Former Banker States the Case for Owning Physical Gold

From AGXIIK:

Until the advent of the FDIC, bank runs and failures meant the client lost everything.  That why they call them “bank runs”.  You run to bank as fast as you can and withdraw your money.  The first one out gets the best deal.  The FDIC is a hollow shell that will not protect a multi-trillion dollar failure.

Allocated and unallocated storage facilities are likely to be stripped of all precious metals and valuablesWhen governments go broke the rule of law is the first thing sacrificed on the altar of saving the people and their way of life.

It will get very interesting when 100 paper golden chairs are surrounded by scores of bankers all trying to get a seat on the single physical golden chair when the music stops

The reason I write this bit of self confession, being a former banker, is to just reiterate my prior warnings and suggestions that if you trust a banker you would also trust a scorpion.  Ask the frog.
There is a reason the FDIC exists.  It protects the trusting and unaware bank customer from the foolish, greedy actions of bankers betting on unwise and imprudent loans that have not been subject to even minimal underwriting while using your money to do so.
Much has been said recently about bankers having the potential for going into customer accounts to use those segregated funds to place bets on bank  investments and loans.  Those are your funds until they are not.  If the bank makes a series of really bad loans without the income and additional deposits to replace their depleted capital base, the customer’s funds are gone; disappeared and vaporized.  Watch the movie with Jimmy Stewart–It’s a Wonderful Life.  Then watch the truly hilarious South Park show   ‘Aaaaand, it’s gone!

Until the advent of the FDIC, bank runs and failures meant the client lost everything.  That why they call them “bank runs”.  You run to bank as fast as you can and withdraw your money.  The first one out gets the best deal.  The FDIC is a hollow shell that will not protect a multi-trillion dollar failure.
Anyone with a safe deposit box should not put anything of value in it.  Mea Culpa when I suggested to use that resource to store your phyzz. The ‘safe’ portion of that wording no longer exists.  Leave nothing of value in that box.  Better yet, save yourself the $100-200 cost.
Allocated and unallocated storage facilities are likely to be stripped of all precious metals and valuables.  When governments go broke the rule of law is the first thing sacrificed on the altar of saving the people and their way of life.  That costs a lot of money and and your contribution to the cause is your life time savings. Pension plans, SDBs, checking and savings accounts and brokerage deposits are all taken for the great good. This is happening in several countries such as Greece, Italy, Ireland, Hungary, and Portugal.  Things are so bad in Spain a flash mob just invaded a food depot and took 3 tons of food.
My concern about allocated accounts is not the honesty of people managing the bullion banks.  My question is simple.  How many divisions of troops do they have?    Hint:  It’s more than the Pope but less than the military.  Troops have been used on US soil in the Depression to control riotous account holders.  Citizen’s gold was confiscated. Other countries with less rule of law did not even need to dispense with the niceties.  You owned it only if you held it and hid it.
It is becoming more and more difficult to US citizens to own bullion or accounts outside the US.  The FACTA and FBAR forms are forcing international bankers to refuse any US accounts.  Bullion banks may be more reluctant to have US depositors in their institutions as events unfold in the never ending story of gold.

It will get very interesting when 100 paper golden chairs are surrounded by scores of bankers all trying to get a seat on the single physical golden chair when the music stops. 

Got gold?

Comments

  1. “Things are so bad in Spain a flash mob just invaded a food depot and took 3 tons of food.”
     
    Not true. This was because of a political and corporate corruption case. Which is not good either, however.
     

  2. Thanks for the insight AGXIIK.  The articles talking about military vehicles rolling through big cities, cameras being grabbed and pictures being erased, FEMA camps being set up while no disaster is happening and buying all those hollow points doesn’t exactly send warm fuzzy feelings to me.
     
    Something big is ready to explode and it seems like the people that are to protect us are taking a different posture.  I don’t know how much protection we can count on or if it is going to be something else like herding cattle.  Anyway one has to think all is not well and it is getting worse at quite an alarming rate. 
     
    I read an article that actually said back when Roosevelt told people to turn in their gold that only a small percentage did as they were told.  I think the number thrown out was 10% and I didn’t save the article.  But I don’t know anyone that would comply with a similar order today.  The collection squad would have to literally go door to door to have any success.  Knowledge of wrongdoing is spreading fast thanks to Doc, others and the internet.  I’m guessing doubt has to be creeping into the minds of even the biggest market supporters.  Otherwise they would not be having our guys appearing on their shows now while they only made fun of them for the past how many years.
     
    I’m starting to appreciate living in a small community that has lost half of its population since the 50′s.  I don’t think it is on anyone’s radar except to avoid.  No jobs here, housing already decently priced but still going down and there are 43 pages of homes for sale in the Saturday Real Estate Supplement that I read with interest.  I’m seeing the nicest homes dropping their asking price by 20% after just a few weeks.  So events are lining up to enhance the value of the shiny stuff and sooner rather than later is now looking pretty good.  May have to make it through a couple of last attempts by the TBTF boys to inflict as much damage as they can.  When all that money on the sidelines starts pouring in and the limited supply is really revealed, it’s going to get crazy.  Hold your position, know what’s going on around you and be prepared for the worst and hope for the best.  Take care.

  3. AGXIIK:
    This may sound like a very foolish suggestion, but here goes. Would it be practical to change the banking system in such a way that bankers would be considered employees of the people to such a degree that a banker could only serve the public a limited number of years? Then after their tenure, they would then have to seek employment in the public/private sector? In essence, it would work like term limits in the political world. Banking would truly then be a business for the people, instead of it being what it is today, a con game! As a former banker you’ll quickly see if this is folly on my part, but could something like this actually work in the real world?

  4. @snowrider
    How is that working out with politicians and other “public servants”? 

    • I understand your point Silverback, but if the motive (money) that causes men/women to blink could be eliminated, nor a examination of one’s conduct and actions could be reviewed by independent source every two years, maybe the bankers would not be so corrupt. When people can do what they do with impunity, corruption is the only result we can expect from the human nature. 

  5. THE BANKSTERS HAVE THE F.D.I.C IN THEIR POCKETS! ALL the money will be gone! — http://seekingalpha.com/article/301260-bank-of-america-dumps-75-trillion-in-derivatives-on-u-s-taxpayers-with-federal-approval


  6. That’s an interesting question snowrider.  Temporary banking positions.  I think it has been tried in certain ways in the past with GNMA, FNMA, Freddie Mac and the USDA.  Jim Willie speaks to the consumate theft from these agencies with totals over $1 trillion.  I have no evidence of that but the last group headed up Raines left with millions in bonuses before these quasi abnks collapsed.   The central banks have their top people rotate in and out.  That does not seem to have worked that well since the quality of the people is suspect at best. They may not be corrupt, just inept. I have seen the top abnker teams replaced by another team and in as little as two years the new crew screwed the bank into the ground and utter failure.
    If the government had anything to say regarding the conditions and term limits of these top people, the same government would be inclined to change those terms and conditions of the temporary employment for seemingly good reason or no good reason at all.
    The government does two things well.  Declare wars and debase the currency.  Central banks finance both. It serves the government to have control over central banks but they do it poorly. Governments tend to screw up nearly anything they touch. Bankers employed by private banks would have to be very well compensated to make it worth their while to stay for only a defined term.  Most bankers like an easy gig with high pay and little recourse for management of their mistakes. Not a single bankers has gone to jail for incredible inedptitude and criminality of the last 7 years so don’t count on competence in the resumes of these temporary banksters. They would most likely be the last in their class.
    It does take a while to get a good understanding of how to run a bank too, so bringing in inexperienced people or those who need on the job training to know how to perform their jobs might be a difficult task.  Look at what happens when Senators and Congresspimples get elected. They are perfectly capable of screwing up in as little as 2 years; or 6 in the case of Senators.
    If they are incompetent before coming into office they generally retain all their incompetence and bad habits while in office.  If they have some competence coming in they will most certainly be turned to the dark side of power, corrrupted by the political process and end up doing just as bad a job as the fool, only for different reasons.
    You can be sure they will be reelected with volumes of funding from those who have the most too lose or gain—becoming in essence Campaign Funding Whores.  The difference is that the hooker will leave in the morning if you pay her. Politicians seem to take on a life of their own, staying forever in office. It’s this permanence that causes them to create the permanent bureaucracy of banksterism. It benefits both the banker and politician, who strive for permanent life on the public dole.
    I think that once a banker is ensconced in a top position they will buy, cheat and steal to stay there. With unlimited funds they will buy the very politicians that rule on term limits of bankers.  Money corrupts absolutely and being the top dog in the big honey pot means you can buy your way to a permanent position. The people will suffer as a result and the process will be worse off than what we have now. 
    Europe is a classic example of the home of the Non Governmental Organizations that operate as banks. The destruction is almost complete and these rulers will never miss a meal, take a hit to their income or be charged with any crime.  The ESM is the latest impending catastrophe that might become the uber overlord bank stripping soverienty from every Euro country, accountable to no one, appointed for life and without any legal liability as to their harm they cause to the countries ruled by this banker elite.  And these policy drones will have power to make a cash call from any country for any amount at any time. Woe be tide to the country that refuses to pay up.  So the question is valid and if the ESM is passed we will see why that idea will probably doom Europe to war and bankrupcty. I’m not optimistic

  7. Richard Russel in his news letter (King News) already came out with how to solve the debt crisis.  And for a change I already had a spreadsheet made with the same principle.  The US, since it has the most gold, should debase the currency in line with our 8,130 tons of gold.  So he said $10,000/oz and pay off all debt with new gold backed dollars.  Then start over with a gold backed currency.  I agree but think they may want to make the amount even higher for all those unfunded liabilities.  How about $30,000 – $40,000/oz gold leaving yourself some room???  The country with the most gold should do it first and start a new game.  Don’t know how much the other countries would like it but it enables everyone to clear the debt and start fresh with sound money in place.  Sounds good for stackers also because that silver also has to go up in value and that 1/16 or less ratio sounds real good on those prices.  What they are doing now makes no sense at all and will make us go there eventually.

  8. Thanks AG, 
      Great article in to the mind of a banker.
    Like 4oz said the other day…Glad your on our side. 

  9. Let us distinguish bankers from banksters, however.  Small town community banks provide their local communities with much needed financial services.  Very large NY banks that manipulate markets, inflate the currency, engage in massive derivative bets, and lose tons of money that they fully intend the US Tax-Payers pay and not them, etc.   Very different critters, IMHO.

    As to the FDIC… does anyone here seriously believe that if the FDIC had their backs to the financial wall, that the US Treasury and Fed would not come to the rescue with unlimited fiat currency to cover any and all losses?  I mean, heck, guys, it’s not like it’s REAL money, now, is it?  We’re talking Monopoly money here… zapped up on demand from thin air and worth every cent of the effort required to create it.
     

  10. I don’t even trust my small town local bank anymore because many have ties to one of the TBTF banks that isn’t advertised.

  11. I always withdraw dollars from my bank account whenever I receive some cash. I use that cash to buy either gold, silver, copper pennies, nickels or silver coins.

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