WASHINGTON – The questionable practice of “bail-ins” begun by Cyprus a year ago to keep banks solvent is beginning to spread to other nations, and holders of large deposits are starting to see their balances plunge literally overnight.
A “bail-in,” as opposed to a bailout that countries especially in Europe have been seeking from the International Monetary Fund and the European Union, is a recognition that such outside monetary injections won’t be forthcoming.
What’s a bail-in?
Essentially it is a grab of a percentage of a depositor’s account as a way to hold additional money in reserve to help banks balance sheets meet the government’s reserve demands. Put another way, this is a new method of taking private sector wealth as fashioned after the Cyrus fiasco this spring.
A recent article in American Banker spells it out saying the era of the bank bail-in is upon us. The Wall Street Journal reported that the banks most likely to give you and IOU in exchange for your hard earned cash are Wells Fargo, JP Morgan Chase and Citigroup. In reality any bank that received a government bailout is a candidate to look to YOU for THEIR bail-in!
Have you heard of the FDIC-BOE plan that many banks are supporting?
Under the plan big banks would get our (your) money and we (you) would get bank shares. That is, you would get bank shares in an institution that is basically insolvent or it wouldn’t be raiding your account to begin with! We wouldn’t be left empty handed. No, no…we’d get the bank’s IOUs otherwise known as converted bank equity shares.
Converted! Do you like that term? What it means is the FDIC under Obama has allowed your cash to be stolen (such an unpleasant term) or converted (see, isn’t that better!) for their use!
Remember that business Obama said that you didn’t build by yourself?
Well, those same fine people believe that whatever is theirs is theirs and whatever is yours is also theirs! In all their wisdom, they believe because the taxpayer bailouts were so unpopular that stealing from small business owners and smaller bank “shareholders” with no voice in Washington, will be less egregious!
The acts that are already in motion now would deliver clear title to the banks of depositor funds. Buried within the Dodd-Frank bill is a provision that makes bail-ins legal!
Plans are under way for our global economy, plans that include global banking allowing access to your accounts. Was the so-called Cyprus Experiment a prelude to the launch of a global trend of bank deposit confiscation? Only the most naive could think otherwise.
Why is it so important to know what is happening in other countries, Canada for instance? Private pension funds were just raided by the government in Poland, and a bail-in is being organized for one of the largest banks in Italy.
As recently pointed out in Time to Run from the Banks, now that bail-ins are becoming globally acceptable, no bank account and no pension fund will ever be 100% safe again.
What is means for us is that the governments of the world are eying our money as part of the solution to any future failures of major banks outside the U.S.
There is one final consideration, the worst part, as it were. Your hard earned money may be used, or “bailed-in” in the future to help bailout the banks/countries whose practices have caused the upheavals in Spain, Greece, Ireland, Portugal.
Remember Lehman Brothers that was too big to fail? Nuff said…
One comment about this video.
This woman isn’t a financial expert, but she does possess more common sense than those (fill in your own adjective ending with er here) in Washington. Her voice helps get through to the important points about bail-ins.