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Canadian banking haven myth exposed

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Get rid of your mortgage, loans, because interest rates set to rise

Get rid of your mortgage, loans, because interest rates set to rise

Get rid of your loans, guys and gals, because we are going into a high interest rate period. Very high. It will be the equivalent of going into the double digit interest rates we had in the 80s where many people threw their house keys at the bank and we had record numbers of ba

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E-cigarettes save lives, money

E-cigarettes save lives, money

"We know that cigarettes have thousands of chemicals in them and we know that they are killing us. They have been for over a hundred years. So now, the e-cig industry comes along with only one or two chemicals in their mixture and people are freaking out over these as well. Whe

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US inches closer to big bank charges

US inches closer to big bank charges

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Canada’s home sales top predictions; why a real estate crash is inevitable

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Comparing today’s recession/depression to the 1980 recession

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Why savers are getting screwed

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Geithner admits USA bankrupt to US Senate

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World economies on verge of currency revaluations to deal with debt

World economies on verge of currency revaluations to deal with debt

"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 Basically what the world central banks are doing is increasing their money by devaluin

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Is Obama the next Mugabe of Zimbabwe?

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US raiding foreign countries with dollars, not soldiers

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FDIC wants your retirement cash to save banks: Bloomberg

FDIC wants your retirement cash to save banks: Bloomberg

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Content By: The Coming Depression Editorial Staff (dates cited below)
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man holding out empty pockets

“According to a spokeswoman, the bank changed the status of the bulk of its consumer checking accounts last year to take advantage of an FDIC policy to provide unlimited account protection to certain types of accounts. When Citi transferred the accounts back to their original status, it triggered the notification of the seven-day requirement,” states the report.

These defaulting banks are just gamblers with visions of instant riches with someone else’s money and they just happen to have lost it all with the spin of a wheel. The defaults are natural and the clients who have their money with these banks should do is give the bank owners a good metaphoric back alley beating.

Banks who are saved are infused with this inflation prone monopoly money and before enough of this ‘paper’ really starts to dramatically affect prices. The best course of action now is to protect yourself from all this. How? Maybe acquiring assets (that you can afford) that hold their value through time whether it would be in precious metals or something people would need and worth trading. Anything written on paper (cash, stocks, bonds, certificates) can be blown away in an instant, but not a hard solid valuable asset.

Citibank Controversy Puts Dubious FDIC Guarantee Back In The Spotlight

Paul Joseph Watson Prison Planet.com Thursday, February 25, 2010

The recent controversy surrounding Citibank’s advisory to its customers reserving the right to impose a 7 day restriction on withdrawals from their accounts is a stark reminder of the vulnerability of the fractional reserve banking system and the FDIC’s shaky guarantee that it can insure deposits in the event of a bank run.

As we reported last week, Citibank’s notice informing its customers of the right to request 7 days notice before funds can be withdrawn from all checking, savings and money market accounts was necessary to ensure compliance with Federal Reserve regulations.

Fox News Business reported on the “little known regulation” yesterday in a piece by Darryl R. Isherwood.

“The requirement is part of Regulation D of the Securities Act of 1933. It applies to all accounts classified as Negotiable Order of Withdrawal [NOW] accounts – basically interest-bearing checking and savings accounts held by individuals and non-profits. Banks are not required to hold reserves in place to cover NOW accounts, so the rule prevents a run on withdrawals for which there are no reserves,” states the report.

For those still unaware of the fact, it may come as a shock that your bank has no reserves with which to cover withdrawals if there was a sudden loss of confidence and a good old run on the bank as has happened on several occasions over the last two years in both the UK and the U.S.

“According to a spokeswoman, the bank changed the status of the bulk of its consumer checking accounts last year to take advantage of an FDIC policy to provide unlimited account protection to certain types of accounts. When Citi transferred the accounts back to their original status, it triggered the notification of the seven-day requirement,” states the report.

Although the FDIC claims it guarantees insurance to the tune of $250,000 per depositor per bank, the rising number of bank failures and those placed on the “problem list” has stoked fears that the tank is running dry.

Alarmingly, The Federal Deposit Insurance Corp. only has about $50 billion to “insure” about $1 trillion in assets across the nation’s financial institutions. This was even admitted in a Yahoo.com article shortly after the collapse of Lehman Brothers in 2008. When Americans realize the fact that banks are “going to run out of money”, the article nonchalantly stated, a run on the banks will accelerate.

On Tuesday the FDIC announced that its deposit insurance fund suffered a whopping $12.6 billion drop in the final three months of 2009 due to accelerating bank closures. “The fund’s reserve ratio was -0.39% at the end of the quarter, the lowest on record for the combined bank and thrift fund,” according to the announcement.

FInancial experts have predicted that the failure of 300-500 U.S. banks would absorb all of the FDIC’s insurance funds. This is precisely why people are worried about banks imposing delays on access to their savings, not as a result of some Internet conspiracy run amok, as the Fox News Business article implies, but as a consequence of the true magnitude of what could plausibly happen in a worst case scenario.

If the U.S. dollar was to suffer a sudden and drastic collapse as innumerable financial experts have predicted and hyperinflation ensued, then being unable to access your money or swap it for another currency or commodity for a period of 7 days could be the difference between preserving your life savings or having them rendered practically worthless.

Imagine if the United States were to suffer a Weimar Republic style collapse and the cost of a pound of butter soared to a million dollars. Generations of wealth could be wiped out overnight if people were unable to access their savings.

It’s no surprise therefore in the current climate that investors have flocked to physical gold and silver bullion not only as a means of preserving their wealth, but ensuring that it actually exists in the first place. With banks affording themselves the power to loan out increasing multiples of what they hold at any one time while the money supply is artificially doubled, being reminded of the fact that our nest eggs consist of nothing more than numbers on a computer screen which can be withheld from us at the discretion of the banks isn’t exactly going to restore trust in traditional methods of saving.

Related posts:

  1. FDIC Insuring 8,200 Banks with $9 Trillion in Deposits and Zero in the FDICIt sure looks like the FDIC is going bankrupt! I suppose only the Treasury Department can save them now. Excerpt Written by MyBudget360 The FDIC has greatly underestimated the problems...
  2. The FDIC Anesthesia Is Wearing Off..the FDIC is contributing to the deflationary trend. It has “tightened rules on required capital levels,” which forces banks’ loan ratios to fall. The FDIC Anesthesia Is Wearing Off November...
  3. FDIC wants your retirement cash to save banks: Bloomberg“The FDIC is constantly looking at structures where we can get the greatest opportunity to tap into capital that we have not had the success reaching through previous disposition methods,”...
  4. US, Greece banks to set cash limits; bank run imminent?“Effective April 1, 2010, we reserve the right to require (7) days advance notice before permitting a withdrawal from all checking accounts. Contrary to financial pundits’ constant chants and cheerleading...
  5. Banks With 20% Unpaid Loans at 18-Year High Amid Recovery DoubtBy Bloomberg News The number of U.S. lenders that can’t collect on at least 20 percent of their loans hit an 18-year high, signaling that more bank failures and losses...
  6. European governments steal private pensions; Is the US, Canada, Brazil next?“Hungary, Poland, and three other nations take over citizens’ pension money to make up government budget shortfalls. The article goes on to detail other pension grabs in Bulgaria, Poland, France...

This entry was posted on Thursday, February 25th, 2010 at 11:46 am and is filed under Bankruptcy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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  1. April 6, 2010 @ 11:45 am


    [...] Citibank Controversy Puts Dubious FDIC Guarantee Back In The Spotlight “According to a spokeswoman, the bank changed the status of the bulk of its… [...]

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