The Reason Banks are Trying to Discourage Cash Withdrawals

It's time to attack the bankers, don't take their credit, use gold and silver for money, and buy a house that you can afford. I know some people who love what's going on. They have saved all their lives, and now are buying cheap houses owned by the bank taken by foreclosure. Of course if the banks don't sell these they are responsible for the property taxes, so they don't want to hang on to these for too long. Don't worry, if we play our cards right, the bankers will fall. We just have to get out of their system, use cash, cut up you credit cards, debit cards and live a simpler healthier life.

Great explanation below, now I am convinced it is best to get my money out of the bank.

Banks keep reserves like their own checking accounts with the Federal Reserve bank and currency (Federal Reserve Notes) in their vaults. These reserves are the base from which they create new checking accounts out of thin air; you borrow from a bank by signing a note to them which becomes their asset, and they create a checking account out of thin air for you, their liability. Notice they earn significant interest on the new loans, but pay little or no interest on the checking accounts, which is the whole reason for this scam banking system. Ordinarily they do not need to pay but a fraction of these checking account liabilities each day, and since these are settled out of their reserves, they only to keep small reserves (hence the term fractional reserve banking).

If you force them to draw down their reserves by getting currency in exchange for your checking or savings accounts, then you inhibit their ability to create these new checking accounts out of thin air. This means that they cannot as easily make new loans and they do not get the corresponding interest income. Credit conditions become very tight; getting a loan becomes more difficult.

It is not as much a problem for the banks to get currency to meet a possible run. They can convert their checking account at the Federal Reserve into currency; they can borrow currency from the Federal Reserve Bank, and in an emergency the Federal Reserve can buy loans from your bank in exchange for currency. Also remember that when you hold currency instead of a checking account you are still holding bank debt; it is just "safer" debt to hold when your local bank is on the road to insolvency.

Ultimately if you take currency from the banking system and banks lose the ability to make new loans, then the economy comes to a halt; economic activity under this debt based money system is dependent on a continuously increasing money supply. This is really a vicious contraction cycle, once it gets going. Once the banking system loses the ability to expand the money supply, the whole house of cards falls and we have a 1930's style event. Many people think that printing currency to fund bank runs is inflationary, but it is just the opposite. The money supply does not change in total, because the checking account component of the money supply goes down equal to the increase in the currency component. Not only do the banks without reserves or with reduced reserves lose the ability to expand the money supply, but people hold onto as much currency as they can so the velocity of money circulation goes way down; people do not spend; businesses fail and jobs are lost; asset prices go down.

What is happening in the economy today is highly dangerous. The financial institutions in their most recent binge of expansion accepted very low quality debt and entered into other complex transactions that are now increasingly subject to default. During this expansion, the price of real estate was driven to values all out of proportion to reality by easy credit. This real estate is security for loans, many of which were to people and businesses with inadequate ability to pay. The contraction in real estate values is just beginning and already the losses being suffered by financial institutions are unmanageable. Not just real estate loans are in question as the losses ripple through the system. Debt is now a four letter word. Insolvency is now a plague facing the financial system. Big name institutions like Merril Lynch, Citigroup and Bear Stearns have been in the news as examples of those in trouble.

There already has been blood spilt, that is why we are in Iraq and about to go into Iran.

After I learned about the fractional reserve banking system and how the federal reserve is really run here is what I did.

-Removed all savings from my bank
-only keep enough cash in my checking account to pay bills and gas purchases
-To fight inflation I put all my new acquired cash into silver
-Every paycheck, just enough goes to pay bills (growing weekly now though) and the rest goes into more silver.

It is great because it protects my money, I am actually making (well, fighting inflation very well) money on the silver and I am protesting the fractional reserve banking system. It also forces me to save more. When all my money is in silver it is impossible for me to make on the fly purchases that I would later regret.

My wife just completed a FULL withdrawl/closure from our CHASE accounts and they issued her, at my request, a cashiers check for the large sum and cash for the smaller amount. They asked if she wanted ALL cash and the figure was relatively substantial, but they indicated they would have honored that much cash, however dangerous it may have been to carry around.

It was a series of reasons why we closed it (low level of quality & incompetent service) but the activity I see today sure helped solidify my actions.

The only bank I trust is my piggy bank. I fill it will silver and gold coins and bust it open when I need it. It doesn't pay much interest, but it does protect against the inflation tax. If I want interest I will lend it to a person I trust by giving them a gold coin, and require the same in return (a gold coin) plus a fair interest rate, I believe the bible says 10% for a 6 year term, all unpaid debt excused on the seventh year. Of course this means I really have to trust the person I lend my money!

Keep in mind that pulling your money out of the banks isn't enough. You will still be raped by inflation. If you want to protect the value of your money, you need to convert it to something that has intrinsic value, namely gold and silver. I recommend purchasing locally. Keep enough FRN dollars on you to purchase what you need, put the rest into gold and silver or even open up an account with a service like GoldMoney. Whatever you do, don't put your eggs all in one basket and don't trust the Federal Reserve Note or you will get burned.

In the early 90's in Brazil people would get their paychecks and immediately go to the market and buy food and other goods. If they waited and spent the money only at the end of the month it would only purchase 50% of what it could at the beginning of the month. Salaries of course were adjusted for inflation on a monthly basis. This could happen if dollars begin to return to the American economy. What is preventing this now is that countries are still required to have a reserve of dollars for purchasing internationally. Especially to purchase petroleum, which China is currently doing since they had a difficult winter and also to increase their reserves of petroleum. But if Iran manages to eliminate the middle man (Federal reserve dollars) and trade directly with other nations without the dollar, the dollar will become basically worthless on the international market and have real value only in the States. Now if people begin to withdraw dollar as cash, this increases the amount on the market, because banks do not hold the dollars as computer digits. Cash can flow from one person eliminating the need for banks.

I'd been thinking about your analogy to 'It's a Wonderful Life' and darn if that isn't true.

When there is a run on the banks, George Bailey implores his S&L depositors not to withdraw their funds, since those funds had been lent to other people (ostensibly, other depositors) to build their homes. 'The money's not here' was the quote IIRC. In essence, the Bailey Savings & Loan had NO reserves. Their 'reserves' were the indebtedness of these homebuilders. Sound familiar? The S&L's wealth was the promise of others to repay their debts.

I'd been debating whether I thought George was a good man and by and large he was; he was just stuck with a Ponzi scheme of a business.

So now I see that there are really TWO legal pyramid schemes in existence today (where no real wealth is created): the Federal Reserve, and Social Security.

issued by a bank that goes under, as most banks will not give out much cash at one time? To add to that question, if the FDIC runs out of money
to pay everyone.

It is true that the Fed can print more money, but they don't produce or hold anything else. So the best thing to do is to buy durable food products, gold or silver before the run really gets started. When money is taken out of investments people need to spend it somewhere, since it would be stupid to put it under your mattress. As more money is taken out of reserves the price of goods goes up. You just have to be smart and not use credit, cause this will just eat up any value you have purchased.

uh, they are waiting for the Fed to print more because they ran out?

"He who exercises government by means of his virtue may be compared to the north polar star, which keeps its place and all the stars turn towards it." Confucius

Some time ago, someone posted a link that shows which corporations own which banks. Now, I'm scrambling to find it, but neither a Daily Paul search nor a regular Google search brings it up (in fact, via Google, there are no results at all for "Daily Paul" "who owns your bank").

Anyone still have this link? Please post? Honestly, I think that would deserve its own thread, so people can easily find such an important link, rather than letting it get buried in the comments somewhere.

Thanks.

Stocks fall on Bernanke's bank-trouble comments
http://seattletimes.nwsou...

"Federal Reserve Chairman Ben Bernanke said in testimony to Congress today that while large U.S. banks will likely recover from the recent credit crisis, other banks are at risk of failing. Three small U.S. banks have already failed since the summer, when the lending industry started losing billions of dollars as mortgage defaults soared." - Seattle Times, Feb 28, 2008

FDIC Brings Out Retirees for Failures
http://www.freemarketnews...

"The Federal Deposit Insurance Corp. is taking steps to brace for an increase in failed financial institutions as the nation's housing and credit markets continue to worsen. The FDIC is looking to bring back 25 retirees from its division of resolutions and receiverships. Many of these agency veterans likely worked for the FDIC during the late 1980s and early 1990s, when more than 1,000 financial institutions failed amid the savings-and-loan crisis. -Wall Street Journal"

The Federal Deposit Insurance Corporation holds just half of 1% of all the deposits it ensures

http://www.mises.org/stor...
"In 1932, Franklin D. Roosevelt was elected president and quickly implemented a New Deal policy of "spending us to prosperity." Even though we needed lower taxes and lower spending, his administration would seek unprecedented amounts of money to finance its big-government programs. In his inaugural speech of March 4, 1933, Roosevelt vowed to put an end to poverty and the unemployment lines and get people back to work. It didn't work: the Depression got worse, thanks to increased central planning. FDR only succeeded in making the monetary system even less sound. Just after taking office the president declared a four-day nationwide bank holiday, absolving the bankrupt fractional-reserve banks of any need to repay their depositors. But before the banks reopened, the Roosevelt administration had to come up with a scheme that would lead people to believe that new deposits would be safe. It created the Federal Deposit Insurance Corporation to lull the public into a sense of security. In reality, the Federal Deposit Insurance Corporation holds just half of 1% of all the deposits it ensures, but what people are counting on is that the Fed, as the lender of last resort, would step in and print whatever money would be necessary to prevent a massive bank run." - From "Money Banking and the Federal Reserve" by the Ludwig Von Mises Institute (also try googling this video)

Bailing out failing banks at the taxpayers expense
"Every time one of the big banks gets into trouble, not the small banks remember, they're the competition, the big banks get into trouble and they are bailed out at taxpayers' expense. Always in the name of protecting the people. If a large corporation is in trouble because it can't make its interest payments to the bank anymore, they go to Congress and say "we can't let this corporation fold; look at the thousands of jobs that would be lost; look how the people would suffer." When a third world country can no longer make its interest payments to a large bank in New York, what happens? The bank goes to Congress and says "you know, you'd better do something about this because if we have to write that loan off of our books we may be bankrupt, we could fold. And look at all of the depositors, good Americans, who have their accounts with us who would lose their deposit. Maybe the FDIC won't be able to cover; we could have a crisis on our hands. If our bank falls maybe the other banks will fall too and we'll have a national recession. Look how the people will suffer." So Congress dutifully steps forward, remember it's a partner in this, and votes the funds to guarantee the loans or in some way to pass the payments on directly or indirectly in some very ingenious methods to the taxpayer. That money is raised primarily through the Federal Reserve System and we pay it through the Mandrake Mechanism**." - G. Edward Griffin, author of The Creature From Jekyll Island, the definitive book on the Federal Reserve System

**http://www.freedom-force.org/videos/video.cfm?&player=2-1-05mandrake

the banks is something that they will agonize over for very long. If such a "run" does materialize, it will cause the printing presses to turn just that much faster in order to deliver the FRNs (Federal Reserve Notes) to put into the hands of customers who want cash in hand, or more properly paper in hand. FDIC is, of course, a sham as you point out. They do not even begin to have the assets required in order to cover a massive exit from the commercial banking system. The system has been operating in a state of technical bankruptcy for a lot of years now and that's not likely to change. However, as banker-of-last-resort, the Fed can, and will, deliver currency to cover withdrawals, but the supply available does not cover the kind of massive and sudden withdrawal that you may envision.

Made me nervous afterwards, but I have a bad habit of telling the exact truth. I told them that I did not like the performance of my investments over the past year, that I did not like Chase to begin with because of their derivatives and had left them for Bank One and then Chase bought Bank One, that I was moving my investments to get them out of the dollar and then I proceeded to tell the guy I was talking to that Ron Paul had given me a great education and he should consider him and a few of the things I had learned. He was very sober and kept asking me questions.

Get your cash out now. What do you have to lose, are they paying you a lot of interest in addition to inflation? Put your money into products with real value, food for example. Cut up your credit cards and tighten your belt. Better to be prepared than caught in the rain.

We are pulling our funds out of the bank today. I trust none of these people. And to think, they are just people like us, not machines. If this is what humans do to each other, suppose what it would be like if SKYNET was running the show.

{{{{{{{{Think about it}}}}}}}}}

I live in a small community in upstate NY and we are starting to see branches close. One of them was mine. It's kind of a long story but the original bank was sold to another bank and now this new owner is selling off several of his branches to another bank. I keep getting a sinking feeling that I am looking at a shell game.

There is cash out there, but it is in reserve in China, Japan and a lot of other countries. There has been a jump in exports from the States, in decrease in the trade in balance is primarily because the U.S. is importing less. This means prices will go up. China is currently purchasing a lot of oil from the Middle East and raw materials from countries such as Brazil, so their dollars are not being spent here in the States to generate our economy. Their purchasing is causing prices to go up and the dollar to fall. As they purchase more the dollar will fall even more and American will have very few to spend except to accept more credit. Cut up those credit cards, more in with family, take family members or friends in to help with payments. Live within your means!

Bear Sterns announced today the an agreement was made with the Federal Reserve to lend them cash for a period of 28 days. Get your cash out now folks and start putting it into something of value, gold is up to 1003 and is expected to rise. Silver is still a good buy, but it may be getting harder to buy these since dealers also are holding. I suggest stocking up on food stuff so that you don't get caught in the inflation fever. Buy things that can be stored for longer periods. Be prepared this is serious!

I am not experiencing any of the things you are.

I just phoned our bank to withdraw $9k in cash from 2 IRAs and there was no problem whatsoever. We will be going in right after lunch to get the cash. We will still have quite a bit more from those accounts we have to get out over the next weeks though.

I am paying off some loans and closing my savings this weekend.

I was at the bank yesterday (making a deposit LOL) and the teller was explaining that the meaning of her name was "prophet". Since this was a verbal exchange I asked; meaning "profit" as in "i'm a Banker" or, "prophet" as in "pass me my crystal ball"? With a chuckle she said the latter. So, I asked (of course) for her vision of the future and she said, with a straight and somber face, "I can't tell you, it's too grim".

I guess banking has her down!

they got nothing to give you.

"He who exercises government by means of his virtue may be compared to the north polar star, which keeps its place and all the stars turn towards it." Confucius