No matter what you think of our views or posts, this is one you cannot ignore. Seems our govt is proposing that banks can now “bail in”. If you don’t know what this means, a bail out is when the govt gives banks or companies money to stay solvent. Well now the govt wants to give banks the power to take depositors money that is in their banks and use it to bail themselves out of trouble, or bail in.
Now if you don’t find this alarming, you must not have any money in any bank or you’re just gullible (believe everything the govt tells you) or worse yet, stupid. In any case, you’d better read on for yourself, I’ll try to highlight the important parts if you don’t want to read the whole thing. So here we go.
U.S. Preparing Bank Bail-Ins – Fed Vice Chair Fischer
Federal Reserve Vice Chairman Stanley Fischer delivered his first speech on the U.S. and global economy in Stockholm, Sweden yesterday.
Fischer headed Israel’s central bank from 2005 through 2013 and is now number two at the Federal Reserve in the U.S. after Janet Yellen.
In a speech entitled, The Great Recession: Moving Ahead, given at an event sponsored by the Swedish Ministry of Finance, Fischer said that the economic recovery has been and remains “disappointing.â€
“The recession that began in the United States in December 2007 ended in June 2009. But the Great Recession is a near-worldwide phenomenon, with the consequences of which many advanced economies–among them Sweden–continue to struggle. Its depth and breadth appear to have changed the economic environment in many ways and to have left the road ahead unclear.â€
Speaking about the steps that have been taken internationally in order to “strengthen the financial system†and to reduce the “probability of future financial crisis,†Fischer said that the U.S. was preparing proposals for bank bail-ins for “systemically important banks.â€
“Additional steps have been taken in some countries. For example, in the United States, capital ratios and liquidity buffers at the largest banks are up considerably, and their reliance on short-term wholesale funding has declined considerably. Work on the use of the resolution mechanisms set out in the Dodd-Frank Act, based on the principle of a single point of entry–though less advanced than the work on capital and liquidity ratios–holds the promise of making it possible to resolve banks in difficulty at no direct cost to the taxpayer.
As part of this approach, the United States is preparing a proposal to require systemically important banks to issue bail-inable long-term debt that will enable insolvent banks to recapitalize themselves in resolution without calling on government funding–this cushion is known as a “gone concern” buffer.â€
Fischer’s comments that the U.S. is “preparing a proposalâ€Â for bail-ins is at odds with Federal Deposit Insurance Corporation (FDIC) and Bank of England officials who have said that bail-in legislation could be used today.
The U.S. already has in place plans for bail-ins in the event of banks failing. Indeed, the U.S. has conducted simulation exercises with the U.K. in 2013 and again this year.
On October 12 2013, Art Murton, the FDIC official in charge of planning for resolutions, and the Bank of England’s Deputy Governor Paul Tucker, both confirmed that the U.S. system is ready to handle a big-bank collapse.
The Bank of England’s Tucker, who has worked with U.S. regulators on the cross-border hurdles to taking down an international bank said that “U.S. authorities could do it today — and I mean today.â€
There is speculation that were Yellen to retire early Fischer would be anointed as the new Federal Reserve Chairman.
Fischer who previously was chief economist at the World Bank, also makes it clear that he expects ultra loose monetary policies to continue in the U.S. which will be bullish for gold and silver.
Now this means that if banks decide they need your money, they can take it. You might think this is no big deal until something happens, (a terrorist attack, a strike, a war, a natural disaster, a stock market correction, etc.) that will make everyone want or need money. Then what will you do when your bank doesn’t have all or perhaps, any of YOUR money?
I’m not saying take all your money out of the bank but I am telling you to diversify now. Buy some gold and silver that you can hold in your hands, spread your money out among multiple banks and keep some cash at home. This will at least help you if things go south, and believe me there are many really smart people who say it’s just a matter of time until they do. My dad would definitely do this or better yet, probably would not have allowed the banking community to do such a thing!
Now that that’s out of the way, onto the day. The boys and I left early, finished up our business in the mountains and then headed back to Denver. On the way we decided to stop and do some fishing. After about an hour with fish jumping around us, we packed it in and headed home. No fish for dinner.
Today I have lots of work to do as it’s my last office day before hitting the road until Sunday. Of course the boys start school Monday so this is our last hurrah, so to speak. Lori worked late yesterday and will do so again today so she can take Friday off. I’ll be glad when our pre-sell is over (August 24th) so I can stop driving every day.
That’s it people, hope you all are well. Hard to believe Robin Williams took his own life. He must have had some really bad demons inside, it’s really sad. We’ll pray for him and his family and you should too!
God Bless
Look at the blog– back feeling better.
My only comment. You have boys and a dog, it’s only going to get worse.
Sounds like Eleanor wasn’t feeling well, hope you’re doing better. And yes Annette, boys and a dog = $$$$$! God Bless.