Sunday, 12 May 2013

Money IN the Bank? Loser!......................from Rico

We have all been conned. hoodwinked, bamboozled into thinking that "money in the Bank" is a good thing.

It is not. - Remember Cyprus?

Money IN the Bank potentially makes YOU a loser.

The 'guidance' of the BIS, BoE, and FED re: the Cyprus situation was purposely vague, misleading, and overly 'technical' because to plainly cite the legal situation would send everyone running to their Bank with their hair on fire to immediately withdraw 'their' funds. [Read: Bank Runs]

In summary, this is exactly how "money IN the Bank" works:

- When you deposit YOUR money in the Bank, you transfer ownrship of that money To the Bank. It becomes THE BANK'S MONEY and as a 'depositor' you instantly become an unsecured creditor.

- You have a 'claim' on an equal sum of money and can ask for it back.

- If the Bank won't return an equal sum to you, it can be sued under tort law, so long as the Bank is solvent...providing you 'ask' for your money back.

- If the Bank is 'broke' then as an 'unsecured creditor' you wind up with pennies on the dollar or even zero since 'secured creditors' of the Bank get paid first.

This is the LAW. For reference, it was established under UK law in 1848 by 'Foley vs. Hill'...once a desposit has been made into a Bank, the Bank becomes a debtor and the depositor a creditor.

- The Bank has NO trusteeship or fiduciary duty to depositors, and cannot be prosecuted under criminal law (bet you're surprised that (a) Eric Holder was RIGHT on this point, and (b) not surprised that he did not cite the exact legal reason in his statement - Banks cannot be held liable to depositors for gambling [think 'OTC derivatives' and 'swaps'] or misusing [think risky loans, bad investments, sovereign bonds like Greece, or huge bonuses to themselves] with THEIR OWN MONEY).

Almost universally, depositors 'think' that money in the Bank is THEIRS. It is NOT. Almost no depositor thinks of themselves as a 'creditor'...much less an 'unsecured creditor.'

This is the 'scam' in plain sight. It's almost as funny as the saying 'sound as a dollar.'

In closing, with a respectful hat tip to Mr. Jim Sinclair, it's time to start getting out of the system.

- As Bank depositors learned in Cyprus, that 'money IN the Bank' isn't really there for them when things 'go South.' How many of them do you think now wish they had their assets outside the system before it blew itself up?


Anonymous said...

What does FDIC mean then?

Lime Lite said...

The Federal Deposit Insurance Corporation (FDIC) is supposed to insure deposits in the bank. HOWEVER, there is upwards of $10 trillion on deposit with banks and the FDIC only has $11 Billion to cover all the deposits! So, think about it. When the fhit hits the san, only a tiny fraction of depositors will see any of their money insured. Most will lose 100%. The FDIC is a con.