If Cyprus is the bellwether, then Canada is the red flag

[neilgin1]

If Cyprus Is the Bellwether, then Canada Is the Red Flag

Jeff Thomas, International Man

May 9, 2013 7:23pm

An intriguing article titled "Canada Includes Depositor Haircut Bail-In Provision for Systemically Important Banks in 2013 Budget" was recently published in SD Bullion.

The somewhat lengthy title offers all the information necessary, but for those who – quite understandably – may not be able to accept that they have just watched Canada tumble down the Cypriot rabbit hole, here is a bit more detail from the approved budget itself:

"The Government proposes to implement a bail-in regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital."

Customer deposits could certainly fall under the label of "certain bank liabilities," and converting them into "regulatory capital" without permission is just a gentle way of describing confiscation. Though Canadian officials have denied that the term "certain bank liabilities" includes customer deposits, we must note that the government in Cyprus also promised that customer deposits would not be touched, only to renege on that promise at the onset of the crisis. Remember lesson #1 of the Cyprus debacle: "Do Not Trust Politicians."

As the recent events in Cyprus have been unfolding, each iteration has seemed to me to be not only logical, but almost predictable. As Jim Sinclair has recently been stating frequently, the EU has run out of options… The next step is confiscation.

There will, of course, be endless rhetoric and debate, followed by minor adjustments in method and percentage taken, but, ultimately, the powers-that-be have reached the confiscation stage. That is now carved in stone.

But at this point, if we are watching the horizon, we will spend less of our time mourning the fall of Cyprus and more of it anticipating which countries will be next in line.

Here, I confess, I have been surprised. There were quite a few countries that, logically speaking, might have been next. Canada was not even on my personal radar. This is not to say that it would not also be in the queue – only that I would have predicted its position in the queue to be quite a bit further back.

Those observing recent developments may have understandably been saying to themselves, "I realize that we live in difficult times and that, if I am to look after my family's future, I need to face up to the fact that we may be seeing dramatic change. But there are some things I can't accept, and one of those is the possibility that my savings could be confiscated by my bank. My government would never allow it!"

For those who very understandably may find this latest realization to simply be beyond the pale, it would be well to take a moment out to rise above the clouds for a bit of an overview at this juncture.

In most countries of what we grew up calling the "Free World," there has been a steady deterioration, particularly with regard to corporatism (the merger of state and corporate powers). One facet of that deterioration has been increasing legislation that allowed financial institutions to create Ponzi schemes with regard to lending, in which the bank goes broke in the end but the cost for the failure is passed to the taxpayer in the form of a bailout.

Put more simply, this means that after the fox has raided the henhouse, the government advises the public that the only way to save the situation is for the government to confiscate more hens from the farmers and give them to the foxes.

The public, desperate to return to "normal," will accept whatever the government says at this point, in the hope that it will all somehow turn out all right. Only a tiny percentage will be prepared to say, "We've been systematically raped and robbed by both our government and our banks, in full complicity with each other. It's high time I put what I have left in a sack and find a way to protect it on my own."

Those few who do so will turn to safe havens for wealth (however much or little that wealth may be). They may invest in overseas properties that cannot be confiscated by their own governments, buy precious metals and store them privately, and so on.

The objective will be simply to make it as difficult as possible for their governments to confiscate their wealth.

While there may be no guarantee that they will succeed, they would know that at the very least, they will not be the low-hanging fruit when their government enters the orchard to begin the picking.

However, as history shows, the great majority of the people of all countries will fail to act. They will watch in confusion as events unfold, as the banks continue to come up with schemes to further bilk the public of their wealth, while the governments assure the public that, "It's an emergency situation. We have to be willing to sacrifice a bit more to save the system, or we'll really be sorry." In the end, the majority of people will comply.

Cyprus is a bellwether of what is next for the world in general. A term has even already been coined for what is coming – a "bail-in." An event in which the public must accept that, in order to save the banks from collapse (which they have been told since 2008 is the absolute worst possible outcome), they must accept that they must make their "contribution" – confiscation of their deposits by the banks. First, it will be, say, 5%, then it will be announced that 5% didn't solve the problem and another transfusion will be needed. Then another.

Some people will figure out along the way that they are being robbed by both their government and the banks, working in concert, but most will regard that reality as impossible, as it has never happened before and surely can't happen now.

If Cyprus is the bellwether, then Canada is the red flag, showing that Cyprus is not an isolated situation. The damage wreaked by monumental debt is systemic, and it has taken place throughout the First World and beyond.

This latter statement will very likely be the most difficult to accept as reality. If so, here is something to consider: Canada has approved its bail-in on a national level just one week after a final decision was made in Cyprus. As we all know, the wheels of governments worldwide move slowly. The reader might ask himself whether he believes that the Canadian government has, in short order, approved its own bail-in, in reaction to the events in Cyprus. If this possibility is simply too far-fetched, he must accept that the plan for Cyprus has been known to the Canadian government for some time and that a similar bail-in for Canada has been in the works for a while. It was simply agreed that Cyprus would go first – to act as the litmus test.

If the reader finds himself agreeing that it is likely that the Canadian government had foreknowledge of the events in Cyprus, his next logical conclusion would be that other nations had the same foreknowledge and have very likely been getting their own ducks in a row.

Most countries in the First World have gone down the same road of monumental debt and have found that that road has led to a precipice. At this point, they have no other option left in their bag of tricks. They are all in the same boat and will play their last option – confiscation of wealth.

While many First World citizens think that events like those unfolding in Cyprus could never happen in their home country, the truth is precisely the opposite – and actions like the Canadian government's send a strong signal that the time to protect your wealth from governmental grabs is running out.

http://www.caseyresearch.com/articles/i ... e-red-flag

[slickeast]

Why are people leaving money in the bank if they know the government is going to take it?

The other concern is 401k confiscation. For many they have more money in there 401k and less access to it without huge penalties.

[Engineer]

Why are people leaving money in the bank if they know the government is going to take it?

The other concern is 401k confiscation. For many they have more money in there 401k and less access to it without huge penalties.

I started up a new credit card a while ago, and got dinged on my credit report for having too many accounts.

I can live with that for limiting each bank to an amount I could lose and still sleep that night...but most people with 401k's are stuck with all their eggs in one basket. That doesn't seem too bad until you consider that withdrawal penalties for 401k's could double overnight to 20% like they did for HSAs.

[IdahoCopper]

I got real concerned about this so I checked my accounts:
IRA = $134.36
401K = N/A
Bank #1 = $383.90
Bank #2 = $74.55
Bank #3 = $58.07
Bank #4 = $7.31
Total = $658.19

And that is the reason why most Americans are leaving money in the bank, knowing the government is going to take it.

WHAT MONEY?

[beauanderos]

I got real concerned about this so I checked my accounts:
IRA = $134.36
401K = N/A
Bank #1 = $383.90
Bank #2 = $74.55
Bank #3 = $58.07
Bank #4 = $7.31
Total = $658.19

And that is the reason why most Americans are leaving money in the bank, knowing the government is going to take it.

WHAT MONEY?

There was a self-help book (psychology) written several years with the perfectly appropriate response to your post.

"I'm okay, you're okay" I shut down and withdrew ALL of my IRA's and two 401K's (although in one I play the odds and still contribute 6% to get the matching 50%)... and I'm keeping a minimum of cash in my accounts. I keep my savings in The First Precious Metals Bank of Beauanderos

[beauanderos]

This article is well written and its implications are huge. You have been warned, don't dismiss this as something that could never happen here. Retain money in banks at your own risk. Most alternatives are better.

[slickeast]

Ray, the FPMBofB is about to fail. You might want to send me your holdings. I'll keep them safe.

[IdahoCopper]

I sold the majority of my Bitcoins yesterday, which resulted in more money than I have in the "system", detailed above. As soon as that cash hits my bank account, it will be spent on 40,000 new one-ounce beef jerky labels, jump-starting my new business tactic.

...

As soon as the initial 1,000 packets of jerky arrive to me next week, I'll send out emails to businesses all over the country, working to get those packets out and into stores, bowling alleys, resorts, etc; using them as samples to acquire sales. I won't make much at all on the packets I wholesale to those retailers.

The tactic is to get the beef jerky into the consumer's mouth in hopes he will visit the website and buy the jerky by the pound.

As the economy tanks, my business is at risk, because nobody really needs to buy premium beef jerky.

[beauanderos]

I sold the majority of my Bitcoins yesterday, which resulted in more money than I have in the "system", detailed above. As soon as that cash hits my bank account, it will be spent on 40,000 new one-ounce beef jerky labels, jump-starting my new business tactic.

...

As soon as the initial 1,000 packets of jerky arrive to me next week, I'll send out emails to businesses all over the country, working to get those packets out and into stores, bowling alleys, resorts, etc; using them as samples to acquire sales. I won't make much at all on the packets I wholesale to those retailers.

The tactic is to get the beef jerky into the consumer's mouth in hopes he will visit the website and buy the jerky by the pound.

As the economy tanks, my business is at risk, because nobody really needs to buy premium beef jerky.

not to derail this thread... but have you considered marketing the jerky from the angle of a Prep? Sending flyers to all the survivalist places, or even going so far to put together IdahoCopper's Prep Pack? A pound of jerky, a pound of pennies, some nickels and silver dimes?

[IdahoCopper]

Yes Ray, I have thought of pushing it as a prep. Your additional suggestion is interesting and new to me, thank you.

Preps are all about the most bang for the buck. Cheap jerky is just as nutritious as my premium jerky.

[barrytrot]

You guys do realize that the government has also seized gold previously, right?

Nothing is safe if the government decides "they own it".

I think the time frame is coming soon where life is going to be much less palatable. The signs are all there and I don't think that you are "safe" if you take your money out of the bank. They will get you one way or the other if we look at past history.

[IdahoCopper]

You guys do realize that the government has also seized gold previously, right?

Nothing is safe if the government decides "they own it".

I think the time frame is coming soon where life is going to be much less palatable. The signs are all there and I don't think that you are "safe" if you take your money out of the bank. They will get you one way or the other if we look at past history.

Good point, Barry.



Preps can be more than Ag&Au and a vault. Perhaps removing the cash, gold, and silver out of the jurisdiction is the way to go.

[StoreOfValue]

Sure, but nobody is getting my Ag, Au, Cu, Ni anymore than they can get my guns, ammo, cash.

They officially don't exist!

Somehow my registered munitions all got destroyed in the last natural disaster.

[beauanderos]

Nothing is safe if the government decides "they own it".

true, but... you can make it easy for them by doing nothing, or at least be proactive and not be the low-hanging fruit.

[barrytrot]

Nothing is safe if the government decides "they own it".

true, but... you can make it easy for them by doing nothing, or at least be proactive and not be the low-hanging fruit.

There is a lot of low hanging fruit. And when you have the hammer the government has nearly all the fruit is hanging low.

[beauanderos]

Nothing is safe if the government decides "they own it".

true, but... you can make it easy for them by doing nothing, or at least be proactive and not be the low-hanging fruit.

There is a lot of low hanging fruit. And when you have the hammer the government has nearly all the fruit is hanging low.

you just like to argue. I nominate Barry for Captain of the Realcent Debate Team. Any seconds?

[barrytrot]

you just like to argue. I nominate Barry for Captain of the Realcent Debate Team. Any seconds?

Understood. I shall keep quiet.

[neilgin1]

You guys do realize that the government has also seized gold previously, right?

Nothing is safe if the government decides "they own it".

I think the time frame is coming soon where life is going to be much less palatable. The signs are all there and I don't think that you are "safe" if you take your money out of the bank. They will get you one way or the other if we look at past history.

[Engineer]

you just like to argue. I nominate Barry for Captain of the Realcent Debate Team. Any seconds?

Understood. I shall keep quite.

Quite what?

[scyther]

you just like to argue. I nominate Barry for Captain of the Realcent Debate Team. Any seconds?

Understood. I shall keep quite.

Quite what?

Quite silent, I assume.

[scyther]

I hate to say it, but I agree with Barry. They would confiscate, or at least tax at an insane rate, precious metals before taking 401ks. Why punish people for using approved investments and reward them for barbarous relics? I think the only way to secure wealth is to move out of the country, and even then I don't know where you would go...

[mongo]

Got this article off of JWR Survival Blog.
Dont believe everything you read, but if this is true (which wouldnt surprise me) this is a US red flag


No Bank Deposits Will Be Spared from Confiscation
By Matthias Chang
Global Research, April 24, 2013
Future Fastforward

I challenge anyone to prove me wrong that confiscation of bank deposits is legalized daylight robbery

Bank depositors in the UK and USA may think that their bank deposits would not be confiscated as they are insured and no government would dare embark on such a drastic action to bail out insolvent banks.

Before I explain why confiscation of bank deposits in the UK and US is a certainty and absolutely legal, I need all readers of this article to do the following:

Ask your local police, sheriffs, lawyers, judges the following questions:

1) If I place my money with a lawyer as a stake-holder and he uses the money without my consent, has the lawyer committed a crime?

2) If I store a bushel of wheat or cotton in a warehouse and the owner of the warehouse sold my wheat/cotton without my consent or authority, has the warehouse owner committed a crime?

3) If I place monies with my broker (stock or commodity) and the broker uses my monies for other purposes and or contrary to my instructions, has the broker committed a crime?

I am confident that the answer to the above questions is a Yes!

However, for the purposes of this article, I would like to first highlight the situation of the deposit / storage of wheat with a warehouse owner in relation to the deposit of money / storage with a banker.

First, you will notice that all wheat is the same i.e. the wheat in one bushel is no different from the wheat in another bushel. Likewise with cotton, it is indistinguishable. The deposit of a bushel of wheat with the warehouse owner in law constitutes a bailment. Ownership of the bushel of wheat remains with you and there is no transfer of ownership at all to the warehouse owner.

And as stated above, if the owner sells the bushel of wheat without your consent or authority, he has committed a crime as well as having committed a civil wrong (a tort) of conversion – converting your property to his own use and he can be sued.

Let me use another analogy. If a cashier in a supermarket removes $100 from the till on Friday to have a frolic on Saturday, he has committed theft, even though he may replace the $100 on Monday without the knowledge of the owner / manager of the supermarket. The $100 the cashier stole on Friday is also indistinguishable from the $100 he put back in the till on Monday. In both situations – the wheat in the warehouse and the $100 dollar bill in the till, which have been unlawfully misappropriated would constitute a crime.

Keep this principle and issue at the back of your mind.

Now we shall proceed with the money that you have deposited with your banker.

I am sure that most of you have little or no knowledge about banking, specifically fractional reserve banking.

Since you were a little kid, your parents have encouraged you to save some money to instil in you the good habit of money management.

And when you grew up and got married, you in turn instilled the same discipline in your children. Your faith in the integrity of the bank is almost absolute. Your money in the bank would earn an interest income.

And when you want your money back, all you needed to do is to withdraw the money together with the accumulated interest. Never for a moment did you think that you had transferred ownership of your money to the bank. Your belief was grounded in like manner as the owner of the bushel of wheat stored in the warehouse.

However, this belief is and has always been a lie. You were led to believe this lie because of savvy advertisements by the banks and government assurances that your money is safe and is protected by deposit insurance.

But, the insurance does not cover all the monies that you have deposited in the bank, but to a limited amount e.g. $250,000 in the US by the Federal Deposit Insurance Corporation (FDIC), Germany €100,000, UK £85,000 etc.

But, unlike the owner of the bushel of wheat who has deposited the wheat with the warehouse owner, your ownership of the monies that you have deposited with the bank is transferred to the bank and all you have is the right to demand its repayment. And, if the bank fails to repay your monies (e.g. $100), your only remedy is to sue the bank and if the bank is insolvent you get nothing.

You may recover some of your money if your deposit is covered by an insurance scheme as referred to earlier but in a fixed amount. But, there is a catch here. Most insurance schemes whether backed by the government or not do not have sufficient monies to cover all the deposits in the banking system.

So, in the worst case scenario – a systemic collapse, there is no way for you to get your money back.

In fact, and as illustrated in the Cyprus banking fiasco, the authorities went to the extent of confiscating your deposits to pay the banks’ creditors. When that happened, ordinary citizens and financial analysts cried out that such confiscation was daylight robbery. But, is it?

Surprise, surprise!

It will come as a shock to all of you to know that such daylight robbery is perfectly legal and this has been so for hundreds of years.

Let me explain.

The reason is that unlike the owner of the bushel of wheat whose ownership of the wheat WAS NEVER TRANSFERRED to the warehouse owner when the same was deposited, the moment you deposited your money with the bank, the ownership is transferred to the bank.

Your status is that of A CREDITOR TO THE BANK and the BANK IS IN LAW A DEBTOR to you. You are deemed to have “lent” your money to the bank for the bank to apply to its banking business (even to gamble in the biggest casino in the world – the global derivatives casino).

You have become a creditor, AN UNSECURED CREDITOR. Therefore, by law, in the insolvency of a bank, you as an unsecured creditor stand last in the queue of creditors to be paid out of any funds and or assets which the bank has to pay its creditors. The secured creditors are always first in line to be paid. It is only after secured creditors have been paid and there are still some funds left (usually, not much, more often zilch!) that unsecured creditors are paid and the sums pro-rated among all the unsecured creditors.

This is the truth, the whole truth and nothing but the truth.

The law has been in existence for hundreds of years and was established in England by the House of Lords in the case Foley v Hill in 1848.

When a customer deposits money with his banker, the relationship that arises is one of creditor and debtor, with the banker liable to repay the money deposited when demanded by the customer. Once money has been paid to the banker, it belongs to the banker and he is free to use the money for his own purpose.

I will now quote the relevant portion of the judgment of the House of Lords handed down by Lord Cottenham, the Lord Chancellor. He stated thus:

“Money when paid into a bank, ceases altogether to be the money of the principal… it is then the money of the banker, who is bound to return an equivalent by paying a similar sum to that deposited with him when he is asked for it.

The money paid into the banker’s, is money known by the principal to be placed there for the purpose of being under the control of the banker; it is then the banker’s money; he is known to deal with it as his own; he makes what profit of it he can, which profit he retains himself,…

The money placed in the custody of the banker is, to all intent and purposes, the money of the banker, to do with it as he pleases; he is guilty of no breach of trust in employing it; he is not answerable TO THE PRINCIPAL IF HE PUTS IT INTO JEOPARDY, IF HE ENGAGES IN A HAZARDOUS SPECULATION; he is not bound to keep it or deal with it as the property of the principal, but he is of course answerable for the amount, because he has contracted, having received that money, to repay to the principal, when demanded, a sum equivalent to that paid into his hands.” (quoted in UK Law Essays, Relationship Between A Banker And Customer,That Of A Creditor/Debtor, emphasis added,)

Holding that the relationship between a banker and his customer was one of debtor and creditor and not one of trusteeship, Lord Brougham said:

“This trade of a banker is to receive money, and use it as if it were his own, he becoming debtor to the person who has lent or deposited with him the money to use as his own, and for which money he is accountable as a debtor. I cannot at all confound the situation of a banker with that of a trustee, and conclude that the banker is a debtor with a fiduciary character.”

In plain simple English – bankers cannot be prosecuted for breach of trust, because it owes no fiduciary duty to the depositor / customer, as he is deemed to be using his own money to speculate etc. There is absolutely no criminal liability.

The trillion dollar question is, Why has no one in the Justice Department or other government agencies mentioned this legal principle?

The reason why no one dare speak this legal truth is because there would be a run on the banks when all the Joe Six-Packs wise up to the fact that their deposits with the bankers CONSTITUTE IN LAW A LOAN TO THE BANK and the bank can do whatever it likes even to indulge in hazardous speculation such as gambling in the global derivative casino.

The Joe Six-Packs always consider the bank the creditor even when he deposits money in the bank. No depositor ever considers himself as the creditor!

Yes, Eric Holder, the US Attorney-General is right when he said that bankers cannot be prosecuted for the losses suffered by the bank. This is because a banker cannot be prosecuted for losing his “own money” as stated by the House of Lords. This is because when money is deposited with the bank, that money belongs to the banker.

The reason that if a banker is prosecuted it would collapse the entire banking system is a big lie.

The US Attorney-General could not and would not state the legal principle because it would cause a run on the banks when people discover that their monies are not safe with bankers as they can in law use the monies deposited as their own even to speculate.

What is worrisome is that your right to be repaid arises only when you demand payment.

Obviously, when you demand payment, the bank must pay you. But, if you demand payment after the bank has collapsed and is insolvent, it is too late. Your entitlement to be repaid is that of a lonely unsecured creditor and only if there are funds left after liquidation to be paid out to all the unsecured creditors and the remaining funds to be pro-rated. You would be lucky to get ten cents on the dollar.

So, when the Bank of England, the FED and the BIS issued the guidelines which became the template for the Cyprus “bail-in” (which was endorsed by the G-20 Cannes Summit in 2011), it was merely a circuitous way of stating the legal position without arousing the wrath of the people, as they well knew that if the truth was out, there would be a revolution and blood on the streets. It is therefore not surprising that the global central bankers came out with this nonsensical advisory:

“The objective of an effective resolution regime is to make feasible the resolution of financial institutions without severe systemic disruption and without exposing taxpayers to losses, while protecting vital economic functions through mechanisms which make it possible for shareholders and unsecured and uninsured creditors to absorb losses in a manner that respects the hierarchy of claims in liquidation.”(quoted in FSB Consultative Document: Effective Resolution of Systemically …)

This is the kind of complex technical jargon used by bankers to confuse the people, especially depositors and to cover up what I have stated in plain and simple English in the foregoing paragraphs.

The key words of the BIS guideline are:

“without severe systemic disruptions” (i.e. bank runs),

“while protecting vital economic functions” (i.e. protecting vested interests – bankers),

“unsecured creditors” (i.e. your monies, you are the dummy),

“respects the hierarchy of claims in liquidation” (i.e. you are last in the queue to be paid, after all secured creditors have been paid).

This means all depositors are losers!

Please read this article carefully and spread it far and wide.

You will be doing a favour to all your fellow country men and women and more importantly, your family and relatives.

[IdahoCopper]

Seems like there may be an opportunity to create something new. Something that is not a "bank", but is more like a secure warehouse for cash. With bank interest rates now so low, would people pay .001 percent per year to store their cash?

[Sheikh_yer_Bu'Tay]

Great article! Good read! Good discussion!

As I read all this I thought of just a few things. Some have already been mentioned, some have not.

Gold was confiscated in 1933 via Executive Order. The current crop of politicians don't have a wiff of loyalty to the Constitution their forerunners had in the 30's, so, it's a no-brainer what will happen to PMs when TSHTF.

During the 2000's whare-housed nickel was "borrowed" without the consent of it's true owners to end the nickel price spike. Message: it's already been done with commodities, too.

During the 80's the Savings and Loan industry collapsed. The FSLIC was supposed to take care of everyone. It was so overwhelmed by bilked depositors, they only got pennies on the dollar as settlement. This has already happened before. Your deposits are not near as safe as you think they are.

Carefully read the fine print of your bank account papers you signed the day you opened a bank account. Chances are the legal ground work for a "bail-in" are already in place with your bank. Who needs the government to do that for them, when they have already done it for themselves?

ALL government sanctioned savings accounts are subject to confiscation. It has already happened in South America. The governments there seized ALL RETIREMENT ACCOUNTS and set up some type of system where they would dole out your money in monthly checks like Social Security payments. That way you could never withdraw more than they wanted you to have. Can't you hear it already? " Come now, Comrade. Don't you know the government can manage your assets better then you can?"

It happened in Bolivia not too long ago. People went to bed with money in the bank and when they woke up the next morning~~ their money had been re-valuated. The government did it overnight while everyone was asleep. If you had $1,000 in the bank the night before, you only had $100 the next morning.

My favorite quote from the article is: "Only a tiny percentage will be prepared to say, "We've been systematically raped and robbed by both our government and our banks, in full complicity with each other. It's high time I put what I have left in a sack and find a way to protect it on my own." "

[Sheikh_yer_Bu'Tay]

You guys do realize that the government has also seized gold previously, right?

Nothing is safe if the government decides "they own it".

I think the time frame is coming soon where life is going to be much less palatable. The signs are all there and I don't think that you are "safe" if you take your money out of the bank. They will get you one way or the other if we look at past history.

Good point, Barry.



Preps can be more than Ag&Au and a vault. Perhaps removing the cash, gold, and silver out of the jurisdiction is the way to go.

Sail on, Sailor!