The Connection Between Gov Shutdown & Customer Deposit Grabs

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The Connection Between Gov Shutdown & Customer Deposit Grabs

September 30th, 2013

Peter Nolan

Susanne Posel
Occupy Corporatism
September 30, 2013

Speaking of the threat of government shutdown, Senator Tom Harkin warned: “It’s dangerous. It’s very dangerous. I believe, Mr. President, we are at one of the most dangerous points in our history right now. Every bit as dangerous as the break-up of the Union before the Civil War.”

Harkin maintains that Senator Ted Cruz filibuster over Obamacare was a “foolish . . . little tirade” that is evidence of his ties to “the most extreme tea-party wing” and promoting this “ideology-driven obstructionism” onto the American public through his recent “display” on the senate floor.

Indeed the US government is staring $17 trillion in debt to the Federal Reserve Bank (FRB) that may be alleviated with a technocratic “bail-in” as was demonstrated in Cyprus.

Last March, Cyprus was the scene of depositors discovering an initial 10% of their monies in private bank accounts being syphoned directly to the International Monetary Fund (IMF) and various European banking stakeholders as part of a $13 billion bailout package.

The IMF released a statement wherein Christine Lagarde, managing director of the IMF said: “I welcome the agreement reached today to address Cyprus’ economic challenges. The IMF has always said that we would support a solution that is sustainable, that is fully financed, and that appropriately allocates the burden sharing. I believe that the agreed package meets these three objectives. On this basis, I intend to make a recommendation to our Executive Board for the IMF to contribute to the financing of the package.”

The agreement Lagarde referred to is an “adjustment program” of the Cypriot financial system allegedly enforced to encourage “sustainable and balanced growth” of the nation.

Jim Sinclair, financial analyst, says a bankster bail-in by depositors would mean that monies above what the Federal Deposit Insurance Corporation (FDIC) and Securities Investor Protection Corporation (SPIC) will insure would be confiscated by the technocrats to “offset” financial failure over the federal government.

Sinclair explains : “Bail-ins are coming to North America without any doubt, and will be remembered as the ‘Great Leveling,’ of the ‘great Flushing’ (of Lehman Brothers). Not only can it happen here, but it will happen here. It stands on legal grounds by legal precedent both in the U.S., Canada and the U.K.”

According to Sinclair “bail-ins do not require a crisis to occur and can surface one bank at a time, spread out over years. The major situation is deposits above insurance levels in banks too big to fail. Those deposits are directly in harm’s way.”

This means that the next target is retirement accounts as the “IMF and governments to secure as fonts of capital into which to place sovereign paper.”

In Rhode Island, the Retirement Security Act of 2011, based on the ideas of Gina Raimondo, a venture capitalist and Rhode scholar, was passed.

This piece of legislation allowed the state to raid pensions of state employees.

Raimondo became the state treasurer after funding for her campaign was provided by Goldman Sachs, Bain Capital and JP Morgan Chase.
This trend can be easily replicated in every state and under the watch of financial technocratic institutions.
Jim Grant commented that “the world will witness extreme monetary disorder.”

Because of the 7th Circuit Court of Appeals (CCA) ruling , banking institutions are now legally allowed to use those customer funds deposited as collateral, payment on debts for loans made, or free use on the stock market to purchase investments as the bank sees fit.

Fred Grede, trustee for the former Sentinel Management Group (SMG), explained that brokers are no longer required to keep customer money separate from their own. “It does not bode well for the protection of customer funds.”

Since the ruling gives banks the right to co-mingle customer funds with their own, no crime can be committed for the use of customer deposited monies.

According to Walker Todd , former lawyer for the Federal Reserve Bank of New York and Cleveland: “Basically, there is a new 7th Circuit opinion saying that there is no reason to impose a constructive trust on a lender’s takings of customers’ funds from client commodity firms that were used (inappropriately) to secure the firms’ borrowings, as long as the lender can say that it did not know WITH CERTAINTY that customers’ funds were being repledged. Negligence and misappropriation (vs. knowing criminal intent) are now a sufficient excuse for letting the lender keep the money and go to the head of the line for distributions in bankruptcies of the client commodity firms.”

When a customer deposits money into a bank, the bank essentially issues a promise to have those funds available when the customer returns to withdraw the deposited amount. When the same customer withdraws funds from their account (whether checking or savings) the customer assumes that the bank has enough funds to cover their withdrawal; including the presumption that their monies are separate from the bank’s assets.

Now those funds are up for grabs by the bank at their discretion without explanation to the customer – nor is the bank obligated to recoup the customer should they “lose” those funds due to bad loans, bankruptcy or stock market loss.