Cyprus-Style Bank Account Confiscation Is In The New 2013 Canadian Government Budget!

By Michael Snyder

NOTE: Read these articles and then you will understand the importance of we-the-people launching our own "economic lifeboats." Start a usury free time currency in your local community. And learn about and support the Unidigi Network.

The politicians of the Western world are coming after your bank accounts. In fact, Cyprus-style bank account confiscation is actually in the new Canadian government budget. When I first heard about this I was quite skeptical, so I went and looked it up for myself. And guess what? It is right there in black and white on pages 154 and 155 of "Economic Action Plan 2013" which the Harper government has already submitted to the House of Commons.

This new budget actually proposes "to implement a 'bail-in' regime for systemically important banks" in Canada. "Economic Action Plan 2013" was submitted on March 21st, which means that this "bail-in regime" was likely being planned long before the crisis in Cyprus ever erupted. So exactly what in the world is going on here? In addition, as you will see below, it is being reported that the European Parliament will soon be voting on a law which would require that large banks be "bailed in" when they fail. In other words, that new law would make Cyprus-style bank account confiscation the law of the land for the entire EU. I can't even begin to describe how serious all of this is. From now on, when major banks fail they are going to bail them out by grabbing the money that is in your bank accounts. This is going to absolutely shatter faith in the banking system and it is actually going to make it far more likely that we will see major bank failures all over the western world.

What you are about to see absolutely amazed me when I first saw it. The Canadian government is actually proposing that what just happened in Cyprus should be used as a blueprint for future bank failures up in Canada.

The following comes from pages 144 and 145 of "Economic Action Plan 2013" which you can findright here. 

Apparently the goal is to find a way to rescue "systemically important banks" without the use of taxpayer funds...

Canada’s large banks are a source of strength for the Canadian economy. Our large banks have become increasingly successful in international markets, creating jobs at home. 

The Government also recognizes the need to manage the risks associated with systemically important banks — those banks whose distress or failure could cause a disruption to the financial system and, in turn, negative impacts on the economy. This requires strong prudential oversight and a robust set of options for resolving these institutions without the use of taxpayer funds, in the unlikely event that one becomes non-viable.

So if taxpayer funds will not be used to bail out the banks, how will it be done? Well, the Canadian government is actually proposing that a "bail-in" regime be implemented...

The Government proposes to implement a "bail-in" regime for systemically important banks.This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital. This will reduce risks for taxpayers. The Government will consult stakeholders on how best to implement a bail-in regime in Canada. Implementation timelines will allow for a smooth transition for affected institutions, investors and other market participants.

So if the banks take extreme risks with their money and lose, "certain bank liabilities" (i.e. deposits) will rapidly be converted into "regulatory capital" and the banks will be saved.

In other words, the banks will just be allowed to grab money directly out of your bank accounts to recapitalize themselves.

That may sound completely and utterly insane to us, but this is how things will now be done all over the western world.

According to RT, the European Parliament will soon be voting on a new law which will make Cyprus-style bank account confiscation a permanent solution for when major banks fail throughout the EU...

A senior lawmaker told Reuters the Cyprus model may not be an isolated case, and is perhaps a future template in dealing with troubled European banks. 

The new template is now likely to turn into a full-scale EU law, letting taxpayers off the hook in case a bail-out is needed, but imposing major losses on bigger savers on a permanent basis. 

"You need to be able to do the bail-in as well with deposits," said Gunnar Hokmark, member of European Parliament, who is leading negotiations with EU countries to finalize a law for winding up problem banks, Reuters reported. 

"Deposits below 100,000 euros are protected ... deposits above 100,000 euros are not protected and shall be treated as part of the capital that can be bailed in," Hokmark told Reuters, adding that he was confident a majority of his peers in the parliament backed the idea. 

The European Commission has written the draft of the law, which now awaits approval from eurozone member states and the parliament on whether and when it can be implemented. It's been reported, the law is planned to take effect in the beginning of 2015.

Are you starting to understand?

The other day when I said that "The Global Elite Are Very Clearly Telling Us That They Plan To Raid Our Bank Accounts", I was not exaggerating.

And for those in Cyprus with deposits of over 100,000 euros, the news just keeps getting worse and worse.

When the crisis first erupted, they were told that 10 percent of all deposits over 100,000 euros would be confiscated.

Then a few days later they were told that it would be 40 percent.Now, according to the Washington Post, those with deposits over 100,000 euros at the second largest bank in Cyprus may lose as much as80 percent of those deposits...

A deal was finally reached in Brussels with other euro countries and the International Monetary Fund early Monday. The country’s second-largest bank, Laiki, is to be split up, with its healthy assets being absorbed into the Bank of Cyprus. Savers with more 100,000 euros ($129,000) in either Bank of Cyprus and Laiki will face big losses. At Laiki, those could reach as much as 80 percent of amounts above the 100,000 insured limit; those at Bank of Cyprus are expected to be much lower.

Sadly, the truth is that those people will be lucky to ever see any of that money ever again.

How would you feel if someone came along and wiped out your life savings so that banks that took incredibly reckless risks could be bailed out?

Needless to say, a lot of people in Cyprus are very, very angry right now. The following reactions from outraged depositors in Cyprus are from Sky News...

"They have stolen our money," Milton Loucas told Sky News. 

"I have been working for 60 years. I am 80 years old. I cannot work again for my living - they have cut the lot. 

"Our money, our social insurance - they have cut them. How are we going to live?"
Another Cypriot, Stelios, came out of the bank empty handed. 

"I tried to get my February wages and they gave me a piece of paper only," he said. 

"I have two children in the army and they asked for money - I don't have money to give them. 

"The Government didn't pay anybody. My old parents didn't get their pension."

A lot of people have just had their entire lives turned upside down.

But there were some people that were told ahead of the crisis and were able to get their money out in time.

According to the BBC, foreigners pulled a whopping 18 percent of their money out of Cyprus banks during the month of February alone...

Information from the Central Bank of Cyprus released on Thursday showed that foreign depositors had already withdrawn 18%  of their cash from the nation's banks during February, before the current crisis hit home.

So how did they know to pull their money out and who told them?

In addition, branches of the two largest banks in Cyprus were kept open in Moscow and London even after all of the banks in Cyprus itself were shut down. So wealthy Russians and wealthy Brits have been able to take all of their money out of those banks while the people of Cyprus have been unable to. It is hard to even find the words to describe how unfair that is. The following is from a recent article by Mark J. Grant...

So let us then turn back to Cyprus and see why the Russians are not quite so upset as they were at the beginning of the crisis. The answer to this question is Uniastrum bank which is headquartered in Moscow. Eighty percent (80%) is owned by the Bank of Cyprus. After the crisis began and right up until the capital controls were implemented the bank wasopen for business with no restrictions upon withdrawals. So the crisis began, was all over the Press and the Russian depositors walked into the local bank and withdrew their money from Uniastrum, the Bank of Cyprus, or had it wired in from the other local Cyprus banks and it was then withdrawn. Problem solved! 

At the same time Laiki bank and the Bank of Cyprus had operating branches in London. There were no restrictions there either so people could walk into those banks and withdraw their money as well. No restrictions at all right up until the time of the Capital Controls. In the meantime, in Cyprus, people and institutions could not get at their money so the Russians and many British took out their money, closed their accounts while the people in Cyprus were left high and dry.

The wealthy always seem to come out ahead somehow, don't they?

Meanwhile, those in Cyprus with deposits under 100,000 euros are now dealing with some very stringent capital controls. In other words, there are some very tight restrictions on what they can do with their money. For example, the maximum daily cash withdrawal has been set at 300 euros. The following are some of the other restrictions that are in force right now...

As well as the daily withdrawal limit, Cypriots may not cash cheques. 

Payments and/or transfers outside Cyprus via debit and or credit cards are allowed up to 5,000 euros per person per month. 

Transactions of 5,000-200,000 euros will be reviewed by a specially established committee, with applications for those over 200,000 euros needing individual approval. 

Travellers leaving the country will only be allowed to take 1,000 euros with them. 

When the next great wave of the economic collapse strikes, capital controls and bank account confiscation will suddenly become "normal" all over the world.

So get prepared while you still can.

One thing that you can do is make sure that you don't have all of your eggs in one basket. The following is what Jim Rogers recently told CNBC...

"I, for one, am making sure I don't have too much money in any one specific bank account anywhere in the world, because now there is a precedent," he said. "The IMF has said 'sure, loot the bank accounts' the EU has said 'loot the bank accounts' so you can be sure that other countries when problems come, are going to say, 'well, it's condoned by the EU, it's condoned by the IMF, so let's do it too.'"

The more places that you have your money, the more difficult it will be for "the powers that be" to loot it.

The global elite are fundamentally changing the game. From now on, no bank account on earth will ever be able to be considered "100% safe" again. This is going to create an atmosphere of fear and panic, and no financial system can operate normally when you destroy the confidence that people have in it.

Confidence is a funny thing - it can take decades to build, but it can be destroyed in a single moment.

None of us will ever be able to have confidence in our bank accounts again, and I fear that the next wave of the economic collapse may be closer than I had first anticipated.

_______________________________

This article first appeared here at the Economic Collapse Blog.  Michael Snyder is a writer, speaker and activist who writes and edits his own blogs The American Dream and Economic Collapse Blog. Follow him on Twitter here.

NOTE: This article is also published at this website:
http://www.activistpost.com/2013/03/cyprus-style-bank-account-confiscation.html

A related article is posted at this website:
http://canadiansituations.wordpress.com/2013/03/31/canadian-banks-copy-cyprus-steal-your-money-if-needed

This City Is the Canary In the Coal Mine for America’s Future

By Dave Hodges

Who am I? In my heyday, I was the fourth largest city in the country? Fifty years ago, I had the highest per capita income in the country. Unemployment used to be rare, now unemployment is rampant. My infrastructure is rotting and not being replaced. Cross a bridge on a public road at your own risk and the chances are one in two that you will not be able to read the sign warning you that the bridge has indeed collapsed due to neglect.

Who am I? Am I speaking about Calcutta, Bangkok, Johannesburg, Mexico City, a remote province in China or some barren stretch of land in Yemen? No, I am talking about Detroit, Michigan.

Fall From Grace

Detroit is the proverbial canary in the coal mine. It is a glimpse of America’s future if we let Agenda 21 fully take over our cities. It is a portent of things to come if we ever accept Cap and Trade legislation.

At the height of Detroit’s success as a city. the city was a representation of the American middle class. It was the greatest manufacturing city ever seen on the planet. Detroit made cars that were the envy of the planet. Today, Detroit is mocked and ridiculed. If you want to know what the future of America is going to be like, just look at the city of Detroit. Once upon a time it was a symbol of everything that America was doing right, but today it has been transformed into a miniature third-world country which rivals any hell-hole on the planet.

Almost 30% of Detroit’s 140 square miles are either vacant or deserted. Detroit used to be the fourth-largest city in the US, with a population of nearly 2 million people. Today, Detroit has less than 700,000 residents. There are more than 33,500 vacant houses and over 90,000 vacant lots in Detroit. The city government is razing entire city blocks of business buildings and residential homes. If you are the only one left on your block, you are forced to move and if you are lucky you will receive $10,000 for your home.

The median price of a home in Detroit is only $9,000! In some areas in Detroit, you can buy a house for just $100. There are approximately 85,000 streetlights in Detroit, but copper thieves have stripped so much wiring out that many of the lights are not working. The Mayor of Detroit has announced that he will reduce the number of streetlights to almost half the existing total down to 46,000.

Today, sixty percent of Detroit’s children live in poverty, when less than 45 years ago, Detroit boasted the highest per capita income in the United States. Today, Detroit does not have one chain supermarket left in the city.

In 2009, more than 30% of Detroit school children did not graduate from high school. Forty seven percent of Detroit’s residents are functionally illiterate. Detroit has closed 16 schools. And the kids who do manage to graduate, are barely better off than the ones who do.

It has one of the highest murder rates in the country. Its infrastructure has been gutted. Real unemployment may be as high 20% in some parts of the city. This is a real bad city to not be able to find a cop; and with the new cutbacks, it is really hard to find a cop because most police stations in Detroit now only open to the public for 8 hours per day. So, if you have to defend yourself, you better be prepared to get through the night on your own. You can call the police on your Obama phone, but you better only call between 8am and 5pm. Just how dangerous is it? Justifiable homicide in Detroit rose by an amazing 79% during 2011.

Who Bankrupted Detroit?

The globalists defeated Detroit through the various free trade agreements. Through NAFTA, GATT, and CAFTA, American auto manufacturing were free to ship their factories overseas in search of near slave labor markets. The passage of these free trade agreements made it possible to hire foreign slave laborers and without the now prohibited tariffs on imports, the globalist-controlled corporations could ship slave labor manufactured products back into the United States. Our government failed to protect manufacturers, and the net effect is that we are beginning to see third-world conditions inside the United States in cities such as Detroit . . . and it is spreading like wildfire. Since the 1970s, America has lost 86% of its manufacturing jobs. Actually the Globalists have been trying to get rid of American tariffs for 100 years in the name of free trade. Look up the Payne-Aldrich Tariff; it is part of our history. A year later, we got the Federal Reserve Act of 1913 and then real fun began in earnest.

No Tariffs, No American Prosperity

Tariffs used to pay our national debt. No longer, we replaced tariffs with the Income Tax Amendment. If you are reading this historical facts for the first time, you have to be getting angry. And who could blame you for getting angry? You and I should not be paying income tax -- tariffs should be paying for the national debt. We are paying income tax because the globalists wanted free trade and it is our “duty to pay” so they can maximize their profits. Oh, and by the way, the third leg of this scheme was to introduce fiat currency where bankers could invent money out of thin air which caused our money to now be worth less than 4 cents for what used to be a dollar.

Now, back to Detroit which helps us understand where we are headed. You may not live in an area of the country in which the jobs are headed overseas. However, you have been targeted for de-industrialization. If you ever let Agenda 21 get a grip on your city, the result will be like Detroit and will result in abject poverty as a result of green zones, Wildlands, promises of Smart Growth, saving the planet from global warming and economic growth inhibitors, etc. By the way, the globalists have the guts to build a $25 million light rail in Detroit, right in the middle of this rotting corpse.

Conclusion

Now that you know the truth, what are you going to do about it, because Detroit’s situation is our future unless we can change the direction we are headed? I would urge you to become familiar with the phrase: all politics is local. We have indeed lost the presidency and we have lost the Congress. However, we can effect some change at the local governmental levels by helping to keep Agenda 21 away from most of our cities. Roll up your sleeves, go to city council meetings and listen for phrases like NGOs, Smart Growth, Planning Areas, Public Private Partnerships in relation to your local utilities. Be vocal, call out your public officials for forsaking their oath to protect and defend the Constitution. Time is very short . . . act as if your life depends on it, because it does.

Dave is an award winning psychology, statistics and research professor, a college basketball coach, a mental health counselor, a political activist and writer who has published dozens of editorials and articles in several publications such as Freedoms Phoenix, News With Views andThe Arizona Republic.

NOTE: This article is originally published at this website:

http://www.activistpost.com/2013/03/this-city-is-canary-in-coal-mine-for.html

The Unidigi Network - With Its Own UsuryFree Monetary System

Are you prepared to "make a difference" during this "Year of UsuryFree Living" and in the future?

Permit me to introduce readers to "The UniDigi Network". I encourage everyone to enrol for FREE - (or make a contribution of $25.00 (or more) if you have access to some usury-bearing debt money) and then invite others to multiply and duplicate your leadership.

If so, please commit to doing some (homework) research and reading and re-reading of this critical information posted at the links listed below.

Start by going to: http://www.OneBigJob.com

1. Read The Introduction: http://www.onebigjob.com/introduction.htm

2. Download and read and re-read the two FREE e-books: http://www.onebigjob.com/theeverythingpages.htm

NOTE: A Few Words About The Two e-Books:

"What concerted lie could be so big we can’t believe it exists? Well, this author just released two ground breaking FREE books on the subject totaling over 500 pages & J. Edgar Hoover wasn’t kidding. But 500 pages is a lot and handing out 300 million books is ludicrous, hence what you have in front of you now, THE MOST EYE OPENING 2 PAGES OF TEXT EVER WRITTEN! Everything herein is FACTUAL, no theories or guess work, it’s all the ABSOLUTE TRUTH. Trust a stranger, 1 last time during this short read for I AM YOUR BROTHER AND WILL NOT FAIL YOU! If anything sounds hard to believe, REFER TO HOOVERS’ QUOTE AND DO YOUR OWN FACT CHECKING. It is OUR DUTY & RESPONSIBILITY to be knowledgeable and to keep our republic free. There is no excuse for not seeking the TRUTH! That said, are you ready to learn some of the largest, most important secrets of your existence? OK, enjoy the unforgettable moments of truth in the “Everything PAGE."

 3. Become familiar with "Number University" at these links: http://www.onebigjob.com/thenumberuniversity.htm  &  http://www.numberu.com

4. Read about "The Contest": http://www.onebigjob.com/thejoecreekretreacontest.htm

5. Learn about the "Unified Numbering Foundation": http://www.onebigjob.com/theunifiednumberingfoundation.htm

6. Learn about "The Unidigi Network": http://www.onebigjob.com/unidigi.htm

7. Know about and be prepared to use The Tool Kit to re-educate others who are ready and willing to be re-educated: http://www.onebigjob.com/the_tool_kit.htm

8. Take action NOW - http://www.onebigjob.com/outbank.htm - Learn about "The Outbank" - The People's Repository". Lots more information at this website: http://www.outbank.com

After your homework assignment is completed, then go to http://www.unidigi.com and sign up for FREE and receive #25 in the new digital currency of "number coin." You have the option of making a minimum contribution of $25.00 (US Funds) and receiving #250,000. Otherwise, if you make a larger contribution, then simply multiply your contribution by 10,000 to calculate the amount of "number coin" you will receive in your account.

More details about "The Outbank's new digital currency called 'numbercoin' in this article "Want To Beat Them? OutBank 'em!"

You will be sent a Temporary User Number and a Temporary Password by email. After you log in you will have an opportunity to create a permanent User Number and Password.

NOTE: My Permanent NumberName is "usuryfree" - so please insert "usuryfree' when you are asked who is your referrer.

Usuryfree creatives - everywhere, please find the time (a) to visit the website: http://www.onebigjob.com and (b) to read the 2 e-books and (c) to join http://www/unidigi.com with myself (usuryfree) as your referrer.

NOTE: Become familiar with "Bitcoin" and understand why "NumberCoin" is superior by reading Anthony Michgels' article titled "Bitcoin, Blessing or a Trap?" and his related articles "Baffling Bitcoin" and "Bitcoin, Impressive But Flawed."

Bitcoin, Blessing or a Trap?

By Anthony Migchels

Bitcoin now stands at $89. It’s the most ridiculous bubble in ages and its bust will be legendary.

Not an extensive analysis this time, just calling the now obvious: Bitcoin is trouble.

Bitcoin was at a mere $6 only 15 months ago and traded at $30 last month. Combined value of outstanding Bitcoins is now almost $1 billion.

As we have analyzed Bitcoin was designed to be deflationary. As a result it suffers from a rising exchange rate, making people hoard it instead of using it for what money was designed to do: exchange goods and services. As it stands now, Bitcoin is just another completely bogus speculative item.

The whole thing is ridiculous, of course: people are paying $89 for just bits and bytes and it is basically no different than speculating with cyberland and ‘avatars’ in on-line computer games. Hardly any serious goods or services can be bought with Bitcoin.

Once reality sinks in, people are going to suffer, not only because of their losses but also because of the dream. And there is a far greater issue here: Bitcoin’s failure will provide regulators with the ideal excuse to clamp down on free market units. The whole thing is starting to look so blatant, it’s probably not unfair to suggest this is just another problem-reaction-solution operation. Considering its shady designer, CIA involvement, recent news that the Government is already looking to get it under control and what is at stake, Bitcoin has become a major liability to free market monetary reform.

NOTE: This article is originally published at this website:
http://www.realcurrencies.wordpress.com/2013/03/29/bitcoin-blessing-or-a-trap

Two Related Articles by Anthony Migchels

Baffling Bitcoin
Bitcoin, Impressive, but Flawed

The Confiscation Scheme Planned for US and UK Depositors

It Can Happen Here

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.

New Zealand has a similar directive, discussed in my last article here, indicating that this isn’t just an emergency measure for troubled Eurozone countries. New Zealand’s Voxy reported on March 19^th:

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 equitywould 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.

One might wonder why the posting of collateral by a derivative counterparty, at some percentage of full exposure, makes the creditor “secured,” while the depositor who puts up 100 cents on the dollar is “unsecured.” But moving on – Smith writes:

Lehman had only two itty bitty banking subsidiaries, and to my knowledge, was not gathering retail deposits. But as readers may recall, Bank of America moved most of its derivatives from its Merrill Lynch operation [to] its depositary in late 2011.

Its “depositary” is the arm of the bank that takes deposits; and at B of A, that means lots and lots of deposits. The deposits are now subject to being wiped out by a major derivatives loss. How bad could that be? Smith quotes Bloomberg:

. . . Bank of America’s holding company . . . held almost $75 trillion of derivatives at the end of June . . . .

That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show.

$75 trillion and $79 trillion in derivatives! These two mega-banks alone hold more in notional derivatives each than the entire global GDP (at $70 trillion). The “notional value” of derivatives is not the same as cash at risk, but according to a cross-post on Smith’s site:

By at least one estimate, in 2010 there was a total of $12 trillion in cash tied up (at risk) in derivatives . . . .

$12 trillion is close to the US GDP.  Smith goes on:

. . . Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs. . . . Lehman failed over a weekend after JP Morgan grabbed collateral.

But it’s even worse than that. During the savings & loan crisis, the FDIC did not have enough in deposit insurance receipts to pay for the Resolution Trust Corporation wind-down vehicle. It had to get more funding from Congress. This move paves the way for another TARP-style shakedown of taxpayers, this time to save depositors.

Perhaps, but Congress has already been burned and is liable to balk a second time. Section 716 of the Dodd-Frank Act specifically prohibits public support for speculative derivatives activities. And in the Eurozone, while the European Stability Mechanism committed Eurozone countries to bail out failed banks, they are apparently having second thoughts there as well. On March 25^th, Dutch Finance Minister Jeroen Dijsselbloem, who played a leading role in imposing the deposit confiscation plan on Cyprus, told reporters that it would be the template for any future bank bailouts, and that “the aim is for the ESM never to have to be used.”

That explains the need for the FDIC-BOE resolution. If the anticipated enabling legislation is passed, the FDIC will no longer need to protect depositor funds; it can just confiscate them.

Worse Than a Tax

An FDIC confiscation of deposits to recapitalize the banks is far different from a simple tax on taxpayers to pay government expenses. The government’s debt is at least arguably the people’s debt, since the government is there to provide services for the people. But when the banks get into trouble with their derivative schemes, they are not serving depositors, who are not getting a cut of the profits. Taking depositor funds is simply theft.

What should be done is to raise FDIC insurance premiums and make the banks pay to keep their depositors whole, but premiums are already high; and the FDIC, like other government regulatory agencies, is subject to regulatory capture.  Deposit insurance has failed, and so has the private banking system that has depended on it for the trust that makes banking work.

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.

The Swedish Alternative: Nationalize the Banks

Another alternative was considered but rejected by President Obama in 2009: nationalize mega-banks that fail. In a February 2009 article titled “Are Uninsured Bank Depositors in Danger?“, Felix Salmon discussed a newsletter by Asia-based investment strategist Christopher Wood, in which Wood wrote:

It is . . . amazing that Obama does not understand the political appeal of the nationalization option. . . . [D]espite this latest setback nationalization of the banks is coming sooner or later because the realities of the situation will demand it. The result will be shareholders wiped out and bondholders forced to take debt-for-equity swaps, if not hopefully depositors.

On whether depositors could indeed be forced to become equity holders, Salmon commented:

It’s worth remembering that depositors are unsecured creditors of any bank; usually, indeed, they’re by far the largest class of unsecured creditors.

President Obama acknowledged that bank nationalization had worked in Sweden, and that the course pursued by the US Fed had not worked in Japan, which wound up instead in a “lost decade.”  But Obama opted for the Japanese approach because, according to Ed Harrison, “Americans will not tolerate nationalization.”

But that was four years ago. When Americans realize that the alternative is to have their ready cash transformed into “bank stock” of questionable marketability, moving failed mega-banks into the public sector may start to have more appeal.

ELLEN BROWN is an attorney and president of the Public Banking Institute.  In Web of Debt, her latest of eleven books, she shows how a private banking oligarchy has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are http://WebofDebt.com, http://EllenBrown.com , and http://PublicBankingInstitute.org 

The Global Elite Are Very Clearly Telling Us That They Plan To Raid Our Bank Accounts

By Michael Snyder

Don't be surprised when the global elite confiscate money from your bank account one day.  They are already very clearly telling you that they are going to do it.  Dutch Finance Minister Jeroen Dijsselbloem is the president of the Eurogroup - an organization of eurozone finance ministers that was instrumental in putting together the Cyprus "deal" - and he has said publicly that what has just happened in Cyprus will serve as a blueprint for future bank bailouts.  What that means is that when the chips are down, they are going to come after YOUR money.  So why should anyone put a large amount of money in the bank at this point?  

Perhaps you can make one or two percent on your money if you shop around for a really good deal, but there is also a chance that 40 percent (or more) of your money will be confiscated if the bank fails.  And considering the fact that there are vast numbers of banks all over the United States and Europe that are teetering on the verge of insolvency, why would anyone want to take such a risk?  What the global elite have done is that they have messed around with the fundamental trust that people have in the banking system.  In order for any financial system to work, people must have faith in the safety and security of that financial system.  People put their money in the bank because they think that it will be safe there.  If you take away that feeling of safety, you jeopardize the entire system.

So exactly how did the big banks in Cyprus get into so much trouble?  Well, they have been doing exactly what hundreds of other large banks all over the U.S. and Europe have been doing.  They have been gambling with our money.  In particular, the big banks in Cyprus made huge bets on Greek sovereign debt which ended up failing.

But what happened in Cyprus is just the tip of the iceberg.  All over the planet major financial institutions are being incredibly reckless with client money.  They are leveraged to the hilt and they have transformed the global financial system into a gigantic casino.

If they win on their bets, they become fabulously wealthy.

If they lose on their bets, they know that the politicians won't let the banks fail.  They know that they will get bailed out one way or another.

And who pays?

We do.

Either our tax dollars are used to fund a government-sponsored bailout, or as we have just witnessed in Cyprus, money is directly confiscated from our bank accounts.

And then the game begins again.

People need to understand that the precedent that has just been set in Cyprus is a game changer.

The next time that a major bank fails in Greece or Italy or Spain (or in the United States for that matter), the precedent that has been set in Cyprus will be looked to as a "template" for how to handle the situation.

Eurogroup president Jeroen Dijsselbloem has even publicly admitted that what just happened in Cyprus will serve as a model for future bank bailouts.  Just check out what he said a few days ago...

"If there is a risk in a bank, our first question should be 'Okay, what are you in the bank going to do about that? What can you do to recapitalise yourself?'. If the bank can't do it, then we'll talk to the shareholders and the bondholders, we'll ask them to contribute in recapitalising the bank, and if necessary the uninsured deposit holders"

Dijsselbloem insists that this will cause people "to think about the risks" before they put their money somewhere...

"It will force all financial institutions, as well as investors, to think about the risks they are taking on because they will now have to realise that it may also hurt them. The risks might come towards them."

Well, as depositors in Cyprus just found out, there is a risk that you could lose 40 percent (and that is the best case scenario) of your money if you put it in the bank.

Why would anyone want to take that risk - especially in a nation that is already experiencing very serious financial troubles such as Greece, Italy or Spain?

As if that was not enough, Dijsselbloem later went in front of the Dutch parliament and publicly defended a wealth tax like the one that was just imposed in Cyprus.

Dijsselbloem is being widely criticized, and rightfully so.  But at least he is being more honest that many other politicians.  His predecessor as the head of the Eurogroup, Jean-Claude Juncker, once said that "you have to lie" to the people in order to keep the financial markets calm...

Mr. Dijsselbloem's style contrasts with that of his predecessor, Jean-Claude Juncker, Luxembourg's prime minister, who spoke in a low mumble at news conferences and was expert at sidestepping questions. Mr. Juncker once even advocated lying as a way to prevent financial markets from panicking—as they did Monday after Mr. Dijsselbloem's comments.

"When it becomes serious, you have to lie," Mr. Juncker said in April 2011. "If you have pre-indicated possible decisions, you are feeding speculation in the financial markets."

But Dijsselbloem is certainly not the only one among the global elite that is admitting what is coming next.  Just check out what Joerg Kraemer, the chief economist at Commerzbank, recently told Handelsblatt about what he believes should be done in Italy...

"A tax rate of 15 percent on financial assets would probably be enough to push the Italian government debt to below the critical level of 100 percent of gross domestic product"

Yikes!

And as I wrote about the other day, the Finance Minister of New Zealand is proposing that bank account holders in his nation should be required to "take a haircut" if any banks in his nation fail.

They are telling us what they plan to do.

They are telling us that they plan to raid all of our bank accounts when the global financial system fails.

And calling it a "haircut" does not change the fact of what it really is.  The truth is that when they confiscate money from our bank accounts it is outright theft.  Just check out what the Daily Mail had to say about the situation in Cyprus...

People who rob old ladies in the street, or hold up security vans, are branded as thieves. Yet when Germany presides over a heist of billions of pounds from private savers’ Cyprus bank accounts, to ‘save the euro’ for the hundredth time, this is claimed as high statesmanship.

It is nothing of the sort. The deal to secure a €10 billion German bailout of the bankrupt Mediterranean island is one of the nastiest and most immoral political acts of modern times. 

It has struck fear into the hearts of hundreds of millions of European citizens, because it establishes a dire precedent.

And when you cause paralysis in the banking system, a once thriving economy can freeze up almost overnight.  The following is an excerpt from a report from someone that is actually living over in Cyprus...

As it stands now, nowhere in Cyprus accepts credit or debit cards anymore for fear of not being paid, it is CASH ONLY. Businesses have stopped functioning because they cannot pay employees OR pay for the stock they receive because the banks are closed. If the banks remain closed, the economy will be destroyed and STOP COMPLETELY. Looting, robberies and theft are already on the rise. If the banks open now, there will be a massive run on the bank, and the banks will FAIL loosing all of its deposits, also causing an economic crash. TONIGHT there are demonstrations at most street corners and especially at the parliament building (just 2 miles from me).

Many are thinking that the ECB and EU are allowing Cyprus to fail as a test ground for new financial standards.

Just wanted all you guys to know the real story of whats going on here. Prayers are appreciated (although this is very interesting to watch) many of my local friends have lots of money in the banks.

Would similar things happen in the United States if there was a major banking crisis someday?

That is something to think about.

In any event, the problems in the rest of Europe continue to get even worse...

-The stock market in Greece is crashing.  It is down by more than 10 percent over the past two days.

-The stock markets in Italy and Spain are experiencing huge declines as well.  Banking stocks are being hit particularly hard.

-The Bank of Spain says that the Spanish economy will sink even deeper into recession this year.

-The latest numbers from the Spanish government show that Spain's debt problem is rapidly getting worse...

"The central government’s interest bill surged 15 percent last year to 26 billion euros, while tax receipts slumped 21 percent. The cost of servicing debt represented 30 percent of the taxes collected at the end of December, up from 20 percent a year earlier."

-The euro took quite a tumble on Thursday and the euro will likely continue to decline steadily in the weeks and months to come.

For a very long time I have been warning that the next major wave of the economic collapse is going to originate in Europe.

Hopefully people are starting to see what I am talking about.

As this point, the major banks in Europe are leveraged about 26 to 1, and that is close to the kind of leverage that Lehman Brothers had when it finally collapsed.  As a whole, European banks are drowning in debt, they are taking risks that are almost incomprehensible and now faith in those banks has been greatly undermined by what has happened in Cyprus.

Anyone that cannot see a crisis coming in Europe simply does not understand the financial world.  A moment of reckoning is rapidly approaching for Europe.  The following is from a recent article by Graham Summers...

At the end of the day, the reason Europe hasn’t been fixed is because CAPITAL SIMPLY ISN’T THERE. Europe and its alleged backstops are out of money. This includes Germany, the ECB and the mega-bailout funds such as the ESM.

Germany has already committed to bailouts that equal 5% of its GDP. The single largest transfer payment ever made by one country to another was the Marshall Plan in which the US transferred an amount equal to 5% of its GDP. Germany WILL NOT exceed this. So don’t count on more money from Germany.

The ECB is chock full of garbage debts which have been pledged as collateral for loans. If anyone of significance defaults in Europe, the ECB is insolvent. Sure it can print more money, but once the BIG collateral call hits, money printing is useless because the amount of money the ECB would have to print would implode the system.

And then of course there are the mega bailout funds such as the ESM. The only problem here is that Spain and Italy make up 30% of the ESM's supposed “funding.” That’s right, nearly one third of the mega-bailout fund’s capital will come from countries that are bankrupt themselves.

What could go wrong?

Right now, close to half of all money that is on deposit at banks in Europe is uninsured.  As people move that uninsured money out of the banks, the amount of money that will be required to "fix the banks" will go up even higher.

It would be wise to try to avoid the big banks at this point - especially those with very large exposure to derivatives.  Any financial institution that uses customer money to make reckless bets is not to be trusted.

If you can find a small local bank or credit union to do business with you will probably be better off.

And don't think that this kind of thing can never happen in the United States.

One of the key players that was pushing the idea of a "wealth tax" in Cyprus was the IMF.  And everyone knows that the IMF is heavily dominated by the United States.  In fact, the headquarters of the IMF is located right in the heart of Washington D.C. not too far from the White House.  When I worked in D.C. I would walk by the IMF headquarters quite a bit.

So if the United States thought that confiscating money from bank accounts was a great idea in Cyprus, why wouldn't they implement such a thing here under similar circumstances?

The global elite are telling us what they plan to do, and the game has dramatically changed.

Move your money while you still can.

Unfortunately, it is already too late for the people of Cyprus.

NOTE: This article is originally published at this website:

http://theeconomiccollapseblog.com/archives/the-global-elite-are-very-clearly-telling-us-that-they-plan-to-raid-our-bank-accounts