bank failure*BREAKING SD ALERT*
Editor note: Bringing this massive story back to the top of the news feed for those who missed it over the holiday weekend.

On Wednesday, SD broke the news that Canada had buried a provision for depositor bail-ins for systemically important banks deep inside its official 2013 budget, and stated that the Cypriot bail-in was not just a one-off event, but is in fact the new collapse template for the entire Western banking system.

We suspected that the same policy change had been made by the US & the UK, but was simply yet to be discovered, buried in the website of a Federal agency.

We suspected correctly…

 

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In the introduction, the resolution informs readers that the FDIC and the Bank of England have been working together to formulate the new bail-in model for future bank failures:

The Federal Deposit Insurance Corporation (FDIC) and the Bank of England—together with the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, and the Financial Services Authority— have been working to develop resolution strategies for the failure of globally active, systemically important, financial institutions (SIFIs or G-SIFIs) with significant operations on both sides of the Atlantic.
The goal is to produce resolution strategies that could be implemented for the failure of one or more of the largest financial institutions with extensive activities in our respective jurisdictions. These resolution strategies should maintain systemically important operations and contain threats to financial stability. They should also assign losses to shareholders and unsecured creditors in the group, thereby avoiding the need for a bailout by taxpayers.


The joint US/UK resolution states that depositor haircuts are already legal in the UK thanks to the 2009 UK Banking Act:

In the U.K., the strategy has been developed on the basis of the powers provided by the U.K. Banking Act 2009 and in anticipation of the further powers that will be provided by the European Union Recovery and Resolution Directive and the domestic reforms that implement the recommendations of the U.K. Independent Commission on Banking.  Such a strategy would involve the bail-in (write-down or conversion) of creditors at the top of the group in order to restore the whole group to solvency.

And that the legal authority has already been given in the US buried in Dodd-Frank:

It should be stressed that the application of such a strategy can be achieved only within a legislative framework that provides authorities with key resolution powers. The FSB Key Attributes have established a crucial framework for the implementation of an effective set of resolution powers and practices into national regimes. In the U.S., these powers had already become available under the Dodd-Frank Act. In the U.K., the additional powers needed to enhance the existing resolution framework established under the Banking Act 2009(the Banking Act) are expected to be fully provided by the European Commission’s proposals for a European Union Recovery and Resolution Directive (RRD) and through the domestic reforms that implement the recommendations of the U.K. Independent Commission on Banking (ICB), enhancing the existing
resolution framework established under the Banking Act.
The development of effective resolution strategies is being carried out in anticipation of such legislation.
The unsecured debt holders can expect that their claims would be written down to reflect any losses that shareholders cannot cover, with some converted partly into equity in order to provide sufficient capital to return the sound businesses of the G-SIFI to private sector operation. Sound subsidiaries (domestic and foreign) would be kept open and operating, thereby limiting contagion effects and cross-border complications. In both countries, whether during execution of the resolution or thereafter, restructuring measures may be taken, especially in the parts of the business causing the distress, including shrinking those businesses, breaking them into smaller entities, and/or liquidating or closing certain operations.


The resolution states that while the US would prefer large financial institutions be resolved through ordinary bankruptcy, depositor wealth confiscation will be pursued in the case of a systemically important institution (i.e. BOA, JPMorgan, Goldman Sachs, etc):

As demonstrated by the Title I requirement of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), the U.S. would prefer that large

financial organizations be resolvable through ordinary bankruptcy. However, the U.S. bankruptcy process may not be able to handle the failure of a systemic financial institution without significant disruption to the financial system.

 

The resolution authority states that shareholders would lose all value prior to depositor scalpings:

Under the strategies currently being developed by the U.S. and the U.K., the resolution authority could intervene at the top of the group.  Culpable senior management of
the parent and operating businesses would be removed, and losses would be apportioned to shareholders and unsecured creditors. In all likelihood, shareholders would lose all value and unsecured creditors should thus expect that their claims would be written down to reflect any losses that shareholders did not cover.

Under both the U.S. and U.K. approaches, legal safeguards ensure that creditors recover no less than they would under insolvency.

 

The banksters plans for a bail-in resolution agency include investment banks and clearing houses as well as deposit bearing institutions!!!

The introduction of a statutory bail-in resolution tool (the power to writedown or convert into equity the liabilities of a failing firm) under the RRD is critical to implementing a whole group resolution of U.K. firms in a way that reduces the risks to financial stability. A bail-in tool would enable the U.K. authorities to recapitalize an institution by allocating losses to its shareholders and unsecured creditors, thereby avoiding the need to split or transfer operating entities. The provisions in the RRD that

enable the resolution authority to impose a temporary stay on the exercise of termination rights by counterparties in the event of a firm’s entry into resolution (in other words, preventing counterparties from terminating their contractual arrangements with a firm solely as a result of the firm’s entry into resolution) will be needed to ensure the bail-in is executed in an orderly manner.

The existing Banking Act does not cover nondeposit-taking financial firms, notably investment banks and financial market infrastructures (clearing houses in particular), the failure of which, in many cases, would also have significant financial stability consequences. The Banking Act also has limitations with regard to the application of resolution tools to financial holding companies. The U.K. is in the process of expanding the scope of the Banking Act to include these firms. This is expected to be achieved through the introduction of the U.K. Financial Services Bill, which is due to complete its passage through Parliament by the end of this year.

 Exactly as played out with the Cyprus template, depositors will receive equity shares in the new, bailed-in institution:

The remaining claims of the debt holders will be converted, in part, into equity claims that will serve to capitalize the new operations. The debt holders may also receive convertible subordinated debt in the new operations. This debt would provide a cushion against further losses in the firm, as it can be converted into equity if needed. Any

remaining claims of the debt holders could be transferred to the new operations in the form of new unsecured debt.

 

Exactly as played out with the Cyprus template, depositor funds will be stolen in whatever quantities are required to keep the TBTF zombie bank afloat:

Once the recapitalization requirement has been determined, an announcement of the final terms of the bail-in would be made to the previous security holders.

This announcement would include full details of the write-down and/or conversion.
Debt securities would be cancelled or written down in order to return the firm to solvency by reducing the level of outstanding liabilities.  The losses would be applied up the firm’s capital structure in a process that respects the existing creditor hierarchy underinsolvency law. The value of any loans from the parent to its operating subsidiaries would be written down in a manner that ensures that the subsidiaries remain solvent and viable.


For now (until the rules are changed when a greater need for funds arises, funds will only be stolen from depositors with more than the FDIC insured $100,000 in their account:

Insofar as a bail-in provides for continuity in operations and preserves value, losses to a deposit guarantee scheme in a bail-in should be much lower than in liquidation.

Insured depositors themselves would remain unaffected. Uninsured deposits would be treated in line with other similarly ranked liabilities in the resolution process, with the expectation that they might be written down.

 


In order for the resolution to work, the banksters state that the public must be convinced their deposits are safe, when in fact they are subject to bail-in confiscation:

 

Similarly, because the group remains solvent, retail or corporate depositors should not have an incentive to “run” from the firm under resolution insofar as their banking
arrangements, transacted at the operating company level, remain unaffected.  In order to achieve this, the authorities recognize the need for effective communication to depositors, making it clear that their deposits will be protected.

0.1% interest on savings deposits with the now VERY REAL THREAT OF COMPLETE CONFISCATION in the US & UK doesn’t sound like such a great return to us.

The Fed appears to be making a calculated play to force savings out of the TBTF banks and into stocks and real estate, a move that is likely to backfire spectacularly.

GOT PHYZZ??

Click here for the full joint resolution by the BOE and FDIC:

 

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  1. These bastards are driving me crazy, get your money out now. Hell I’m glad I listened a couple of years ago to the people on this forum and others.
    These Elitist bastards should be Hung and Quartered and even that is to soft for theses Evil Bastards.

    • “These bastards are driving me crazy…”
       
      Same here, Charlie, only now it is more of a putt than a drive.  :-/
       
      “These Elitist bastards should be Hung and Quartered and even that is to soft for theses Evil Bastards.”
       
      Rub ‘em with 80 grit sandpaper and roll ‘em in salt, says I.  GRRR!
       
       

    • The point IS for them to drive you crazy.  The harder and harder they do us, the more of us go schizo, and make easy meat for them.
      The point of the volatility is to drive people away, the point of the hammering is to discourage us, and drive away hope
       
      The way beat them is to stay balanced and stack.
       
      BTW anyone have a Link to that Canadian Budget PDG ?

  2. Just when I thought that the ECB’s handling of the PIIGS was ham handed, I feel so warm and fuzzy to know that we’ve been lied too, killing us softly with their words.
    Very few people in this country will understand this, much less realize the full impact of these bail-in measures once they start being fully implemented.   It’s fairly clear now why we’ve seen so many cyber attacks and short term shut downs of banks in the UK, Ireland, Italy and even here.  Testing, testing, the sound you are now about to hear is your money vaporizing.   The real fraud I see here is that we will be told that FDIC will save all those with $250,000 or less.  Problem here is that FDIC as about $9 billion in cash and $50 billion in lines to pay depositors.Match that up to hundreds of billions of losses that appear overnight and the FDIC does not have the horsepower to protect these accounts.   Now it makes sense why the FDIC reduced the unlimited coverage  on December 31, 2012.  My post was right for the wrong reasons.  This whole scam’s been the works for 2-3 years.  The FDIC will be collateral damage to this high handed scam against depositors. There will be a day or so of boo boo face sermonizing from TPTB that ‘we are soooo sorry and we didn’t see this coming’ Yet they knew with mathematical precision that this would be the result. Cyprus is the test of the system and it worked perfectly, notwithstanding the smart folks who see this scam setting up and remove as much as they can from their accounts in anticipation of some pivotal event that causes a systemic failure at a large bank.
      Like was said by another SD poster, your deposits are a LIABILITY on the bank balance sheet.  Liability means you are in line to be paid. You are way, way, way back in line. If your account is more than $250,000, you will lose 100% of the amount over $250,000 through the bail-in. You’ll be offered stock in a bankrupt bank. That’s is comforting.
    The TBTF banks each have trillions in derivatives that would gut them in 24 hours. There’s between $8-9 trillion in customer deposits in ALL of the TBTF banks. They are leveraged 15 to 1. Any one bank failing through derivatives would strip every dollar of every TBTF bank in no time at all. The Fed stress tested the 18 largest banks and said they could sustain a collective loss of about $488 billion. That half a trillion would be a drop in the bucket if the derivatives go south.  If any one of these TBTF banks appears to be careening into the tank, the government will pull the nuclear trigger.  Accounts will vaporize in a New York second as the bank is shut down. Losses could be in the trillions. Overnight or preferrably over the weekend, the bank will close as your money is stolen. Your FIAT will like a fly stuck in amber. It looks alive but it is dead, dead, dead. You’ll get fly crap in return.
    If you think that the government’s assurance that you will get stock in a rebuilt, renewed, revitalized bank is a good thing, your best bet is to short the crap out of that bank. Like EU zone FinMin Douchel-Boom said ‘If you have money in an EU Bank, check the financial health of that bank.’
    Well Duh!
    You will be sorely disappointed in the stock received for your hard earned funds  You will be a secondary, strap hanging subordinated stake holder in a nationalized bank that will leave you with the same rights as the white collar pension holders of GM or the schmucks who bought into GNMA and Freddie Mac when Barney Frank shouted from the rooftops that these two firms were great investments and would never fail. Not only did they fail with losses of billions to the share holders, this is the same Barney Frank who co-authored this POS theft machine. You just can’t make this up, my friends. It just amazing
    Once one TBTF bank hits the skids, the rest will be hit with bank runs that make the Boston Marathon look like an AARP gurney Olympics.  The entire banking system could and would be locked down instantly and your money, ATMs and ability to transact any financial matters will stop dead in their tracks.
    Now you know why the DHS bought billions of rounds of ammo and 2,700 MRAPS. Picture Herr Napolitano in front of JPM,  standing in full DHS regalia telling us to be calm and carry on.
      All this is a piece of the big picture.  Connecting the dots is not that tough once the gloves come off and the banksters and politicians show their real intentions.
    Another way to view this rape of Cyprus is to think that these banks were like gambling casinos, along the lines of the Sands or Ventian. These casinos wager heavily on their own debt as well as investments in other casinos affiliated with their operations. They take in customers money through gambling and other services and then use these funds to place their own bets, which turn out badly. Instead of the corporation failing, declaring bankruptcy and closing down, the government tells all the players they must return to the casino, place wagers and lay down their bets. But in this case, the chances of winning at zero. They are forced to bet on a losing hand to save the gambling mecca.

    • Well said @Agxiik you paint one ugly picture for what’s down the road for the Sheepee.
      But you did make me laugh with this quote, “Your FIAT will like a fly stuck in amber. It looks alive but it is dead, dead, dead. You’ll get fly crap in return.” LMAO

    • “If you think that the government’s assurance that you will get stock in a rebuilt, renewed, revitalized bank is a good thing, your best bet is to short the crap out of that bank. Like EU zone FinMin Douchel-Boom said ‘If you have money in an EU Bank, check the financial health of that bank.’  Well Duh!”
       
      Well, said, AG.  There might be a way to buy one’s own deposit insurance, though.  That would be to buy put options on your bank in sufficient amount that if the bank fails, you make enough on the options to cover or even exceed your losses. Options are usually cheap enough that this could be done for a reasonable sum.  This could be a viable option for those who do not want to remove their money from their local bank or CU.  I’m not an options guy, so this is just a food for thought comment and anyone trying it will need to do their own due diligence.
       
      I know that the FDIC supposedly insures depositors but your info clearly shows that they only have a tiny percentage of the money needed in the event of a large scale banking disaster.  How much is their guarantee REALLY worth, especially for those whose life savings might be $100k or less?

  3. I like to sum it up in two words…
     
    WE’RE SCREWED!!!!
    Stackers of PM’s will be rewarded, like William Wallace said facing the British….Hold, hold, hooooollllldddddd!! 
     
    Preppers of all persuasions are now the sane and the sensible!!!

  4. due to internet education, the ability to read & research on the net, i knew what was coming a few years ago.   i’ve done my best to prepare for a new monetary system & currency collapse.    i have warned my friends & family now for the past few years & no one believes a word i have to say .    in fact , i’ve become a laughing stock & my own sister has declared this topic “off limits” when we are together, she can’t listen to this nonsense anymore.  
    i’d like to have the last laugh, but, it will be a very painful last laugh.   also, i do not have enough resources to save the people who laughed at me…..& i just know they will be knocking at my door for food. 

    • Yes, this does pose a big problem for many of us.  We see the BS flying towards the revving fan and want others to buy a plastic rain suit, boots, gloves, and goggles but we just can’t get any takers.  Been there, done that.  While it might be somewhat satisfying that when the SHTF to just shrug and say “Yep.  No surprise.  Good thing I’M ready for it!” or even “Hey, Sis, how’s that denial working out for ya?”.  lol
       
      But, even though we have Sheeple in our own families, we still love the fuzzy little critters and want to look after them as best we can.  I will say this, though… neither my kids nor my grand kids are gonna go hungry, thirsty, or cold if I can help it and I will not risk them for the sake of those who laughed at me for being prepared.  If we do get a SHTF situation during my lifetime, it will be the worst thing that anyone now living likely will experience.  It will be very hard times and it will require some hard people to get through it.
       

    • @ Lynny! I know exactly how you feel! However, they will come and turn to you at the time of crisis. They will apologize and come begging for you to assist them sad to say? I told you so will be on your face. I have told everyone that I could possibly tell. Yet they are so dependent on what the news feeds them and walk around with blinders on. I have even told those close to me to move out of highly populated areas and get plenty of food and whatever you need to survive. 
      It will be very very ugly within the next 18 months. The Stock Markets closed until Tomorrow will be something to behold of for Precious Metals Owners. We have no idea what to expect tomorrow night in Asia.

  5. Actually, stackers will be screwed too. Just not as much as fiat zombies. Having PMs by itself will be problematic when we try to use that asset for actual purchases. The only way to use them will be the black market since the gov will want to monitor transactions due to capital controls. Dealing in the black market presents some unique “difficulties” of its own, i.e, dealing with dubious people, exchange rate control, informants, and just outright refusal to accept PMs in trades.
     
    As Marc Faber said, “My concern is that we are going to have a systemic crisis where it is going to be very difficult to hide. Even in gold, it will be difficult to hide.”

    Read more: http://www.businessinsider.com/faber-gold-wont-be-a-place-to-hide-2013-3#ixzz2Oz4us2Mb
    But it will be somewhat better than NOT being in PMs.

    • If there is a systemic banking crisis, we are all screwed. In the short term converting PM into anything that is really useful is going to be problematic. But this is die hard worst case scenario. The world has never seen such a scenario and in my humble opinion, never will. I think worst case scenario will be inflation, lose of money some place and economics going into the dark ages for about 2 years.
       
      The only thing that PM’s do is protect your wealth, outside of the Fiat system. You might make some money on the exchange, but as a general rule you won’t loose any of your original converted wealth that is now in PM’s. This is true for any valued asset class.

    • Marc Faber is trying to scare us, which should tell us something. In addition, he never gives a straight answer on anything, even when he was recommending PMs in the last years. He is fearmongering, just like Alex Jones, Clif High, Jeffrey Christian, and the MSM. Don’t fall for it. Be confident, PMs are the only way to go.

      Marc Faber has revealed himself as the enemy with this advice.

      Things are about to go to hell, and before they do, these creeps all crawl out to give us the wrong advice, like the smashes in Au and Ag. They don’t want ANY riders to safety, except for them.

      Having PMs will make us WEALTHY versus being totally finished with NO recourse.

    • I dunno, Chief.  I can see where it could be seen that way but maybe Faber IS just trying to get people off their butts and if he has to scare people into action, he is willing to do that.

  6. Every UK-REGULATED account gets £85,000 protection as standard per Financial Institute. Fact.
     
    If you put your money in more than one institute you can probably get up to £500,000 protection as long as it is UK based.
     
    There has never been protection above this. Nothing secret, buried or sinister there. 
     
    To be honest if you got savings greater than £85K and you keep it in a savings account attracting 3% APR tops, then you deserve to have your money taken from you when inflation is running way higher than this. They have been taking your money away from you already :)
     
    As for Pension schemes, they got LARGE print saying that your investment can go up or down. I think this covers any loss. Buyer Beware
     
     
    I am 100% behind the principal of this site, but come on…better journalism.
     

    • WaitingForSilver…Deposit insurance is nothing more than another underfunded social program that mathematically can not deliver the promised benefit.

    • Comeon you hardly believe when tshtf this will stand? Have a bit of sence, i dont know the whole protection wording but im sure a haircut could be labeled a tax and then the protection would be worth sweet fa!

    • Actually, with the FSCS, there would be a very strong case for a High Court challenge if there was a refusal to settle up and protect deposits of £85k or below; the levy charged to fund the FSCS was effectively instituted by HMG through one of their statutory instruments.
       
      Besides, for the sake of printing a few Titan notes, I’m not sure the BoE will be that upset.

    • They would never seize deposits in the US. It would be deemed as Un-American. My only question is why do people assume their money is safe in a bank?
       
      If you keep PM’s in your house, you run the risk of getting burgled and having your wealth seized by criminals. But guess what, you got insurance to cover your loses. That is if you can prove that you had the PM’s in the first place to your insurer. :)
       
       

    • “If you keep PM’s in your house, you run the risk of getting burgled and having your wealth seized by criminals. But guess what, you got insurance to cover your loses. That is if you can prove that you had the PM’s in the first place to your insurer. ”
       
      Only if you have a rider that specifically covers your PMs.  You pay considerably more for that than you would just for a home-owners typical policy.  Yes, you do have to document the exact PMs you have, as they will only cover that which is fully documented.  I checked with my insurance company about this and discovered that it was cheaper to buy a 24/7 monitored video alarm system than it was to insure my bullion.  While insurance can be good, there are a number of hoops through which one must jump to set it up and then to keep it current.
       

    • “..here in the USA we’d wake up the next morning with a new government or no government.”
       
      You’ve got to be kidding me! The psychotropic drug addled, American Idol mesmerized, news illiterate average citizen is going to pick up their arms and march on DC?!?!?! Look at all the Constitutionally illegal legislation and executive orders that have been passed by the Usurper in Chief and his cadre of chimps in congress over the last four years and count how many times have we gotten a populist uprising?!?!?! Hmmmm, I think you could count the times on one finger. Unfortunately, that finger is up our collective ass!

      Really! You’re too F’ing funny!

    • I insured my PMs while Ag was £18 ($27) but under a separate condition that I added on to my standard policy… which I paid a premium for. I can’t imagine being compensated in the specie should my PMs be stolen. Besides, my sum insured is right on the maximum limit and, if the spot price or cash price should increase significantly from the time I bought my insurance, I would not be compensated fully.
      I think sometimes whether it was a good idea to declare my metals to an insurer. Should there be an asset tax of some description, the govt agency can easily gather info from banks, insurers and mortgage providers among others. In short, PM storage in your possession is fine as long as you have enough confidence in the security of your home that you would not need to declare it… you could sit on it quietly. After all, my PM clause does not exactly cover me for the risks that come with a black market.

  7. I think most folks who come to this site are already PM stackers and have a percentage of their money outside of the banking system.  If we are smart we also believe in not being in debt.  We cannot save the sleeping spooge or sheep in denial.  We can only save ourselves some aggravation by having some of our savings in PM.  When the next bail in happens then we can pull the rest of our savings out of the bank.  It is not time to panic yet.  Don’t dwell on this.  Just stay alert.  We must try and not act impulsively.  And, the sheep.  They don’t want to hear it.  Everything will be fine according to the sheep.  If we can get thru this mostly whole I will be happy.  The negativity is very tiring.

    • My Gripe is that the “Sheep” are heavily in debt with credit card and mortgage debt. makes you think that in a Fiat based system, is it not better to be a debtor than a creditor?

    • “makes you think that in a Fiat based system, is it not better to be a debtor than a creditor?”
       
      I’ve wondered about that as well.  If we owe a bank a lot of money and the banking system collapses, do we still have to pay it back?  If so, who gets it?  How do we get it to them?  Will our currency still work to settle debts?  I dunno… maybe we just say “Oh, well, and what the hell!”.  lol
       

  8. I agree. This article sets out to use “depositors” to describe “unsecured debt holders” and “unsecured creditors”. That is incorrect. Unsecured debt is what it sounds like – uninsured. Same as most derivatives are unsecured, which means the event of a bankruptcy you are not guaranteed to get all or any money back. This is nothing new. And then there is uninsured vs insured deposits of course which is not new either if you live in the western banking world. I am sorry, but it is time that people who place uninsured money in insolvent banks to learn a lesson. It is after all their complacency and ignorance which let the banks go about their plundering business in the first place.
     
    I do however think that the banksters will try to bend the definition of “creditors” to include also deposits. That’s another story and let’s not fall into their trap by using the wrong definitions interchangeably and support their deceitful vocabulary.

  9. Many good comments have come out about all this but it would be good if we could differentiate between the big systemically important banks that are most likely to have problems and all the itty bitty banks out there that serve local towns and villages and are unlikely to have financial problems.  None of them are of national significance, so should be a better place to keep some money… not LOADS of it, for sure, but some.  Thoughts?

  10. You have to ask yourself, what is buried in legislation passed in the last 20 years. What do those Presidential Executive Orders really say? Has anyone even bothered to download Dodd-Frank? The real losers in any bail-in are the corporations and business owners. McDonalds with accounts in all major banks, your Firestone Auto Centers with accounts in all major banks. How about electric utilities?Dunkin Donuts, Pet-Smart and even state lawyers and judges.  Who wears the pants in this economy? We are all sitting here like we are helpless or something. You want solutions? Answers? Results? What will future generations say about this moment in history if all we can do is stack, smack, frack, track, and shellac? To start, Political Action Committees are really the only place to begin with 18 months to the 2014 elections. Get our people in and their people out. Next, start reading those bills that passed, have been introduced, and are being debated…go back to 1960 to present. The firewall? Super PACs is my only answer coupled with the next 4 election cycles. That is my two cents. BTW, any systemic failures will most likely start with Morgan Stanley…they were set up to fail next.

    • The greatest political lever of power the US Citizen has exists at the level of local politics.  That’s true at the city and county level, all the more so in more rural areas.  State power, especially when it comes to nullification efforts such as what Texas is considering with gold bullion storage can go a long way towards addressing some of the problems too.
       
      The Super PAC idea is interesting.  We already have a model that could grow into something like that with Ron Paul returning to run Campaign for Liberty.
       
      There are no perfect solutions nor strategies given the magnitude of our problems.  But one thing hasn’t changed:  in order to rule the powers that be must have the consent of the people.  Tyranny from the top or zombification from the bottom provide no long-term lasting power for the oligarchy.  That being the case, anything and everything that has an ability to wake people up needs consideration.
       
      We also need to figure out how mass movements can be incubated that focus on making the most of our day to day economic lives. Americans have titanic power when it comes to the goods and services we consume and there’s got to be ways to improve on the old boycott model of political activisim. Those of you familiar with Catherine Austin Fitts’ ideas about developing local investment circles for local/community develoment (versus dependence on the financail services industry) can see an example of going a step beyond the boycott model. We need to figure out many more applications of this type of thinking.

  11. I read the Canadian budget on page 144 and 145 and there was no mention of anything mentioned on this site. The paragraph mentioned was either removed or it never was there. I looked at it twice, please someone point it out.

    • “Good round up, good information, bad conclusions. Wilson wants more derivatives.”
       
      More derivatives?  OMG!  What is wrong with these people?  Do they not grasp the idea that derivatives are the financial equivalent of Russian Roulette with only *1* chamber empty instead of 5?

    • What does anyone else think about this?
      Is silver money? or solely an industrial metal? I realize silver has been demonitized in recent history, but what about the previous 5000 years? and why could it not be remonetized?

    • All you have to do is check out the work of Hugo Salinas Price.  He is a pretty influential dude in the third world who is promoting a return to silver as a monetary metal.  His idea is to bring back a 3 gram silver coin with no dollar value on it to third world country’s.  The coin could go up in value with inflation.  This would help the poor to save.  He is having no luck in this campaign because it basically helps the poor, not governments.  Governments like inflation and the ability to print money.  This gives them power.  Silver would give the poor power because they could save money that kept up with inflation.  No country wants the poor to have anything of value.  They want the poor to stay poor and desperate so they can serve the elite.  Gold will become re monetized because that would serve the interests of the elite.  The sooner you understand the concept the better.  Start stacking some gold.

    • Should gold be remonetised, would that not make it part of a future bail-in? I’m in two minds whether the govt would bother: on the one hand, only a tiny minority of Western investors hold physical gold now and most of them would either hide it or deposit it outside the Western banking system; BUT on the other, I can well imagine any govt to be aware of increased gold demand and will find as many weak hands as it can.

    • @UglyDog – yes, we were taken down hours after we broke this story from a massive DOS attack. Just getting back up now, we’ll see how long we can stay up.  May want to forward this link and spread the story to everyone as quickly as possible while it’s still up.

      -Doc

  12. Ya know, I used to wonder why my local bank many years ago started calling me a “shareholder”. I read the statements in the article above and it is clear. They were “prepping” us for the kind of risk sharing that Cyprus is experiencing to bail out their stupid investment decisions. I NEVER wanted to be a shareholder in ANY bank. But then companies browbeat you into using things like direct deposit and 401k contributions so you now have all your money where they can get their greedy little hands on it in an “emergency”.
     
    As people have been saying above…….GET YOUR MONEY OUT OF ANY BANKING OR FINANCIAL INSTITUTION NOW!!!!!!!!
    Take whatever you have and buy gold! For those with limited means, it is the easiest and most transportable asset EVER! Think transportable since you will need it when the shit storm starts this summer.

  13. All this goofy patchworking is a fool’s errand. There isn’t anything that can circumvent the co-generation of currency and interest that’s intrinsically indispensible to a banknote ‘money’ scheme. It’s that underlying exponential progression that inevitably surpasses excess productive capacities (supporting interest service funding), first of individual countries and then of the entire world economy, that grinds down to Debt Saturation and certain implosion!
     
    Until these moronically willful idiots concede to re-institution of the Hard Money scheme again, this mess can only get worse and worse.

    • “Until these moronically willful idiots concede to re-institution of the Hard Money scheme again, this mess can only get worse and worse.”
       
      Which they will GLADLY do once 2 things have been arranged:  1)  they have wrung every cent from us that they possibly can via the fiat money / inflation / deflation scheme; and 2) they have as much of the gold as they can possibly get.

  14. http://www.oudaily.com/news/2013/mar/25/ap-cyber-attack/

     
    SEOUL, South Korea (AP) — Computer networks at major South Korean banks and top TV broadcasters crashed simultaneously Wednesday, paralyzing bank machines across the country and prompting speculation of a cyberattack by North Korea.
    Screens went blank at 2 p.m. (0500 GMT), the state-run Korea Information Security Agency said, and more than six hours later some systems were still down.

  15. I’m already 95% out of the Bank system, but got to think to the contrary sometimes, what have the Banksters got to gain and we to lose, if we all pull our money out of the Banks?
    There could be a reason for them to gain and they are herding/manoeuvring us into pulling our money out, just sayin’ by playing devil’s advocate.

  16. “Well, said, AG.  There might be a way to buy one’s own deposit insurance, though.  That would be to buy put options on your bank in sufficient amount that if the bank fails, you make enough on the options to cover or even exceed your losses. Options are usually cheap enough that this could be done for a reasonable sum.  This could be a viable option for those who do not want to remove their money from their local bank or CU.  I’m not an options guy, so this is just a food for thought comment and anyone trying it will need to do their own due diligence.”
     
    If one is willing to buy insurance by paying an option premium to indemnify against deposit risk (FFS, bank deposits are now risk assets paying 0%), it wouldl be more prudent to remove or reduce said deposits in view of the fact the time decay curve is not linear. Also, by paying a low premium the put would probably be way out of they money and, as a matter of consequence of the nature of a put, as the put goes in the money it fails to retain its excess value as much as a call would. Nevertheless, since the context of the argument is protecting against a total bank failure, implied volatility would skyrocket on a stock collapse and your put would pay handsomely!

     

    • “Nevertheless, since the context of the argument is protecting against a total bank failure, implied volatility would skyrocket on a stock collapse and your put would pay handsomely!”
       
      Indeed so.  I didn’t want to get too specific with that because everyone’s financial life is different.  If, for example, someone needed a good size sum of money available, say for a business or real estate deal, having that money handy could be of sufficient utility that paying a fee to protect it would be worthwhile, whereas for many others, it might not be.
       

    • Just curious, but what can you do with 90% silver junk? Do they refine it into 900 silver bars or do some reclamation on it?
       
      Here in the UK 92.5% silver is sterling silver and so is put back into the jewellery trade as 925 silver products (bars, grain etc)
       
      I ask because I got some 50% old British Coinage, but for the life of me I got no clue what to do with it.
       
      I own some Old Canadian Coins and American Coins, but they are fine just as they are as good numismatic coins.

  17. In 1938 The nazi regieme began rounding up Jews. Some fled immeadiatly. Others stayed and said “Well, let`s just wait and see, they are not doing it here.” “We should be OK.”
     
    As Will Rodgers said, “History may not repeat itself, but it damn sure rhymes.”

    • Although the people of Calif are not facing imminent bodily harm, they continue to wait and see what will happen next.  They are going to get totally financially gang raped, IMO.  Wait and see my arse.  There is a time to consider your options and a time to run like hell.  The time to consider options is over, IMO.

  18. The BRICS and SA form a bank. Let me think about this for a moment and look at it objectively.
    They represent an economic block of about 40% of the world’s population, all pretty much up and comers.  Resource rich except maybe for India, which is rich in resources of a inreasingly well educated people.  Their social and cultural natures are very different.  That could be problem, maybe in the  way that the Eurozone pushes together 17 divergent nations, cultures, histories and languages.
    The BRIC may represent a common economic front with an adversary in the Western World. But uniting very different countries, more divergent than the eurozone, might present a challenge.  The enemy of my enemy is my friend is a tenuous bond at best. It generally  doesn’t  last long whether the adversary is vanquished, held to a stalemate or retains a superior position.  This is not a good reason for durable unity.
    Forming a bank that is created to counter the Western world’s frail, over-this-top FIAT hegemony could work but the basic business model of a bank, western, eastern, BRIC or otherwise, is still a bank.  I don’t see how this diverse group will be able to come up with a more effective model if they use the tried and untrue methods of our present system.  Are they going to be able to bring together the BRICS under a common alternative currency, Sino dominant with the Yuan as the main form of currency, gold backed or otherwise.
    Human nature is well defined.    Applying our nature to fractional reserve bank, whether it’s follows the part of the 100 year history of the Fed and its dominance, or another form of central bank headquartered in Beijing, New Dehli or Moscow, is probably not going to prevail in any short order. The Fed, ECB, IMF and World Bank have spent 100 years achieving their positions and remain the predominant banks.
    Unless they are taken down through a concerted effort by a BRIC bank or their demise caused by a failed, kleptocratic and unsustainable model such and we see potentially forming now, I can’t see how  a BRIC bank will achieve a  predominance in anything but their own bankyard. And even in that area, their national natures won’t permit theme to coalesce into a cohesive whole. 

    • If they be try to copy the system of petro-dollars, they will be defeated.
      But if they will create a new system, that will be based on the gold as a currency, then they will succeed.

    • They will control Asia, South America, Australia, Africa, and parts of the Middle East.  The only part of the world left is Europe and North America.  Since China holds 3 trillion of dollar denominated assets, they have the upper hand to control monetary policy over the US.  We are the debtor, they are the creditor.  China doesn’t put up permanent military bases in the country that they do business with.  The US always has and will.   Once the US lends you money or forces you to take the money,  you are controlled by force.  If I was a country that had a natural resource to sell or trade, I would choose the BRICS.  It’s not even close.  The way they do business is more straight up.  After they set up the banking system and the FX markets trade the yuan, the dollar perception will change quickly.  Willie has talked about Turkey being a swing state.  This is a very interesting way of looking at the world.  It just takes a few countries to do business with the BRICS to swing the power.  Cyprus was huge not only because it showed how weak Europe and the Western world has become but the flow of business and money could be headed to other parts of the world.  The elites and ultra rich will have to protect their wealth.  If they don’t feel like it’s safe in European or US banks because of confiscation, they will move it East.  If the new banking system controlled by the BRICS is backed by gold or a basket of commodities, where would you put your money?  The Western world’s fiat, fractional system or a gold backed system that supports the currencies?  We can tell what countries are leaning or going towards the new BRICS system.  It’s the countries that are buying and hoarding gold.  If a country has increased their supply of gold the last few years, the are going with the BRICS.  The only countries not doing this is Canada, US, and Europe. 

    • The BRICS can create a funded bank, but this does nothing. Its a closed system unless they can export goods to countries outside of the BRICS. This is the same model for any System. You must be able ot export to make money, there are always winners and losers.
       
      These countries have a lot of raw resources, a lot of man power, I grant you, but they don’t have the smarts of the North America and Europe.
       
      Weight for weight the Anglo centric countries have invented more useful products, techniques and scientific discoveries.
       
      Also I might add that most of the countries in the BRICS have one time or another gone through some major political changes over the years, Just take a look at Russia and Brasil, let alone China. What about South Africa. These countries are not stable. Even today. 
       
      I have no worries whatsoever, I am more concerned by the fact that the world economy is slowing down because no one can afford to buy anything :)

  19. Hi All, Just want to say that SD, along with MaxKeiser.com, GATA and many other sites are doing a great job spreading the word on PMs and those things not reported in MSM (like FDIC/BOE bail ins above). In my own small way I’m trying to get the word out to as many people as possible.
    Wed 3rd April Radio 4′s regular Money Box live programme is on and the topic is… PERSONAL BANKING !!!
    I thought this would be a great opportunity for people on this site and any others you know of to send in the FDIC/BOE information, concerns about its implications and why MSM (and in particular the BBC!) isn’t covering this.
    You never know, you may even get SilverDoctors a mention on a radio programme listened to by thousands!

  20. Does anyone know how the Swedish Central Bank works ?
     
    I understand that they nationalized the big banks earlier on.
     
    When money is created, to whom is the interest paid ? If the Swedes own their own Central Bank for the benefit of Swedes, that seems a good step in the right direction- maybe we should do that here.

    Seems to work for them.

    • @spaniel
       
      Paper Rots, Coin Does Not. ANY paper scheme of ‘money’, whether interest bearing or not, steals from SOMEone.
       
      In this present case, the interest forces currency inflation and commensurate price increases, stealing from savers. In the absence of interest, the LENDER has the time value of his loaned asset stolen. That’s the PURPOSE of interest, to compensate for loss of immediate use and benefit of assets that lenders lose during the course of their loan.
       
      FORGET paper ‘money’! It’s thoroughly immoral. It’s the ultimate wet-dream of craven rent seekers and free-lunch bums!

  21. Keep your eyes Banca Monti dei Paschi.  This bank is on its third bail OUT due to derivative losses.  It’s both a model of what happens when a bank loses bets on Derivs. plus being rescued by the tax payers.  In the recent weeks depositors have withdrawn 3-4 billion Euros.  For a bankrupt bank to lose those funds means it will fail sooner or later.  This one bank, one of the largest in Italy, along with Unicredit, could force a bail in.  The Italians are many things and not one of them is  “STUPID” 
    In 1992 there was a fraction of a percent haircut imposed by the Italian government. It nearly shattered the faith of the Italian people in their banking system. This is one of the reasons Italy recentlyimposed currency controls, cash withdrawal limits and other measures to control capital flight.  If EU FINMIN Weisel-Boom (sung to the tune of Camptown Races) says that the sovereignty of Italy is sacrasanct and there is no threat of a Bail-In in Italy, you know that it will happen within a few days to 2 weeks. 
    When things get serious, start lying. 
    When lying gets serious, start running.

  22. Interesting article on this very topic here:
    http://www.ritholtz.com/blog/2013/03/bank-confiscation-scheme-for-us-and-uk-depositors/

    Extract from article:
    The Cyprus haircut on depositors was called a “wealth tax” and was written off by commentators as “deserved,” because much of the money in Cypriot accounts belongs to foreign oligarchs, tax dodgers and money launderers. But if that template is applied in the US, it will be a tax on the poor and middle class. Wealthy Americans don’t keep most of their money in bank accounts. They keep it in the stock market, in real estate, in over-the-counter derivatives, in gold and silver, and so forth.
    Are you safe, then, if your money is in gold and silver? Apparently not – if it’s stored in a safety deposit box in the bank. Homeland Security has reportedly told banks that it has authority to seize the contents of safety deposit boxes without a warrant when it’s a matter of “national security,” which a major bank crisis no doubt will be.

    • Rough Rook  That is a good article.  When one notes the FDIC and B of E in the same sentence it reminds me of two wolves talking with a sheep about what’s for dinner. In this case it’s more than a haircut for the wolly. 
      Also, B of A moved its $75 trillion in derivatives to its ‘bad bank’ balance sheet so that if they went FUBAR the FDIC and tax payers get stuck with the bill.  This is the same trick Lehman pulled when they moved their book of derivatives offshore so that their balance sheet was not filled with garbage.  Bail Ins at this level are more FIAT than is held in every bank and private account in the world.  Private pension plans would be attacked immediately as would be any depositor with an open account.  That’s my assumption and it might be wrong  But B of A’s President Moynihan is a sneaky disingenuous SOB so nothing is impossible here.

    • Yes that is a good article, but I followed the links and it is still up in the air as to the credibility of this.
      Having said that – many arrows do indeed seem to be pointing in this general direction.
      In essence – any wealth which you store in a bank, whether in an account or safe-deposit box, may be subject to confiscation.  Those who are awake should prepare accordingly.

  23. Why doesn’t anyone talk about the haircut that us silver investors have taken?  Oh, thats not nice since we are on The Doc’s site.  I have taken a haircut.  A serious haircut since investing in silver in July of 2011.  Yes, its not the same as a banking haircut.  We seem to believe that investing in bank accounts are safe havens.  Well, here we are.  I invested in silver at 38 dollars per oz.  That is total amount per oz I invested in silver on July 18 of 2011.  We are now at 28 dollar silver and going lower by anyones count.  Now, this isn’t news but it should be here on the so called Silver Doctors website or the so called antidote to financial woes.  Now, I am not blaming this on the doc, but this is how it goes.  Be real silver investors.  Real haircuts are the reality today.  Lets see, I am down on my investment by what.  30%?  I am not complaining.  Just explaining.    
    This is what can happen to all investors.  I patiently wait for silver to change course.  I will get out if I get the chance and invest in gold.
    Now, I want to take a poll.  It has already sort of been taken.  Many of you reported 15% losses on the value of your silver.   We don’t want to upset Doc I know.  We don’t want the spooge to realize that the average silver investor has lost at least 12% to 15% if they sold their silver at todays prices.  It is what it is.  Look at it with common sense and calculate the cost per oz plus premium plus shipping etc minus what a serious dealer would pay you if you sold today.  Figure it out.  Don’t keep being positive about something that right now is not positive.  
    I believe there will be a turnaround but we do not know when this will happen.  Could be a year or more.  Could be next month.  I don’t like the security of this investment.  There fore I will lighten up if I am given the chance.
    Now, I know there are hard core silver investors in our circle.  I don’t mean to step on your belief system as I am on your side.  Just sayin.
    I live in the third world.  We don’t invest in things that hurt on purpose or that have the chance of hurting us with the freakin dream that over rules common sense.
    Drive on people and make your own decisions.
    Pollo
     
     
     
     
     

  24. Hey Doc, what is the source document that you are quoting here?  You refer to “the resolution”, but don’t mention the document’s name or provide a link.  Where can I find the source document?

    • @pmbug if you index on ‘deposit’, this is one of the more revealing passages …

      “(I)nsofar as a bail-in provides for continuity in operations and preserves value, losses to a deposit guarantee scheme in a bail-in should be much lower than in liquidation. Insured depositors themselves would remain unaffected. Uninsured deposits would be treated in line with other similarly ranked liabilities in the resolution process, with the expectation that they might be written down.”

      So, emphasis isn’t on protection of ‘deposits’. It’s on ‘providing continuity in operations’ and prevention of destruction to Bank Common Stock ‘value’ as would follow a liquidation. What deplorable scum-bags, politicians and bureaucrats are.

  25. Hey doc you made international radio with The Power Hour on shortwave. Heard the replay last night talking about this discussion on 4840khz at 3AM. Mentioned Silver Doctors website so free advertising!

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