rules for keeping the too-big-to-fail banks alive: use creditor funds, including uninsured deposits, to recapitalize failing banks.

But isn’t that theft?

Perhaps, but it’s legal theft.  By law, when you put your money into a deposit account, your money becomes the property of the bank.  You become an unsecured creditor with a claim against the bank.  Before the Federal Deposit Insurance Corporation (FDIC) was instituted in 1934, U.S. depositors routinely lost their money when banks went bankrupt.  Your deposits are protected only up to the $250,000 insurance limit, and only to the extent that the FDIC has the money to cover deposit claims or can come up with it.

The question then is, how secure is the FDIC?

********

FDIC has already received to additional cash infusions from the Congress.  Payout from bank failures had already twice made the FDIC insolvent.

Why would the government want instant citizenship for millions of illegal aliens?  Perhaps that is because it will translate into millions of new, additional votes.

As we move toward a financial collapse with the FED continuing to create $85 billion per month, the  value of the dollar will continue to drop.   Bank balance sheets continue to show insolvency, so there is a need to obtain more money to repair those balance sheets.

Argentina just nationalized private pensions.  The U.S. has already begun to consider doing the same.  The Labor Department has already held hearings on that topic in December 2012. There are trillions of dollars in American pension plans.  In order to achieve this ‘money grab’ of trillions of dollars in privately held wealth there will be a need of sufficient voters to pressure members of congress to “protect the citizens” and their financial futures.  Consider what the government has done with management of social security . . . 

The solution: acquire millions of new voters who will be appreciative of being given citizenship and ‘un-earned’ entitlement benefits.   Create a new majority to vote away money from those that earned it and transfer those monies to the government to be partly re-distributed to those new citizens for new found benefits and to the insolvent banks.

One ‘new law’ will lead to the other.   

Today legendary trader Jim Sinclair told King World News that today is a day of financial infamy as Cyprus depositors have now officially been flushed.  Sinclair also stated that history will show this day as being as serious as the flushing of Lehman Brothers.  Below is what Sinclair, who was once called on by former Fed Chairman Paul Volcker to assist during a Wall Street crisis, had to say in this remarkable interview.

Eric King:  “Jim, we now know the answer to the ‘Cyprus Solution.’”

Today legendary trader Jim Sinclair told King World News that today is a day of financial infamy as Cyprus depositors have now officially been flushed.  Sinclair also stated that history will show this day as being as serious as the flushing of Lehman Brothers.  Below is what Sinclair, who was once called on by former Fed Chairman Paul Volcker to assist during a Wall Street crisis, had to say in this remarkable interview.

Eric King:  “Jim, we now know the answer to the ‘Cyprus Solution.’”

Sinclair:  “Yes, Cyprus depositors have now been flushed.  The Bank of Cyprus, the island’s largest bank said it has converted 37.5% of deposits exceeding 100,000 euros into a Class A share, with an additional 22.5% held as a buffer for possible conversion in the future.

Anther 30% will be temporarily frozen and held as a deposit.  So the amount of money that has been taken from the Cyprus depositors is an all practicality almost their entire accounts.  Major depositors funds have now been taken in grand style.

Depositors everywhere are now defined as lenders to the banks.  Today is a day of financial infamy.  History will see this event as serious as the flushing of Lehman Brothers….

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New Zealand and Canada have made ‘sounds’ that they may do the same thing.  How long until this maneuver is used here with our ‘insolvent’ banks?

Government Sets Its Sights on Private Retirement Accounts: “Giant Effort to Redistribute the Wealth of America’s Older Citizens”

Mac Slavo
SHTFplan.com
Nov 21, 2012

A new effort by the Obama administration, Congress, the Treasury Department and labor unions aims to fundamentally alter how Americans plan and save for retirement.

Warnings have been popping up over the last several years about the possibility of re-appropriating the $3.5 Trillion sitting in private retirement and spreading those funds around to Americans who are deemed less fortunate.

This couldn’t possibly happen in America, right? At one time, most Americans also believed heath care mandates that force Americans at the barrel of a gun to surrender portions of their earnings into a universal system for all would never happen. Well, it did.

And now, those who would control and regulate every aspect of our lives are making a new push; one whose efforts will ultimately end in the seizure and redistribution the personal retirement savings of every American who has ever put money into a 401(k) or IRA.

This is no longer in the realm of conspiracy, but rather, public record.

A recent hearing sponsored by the Treasury and Labor Departments marked the beginning of the Obama Administration’s effort to nationalize the nation’s pension system and to eliminate private retirement accounts including IRA’s and 401k plans, NSC is warning.

The hearing, held in the Labor Department’s main auditorium, was monitored by NSC staff and featured a line up of left-wing activists including one representative of the AFL-CIO who advocated for more government regulation over private retirement accounts and even the establishment of government-sponsored annuities that would take the place of 401k plans.

“This hearing was set up to explore why Americans are not saving as much for their retirement as they could,” explains National Seniors Council National Director Robert Crone, “However, it is clear that this is the first step towards a government takeover. It feels just like the beginning of the debate over health care and we all know how that ended up.”

…

A representative of the liberal Pension Rights Center, Rebecca Davis, testified that the government needs to get involved because 401k plans and IRAs are unfair to poor people. She demanded the Obama administration set up a “government-sponsored program administered by the PBGC (the governments’ Pension Benefit Guarantee Corporation).”

…

Such “reforms” would effectively end private retirement accounts in America, Crone warns.

“These people want the government to require that ultimately all Americans buy these government annuities instead of saving or investing on their own.The Government could then take these trillions of dollars and redistribute it through this new national retirement system.”

…

“This effort ultimately is designed to grab the retirement nest eggs of America’s senior citizens. This new government annuity scheme, even if it is at first optional, will turn into a giant effort to redistribute the wealth of America’s older citizens,” explains Crone. “This scheme mirrors what I expect the President will try to do with Social Security. He wants to turn that program into a welfare program, too.”

Via: National Seniors Council

With the re-election of President Obama, a majority Democrat Senate and powerful organization and lobbying from labor unions, we can fully expect legislation that will shift private accounts into the public coffers to become reality in the not too distant future.

In fact, the push to mold the perceptions surrounding this issue is already on, as highlighted in a recent Market Watch article which claims to explain the 10 Things 401(k) Plans Won’t Tell You.

Did you know, for example, that 401(k) plans aren’t supposed to provide you with full retirement benefits, and that they were originally intended to be “mere supplements” to other plans, and that they only “benefit the rich?” Not only that, but according to the article, no one can really tell you how much money you’re going to need; all of those math formulas and expert calculations were all wrong. Additionally, there are so many hidden fees that you’re losing hundreds of thousands of dollars to Wall Street (most of us knew that one).

And all this time, the millions of Americans who contributed their money to these accounts over the last three decades were under the impression that their accounts would one day grow into a retirement nest egg from which retirees could spend their days in comfort and relaxation.

Nope. We had it all wrong. Private retirement accounts were never actually designed to ensure that you could retire! Only a government managed retirement plan can ensure that you will have the money you need when you turn 59 1/2. Only they will be able to ensure you don’t pay excessive, hidden fees (even though they could have created legislation to require firms to overtly disclose this information int he first place). And, only the government can provide 100% full retirement coverage, not just supplemental funds. Oh, and they also know WHEN you should retire, currently 65 years of age.

It’s on folks. They are going to hit Americans from all angles on this one.

First, the political hearings that will claim only the rich are benefiting from private retirement accounts.

Then they’ll point out how stock market crashes and volatility put your money at risk. In fact, if we do have another market crash, look for this to be a key reverberation.

Then they put the spin machine into action, so that you think you’re getting unbiased analysis and truth.

Then they open the guilt spigot and make those who have personal retirement savings wonder if they are being greedy, and those who don’t have savings will direct their anger not just at the rich, but anyone who has put any money away.

Finally, they will pass a bill, which we have to pass first in order to know what’s in it, and it’ll be a done deal.

The government of this country is coming for everything they can get their hands on.