New Bank Bailout Plan: Depositors Pay

Bank of America deposit slip

Will your deposits be safe? How solvent is your bank? Are they derivatives players?

New Bailout Plan: Depositors Pay

The European Finance Ministers have now set the precedent that when banks go broke and need a bank bailout, then  the depositors are the funding source.

What’s wrong with this picture?  When corporations go insolvent it is supposed to be their shareholders lose, not their customers.

Michael Snyder’s analysis of the ongoing fallout of the Cyprus levy tax on deposit holders is one that I will be following in my research. –No Name Attorney

Michael has a B.S. in Commerce from the University of Virginia, a law degree (J.D.) and a Masters of Law in Taxation (LL.M.) from the University of Florida School of Law.

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

By Michael, on March 27th, 2013

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.

Read More Here….

 

Is the World Economy Becoming One Economic Pyramid Scheme?

Is the World Economy Becoming One Economic Pyramid Scheme?

You’ll find this article very sobering to realize what a mess globalism has become.  It’s an excellent reason to question all the interconnections and centralizations between nations.  Has it become a de facto economic pyramid scheme?

Ask yourself how to we start to clean up this mess?  It has to be done.  What about getting each country to discount the debts of another?  What if all the debt was “flushed” and every country was reset to “0” balance? 

What ideas do you have?  Feel free to comment and post them below.   It’s going to take collective “think power” in resolving this.–No Name Attorney

The author of the article below, Michael Synder, has a B.S. in Commerce from the University of Virginia, a law degree (J.D.) and a Masters of Law in Taxation (LL.M.) from the University of Florida School of Law.

 

Why Is The World Economy Doomed? The Global Financial Pyramid Scheme By The Numbers

By Michael, on March 20th, 2013

Why Is The World Economy Doomed? The Global Financial Pyramid Scheme By The Numbers

Why is the global economy in so much trouble?  How can so many people be so absolutely certain that the world financial system is going to crash?  Well, the truth is that when you take a look at the cold, hard numbers it is not difficult to see why the global financial pyramid scheme is destined to fail.  In the United States today, there is approximately 56 trillion dollars of total debt in our financial system, but there is only about 9 trillion dollars in our bank accounts.  So you could take every single penny out of the banks, multiply it by six, and you still would not have enough money to pay off all of our debts.  Overall, there is about 190 trillion dollars of total debt on the planet.  But global GDP is only about 70 trillion dollars.  And the total notional value of all derivatives around the globe is somewhere between 600 trillion and 1500 trillion dollars.  So we have a gigantic problem on our hands.  The global financial system is a very shaky house of cards that has been constructed on a foundation of debt, leverage and incredibly risky derivatives.  We are living in the greatest financial bubble in world history, and it isn’t going to take much to topple the entire thing.  And when it falls, it is going to be the largest financial disaster in the history of the planet.

The global financial system is more interconnected today than ever before, and a crisis at one major bank or in one area of the world can spread at lightning speed.  As I wrote about yesterday, the entire European banking system is leveraged 26 to 1 at this point.  A decline in asset values of just 4 percent would totally wipe out the equity of many of those banks, and once a financial panic begins we could potentially see major financial institutions start to go down like dominoes.

We got a small taste of what that is like back in 2008, and it is inevitable that it will happen again.

Anyone that would tell you that the current global financial system is sustainable does not know what they are talking about.  Just look at the numbers that I have posted below.

The following is the global financial pyramid scheme by the numbers…

$9,283,000,000,000 – The total amount of all bank deposits in the United States.  The FDIC has just 25 billion dollars in the deposit insurance fund that is supposed to “guarantee” those deposits.  In other words, the ratio of total bank deposits to insurance fund money is more than 371 to 1.

$10,012,800,000,000 – The total amount of mortgage debt in the United States.  As you can see, you could take every penny out of every bank account in America and it still would not cover it.

$10,409,500,000,000 – The M2 money supply in the United States.  This is probably the most commonly used measure of the total amount of money in the U.S. economy.

$15,094,000,000,000 – U.S. GDP.  It is a measure of all economic activity in the United States for a single year.

$16,749,269,587,407.53 – The size of the U.S. national debt.  It has grown by more than 10 trillion dollars over the past ten years.

$32,000,000,000,000 – The total amount of money that the global elite have stashed in offshore banks (that we know about).

$50,230,844,000,000 – The total amount of government debt in the world.

$56,280,790,000,000 – The total amount of debt (government, corporate, consumer, etc.) in the U.S. financial system.

$61,000,000,000,000 – The combined total assets of the 50 largest banks in the world.

$70,000,000,000,000 – The approximate size of total world GDP.

$190,000,000,000,000 – The approximate size of the total amount of debt in the entire world.  It has nearly doubled in size over the past decade.

$212,525,587,000,000 – According to the U.S. government, this is the notional value of the derivatives that are being held by the top 25 banks in the United States.  But those banks only have total assets of about 8.9 trillion dollars combined.  In other words, the exposure of our largest banks to derivatives outweighs their total assets by a ratio of about 24 to 1.

$600,000,000,000,000 to $1,500,000,000,000,000 – The estimates of the total notional value of all global derivatives generally fall within this range.  At the high end of the range, the ratio of derivatives to global GDP is more than 21 to 1.

Are you starting to get the picture?

Read More Here