Bank Run Fears: Customers Being Forced to Provide Evidence For Why They Need Cash

dollars-lockedIn early 2013 the country of Cyprus locked down private banking accounts and restricted access to depositor funds. It was the first widely documented instance of a “bail-in,” as bank officials and European regulators determined that bad loans taken on by the banks were now the responsibility of the banks’ customers. This led to a country-wide confiscation of 10% or more of all customer funds. In the heat of the Cyprian financial panic banks limited cash withdrawals to around $ 300 and ramped up security to prevent angry Cypriots from breaking down the doors.

What happened in Cyprus was big news all over the world, but within a few news cycles, once European and American officials assured the people it was a limited-scope event, the general population swept potential fears under the rug. No one really reported on the fact that the European Union quickly instituted new regulatory policies that would force bail-ins across the entire continent should such a crisis take hold again. Likewise, Federal Reserve Chairman Ben Bernanke assured Americans that the crisis in Cyprus and Europe posed no risk to the US financial system, citing FDIC insurance for U.S. bank depositors as the safety net that would prevent a similar situation in the United States.

The United States, Europe, China and all of the world’s developed economies are, if officials are to be believed, completely immune to what happened in Cyprus. The current belief by the best and brightest is that these countries are simply too big to ever be faced with a total collapse of their banking systems.

But what if they were wrong? What if private debt reached such obscene levels that the loans taken on by lenders could never be repaid? What if a country like China, which holds trillions of dollars in cash reserves and has modern central banking regulations, did face such a problem?

Couldn’t happen, right?

It turns out, that’s exactly what is happening right now, as Chinese banks struggle to cope with nearly $ 23 trillion worth of potentially bad loans. Yes, that’s Trillion, with a “T.” The Chinese, it appears, have mimicked the exact set of circumstances that led to the 2008 crisis in America. Remember all of those empty cities and malls in China – they housed no people or shopping venues, yet cost billions of dollars to develop? It looks like all those bridges to nowhere are catching up with the Chinese. And the panic has begun, as evidenced by capital controls and restrictive withdrawal policies now being implemented by one of the largest banks in the world all across China.

Want to know how a bank run starts? Look no further:

 HSBC is imposing restrictions on large cash withdrawals raising a number of red flags. The BBC reports that some HSBC customers have been prevented from withdrawing large amounts of cash because they could not provide evidence of why they wanted it. HSBC admitted it has not informed customers of the change in policy, which was implemented in November for their own good: “We ask our customers about the purpose of large cash withdrawals when they are unusual… the reason being we have an obligation to protect our customers, and to minimise the opportunity for financial crime.” As one customer responded: “you shouldn’t have to explain to your bank why you want that money. It’s not theirs, it’s yours.”

“When we presented them with the withdrawal slip, they declined to give us the money because we could not provide them with a satisfactory explanation for what the money was for. They wanted a letter from the person involved.”

Mr Cotton says the staff refused to tell him how much he could have: “So I wrote out a few slips. I said, ‘Can I have £5,000?’ They said no. I said, ‘Can I have £4,000?’ They said no. And then I wrote one out for £3,000 and they said, ‘OK, we’ll give you that.’ “

He asked if he could return later that day to withdraw another £3,000, but he was told he could not do the same thing twice in one day.

Mr Cotton cannot understand HSBC’s attitude: “I’ve been banking in that bank for 28 years. They all know me in there. You shouldn’t have to explain to your bank why you want that money. It’s not theirs, it’s yours.”

Via: Zero Hedge

As in China, the debt party in the United States has returned in force. We are now very close to the same levels of personal and commercial debt as we saw prior to the crash of ’08, but rather than being concerned the experts say don’t fight it, embrace it.

But as is the case in China, the debt party will soon be coming to an end in the United States as tens of millions of Americans see their wealth and jobs wiped out. Like the people of China who took on loans they can’t repay, Americans are under the gun. And in the near future, the same credit problems that gripped the world before will do so again. And this time we’ll be footing the bill directly from our bank accounts (rather than the Federal Reserve’s printing presses).

We may not yet have official regulatory or bank policies for restricting cash withdrawals here in the USA, but just try to head to your local bank and withdraw $ 5000 or $ 10,000 and see what happens. You will invariably be met with stares from bank employees and questions about your intentions and why you need that much cash.

We’ve already seen how fast they can lock down the entire banking system. It’ll only take a push of a button and everything you think you have in your personal bank account could be seized.

But then again, as Ben Bernanke has said previously, there is no risk to the financial system. Moreover, the FDIC has insured your money, so if something does go wrong with the American banking system, all of your losses are totally covered by the roughly $ 50 billion in FDIC reserves. That should be plenty of money to handle the $ 9 trillion in US-based domestic customer deposits, plus the $ 300 trillion in derivatives bets made by the banks.

So, no need to worry, because the government’s got your back (and they would NEVER think of using your deposited funds to offset any bank losses).

But even though it is impossible to conceive that such a thing might happen we recommend preparing for it just in case. We know FEMA will be there to provide emergency cash, food and recovery tents. But in the off chance the credit system locks up again, ATM’s are limited to minimal withdrawals, and the banks do seize your money you might want to have some food, supplies, gold, and reserve cash on hand.

We realize such a thing could never happen – not in the world’s most developed and richest economy. Ben Bernanke, Janet Yellen, government officials and TV pundits say it can’t. So, these extra supplies would be just for fun and entertainment – something to show friends and family when they come over so you can have a laugh about all these crazy Doomsday scenarios.


SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You

A Message to Obama: “Being Black Isn’t Your Problem… The Problem Is You Suck!” *Video*

One of our favorite commentators on politics and global happenings is back with his latest diatribe, and as is usually the case, he’s right on target.

This week Bob at Drinking with Bob takes aim at President Obama’s recent comments in an interview with The New Yorker in which he made the claim that one of the main reasons his popularity is sinking is because he is black and some Americans haven’t gotten over that.

Here is the excerpt of the interview to which Bob responds in the following video:

Obama’s election was one of the great markers in the black freedom struggle. In the electoral realm, ironically, the country may be more racially divided than it has been in a generation. Obama lost among white voters in 2012 by a margin greater than any victor in American history.

The popular opposition to the Administration comes largely from older whites who feel threatened, underemployed, overlooked, and disdained in a globalized economy and in an increasingly diverse country. Obama’s drop in the polls in 2013 was especially grave among white voters. “There’s no doubt that there’s some folks who just really dislike me because they don’t like the idea of a black President,” Obama said.

“There is a historic connection between some of the arguments that we have politically and the history of race in our country, and sometimes it’s hard to disentangle those issues.”

There is no doubt that there are those who dislike Barack Obama because he is black. Likewise, there are plenty of African Americans who dislike white politicians simply because of the color of their skin. Welcome to earth, what else is new?

But for President Obama to make this claim is not only disingenuous, but is a complete deflection to steer the American people away from his failures and to pit us against each other by once again throwing out the race card..

Barack Obama became President of the United States because half of the country voted for him. And he knows very well that a large portion of those voters were white. In recent weeks we’ve seen his poll numbers collapse to a 39% approval rating, suggesting that many who supported him during the elections have lost faith.

If we are to believe the President, then that 10% drop in approval was a result of the anti-black racists?

When they voted for a (half) black man for President it was a “fundamental transformation” for America. What’s troubling is that when those very same people who put him in office disapprove of his performance, President Obama claims they are doing so because of the color of his skin?

His complete failure in everything he’s touched – from health care to foreign policy – couldn’t possibly be the reason, right?

Bob weighs in:

Stop using the color of your skin as an excuse for your failures. Being black isn’t your problem. The problem is you suck, bro. You friggin’ suck.

Previously from Bob (because sometimes one video isn’t enough): “What was Obama Doing at Harvard… Parkin’ Friggin Cars?”

obama-halfandhalf


SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You

OPRAH WINFREY: Millions Who Lost Health Insurance Are All Racists For Being Furious With Liar-In-Chief

Consider the hypocrisy of this self-made billionaire — who leveraged the most wonderful, beneficent, tolerant society in the world to become incredibly wealthy — trashing her own country. The overstuffed, over-made-up kook known as “Oprah Winfrey” — if that is her real name — is truly beneath contempt.

[BBC reporter Will] Gompertz asked Winfrey if she thought the problem of racism was solved.

“Of course, the problem is not solved,” the actress said. “As long as there are people who still, there’s a whole generation – I say this, you know, I said this, you know, for apartheid South Africa, I said this for my own, you know, community in the South – there are still generations of people, older people, who were born and bred and marinated in it, in that prejudice and racism, and they just have to die.”

If President Obama weren’t an African-American, Gompertz asked, would he be treated differently?

Winfrey mentioned the time when U.S. Rep. Joe Wilson, R-S.C., called Obama a liar while the president was delivering a speech to Congress.

“Just the level of disrespect,” she said. “When the senator yelled out, ‘You’re a liar.’ Remember that? Yeah, I think that there is a level of disrespect for the office that occurs, and that occurs in some cases, and maybe even many cases, because he’s African-American.”

Level of disrespect?

I’ll tell you a level of disrespect, you hateful shrew:

How about disrespecting the millions of Americans who just lost their health care after being promised dozens of times by the Liar-In-Chief that they could “keep their plans”?

How about disrespecting the families of those killed in Benghazi? A president who lied right to their faces about the cause of the attack and didn’t lift a finger to save them.

How about disrespecting the families of the hundreds killed by Operation Fast and Furious? A president who gave or sold thousands of military-grade weapons to Mexican drug cartels as part of a truly evil plot to demonize gun-owners.

How about disrespecting all of those conservatives, Christian, and pro-Israel groups targeted by Obama? A president who used the IRS to win the 2012 election and then lied about it.

You’re a hack, a clueless know-nothing, a Leftist kook who claims entirely legitimate criticism of the Liar-In-Chief’s outrageous activities is based on “racism”.

Go drink a nice, tall glass of shut-up juice and get the hell off of my television.

Doug Ross @ Journal