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Think Your Money Is Safe In An Insured Bank Account? Think Again

Think Your Money Is Safe In An Insured Bank Account? Think Again

Monday, 08 July 2013 10:05
By Ellen Brown, Web of Debt Blog | News Analysis

A trend to shift responsibility for bank losses onto blameless depositors lets banks gamble away your money.

When Dutch Finance Minister Jeroen Dijsselbloem told reporters on March 13, 2013, that the Cyprus deposit confiscation scheme would be the template for future European bank bailouts, the statement caused so much furor that he had to retract it. But the “bail in” of depositor funds is now being made official EU policy. On June 26, 2013, The New York Times reported that EU finance ministers have agreed on a plan that shifts the responsibility for bank losses from governments to bank investors, creditors and uninsured depositors.

Read more: http://truth-out.org/news/item/17433-think-your-money-is-saf...

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fireant's picture

Depositors SHOULD take the hit!

Put the consumer back into the equation, and risky bank behavior would stop. As it is, no one does their own due diligence with banks because papa daddy goobermint "insures" their deposits.

Undo what Wilson did

Three Points

1. The "bail-in" makes the the owners and creditors of the bank take the loss, rather than the taxpayer - as it should be. The bail-in is just a modified bankruptcy, and it's definitely better than a bailout.

2. In the Cyprus bail-in insured deposits were *not* touched. All the plans laid down by politicians for future bail-ins specifically say that insured deposits won't be touched. I think it is unlikely they would ever let deposit insurance fail (not because they care about us, but because it would doom *their* system).

3. Ellen Brown is a greenbacker and, as such, anything she says on money and banking should be taken with a grain of salt.

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

Roman Empire was a salt based economy after silver disappeared.

Latin Glossary Salarium (Latin) - payment or allowance. Salary (English)

Ellen Brown describes monopoly-money [debt-based promissory notes] backed by the "full faith & credit of the United States government." [Fiat: by decree. Backed by nothing tangible, not even a grain of salt. When a fiat currency fails, the only take-away is the trash.]

The actual meaning of the word "salarium" has been a obscured over the centuries. In the Roman Empire, it meant tax or duty paid on or in salt. It referred also to the road or way by which salt was transported from its place of production (salt mine or the sea).

It meant payments or allowances made to soldiers and the word is clearly linked with the Latin word for salt (sal). Salarium is also an adjective meaning salty. At times that silver was unavailable (such as on a distant campaign) Soldiers were paid... an amount of money (Roman Empire coin) equivalent to a particular amount of salt. Worth their salt.

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

Sorry...what's your point?

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"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

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never mind, Mark beat me to it.

Recommended reading: The Most Dangerous Superstition, http://www.amazon.com/Most-Dangerous-Superstition-Larken-Ros...

"Should be taken with a grain of salt." Whose salt?

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

,duck, ...

goose

LOL

...m'kay.

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

Not so fast cowboy

Yes, but...when one deposits money into a bank that person becomes a creditor. The money then belongs to the bank. It's not your money sitting in their vault. You are now an unsecured creditor of the bank. When the bank goes bust and gets restructured, the big secured creditors get their dough first. You, the gullible peon who deposited money into the bank to be invested, making you a creditor, will get the crumbs as the smoke clears. See the video below for a better explanation.

https://www.youtube.com/watch?v=9GeSTgy0Kcw

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when one deposits money into a bank that person becomes a creditor. The money then belongs to the bank. It's not your money sitting in their vault. You are now an unsecured creditor of the bank.

I agree (and, incidentally, this is why the Rothbardian criticism of FRB is wrong, a demand deposit is not a bailment, it's a loan).

When the bank goes bust and gets restructured, the big secured creditors get their dough first. You, the gullible peon who deposited money into the bank to be invested, making you a creditor, will get the crumbs as the smoke clears.

In a normal corporate bankruptcy, unsecured creditors come after secured creditors, yes, but that's not how it's going to be done in reality with banks. Deposit insurance will be honored, and they've reserved to themselves the right to monkey around with the priority of the other creditors.

My point was that this is still preferable to a bailout, at least the creditors/owners take some kind of hit (even if not apportioned properly) rather than the entire burden falling on the public.

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

NCMarc's picture

what money? you mean those

what money? you mean those worthless "Reserve Notes"... they are like IOUs with no repayment plan.

I don't keep much money in the bank. I don't like their rules of how much I can take out a day and their hours of operation.

I prefer to deal in hard goods. Things that have real value and are useful to a large portion of the world.

Invest your money into tangible things, you'll be a lot better off later.

I don't plan on the economy being the same in 20 years when I retire as it is now. Things are WAY to unstable.

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A great empire, like a great cake, is most easily diminished at the edges. - Ben Franklin