Banks & Cash

The Rise of Cashless Banks (And What To Do About It)

By J.P. Koning Monday, March 11, 2019

For centuries bank deposits have come with a comforting guarantee. Depositors have always been able to quickly convert them at par into cash.

But this guarantee is slowly being eroded. Banks in Canada, Ireland, Australia, Denmark, and Sweden are closing full-service branches and adopting a less-staffed “cashless bank” model. In a cashless branch, customers can no longer deposit or withdraw cash over the counter.

The next step will be when banks remove their external ATM machines too. Once this happens, we’ll have entered a strange new world where bank deposits are permanently inconvertible.

But if we don’t want a world with cashless banks, here’s a potential solution. Maybe banks should be allowed to issue their own unique brand of banknotes. By doing so, bankers may have more of an incentive to promote cash availability.

Bankers have been steadily introducing cashless banks over the last few years in response to falling customer demand for cash. With fewer people wanting to withdraw or deposit cash, the cost of offering these services gets harder to justify to shareholders.

Some commentators worry that banks are not simply reacting to customer preferences but are taking an active role in reducing cash usage. In a recent opinion piece, Brett Scott accuses banks of nudging customers away from cash by re-designing the withdrawal and deposit processes to be less accommodating.

As Scott points out, banks have an incentive to move customers into cards and other digital channels because that way they can make more profit off of transactions and suck up more data. Furthermore, deposits compete with central bank-issued banknotes as a form of saving. Banks prefer that consumers lodge cash at the bank because deposits are a low-cost source of funding for banks.

That banks are sole distributors of a third-party product that they directly compete with represents a major conflict of interest. This arrangement is unfortunate given cash’s many benefits. To begin with, it makes for a great back-up payments system — unlike card-based systems, cash can’t crash. It is also used by many people for budgeting purposes. And finally, banknotes allow people to regulate how much personal information they must give up in transactions. I’ve talked about many of these advantages before.

Given that cash is important to society, but banks have a perverse incentive to prevent its circulation, what is the solution? Perhaps the answer is to get banks on side by allowing them to issue their own banknotes. If they have a direct financial stake in the fate of cash, then banks will be less conflicted in the role they play as society’s main distributors of coins and banknotes.

Ireland is an interesting case study. The Bank of Ireland is the largest private bank in both the Republic of Ireland (a separate country) and Northern Ireland (which is part of the UK). Oddly enough, even as the Bank of Ireland threatens to make most of its branches in the Republic of Ireland cash-free, the northern arm of the bank is rolling out new polymer banknotes in 2019.

Banks in Northern Ireland and Scotland enjoy a long tradition of issuing their own banknotes. Of the four note-issuing banks in Northern Ireland, the Bank of Ireland is the largest issuer followed by Ulster Bank, Danske, and First Trust. As of the end of 2018, the big four had issued £2.9 billion worth of banknotes. These banks aren’t obligated to provide Northern Ireland with cash. They print it because their customers want it.

The Bank of England, UK’s central bank, requires Northern Ireland’s private note issuers to “back” each pound they issue with at least 60 cents in Bank of England notes or coins. The other 40 cents in backing can be held in an interest-yielding account at the Bank of England.

Northern Ireland’s cash-issuing banks thus enjoy two advantages relative to banks that cannot issue cash. Since they needn’t pay any interest to their banknote customers, but enjoy interest on the backing assets held in their account at Bank of England, they earn a recurring flow of income on each note that they put into circulation. Secondly, the circulation of their particular brand of banknotes serves as a form of free advertisement. The more of its notes that a bank can get the public to use, the more visibility it steals from competitors.

Thus, the Bank of Ireland’s northern operations have an incentive to ensure that cash is always available to depositors. But the bank’s southern arm, which distributes euro banknotes, does not have the same incentive, since it doesn’t directly share in the financial advantages of promoting cash usage.

The benefits of issuing cash can be sizable. For instance, at the end of 2017 Ulster Bank has issued £803 million in banknotes. This accounts for 7% of the bank’s total £11,501 million in liabilities. Given that Ulster Bank currently pays as much as 0.85% on its other liabilities, including savings accounts, the ability to issue notes at 0% significantly reduces its funding costs. I doubt that Ulster Bank would want to sabotage this gift.

Critics will point out that allowing banks to issue cash comes at the expense of the tax payer. That’s true. All of the profits that the Bank of England earns are paid back to the state, and ultimately the taxpaying citizens. By directing a bit of interest to the Bank of Ireland and other private issuers, that leaves less for the state.

But notice that Bank of England strikes a careful balance. It only allows the Bank of Ireland, Ulster Bank, and other private issuers to keep 40% of their backing assets in an interest-yielding account, the other 60% being lodged in no-yield Bank of England banknotes. So the current Northern Irish arrangement illustrates how it is possible to accommodate both taxpayers, banks, and their customers.

Alternatively, banks could invest the 40% in a higher yielding loan portfolio. Although some people might have financial stability concerns, we know from Selgin and White’s explorations of free banking that private banknote systems can be quite sound.

Allowing private banks to issue banknotes may seem like a radical solution. But by fixing the dysfunctional relationship between banks and cash, this option may help prevent an equally radical scenario from emerging; a world with only cashless banks.

from:    https://www.aier.org/article/sound-money-project/rise-cashless-banks-and-what-do-about-it

The Future of Banking?

Major Bank Official: Banks Are “Preparing for an Economic Nuclear Winter”

Posted by August 30, 2016

nuclear winter-compressed

By Matt Agorist | Activist Post

After years of giveaways to megabanks, marketed to the taxpayers as ‘quantitative easing,’ the crutches shoved under the banker-controlled global stock trade are about to snap. Bankers now say they are preparing for the collapse.

In June of 2015, former Congressman Ron Paul predicted that these crutches would fail, and the financial bubbles created by them would send the stock market into a free-fall.

The consequences will not be minor. Surprises will be many, since we are in uncertain waters and the world has never faced the gross misallocation of capital that exists today. The process is self-limiting. It will come to an end, and it’s not going to be far into the future.

Now, as chaos in the EU and weak corporate earnings create a tornado of uncertainty, banks are preparing for the worst.

According to CNBC quoting a major lender, banks are “preparing for an economic nuclear winter situation.”

The chaos in the market has major bank officials running for the hills. According to CNBC, European banks, in particular, have had a very tough six months as the shock and volatility around Brexit sent banking stocks south. Major European banks like Deutsche Bank and Credit Suisse saw their shares in free-fall after the referendum’s results were announced. In the U.K., RBS was the worst-hit, with its shares plunging by more than 30 percent since June 24.

On Sunday, a source, speaking on the condition of anonymity, due to the fact that revealing this information can get bankers killed, a source from a major investment bank told CNBC “that financial services firms have put together a strategy in place that takes into account the worst-case scenario that could happen by the end of this year.”

“This could mean triggering Article 50, referendum in other European nations leading to a break-up of the euro or sterling hitting below $1.20 or lower. The banks are ready for anything now,” the source said.

This grim warning comes after the Royal Bank of Scotland has warned its investors of a “cataclysmic year.” In an eerily ominous note to its clients early this year, the megabank predicted another worse case scenario.

Sell everything except high quality bonds. This is about return of capital, not return on capital. In a crowded hall, exit doors are small.

In the note, RBS’s credit chief Andrew Roberts told investors how Quantitative Easing has failed and was expected to fail.

We have been told for 7 years now since the credit crunch, under QE, to borrow money and invest it in one of 3 things: 1) EM 2) credit 3) global equities. This is a big picture, multi-year bet that has been taken, which has worked fine, and stopped working 10 months ago, (this is NOT NEW).

As the Guardian’s Larry Elliott points out:

Markets have been supported for some time by low-interest rates, stimulus measures from central banks including quantitative easing, and hopes of economic recovery. But with the Federal Reserve raising rates and the Bank of England expected to follow suit, that prop is being removed.

Those who pay attention to the effects of central bankers looting their respective countries have long pointed out the mathematical certainty that is an economic collapse.

The collapse of global markets is inevitable as it is a natural correction to the wholesale fleecing of the citizens through the unscrupulous actions of central banks.

Ron Paul sums up the situation perfectly:

The credit and new money, when created by a central bank, is delivered to the market in a political fashion for which the one percent receive special benefits. It allows the pyramiding of debt to fractional reserve banking, which compounds the long-term problems.

It may be fun while it lasts, but it always ends with a crash.

from:    http://consciouslifenews.com/major-bank-official-banks-preparing-economic-nuclear-winter/11125063/

What is Going On ?

Survival Weekend: What Could Possibly Go Wrong?

by Elle

0 16

Daisy Luther
Contributor, ZenGardner.com

Today on Survival Saturday, we have a series of stories that could  all be headlined, “What could possibly go wrong?” Do you remember the reality show by that name, where a couple of guys apply science and logic to ill-conceived ideas and explain exactly what could go wrong when you power  a skateboard with homemade rockets? Perhaps our future doom won’t be caused by some kind of epic disaster, but by the unwillingness of the people to actually accept reality and apply logic to it.

Survival Saturday is  a round-up of the week’s news and resources for folks who are interested in being prepared.

This Week in the News…

Coming to a City Near You: Aerial Spraying of GMO Bacteria over Residential Neighborhoods

Since regular pesticide isn’t bad enough, the officials of Seattle, Washington have taken things one step further: they’re going to douse the city in a genetically modified bacteria in an experimental attempt to eradicate gypsy moths. What could possibly go wrong with that one? (Well, for one thing, the story about the Zika virus originating in the area of South America where GMO mosquitos were released comes to mind.)

If you ever wondered whether you might possibly be an unwilling participant in a science experiment, I think it’s pretty safe to assume that you are.

The Washington Department of Health has recommended that people stay indoors for half an hour after the spray. (They don’t mention anything about sealing doors and windows with duct tape or closing vents to the outside, but hey, maybe that’s just me.)  Of course, the USDA, always a proponent of things GMO and unnatural, says everything will be just fine, claiming that “the acidic diet of most Americans renders the bacteria harmless, though it is persistent in produce and food products.” Apparently, this GMO bacteria pesticide has been sprayed on our food for a while now, although I must have missed the announcement of that practice.

Speaking of pesticides, if you’re trying to avoid them check out this newly-released list of the fruits and vegetable with the highest pesticide residue this year. Grab a kleenex, because the things that must now be purchased organically will make you weep.

Reality Is Mean

Let me preface by saying that this little rant does not reflect my opinions on who can use which bathroom. Honestly, I don’t care. There are stall doors. Don’t even get me started on pondering how bathroom laws would be enforced or how it isn’t the government’s place to be potty monitors. We have bigger problems in this country than who pees where and you’d be wise not to get sidetracked by that ridiculous debate.

Okay – back to the story.

I’ll never forget when my kiddo was in 4th grade. She was telling me about an event that happened in school and being very vague in her description of the girl involved. Finally, it dawned on me. I asked her, “Are you talking about the girl in your class who is black?”  Since there was only one child in the class of African American descent, that did indeed narrow it down. But my daughter was horrified because the kids had been taught never to refer to a person’s race, even when it was the most accurate descriptor.  If I thought that was absolutely ridiculous, I had no idea at the time what was coming down the pipe of political correctness.

Well, here it is. And what has come out of the pipe is the pure sewage of cognitive dissonance.

What could possibly go wrong in a society that politely accepts fantasy as fact? It seems pretty obvious to me that college students are being prepped for the world Orwell had imagined.

Here’s What’s Going on Behind the Pending Economic Disaster

I sent out an extra email last week because I stumbled upon a series of events that made me wonder if the economic collapse is truly upon us. The Fed (which isn’t at all federal, but that’s another story – and one you really should read) has issued warnings to 3 major banks that their contingency plans simply won’t cut it. Chillingly, the Fed wrote to JPMorgan Chase that their plan was “not sufficiently actionable” and that it contained a “deficiency” so great that it could “pose serious adverse effects to the financial stability of the United States.”  Gulp.

Meanwhile, secret meetings between those in the economic know abounded last week and Saudi Arabia threatened the US with massive economic reprisals – and by massive, I mean billions and billions of dollars –  if their part in 9/11 came to light in a bipartisan bill on the table in Congress that would allow victims of 9/11 and other terrorist attacks to sue foreign governments.

A commodity trader has come forward (sort of…anonymously) and said that the current plan in the economic world is even worse. In his own words:

Here comes my Very-REAL Conspiracy Theory: the stupid FED and other Central Bankers around the world acting in unison to artificially raise inflation so that they can hopefully get out of the F’ing mess they got themselves into with this low/negative rate BS.  Call me crazy, and I am not a “conspiracy theorist” – but what is happening has absolutely no “reasonable” explanation.  So I have to think outside the box…

The FED and other Central Banks have already destroyed the equity and other macro-financial markets… it is now turn for the commodities markets…

Gee…what could possibly go wrong if/when that plan is enacted? Read the rest of his theory here.

Oh – and on a related note, if you ever wondered why no bankers have gone to jail for their parts in the economic cluster pulling the rest of the country under – an insider explains exactly why in this article. What could possibly go wrong with ignoring that?

You’ve Got to Taste It to Believe It

Do you have the supplies you need to survive an interruption in the supply chain? Regardless of what type of disaster you are preparing for, it pays to have nutritious, long-term supplies that you can rely on. Preppers Market features the products I use to ensure my own family’s health and well-being. You won’t find any GMOs, any soy, or chemical preservatives in our foods.  Gluten-free products are also available for those who do not tolerate wheat products.

Emergency foods are hard to fully appreciate without tasting. Before you make an expensive purchase, try our 4 recipe Sampler Pack: Pasta Primavera, Enchilada Beans and Rice, Granola and Sweet Habanero Chili.

Healthy food storage with GMO-Free ingredients and great taste are rare. I know you’ll be convinced when you taste test our food!

Go here to check out the high-quality offerings, or try a sample pack first. You won’t be disappointed in the delicious taste!

Remember How I Said Justice Scalia’s Death Would Have Serious Repercussions?

I’m not one to say “I told you so!” – wait – who am I kidding? I totally am.

So, here it is.

Remember how I said Scalia’s sudden death, whether it came from natural causes or he was murdered, could change everything? At immediate risk, it seems, will be our right to bear arms.

If you’re wondering what could possibly go wrong if we get someone left-leaning in office, consider that Scalia’s replacement could very likely be the deciding factor in whether or not the Second Amendment remains strong. And now, Chelsea Clinton has danced on his freshly turned grave affirmed the plan to poke even more holes in our right to protect ourselves and our families, and even points out how much easier it will be now that Scalia is no longer on the bench. As reported by SHTFplan:

“It matters to me that my mom also recognizes the role the Supreme Court has when it comes to gun control. With Justice Scalia on the bench, one of the few areas where the court actually had an inconsistent record relates to gun control.”

“Sometimes the court upheld local and state gun control measures as being compliant with the Second Amendment and sometimes the court struck them down.”

“So if you listen to Moms Demand Action and the Brady Campaign and the major efforts pushing for smart, sensible, and enforceable gun control across our country — disclosure [they] have endorsed my mom, they say they believe the next time the court rules on gun control, it will make a definitive ruling.”

Stock up, folks. Foodammo, and firearms.

Oh – and on a related note, did anybody else notice that Prince was immediately autopsied and a Supreme Court Justice was pronounced dead over the phone and instantly embalmed, thus precluding the possibility of an investigation into his death? Just sayin’.

Anything to add to Survival Saturday?

Oh – I do! Here’s one last link. Remember how our cat disappeared on moving day? Well, our pampered housecat managed to survive almost 5 weeks in the forest, and now he’s back. Of course, it got me thinking about how we could all learn some survival lessons from a lost kitty – you can check out the story here, assuming you don’t hate cats or happy endings.

from:    http://www.zengardner.com/survival-saturday-possibly-go-wrong/

Bank Bail-ins Threaten Savings

A Crisis Worse Than ISIS? Bail-Ins Begin

by Zen Gardner Dec 30, 2015

EllenBrown.com

While the mainstream media focus on ISIS extremists, a threat that has gone virtually unreported is that your life savings could be wiped out in a massive derivatives collapse. Bank bail-ins have begun in Europe, and the infrastructure is in place in the US.  Poverty also kills.

At the end of November, an Italian pensioner hanged himself after his entire €100,000 savings were confiscated in a bank “rescue” scheme. He left a suicide note blaming the bank, where he had been a customer for 50 years and had invested in bank-issued bonds. But he might better have blamed the EU and the G20’s Financial Stability Board, which have imposed an “Orderly Resolution” regime that keeps insolvent banks afloat by confiscating the savings of investors and depositors. Some 130,000 shareholders and junior bond holders suffered losses in the “rescue.”

The pensioner’s bank was one of four small regional banks that had been put under special administration over the past two years. The €3.6 billion ($3.83 billion) rescue plan launched by the Italian government uses a newly-formed National Resolution Fund, which is fed by the country’s healthy banks. But before the fund can be tapped, losses must be imposed on investors; and in January, EU rules will require that they also be imposed on depositors. According to a December 10th article on BBC.com:

The rescue was a “bail-in” – meaning bondholders suffered losses – unlike the hugely unpopular bank bailouts during the 2008 financial crisis, which cost ordinary EU taxpayers tens of billions of euros.

Correspondents say [Italian Prime Minister] Renzi acted quickly because in January, the EU is tightening the rules on bank rescues – they will force losses on depositors holding more than €100,000, as well as bank shareholders and bondholders.

. . . [L]etting the four banks fail under those new EU rules next year would have meant “sacrificing the money of one million savers and the jobs of nearly 6,000 people”.

That is what is predicted for 2016: massive sacrifice of savings and jobs to prop up a “systemically risky” global banking scheme.

Bail-in Under Dodd-Frank

That is all happening in the EU. Is there reason for concern in the US?

According to former hedge fund manager Shah Gilani, writing for Money Morning, there is. In a November 30th article titled “Why I’m Closing My Bank Accounts While I Still Can,” he writes:

[It is] entirely possible in the next banking crisis that depositors in giant too-big-to-fail failing banks could have their money confiscated and turned into equity shares. . . .

If your too-big-to-fail (TBTF) bank is failing because they can’t pay off derivative bets they made, and the government refuses to bail them out, under a mandate titled “Adequacy of Loss-Absorbing Capacity of Global Systemically Important Banks in Resolution,” approved on Nov. 16, 2014, by the G20’s Financial Stability Board, they can take your deposited money and turn it into shares of equity capital to try and keep your TBTF bank from failing.

Once your money is deposited in the bank, it legally becomes the property of the bank. Gilani explains:

Your deposited cash is an unsecured debt obligation of your bank. It owes you that money back.

If you bank with one of the country’s biggest banks, who collectively have trillions of dollars of derivatives they hold “off balance sheet” (meaning those debts aren’t recorded on banks’ GAAP balance sheets), those debt bets have a superior legal standing to your deposits and get paid back before you get any of your cash.

. . . Big banks got that language inserted into the 2010 Dodd-Frank law meant to rein in dangerous bank behavior.

The banks inserted the language and the legislators signed it, without necessarily understanding it or even reading it. At over 2,300 pages and still growing, the Dodd Frank Act is currently the longest and most complicated bill ever passed by the US legislature.

Propping Up the Derivatives Scheme

Dodd-Frank states in its preamble that it will “protect the American taxpayer by ending bailouts.” But it does this under Title II by imposing the losses of insolvent financial companies on their common and preferred stockholders, debtholders, and other unsecured creditors. That includes depositors, the largest class of unsecured creditor of any bank.

Title II is aimed at “ensuring that payout to claimants is at least as much as the claimants would have received under bankruptcy liquidation.” But here’s the catch: under both the Dodd Frank Act and the 2005 Bankruptcy Act, derivative claims have super-priority over all other claims, secured and unsecured, insured and uninsured.

The over-the-counter (OTC) derivative market (the largest market for derivatives) is made up of banks and other highly sophisticated players such as hedge funds. OTC derivatives are the bets of these financial players against each other. Derivative claims are considered “secured” because collateral is posted by the parties.

For some inexplicable reason, the hard-earned money you deposit in the bank is not considered “security” or “collateral.” It is just a loan to the bank, and you must stand in line along with the other creditors in hopes of getting it back. State and local governments must also stand in line, although their deposits are considered “secured,” since they remain junior to the derivative claims with “super-priority.”

Turning Bankruptcy on Its Head

 Under the old liquidation rules, an insolvent bank was actually “liquidated” – its assets were sold off to repay depositors and creditors. Under an “orderly resolution,” the accounts of depositors and creditors are emptied to keep the insolvent bank in business. The point of an “orderly resolution” is not to make depositors and creditors whole but to prevent another system-wide “disorderly resolution” of the sort that followed the collapse of Lehman Brothers in 2008. The concern is that pulling a few of the dominoes from the fragile edifice that is our derivatives-laden global banking system will collapse the entire scheme. The sufferings of depositors and investors are just the sacrifices to be borne to maintain this highly lucrative edifice.

In a May 2013 article in Forbes titled “The Cyprus Bank ‘Bail-In’ Is Another Crony Bankster Scam,” Nathan Lewis explained the scheme like this:

At first glance, the “bail-in” resembles the normal capitalist process of liabilities restructuring that should occur when a bank becomes insolvent. . . .

The difference with the “bail-in” is that the order of creditor seniority is changed. In the end, it amounts to the cronies (other banks and government) and non-cronies. The cronies get 100% or more; the non-cronies, including non-interest-bearing depositors who should be super-senior, get a kick in the guts instead. . . .

In principle, depositors are the most senior creditors in a bank. However, that was changed in the 2005 bankruptcy law, which made derivatives liabilities most senior. Considering the extreme levels of derivatives liabilities that many large banks have, and the opportunity to stuff any bank with derivatives liabilities in the last moment, other creditors could easily find there is nothing left for them at all.

As of September 2014, US derivatives had a notional value of nearly $280 trillion. A study involving the cost to taxpayers of the Dodd-Frank rollback slipped by Citibank into the “cromnibus” spending bill last December found that the rule reversal allowed banks to keep $10 trillion in swaps trades on their books. This is money that taxpayers could be on the hook for in another bailout; and since Dodd-Frank replaces bailouts with bail-ins, it is money that creditors and depositors could now be on the hook for. Citibank is particularly vulnerable to swaps on the price of oil. Brent crude dropped from a high of $114 per barrel in June 2014 to a low of $36 in December 2015.

What about FDIC insurance? It covers deposits up to $250,000, but the FDIC fund had only $67.6 billion in it as of June 30, 2015, insuring about $6.35 trillion in deposits. The FDIC has a credit line with the Treasury, but even that only goes to $500 billion; and who would pay that massive loan back? The FDIC fund, too, must stand in line behind the bottomless black hole of derivatives liabilities. As Yves Smith observed in a March 2013 post:

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 depositors to fund derivatives exposures. . . . The deposits are now subject to being wiped out by a major derivatives loss.

Even in the worst of the Great Depression bank bankruptcies, noted Nathan Lewis, creditors eventually recovered nearly all of their money. He concluded:

When super-senior depositors have huge losses of 50% or more, after a “bail-in” restructuring, you know that a crime was committed.

Exiting While We Can

How can you avoid this criminal theft and keep your money safe? It may be too late to pull your savings out of the bank and stuff them under a mattress, as Shah Gilani found when he tried to withdraw a few thousand dollars from his bank. Large withdrawals are now criminally suspect.

You can move your money into one of the credit unions with their own deposit insurance protection; but credit unions and their insurance plans are also under attack. So writes Frances Coppola in a December 18th article titled “Co-operative Banking Under Attack in Europe,” discussing an insolvent Spanish credit union that was the subject of a bail-in in July 2015. When the member-investors were subsequently made whole by the credit union’s private insurance group, there were complaints that the rescue “undermined the principle of creditor bail-in” – this although the insurance fund was privately financed. Critics argued that “this still looks like a circuitous way to do what was initially planned, i.e. to avoid placing losses on private creditors.”

In short, the goal of the bail-in scheme is to place losses on private creditors. Alternatives that allow them to escape could soon be blocked.

from:    http://www.zengardner.com/a-crisis-worse-than-isis-bail-ins-begin/

Charging Fees for Cash Deposits?

WAR ON CASH: Banks to start charging for cash deposits

(NaturalNews) Few could have envisioned it even just a few years ago, but it’s happening now, and on an ever-widening scale. More big U.S. banks are shunning cash, because the banking system has become so dependent on other “assets” that large cash deposits actually pose a threat to their financial health, according to The Wall Street Journal.

State Street Corporation, a Boston-based institution that manages assets for institutional investors, has, for the first time, begun charging some customers for making large cash deposits, according to people familiar with the development.

And the largest U.S. bank in terms of assets — JP Morgan Chase & Co. — has dramatically cut “unwanted” deposits to the tune of $150 billion this year alone, in part by charging customers fees.

What gives? What kind of world do we live in when banks no longer want cash?

As the WSJ reported:

“The developments underscore a deepening conflict over cash. Many businesses have large sums on hand and opportunities to profitably invest it appear scarce. But banks don’t want certain kinds of cash either, judging it costly to keep, and some are imposing fees after jawboning customers to move it.”

As usual, the problem originated largely in Washington, D.C.

Criminalizing cash?

The paper said the banks’ actions are being driven by low interest rates (set by the Fed) that eat into profits, as well as “regulations adopted since the financial crisis to gird banks against funding disruptions,” adding in a separate report that a number of large financial institutions have become more dependent on buying and selling stocks, bonds and commodities like oil.

The latest round of fees for large deposits stems from regulators’ deeming them risky. They are sometimes dubbed hot-money deposits that analysts believe is likely to flee quickly in a crisis (think runs on Greek banks recently, which the government eventually curbed).

Agreed upon a year ago in September and managed by the Federal Reserve and other regulators, the rule covering liquidity coverage ratios forces banks and financial institutions to retain high-quality liquid assets — like central bank reserves and government debt — to cover anticipated deposit losses over a 30-day period (creative way for the federal government to continue financing its overspending — by forcing private banks now to hold government debt). Under the rules, banks are required to retain up to 40 percent against certain corporate deposits and as high as 100 percent against some hedge fund deposits, WSJ reported.

“At some point you wonder whether there will be a shortage of financial institutions willing to take on these balances,” Kelli Moll, head of Akin Gump Strauss Hauer & Feld LLP’s hedge-fund practice in New York, told the paper.

Moll added that the subject of where to actually put cash has become something of an interesting conversation as hedge funds are turned away by the traditional banking sector.

Dodd-Frank is to the financial industry what Obamacare is to health care

WSJ further explained the phenomenon and fallout:

“Jerome Schneider, head of Pacific Investment Management Co.’s short-term and funding desk, which advises corporate and institutional clients, said that as a result of the bank actions, he and his customers have discussed as cash alternatives boosting investments in U.S. Treasury bonds, ultrashort-duration bond funds and money-market funds.”

“Clients have been put on warning,” Schneider said, when it comes to cash.

The rules essentially criminalizing large depositors of cash stem from the 2010 Dodd-Frank financial “reform” law — a “reform” that did to the banking industry what Obamacare has done to the health care industry.

The law’s two primary authors — Democrats Chris Dodd of Connecticut and Rep. Barney Frank of Massachusetts, both of whom are now out of Congress — were also backers of Clinton-era housing rules said by experts to have caused the 2008 financial crisis. So, in essence, Dodd-Frank is punishing banks for rules that the two of them (along with most other Democrats and too many Republicans — and Bill Clinton’s signature on the legislation) actually caused.

In the meantime, there appears to be no end to the federal government’s meddling in both the financial industry and just about every other facet of American life.

Causing more problems than it solves — that’s a classic congressional move.

Reflections on the Monetary System

Is it Time for a New Monetary System?

http://themindunleashed.org/wp-content/uploads/2014/11/monetary.jpg
No matter what problem we look at today, regardless of scope or gender, demographic statistic or geographic location we can provide a solution; if we throw enough money at it…

And therein lies the actual problem.

The fundamental problem the human species faces today is the current monetary system. I submit that only by completely revamping the monetary system will we be successful as a species.

Currently the monetary system is controlled by a “for profit” Central Banking system. The major problem with this system is the idea of profit itself. Profit means “to obtain a financial advantage or benefit”. Unlike barter, the concept of profit necessitates a winner and a loser in any transaction. Most people are not aware that the current monetary system is a for profit system designed to create wealth and power for those that control the system, just as one would profit from the oil or manufacturing industry. Central banking is the business of controlling the monetary system to enrich only those that wield control of the system.

“Give me control of a nation’s money and I care not who makes its laws” ~ Mayer Amschel Bauer Rothschild

The business of banking rests on two pillars. One is foreclosure, the other is usury, or more commonly called interest.

When a man or company or Government takes a “loan” from a bank, the bank actually creates a new digital entry into the system under the borrower’s associated account. It is imperative to understand that this is a digital entry for new “never before been in existence” digital currency.

Regarding the business of foreclosure, if the “borrower” never pays the “loan” back, the bank can foreclose on an outstanding “loan” and then gains control of a tangible asset like a car or a property. Yet the fact is that the bank never risked anything to begin with. The digital currency created at the time of the “loan” is not a tangible thing. It doesn’t exist. It’s like getting the “blessing” of the Bank to go and purchase something. This is a simplification of the system but it is basically a correct understanding. This scheme has worked like a charm for them…

“They will be stripped of their rights and given a commercial value designed to make us a profit and they will be non the wiser, for not one man in a million could ever figure our plans and, if by accident one or two would figure it out, we have in our arsenal plausible deniability”. ~ Edward Mandell House

Regarding the business of usury, whenever a “loan” of non-existent currency is created there is also an interest charge built into the contract. When the borrower pays back the “loan” they are also required to pay back an interest charge that is over and above the newly created currency. The point to understand here is that the interest due was not created along with the new digital currency and thus a shortfall of currency is actually built into the system. Thus bankruptcy is a fundamental component of the current monetary system because there is always a shortage of currency. If every dollar of debt in existence today were to be paid back right now, all the interest would still be outstanding. This is the mathematical formula that has been used for centuries in order to steal tangible wealth from the actual creators of that wealth.

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. ” ~Henry Ford

Having said all that, you might be intrigued and start to gain the understanding that only the bankers can win, but you might also say “so what”? People should be able to profit, after all, profit is the motivating factor in our world.

I submit that the concept of profit is the fundamental core of what is destroying the human species. If a larger, stronger man takes control of another man and subjugates him simply because he can, that is tyranny, and we as a species have evolved to see that this ethically wrong. Now we as a species have to evolve our understanding of the current monetary system to see that we are being subjugated into continuing to propagate the greatest control mechanism ever developed on this planet.

Let’s play the “If” game for a second.

If profit was taken out of the equation; do you think that cancer would still be a major threat to our species?

If profit was not a requirement; do you think that we would be using oil as the fundamental energy source used throughout the world today?

If the concept of profit was not in the human consciousness; do you think that “health” centres would ever refuse to treat the ill? Or actual cures for diseases would be shelved by Big Pharma?

If profit was not the driving factor of agriculture; do you think that we could easily feed the population of the world?

If everyone on the planet never had to worry about shelter or having enough food to eat or clothes to wear, would having more than you need be a consideration?

The concept of “profit” is what is holding us back as a species. We have been indoctrinated into a short term “take what we can NOW” philosophy that is based on the fallacy of continuous growthand competition. I submit that we would be far better off if we forged our future by cultivating the creative use of our finite resources using a co-operative intellectual methodology.

Study after study has shown that the world’s hunger and housing problems could be solved very quickly if a certain amount of money where to be thrown at those two problems. Studies show ending world hunger would cost around 30 billion dollars per year (vs $684 billion for the 2010 U.S. military budget). The fact that we as a species have not eliminated hunger proves that this problem is actually being facilitated. Is that acceptable to you? If it is, then all of us (but the few of the elite at the top of the control pyramid) are doomed.

Profit stifles as much creativity as it generates. Just look at the alternate technologies that have been suppressed because they would have upset the current paradigm, technology such as almost free and truly sustainable energy and anti-gravity devices. If either of these technologies ever went main stream the oil economy would take a huge hit and there would be an immediate shift in the controlling power structure.

The concept of profit is the paradigm that must be shed in order for us to move forward as a compassionate, free and intelligent species. It is the concept of profit that is the shovel we use to dig our own graves.

“Problems are best solved not on the level where they appear to occur but on the next level above them….Problems are best solved by transcending them and looking at them from a higher viewpoint. At the higher level, the problems automatically resolve themselves because of that shift in point of view, or one might see there was no problem at all.” ~David R. Hawkins

Abandoning just one concept, the concept of profit and our species will thrive for centuries to come.

About the Author

Rod Morin operates Barrie Tai Chi & Qigong studio in Barrie, Ontario, Canada, focusing on Yang-style Tai Chi, Taiji Qigong and Ziran Qigong. Rod has taught hundreds of students basic tai chi and energy work while striving to incorporate the profound teachings of taiji philosophy into his daily life. Please visit his website at www.barrietaichi.com.

For more ideas and a potential solution to economic subjugation, please visit Secodnary Money System.

Sources:

 – David R. Hawkins. 2009. Healing and Recovery. Sedona, AZ; Veritas Publishing, p. 176.

This article is offered under Creative Commons license. It’s okay to republish it anywhere as long as attribution bio is included and all links remain intact.

fr0om:    http://themindunleashed.org/2014/11/time-new-monetary-system.html

Mass Banking Resignations Continue

February Fever Becomes March Madness: Mass Banking Resignations Continue Unabated

28th March 2012

By Madison Ruppert

Contributing Writer for Wake Up World

Previously I covered a small slice of the huge number of resignations of executives of financial institutions across the globe, and surprisingly these have not seemed to slow down at all.

At the time, we posted a mere 40 resignations, now that number has jumped up to a shocking 450. These include major figures in everything from saving retirement funds to equity funds, sovereign wealth funds, banks, investment houses and other financial institutions.

The big question that remains from all of this is: why?

Currently the answer to that is unknown and anyone offering a concrete answer is engaging in pure speculation.

One of the most recent resignations is Tarek Amer, the Chief Executive Officer of the National Bank of Egypt. He announced that he will be stepping down from his position at the end of 2012, according to the Egyptian Al Ahram WeeklyInterestingly, he stated that he has not received offers from any other banks and refused to disclose why he was leaving. Apparently Amer first submitted his resignation in February 2011 but it was not accepted.

Also recently announced was the resignation of the UK’s Bank of America Corporation’s Jonathan Moulds. In addition to Moulds quitting, Andrea Orcel, the chairman of global banking and markets, is slated to leave Bank of America Corp. (BAC) to head to UBS AG.

According to Bloomberg, these resignations will be “depriving the firm of two of its most senior executives in Europe.”

Moulds used to oversee the debt and equity sales and trading for both Europe and Asia, in addition to playing a large role in creating BAC’s over-the-counter derivatives trading practices. He also held prominent positions including the global head of rate derivatives trading, the head of global derivatives and the head of global rates and commodities.

Unsurprisingly, there is no clear reason for this individual to resign.

On the same day that the resignation of Moulds was announced, it was also divulged that the Chief Investment Officer at the Nedlloyd Pension Fund, Bert Tibben, stepped down.

Also on that day, March 22, 2012, it came out that Neil Rogan, the head of global equity at Henderson Global Investors in the UK resigned.

March 21 brought no less than five resignations. These included the global head of equity prime services at the Royal Bank of Scotland Group, Gregory WagnerMike Miller, the Ontario and Atlantic regional manager for National Bank Financial in Canada; John Botham, the European equity head for Aviva Investors; Eric Dean, the Chief Information Officer for Liquidity Services Inc.; and Wolfgang Hammes, the co-head of Deutsche Bank AG.

The mysterious and rapid nature of these resignations is quite interesting and makes one wonder what is behind all of this.

Do they know something we do not? Are they preparing for something and cutting their losses? Unfortunately, with how little we know, it is anyone’s best guess. I wish I could tell you that I know why this is going on, but I would be lying.

There is now a Facebook page which is tracking the mass resignations, which I encourage you to visit for the most up-to-date listings of resignations of major figures in financial institutions, government, and other companies.

About the Author

Madison Ruppert is the Editor and Owner-Operator of the alternative news and analysis database End The Lie and has no affiliation with any NGO, political party, economic school, or other organization/cause. He is available for podcast and radio interviews. If you have questions, comments, or corrections feel free to contact him at admin@EndtheLie.com

from:    http://wakeup-world.com/2012/03/28/february-fever-becomes-march-madness-mass-banking-resignations-continue-