Monday, June 17, 2013

Legally, the bank owns a depositor’s funds–Super Scary!

What happened in Cyprus to bank depositors’ funds surely must have scared everyone a lot—except for the bankers themselves that is.

Those of us outside Cyprus would all have thought to ourselves “Thank goodness that can’t happen in my country” and gone on with our day-to-day existence.

But apparently that’s not the case already in some countries, and probably in more and more countries over time.

Read this scary article by Ellen Brown at the Web Of Debt website:
It Can Happen Here: The Confiscation Scheme Planned for US and UK Depositors

Apparently New Zealand plus probably other countries are planning something similar.

“Can the banks do that?” she asks (emphasis mine):

Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.” The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills.

. . . If our IOUs are converted to bank stock, they will no longer be subject to insurance protection but will be “at risk” and vulnerable to being wiped out, just as the Lehman Brothers shareholders were in 2008.

To become even more scared, you only have to read an earlier post of hers:
A Safe and a Shotgun or Publicly-owned Banks? The Battle of Cyprus

This has got me pondering how to make my funds safer. Stuffed under the mattress, or buried in a biscuit tin under the lemon tree in the back yard?

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