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The "Gates" Are Closing: SEC Votes Through Money Market Reform
It was nearly five years ago when Zero Hedge first wrote: "This Is The Government: Your Legal Right To Redeem Your Money Market Account Has Been Denied" in which we predicted as part of the ongoing herding of investors away from every other asset class and into stocks, regulation will be implemented to enforce that "money market fund managers will have the option to 'suspend redemptions to allow for the orderly liquidation of fund assets" or in other words implement redemption "gates." The logic: spook participants in the $2.6 trillion money market industry with the prospect of being gated (i.e., having no access to ones funds) and force them to reallocate funds elsewhere.
Moments ago the gates arrived, when following a close 3-2 vote (with republican commissioner Piwowar and democrat Stein dissenting), the SEC adopted new rules designed to curb the risk of investor runs on money market funds, capping the end of a years-long heated debate between regulators and the industry dating to the financial crisis according to Reuters.
Among the changes, funds will have to switch to a floating share price instead of the current $1/share (hence the term breaking the buck). But the key part: "The SEC's rule will require prime money market funds to move from a stable $1 per share net asset value, to a floating NAV. It also will let fund boards lower redemption "gates" and fees in times of market stress."
And therein lies the rub, because the very presence of the "gate" effect will be enough to send money market investors rushing out (as they are all sophisticated enough to know that this fake, rigged market is a house of cards just waiting to come down) and into other asset classes.
Of course, it is the desire of the SEC, the Fed and the US Treasury that the one asset class picked as an alternative to money markets is equities: considering that the entire rally since 2009 has been on the back of the Fed and the primary dealers, with virtually none retail participation, the SEC decided it was about time to herd the "retail investor" out of the ZIRP "danger" of money markets and into the "safety" of an all time higher stock market where even Janet Yellen admits there is at least a biotech and a social media stock bubble.
Below are some of the concerns voice by one of the objectors, Kara Stein, via Bloomberg which incidentally are all spot on:
Redemption gates are the “wrong tool to address risk,” said SEC Commissioner Kara Stein during open meeting.
Fear incentives will result in “greater chance of fire sales in times of stress and spread panic to other parts of the financial system while denying investors and issuers access to capital”
- “Money market funds are only one part of wholesale funding markets that need to be strengthened”
- In the event the gate imposed increases, investors have a “strong incentive to redeem ahead of others”
- While a gate may be good for one fund, “it can be very damaging to the financial system as a whole”
- When the gate for a fund is used, it doesn’t mean the “impact on wholesale funding markets will be prevented”
She is spot on. But forget about our opinion, or even that of the SEC, because while on the surface this now enacted proposal to establish withdrawal limits is spun as benign, it was the Fed itself who warned in April of 2014 that "the possibility of suspending convertibility, including the imposition of gates or fees for redemptions, can create runs that would not otherwise occur... Rules that provide intermediaries, such as MMFs, the ability to restrict redemptions when liquidity falls short may threaten financial stability by setting up the possibility of preemptive runs."
Clearly, everyone understand that the only purpose behind implementing "gates" is to redirect the herd. And with some $2.6 trillion in assets, money markets can serve as a convenient source of "forced buying" now that QE is tapering if only for the time being. The only question is whether the herd will agree to this latest massive behavioral experiment by the Fed, and allocate their funds to a stock market which is now trading at a higher P/E multiple than during the last market peak.
And should this particular exercise in inflating stock bubbles fail, then gating bond funds, another "reform" which as we reported last month is in the works, should certainly force equities to unseen bubble proportions.
On the other hand, a blow off top in which the S&P rises by a few hundred points in weeks if not days may be just what this market needs for its final catharsis before everyone realizes just how insane centrally-planned things have gotten, and the long-delayed reset can finally take place.
* * *
For those curious, here is the section in Kara Stein's objection remarks dealing with gating:
... while the rule contains improvements, I believe it has a significant shortcoming – redemption gates. I agree with the staff that a floating net asset value, even when combined with these other improvements and the 2010 amendments, is not a panacea. Money market funds remain vulnerable to runs because investors will still have an incentive to redeem in a crisis.
However, after careful study, I am concerned that gates are the wrong tool to address this risk. As the chance that a gate will be imposed increases, investors will have a strong incentive to rush to redeem ahead of others to avoid the uncertainty of losing access to their capital. More importantly, a run in one fund could incite a system-wide run because investors in other funds likely will fear that they also will impose gates. I share the concerns of many commenters and economists that while a gate may be good for one fund because it stops a run in that fund, it could be very damaging to the financial system as a whole.
Even further, while a run by investors in one fund may be halted when the gate for that fund is used, that does not mean the impact on the wholesale funding markets will stop. To the contrary, a fund that drops a gate likely would need to build liquidity to meet redemption requests when the gate is lifted. This means the fund is likely to stop re-investing maturing securities during the gated period, or will invest primarily in government securities, thereby cutting off funding to issuers. This effect could be amplified by investors, who likely will redeem assets from other funds if one fund imposes a gate. And if investors are not able to redeem before the gate comes down, they will be harmed as they are deprived of access to their capital. Ultimately, this contagion could freeze the wholesale funding markets in much the same way as occurred during the recent financial crisis.
I appreciate that the rule seeks to mitigate some of these concerns by allowing the fund’s board to impose gates at a higher liquid assets threshold than was proposed, by shortening the length of the gate, and by requiring daily disclosure of a fund’s level of liquid assets. However, I do not believe that these changes adequately address the risk of destabilizing pre-emptive runs for the following reasons.
First, adding discretion that makes it easier for a fund to impose a gate could actually increase an investor’s incentive to redeem because it makes the use of a gate more likely. This could be especially problematic in a crisis, when an investor’s preference to avoid uncertainty could be magnified. Second, shortening the gating period to ten business days may only marginally decrease the incentive to redeem since even a ten business day gate is significant, particularly for corporate treasurers or other investors seeking to make payroll or meet other daily demands. Third, while disclosure could help, it also could have the opposite effect by highlighting that a fund could be at or approaching a threshold that would allow it to impose a gate.
I also am not sufficiently persuaded by the argument that many investors with a low tolerance for gates will seek alternative financial products that are better aligned with their risk-return preferences. While this could happen, it seems just as likely that those same investors will continue to invest in money market funds because they believe they will be able to redeem before a gate is imposed, or that sponsor support will prevent the gate from ever being used. While the rule requires disclosure of sponsor support, it unfortunately does little to address the moral hazard that is created by it.
In the end, these are difficult issues with uncertain answers. Ultimately, despite the rule’s efforts to mitigate the risks posed by gates, I believe the incentives to avoid them will remain powerful. I fear these incentives may result in a greater chance of fire sales during times of stress, and a spread of the panic to other parts of our financial system, while also denying both investors and issuers access to capital. I am, therefore, in the unfortunate position of not being able to support the rule that the staff recommends adopting today, despite some of its well-considered and thoughtful components.
Whatever the result today, money market funds are only one part of the wholesale funding markets that needs to be strengthened. We and our fellow regulators need to take additional steps to improve the transparency and resiliency of these markets. I look forward to working with the staff, my fellow Commissioners, and my fellow regulators on this more comprehensive and necessary project as we move ahead.
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Keep the bare minimum in your account to function or operate with a line of credit with minimal interest outlays.
Or downsize, close up shop, and minimize your outlays, and fuction on what you have.
Sometimes it's hard to escape the system, it's unique to each person's situation.
Or make the jump into crypto-currencies and learn to forex style trade instead on their exchanges and tell the SEC and whole system go and fuck off.
It's a fair assumption that humanity, and likely commerce, will continue after the crash. I don't think god is going to let us out so easily. That's where the REAL exit gates are set up.
It would be nice to see more conversation on post crash business opportunities. Not predator businesses. People will need productive, helpful survival goods/services.
"post crash business opportunities". . .
consider investing in what you'd like to eat to survive, and I don't mean tinned stuffs & food stores, that's an obvious prep.
land, set up for sustainable growing, including meat sources, in areas where CAFO & BigAg are not so prevalent, where communities are already "self supporting" in the basics. if you don't want to be the "grower" look into investing in someone who DOES.
permies.com is a great place to get up to speed on what can be done, and who knows, you may just find a "business partner" if you're clear about what you are looking for. . .
looking for inspiration? these guys rock. their community does too. . .
loners will need to be smart, lucky and well capitalised - community is where it's at for some others.
Buying and owning property is a myth.You have sound advice except for HAVING your name on the deed,I suggest renting some from some farmer that's clueless, and that way you can roll, and not get nailed by TAXES so friggin high tht you cannot afford to keep it.As long as there are such things as taves county,state,city, Ag, etc.You own NO land,or your home,biggest mistake I ever made(was a great idea at the time early 90's) was to write a check and pay off my digs.RENT is the way to fly,or lease only.
IMHO
then rent your land. folks do it for growing all the time, plenty of "idle" land sitting around waiting for the "market price".
while no one truly owns "their land" - some find it beneficial to at least play the game while they invest their time in creating self-sufficiency. . .
Wise advice.
And there it is. You have little incentive to stay at it, paying taxes, employing people, providing us goods and services, because of this crap. I am so sorry. You and your kind, of all of us, should be nurtured and encouraged by a so called system.
I have a little weak spot for entrepreneurs. Maybe that is a reason I like this place. Best wishes.
Same situation here. Business is still generating too much cash to walk away, and I'm stumped on where to stuff profits now. (Yes, I realize PMs are the go-to answer here, but you can get to a point where sane risk management says your portfolio is out of balance.)
I keep looking for credible advice for 1%ers (not 0.01%ers!) on how to structure assets, invest or even just save that takes sizable accumulated wealth into account. Nearly every suggestion out there is written by people with a vested interest in 1) taking your savings and 2) keeping you in the matrix. Someone actually suggested fucking annuities to me a few months ago, which is zimbabwe dollar-level stupid for wealth protection.
Invest in buying a second passport for you and your family along with a place to go.
You won't be sorry for doing it even if the shtf scenario never happens.
Think of it like buying a vacation property. You can then figure out how to turn it into a revenue generator even when you aren't there. Plus if you buy an island in the Caribbean you could bury your gold treasure and make a cool pirate map for your kids.
I'm not going to advocate a particular country, you need to do your own research on that to find what fits your situation best.
Farmland in Uruguay, or Ecuador.
Not sure if you are still on thread or not, but I have been chewing on this exact problem for a while. My situation is different, I am looking down the road and trying to figure out what my plan is in a year or two when I finally get zero debt, but it is still the same problem. I like to call it "staying in the saddle another 25 years".
I have concluded that a cash flow positive business is likely the best bet. Probably not useful advice at all, but I don't see how else to survive having savings completely wiped out during a currency collapse. People here will parrot the same farm land, bullion, etc crap, but the best trades will always be the ones NO ONE ELSE is doing. That is kind of how you know you are on to something ... it pencils out, it makes sense, it is resilient over at least a few years if not more, it isn't easy, and no one else is talking about it, doing it, or working on it.
I ended up in Alaska.
Regards,
Cooter
They charge me 7-10 dollars to cash a check at a bank I don't have an account at.
not to mention the face-time on their survelliance cameras, the digit-print (finger, thumb) and ID hoops to be jumped.
but yeah, there's the skim, always the skim. . .
It's fraud upon fraud. I went ballistic when they pulled that on me. They won't even honor their own script these days. The banks have total and absolute control over our society.
LOL!
I took a check from a renter to their bank to cash not long ago.
"We can cash this but there will be a 25 dollar charge."
"What!? This check is from this bank! Is there insufficient funds to cash it?"
"No - but we cannot cash it without the charge if you don't have an account here. Would you like to open an account with is today?"
So I walked out. Literally unbelievable.
So the rent goes up $25, and you get to point the finger at the big banksters.
With logic like that, you AIN'T no bag holder.
Buy gold and silver. Get out of bonds. Get out of the big banks. If they fail again they can take your deposits like they did in Cyprus.
FDIC will cover your first $250k (savings account, not MM). The rest may be at risk...
Yep, 25 billion in the fund to cover trillions in deposits.
Bwahahahahah, biggest joke of a guarantee.
Dude, if all the banks fail tomorrow, nothing will save you.
not having money in the bank would be a good start.
If all the banks failed, that would be the end of division of labor. I would die along with millions of my niche professional counterparts.
Ahh, Yep.
I have a feeling HH will survive lol
Like a derivatives trader, banker,
realtor, healthcare administrator, politician, actuarial, benefits
coordinator, DMV clerk, compliance officer, or similar?
Item 8
Gain, store, and maintain the knowledge, skills, and special equipment that would enable you to do at least one third-world job. If you are a dentist, doctor, farmer, cowboy, mechanic, miner, fisherman, lumberman, mason, blacksmith, whore house piano player, plumber, butcher, or similar, then you are already set. If you are a derivatives trader, banker, realtor, healthcare administrator, politician, actuarial, benefits coordinator, DMV clerk, compliance officer, or similar, then get cracking.
Blessed are the cheese makers for they know the whey.
Tao te whey, kinda cheesy but I like it!
IMO, the best way to prepare for some of the things that will result financial meltdown and a complexity collapse aren't to go out and buy all of your prepper food, but to grow it yourself. Start learning to do things that normally require industrial inputs in this day and age without those inputs NOW so that you won't be shocked when you have to learn how to do them when it actually counts. What are you going to do about soap if the JIT distribution system locks up? Hygene will be very important, and soap is just one of the many things that we take for granted. And how about cooking without natural gas, white gas, propane or electricity? I can do it because I like to camp and when I grill a steak, my cooking style requires an axe and a hatchet to get the heat source going.
And I would hope that people trust me on this when it comes to growing your own food: You do NOT want your first (or even second) year of gardening experience to be under conditions of collapse. Food is getting more expensive anyway, so growing your own will save you some $$. Learn how to save your own seed, and the costs will be lower the second year, and, if you get enough cultivars, you will have one year of selection against cultivars that don't do well in your area. Just make sure to avoid inbreeding depression and stick to open pollinated cultivars. Open pollinated cultivars is important, because many of the hybrid seeds sold by big seed producers has male cytoplasmic sterility that was induced by humans in a lab, and this trait is passed on by the female plants/plant parts. You will make A LOT of mistakes your first year and several your second year.
If people ask why you're doing it, you don't have to tell them that it is because you expect some sort of collapse. You can tell them that the food in the supermarkets today is crap and you want to eat real food, or that food is getting expensive and you're trying to save money in the long run, though you won't save money the first year. I cannot hide the fact that I am growing food from anybody that drives or walks down my road because some of my corn is 11'-12' tall. But it does taste better than the shit from the store and I can guarantee that it is not GMO. While I do use a jet pump on a well to water it, I need not use that, and I planted it with hand tools and a stick. I'll be putting in a pitcher pump on a 1 1/4" well when the weather cools down, and I can get water even without that.
Tell it gospel penguin.
I am not near ready enough, but I am working it. My front yard is an small orchard, adding new fruit trees every year. This year it was some more figs, but I have 6 blue berries, 2 complementary apple trees, two peach trees we put in last year, plus we planted a lot of noninvasive comfry to support the fruit trees. Also daylilies, which can be eaten. Blueberries, paw-paws, black berries and figs in back too. Plus I have lot of spices and herbs, fruit and veg planted, a second year asparagus patch, strawberries (jesus when they come in they don't stop). And supporting flowers. I did this for collapse, cutting down on food bills, eating organic and experience.
There are so many more things I want to do though. This year I have frozen apples and strawberries in the freezer. Canning intimidates me but I know I must learn it.
I canned 7 quarts of green beans last night. Canning is easy once you have a good pressure canner. You just have to be patient when letting it cool back down, because if you take the weight off too soon, the liquid in the jars will boil very hard and it screw up the seal by getting small amounts of food caught in it.
I would reccommend the All American brand. They're pricy, but the only gasket on the things is a neoprene gasket that is a safety valve. They're sturdy aluminum with a machine seal, and when I was looking for what one was best, I found several reviews that said "I got this exact same model back in 197X and I still use it regularly!" Other canners have seals that do go out.
FYI, picking, processing and canning 7 quarts of green beans (~7lbs) will take one person roughly half a day, but you can pick on one day, and process and can on the next day.
I'm going to do the hand pump thing too. The electric co. is always busy as it is repairing lines that are knocked down by falling trees. There are miles and miles of trees everywhere around here. So in a SHTF scenario I doubt it would be a priority to fix the remote locations. I like it here too because the few people around here have farms and already know how to get their own food. And let me tell you, they *know* when somebody around here doesn't belong...and they *all* carry guns. They've been prepped for a long time so why would they steal things from me? If zombies come here they are fucked.
Does anybody need any tomatoes? Cucumbers? Peppers? Beans LOL! They are damn good but I'm going to turn into a cucumber. We've done real good but next year will be even better.
If you are going to drive it yourself rather than using a pressure washer or some other contraption, a couple points that will make your life easier:
1) My neighbor rents a 90lb jackhammer when he decides he needs to put in a new well and gets somebody to man the thing while standing in the bucket of his tractor. That is one option.
2) If you are doing it by hand, which I will be, and you have alternating sand/clay layers like I do, having access to a hose will make driving through the clay a lot easier. I drove a 2" well 32' a few years ago, and I found that running a hose all they way down into the pipe when the drive point was in clay would get me about 4"-6" of easy driving before I had to do it again. I'd just let it run until the water coming back up starts to clear. Of course, I was 15'-20' into it when I figured this out, but the last 12'-17' were a lot easier.
Oh, and I've probably got 10-15lbs of summer squash on the counter, and I've been eating the stuff a lot lately. My winter squash hasn't even started producing yet. I've got squash and green beans coming out my hears.
What I'm thinking of is a brass hand pump that is inserted in the existing above-ground piping that goes to my submersible well pump. I've seen them before and think HH might have had it on a Christmas list one year?? LOL on the squash...my better half just did a pickle marathon...they're everywhere.
Another thing that's fun but has a learning curve is chickens. It's hilarious watching their antics and once you get the coops, runs, etc. it's pretty easy. Mine aren't laying yet but we're estimating at least 2000 eggs a year. Yikes. Right now I've got 16 guinea keets in a tractor coop I made. 2 weeks old and they already fly...nothing like chickens. Throw bugs in there and they go meantal like sharks. If someting distubs them it sounds like 16 smoke alarms going off but when I go over they shut right up and jump in my hand. Trying to keep them tame so they don't fly away. Ticks/bugs will be saying hello to my little friends soon.
I have ducks and used to have geese. (I had one goose that lived nearly 20 years - LOL) I'm going to swap over to chickens here once I'm done building the coop. I'm just going to free range them and put them up during the night. I've got dogs that won't attack them, but will chase coyotes, raccoons, etc... off. I expect a few losses here and there, but I've only lost one duck to predators doing it that way. Waterfowl is a pain in the ass, and they don't go after the insects like chickens do. After getting a locust swarm this year and having to replant 3/4 of my chile plants, I want something that hammers insects. Besides, in a SHTF situation, if I want to eat some duck or goose, I can just hop my back fence, hop the ditch, walk 50 yards and kill something. Doing it now means jail time, but in SHTF, I'm pretty sure I'll have worries much bigger than jail.
Nice!
This is what we're gonna turn into lol!
The Hazards of Backyard Henshttp://www.youtube.com/watch?v=Ll187f27Pxg
"Chickens are a gateway livestock"
That's a good idea unless you live in condo's, apartments and urban areas.
My guess is that you have to get through an early critical period.
My long term hope will be in some sort of spontaneous revolution, whether by the public, independent states or something like that. The failed system will have to be put down or frankly not many will make it.
I do like you preppers, though. I am doing a minimalist urban version.
And therein lies their evil intent. Familiar with Agenda 21?
Or you can go to a nice FEMA camp.
+1.
get familiar with Agenda 21, and Codex Alimentarius.
the sooner, the better.
I waited 14 months to get paid on a govt. guaranteed insurance once.
Then it was denied.
Promises are made to be broken.
Much like insurance, you pay them upfront then they later decide what will be covered.
That can't be true. The government would never lie. After all, this is a democracy, and the government is responsible to the people. If the government lied about something, the people would vote their representatives out of office and select more honorable men and women.
You, sir, are obviously a communist, pro-Putin propagandist who never went to public school.
I'm a capitalist pig, that went to an English Public school.
Even have my 'old school tie' in my cupboard to prove it, it opens a lot
of unexpected doors,not that I used it, unlike others, for that purpose.
We'll eventually find each other when the time comes. We are like magnets. Winks
Nope you would beg me for bread in trade for unspeakable labor and then end up in my stew pot. I pray for failure every day so this insanity will stop and I will become sane again.
You pray for events which would lead to having people in your stew pot so you can return to what you beleive to be sane? scary world you live in. sicko.
Willful misinterpretation of that poster's message.
You guys expect an event ... wrong. This is a process. Whishful thinking makes people quit smoking to avoid death. Wrong. If you are dead, you are done. Period. The problem is not death (event) but living a long time sick (a process).
Ssssnnnaakkkeee...
Sorry, just having a Metal Gear Solid moment...
When the going gets weird, the weird go hunting.
If all the banks failed...
Half the guys on ZeroHedge would setup black market banks a day later.
if 3 % of the banks failed at the same time, fdic would be broke
"FDIC will cover your first $250k (savings account, not MM). The rest may be at risk.."
Even if all the banks fail, they can print everyones money and pay them back. Of course gas will be $25 a gallon and bread will probably be higher. Saving money in tangible assets is the only way to go. Things with utility, like a tractor, would make a great investment under said scenario. I bet a good tractor would go up in price more than gold and silver if TSHTF.
I'll be heading your way when I hear it start up.
Get an old tractor.
I have a 50+ year-old John Deere 820 with a German built diesel. It runs like a top, and I can still buy every part from these amazing folks...
... or the prime movers from the day before yesterday, Horseman ; )
Farming The Palouse in the 30's
This guy has some great vids. In this one you witness the transition from The Team to 'the crawler'
Sincerely,
Fendt guy ; )
LOL, I know a dude that has a working steam tractor. I would love to drive that thing. It's just friggin' cool as hell. It won't go as fast as a modern diesel tractor, but it will out pull one.
If gas is $25 a gallon (and probably more like $60 a gallon), that tractor isn't moving too far. I'm long on horses and plows.
Wood burning engine. You ever watch Mountain Men, that was one of the more fascinating things watching one of those guys taking out some old blueprints from the 1800s and converting his pickup truck to run on burning wood.
In the 70s (?) Jean Pain was trying to stop forest fires and he stumbled on a way to generate methane, heat, and compost from woodland refuse. He powered his whole farm on methane; heated his house with water run through a compost system (~140F).
http://permaculturenews.org/2011/12/15/the-jean-pain-way/
Here is his whole book: http://files.uniteddiversity.com/Permaculture/Another_Kind_of_Garden-The...
Here is a great small scale system: http://shaunsbackyard.com/wp-content/uploads/2012/03/Biogas-Digester-Des...
Larger systems can be combined with CHP systems to generate electricity as well as heat. https://en.wikipedia.org/wiki/Cogeneration
1 ton of yard waste has ~400m3 of methane. About 800kwh of electricity can be harvested from it (plus ~25000BTUs heat).
Ummm....like...dude...we were told there would be no math.
Funny, I messed up actually; you get 25k BTU per cubic meter, so 1 ton of yard waste gives you 800kwh and 10 million BTUs.
Check out Downdraft Gasifier.
Wood gas generator to power IC engines. Easy to build.
Good stuff bookmarked for further reading.
Also always like this setup building a greenhouse attached to your house and reclaiming the heat
http://www.offgridworld.com/get-free-home-heating-with-an-attached-green...
You could technically heat the greenhouse also with that same compost that is generating methane at the same time.
Another cool idea I seen a solar furnance to heat your garage in the winter time using soda cans.
http://blog.hemmings.com/index.php/2007/04/26/almost-free-garage-heat-ju...
http://www.offgridworld.com/heat-your-home-with-240-recycled-aluminum-cans/
"Wood burning engine"
Check out Engineer775 on YouTube...he's a big proponent of wood gasifiers.
https://www.youtube.com/user/engineer775
You can modify the carb and produce fuel with your still - only for fuel purposes of course.
How to make it
http://journeytoforever.org/biofuel_library/ethanol_motherearth/meCh7.html
How to make it and modify gas engines for it - more extensive resource
http://www.permaculture.com/node/452
http://www.alcohol4fuel.com/id26.html
How to make biodiesel
Biodiesel is made from vegetable oil or animal fat (triglycerides) reacted with methanol or ethanol and a catalyst (lye), yielding biodiesel (fatty acid methyl or ethyl esters) and glycerin as a by-product.
http://journeytoforever.org/biodiesel.html
Latest Advances in Biofuels.
http://oilprice.com/Latest-Energy-News/World-News/Energy-From-Biofuels-C...
True but that tractor will need some $28 a gallon diesel to run...
Storable food and ammo
Dude, if the big banks has been allowed to fail back in 2007/8, other banks would have taken over, and the U.S. would be in a real recovery by now. It's a big leap from "we must save the banks" to "we must save these banks." All the banks were never in danger of failing, just the largest and most corrupt.
But it seems like the only common sense in the world is in Iceland, which is indeed doing quite well.
Spot on. Putin's country has already taken this medicine and that is why Putin can play a slow, well planned out, game of chess unlike our representatives (cough)[assholes](cough). They are not desperate, they have a vision and a plan, and they are implementing it, playing the hand they have been dealt.
Putin is KGB. I don't think skittles come out his ass nor do I think he rides on a unicorn to go to work. He is deadly. But he is deadly working for his team. They, for now, are done working through their collapse. We will have to get through ours and we are not ready at all.
Edit: Don't know if you know this, but using the quote function on the comment tool bar disables the ability for us to give you an up vote. Count me for one.
"Full Faith and Credit" means they can print up what is needed. I wouldn't worry about the FDIC guarantee. But anything above that is a very big risk. Use Treasury Direct instead for larger amounts.
>>>Use Treasury Direct instead for larger amounts.
Call me naive or simple-minded, but lending your "money" to Uncle Sugar is giving booze to a drunk. Still, it might be good for a laugh....
Even IF the FDIC did what it has always advertised: it will take years if not decades for the funds to be doled out; -and knowing how CONgrASS and the Treasury/IRS function it's very likely that all manner of exemptions and loopholes and gotchas will be part of 'doing the right thing'.
Throxx,
Even IF the FDIC did what it has always advertised: it will take years if not decades for the funds to be doled out;
RIGHT now the FDIC as up to a YEAR to make you whole,that's without a crisis.
Next you're gonna tell him Santa Claus isn't real and crash his whole world view.
.
No, he just has a different name amongst adults - Taxpayer.
Attention on Deck - Ut Oh!
https://www.youtube.com/watch?v=KSFCZSxDreg
Riiiiiiiight.
Of all the bank failures in 2013, I am not aware of anyone losing their deposit below the $250k. Let me know if I missed it. provide a link.
On a long enough timeline...............
Your ass will be an owner of the bank by a debt(deposit) for equity swap.
pods
They can change the $250k deposit rules in hours, if not minutes. If TSHTF, they can and will change the rules at will. Of course, they won't benefit you or me.
Exactly. They changed the rules in a heartbeat before. They can do it again.
Ohhh me,me,me (waving arm)
I always wanted to own part of a failed bank.
Do you get to party on yachts with young nubile chicks and shit?
Of course they were saved. We are still in the 'orderly' part of the system decay/crash. It's when folks go to withdraw in mass... that's where the gates come up... which is the point of this article as I recall.
And printing enough money to FDIC all withdrawals would make the currency worthless. Hey! maybe that will be the trigger for hyperinflation.
Well, in Cyprus there were a helluva lot of them, and the Central Banks seem pretty enamored of the idea for Europe and the US.
Are you for real?, it's MATH.
Dude, it's all at risk if it is in a bank. In court, you are considered an unsecured creditor if (when) the bank fails. There is no fucking way you're getting your money back.
And the FDIC? They are praying they never have to make good on that promise to insure funds in the event of bank runs. The first thing they will do, if they haven't already done so, is exactly what Europe did: they will lower the amount that is insured. And when that fails to work (which it will), the Federal Deposit Insurance Corporation will go belly-up, because of course it is not properly funded. You WILL be Cyprused if you leave it in the hands of the same people who caused the crisis to begin with. The bank WILL ask for a bail-in and WILL get it, and you will receive a very severe damn haircut, if they don't shave your head to a cue ball state. Get it out NOW and put it in tangibles.
From what I have heard, the fine print says that they have up to 30 years to pay you back your insured amount.
FDIC will cover your first $250k (savings account, not MM). The rest may be at risk...
You forgot the $1000 monthly withdrawal limit that will go into effect on your "risk-free" savings.
So all this does is increase investor aggravation... They all move over to ultra short CD and T Bills. Pain in the ass? Yes. But safer assumption than believing investor behavior changes enough to go from "cash" to " risk".
I've always thought your avatar looks less like an eye and more like a huge, burning cunt.
That would explain the fear it strikes into the hearts of men, hobbits and elves.
Gauntlets. You're talking about gauntlets.
Umm Ya.....
M2V new lows are in
http://research.stlouisfed.org/fred2/series/M2V
On $11.3 Trillion M2
http://research.stlouisfed.org/fred2/series/M2
We are so screwed. ....gold is the only way.
And I believe that says nothing about the dollars held by foreigners. If I'm wrong on that, I expect to be corrected shortly by somebody.
The government's own system, Treasury Direct, seems far more attractive than a fund that will get gated when you most need cash.
Do not put amounts in excess of FDIC limits in any bank.
let it be known...
as i have preached every since i came here...
you remain in their debt based paradigm...
you deserve what has and is to come...
forsake the only 2 forms of real money to your own peril...
they can not make any clearer that they exist to enslave and rob you...
in large part your liberty resides in Physical Silver and Gold...
DEATH TO THE MONEYCHANGERS...
By design....most people do not realize that they are living in peril.
on monday i went into BOFA to deposit $7,500 cash in order to turn right around and wire to APMEX for some more real money...after making the depo (all C-notes) i sat down at the acct. reps desk to execute the wire like i have done many times...
she then informed me that there would have to be a 24 hour hold on my funds to make sure "it cleared"... i told her i just depo'd cash and there was no way BOFA was gonna hold my fucking funds for 24 hours locking me out of transacting while their insolvent institution did whatever the fuck they wanted to with my shit...
she insisted that this was the new policy to which i responded "i dont give a fuck - and give me back my $7500"... i withdrew the funds immediately and then asked for a cashiers check and told her to waive the fucking fee which she did..
do u all c where this shit is headed?????
do u c why i only leave 20 fucking bucks in all my accounts unless there is a transaction that i need to do pronto????
they r coming for your savings...and if u leave more than you can afford to lose in their hands you can say bye, fucking bye....
I hear you. I got a call from one of my banks asking me about my transfer history. Thankfully, I knew a girl at the branch and the investigation was quashed...as far as I know. Scary shit.
That IS some scary shit.
I deposited 7K cash in the bank a while back. One gal sitting at a supervisors desk looked me over as though I was about to take money out of the bank (if you get my meaning), rather than putting it in.
Don't take in 10K, they will report that to the IRS.
That's probably my fault, Kaiser. I use a BOFA credit card for every purchase I make and pay the balance in full just before the due date. Never pay a penny of interest and get a check back from them every six months or so for about $500. I get a 30 day float on my living epenses plus a little extra. Of course, I will have to re-think this strategy once retailers start charging more for credit card transactions.
I do the same thing with AMEX but I charge considerably more through my business. I pay off my card every month, get approx 200,000 Amex points, then go to their site and buy a number of $500 Home Dept Gift Cards and sell them on eBay for ~90% of their cash value. This nets me approx $2500 a month from AMEX for just using their shitty card. I then turn around and exchange that cash for metals (real money). Until they collapse I'm going to keep working these banksters like the f'ing parasites they are :)
Nice.
Foster? Could not be Fonestar for sure, great job!
...there's no where else on the planet left to loot besides your private assets.
Kaiser,
i withdrew the funds immediately and then asked for a cashiers check and told her to waive the fucking fee which she did..
I believe you THINK you got a Cashiers Check,they are not the same as cash anymore.My bank is large, and they stopped issuing what were Cashiers Check, for Bank Checks.Cashiers Checks(by that name) are no longer the guarantee they used to be.
My young sales partner just ran into that this week when she ran out of checks but needed one for a new apartment deposit.
I wonder if something is silently afoot.
Yes, Moneychangers are opportunistic parasites, but...
So far, every SOB who ever screwed me or my family in the last 80 years was a "Christian", because "Christian trust" was in the equation, rather than Universal Principles of human nature.
For this reason I've never been 'screwed' by a Jew or Israeli, as all our negotiations were done with the brain On, eyes & ears Open, and religious ideology by the wayside. That left only the fun of the game of Negotiation & Haggling -- using smarts, wit, charm, satire, sarcasm, etc., until an equitable deal was struck. It's like playing Chess and Poker at the same time -- which is not for everyone... not for simpletons or gullible people.
When people start waving their religious/Christian flags or don their Christian cloaks, it's time to put on the Game Face, and count your fingers after the deal -- 95% of the time. Reagan said "Trust but verify". I say "Make them earn your trust." Until that happens, take trust out of the equation and proceed on Principle: Verify! Verify info, facts and compliance.
Righteous Indignation has a rightful place in human affairs, but impotent rage or seething hatred does not. It's a waste of energy and creates more problems than it solves. Hatred -- like all negative emotions -- is a Learning Disability. Treat anger as a fuel in your gas-tank, not as fuel in a Molotov cocktail. Just solve the problem or be part of the solution, and move on.
-Kirk out.
I believe you are referring to the Jesuits?
http://intheknow7.wordpress.com/jesuits-smom-knights-rcc/
Dessert -
http://intheknow7.wordpress.com/anatomy-of-sarah-l-palin/
hahahh, love the sarah palin wrapped-in-the-US-flag pic.
“When fascism comes to America, it will be wrapped in the flag and carrying a cross” — Lewis Sinclair
And you can be sure that where the SEC fails to punish Wall Street they are certain to punish Main Street.
As WC Fields said in "The Bank Dick" during the chase scene
"The resale value of this car is gonna be nil."
Correct me here
This is just an extension of the Stupidity that collapsed in 2008. ZIRP, NIRP, and fees for individual bank accounts. And the Bail-Ins.
On Money Market Funds, someone I know got involved back in the 1970s or early 1980s. Correct me if I am wrong, but didn't some or a lot of MMFs invest in CDs, US Treasuries, so they were pretty secure and it was very rare for any negative fluctuation?
MMF Rules change just reflects how municipal bonds back up huge municipal debt and how ZIRP may become NIRP.
I AM BEARISH ON THE US DOLLAR
money market fund (also known as money market mutual fund) is an open-ended mutual fund that invests in short-term debt securities such as US Treasury bills and commercial paper.[1] Money market funds are widely (though not necessarily accurately) regarded as being as safe as bank deposits yet providing a higher yield. Regulated in the US under the Investment Company Act of 1940, money market funds are important providers of liquidity to financial intermediaries.[2]
This is the US Government Creating a Lower Class of Citizen of those on Fixed Income, Retired, Disabled, or Dependent.
I AM BEARISH ON THE US DOLLAR
MMs invest in US Treasuries. The only way to go Negative is for NIRP. NIRP Means US Forces Banks to buy Treasuries OR it means the US FIAT IS COLLAPSING, PETROL DOLLAR IS GONE.
Treasuries are money for all practical purposes. For arguments sake let's say the dollar collapses, Treasuries will just be denominated in something else come payout time. If the Treasuries go you got a lot bigger problems than your savings at that point if you are in the US.
Also if the Federal Reserve was removed from the scene you'd expect the Treasury Department to still honor the outstanding debt issuance in whatever they are calling money at that time. As long as you can use that money to buy stuff including food people will ultimately accept it locally. They have to or else the government is no longer a legit government if the people won't take their debt toilet paper. It is kinda a form of voting if you think about it.
What would be the point of inflating the currency nearly to zero, then paying dollar-denominated bonds in something valuable? No - ya paid dollars for those notes, you're getting dollars back. Your problem if it takes $10k to buy a loaf of bread by then. Not even a bought-and-paid-for Congress would pay gold to rich people for treasury notes when the masses are rioting for bread.
Inflation is the only way to make that unpayable $17 trillion debt go away. The Constitution forbids outright default (I know, since when does anybody pay attention to that old thing?).
You are partially right. A default is the proper and orderly way. However, there is no real problem with the Constitution. As Justice Roberts pointed out you need only rename something. So, Obamacare is Constitutional by calling it a "tax" even though the Dems were adamant it was not. No matter that tax bills have to originate in the House, which it did not, as well.
So, they will call it something else. Default will be called some sort of tax, fee, restructuring debt, etc. It will go into the leftist gray area of terminology and magically become Constitutional...if they actually want to default.
Inflation is the preferred government cowardly way of doing it even though it causes horrendous turmoil and pain. Better our pain than theirs.
Treasuries are in the debt outstanding column for Johhny Taxpayer.
As for Jimmy Investor, while I can't disagree with you, Jimmy just has to determine both for t-bills and t-bonds/notes, especially these latter two given the longer maturity/risk, how much he is actually losing in purchasing power over Xt, relative to his other options.
I mean, why not go with a cd or mm account at a smaller bank and get a cunt hair more interest?
You're right though - for all the doom porn, treasury ious will pay out in something - the concern is how much purchasing power it will have.
It's purchasing power will be based on privately nongovernment issued money aka crypto-currency. People don't see it yet but you have to have privately issued money like bitcoin if the financial system collapses it will be used in the interm as everything readjusts. People don't see it but that is going to mitigate a bunch of socitial problems since it is already road tested. Not only that it can function as it's own internet without the internet as I've been trying to get that point accross which is important and another resillient layer of the block chain technology. Commerce can continue to function and paychecks can keep being paid during the transition. It is ultimately in the long term interests for all countries to have privately issued money like crypto-currencies along with goverment issued money. It will mitigate a lot of social upheaval as governments and their financial systems fail.
Bullshit dude.
We shall see soon enough. The moment of truth is almost upon us.
Also think of it this way. When everyone's savings are wiped out and they have no money to buy bread as long as you can buy bread with it you are already ahead of the game.
For all the doom and gloom Treasuries are still one of the safest places to park in paper even in the tshtf scenario. It may not be the best place to get a rate of return but you will be guaranteed to get something.
Thanks for the string here. Sort of got me thinking about Bitcoin a little.
Is that some Tourette's thing where you suddenly and uncontrollably blurt out "I AM BEARISH ON THE US DOLLAR" every few seconds?
Yeah, just commiserating a little.
You know the story. The following are under reported and ignored
1) Municipal Debt is wide spread problem
2) Pensions are under funded widely, PBGC is also under funded
3) Medicare & SS are Under Funded
4) Inflation is rampant in Health Care
5) Households lost at least $1 Trillion in savings in Crisis
6) Federal Debt is Exponentially Increasing
7) Money Supply is Exponentially Increasing
8) Small Businesses, The Number of Banks, and Labor Participating Rate are on steep Decline
9) Real Wages in the US are in Decline
10) USA is addicted to Either Power or War or Banking (OR all Three)
Why not simply go FULL RETARD and demand that 'ALL MMfunds MUST be diversified into Stocks and TIPS or converted directly into MyRA accounts' to get under the gates? -& give Everyone between Nov. 1st and Jan. 1st to settle up; -just like ObamaCare!
Because then all the tax cows the gubmint is depending on to kick that can for another ten years would pull a Saverin and Singapore would suddenly have a much richer tax base. Those who have the cash can move at will. Even the gubmint can't get blood from a stone, though they will of course spend 6.9 billion on a study to find out why, and create a new Department to administer to the findings. It will be called the Department of The Impossible Just Takes A Little Longer and its logo will be a skittle-shitting unicorn.
Perhaps the MM funds should invest in giant mattresses...
Should be a good decision for gun sales.
Piwowar seems like an interesting guy -
http://www.law360.com/articles/558257/sec-s-piwowar-stokes-long-simmerin...
I hope he avoids small planes...
And expensive German cars that tend to spontaneously combust. Oh, and nail guns, can't have any financially minded people around those bitches. The gubmint should make warning labels for nail guns: WARNING! This machinery can cause spontaenous suicidal impulses in the financially literate. Operate with extreme caution and see your doctor IMMEDIATELY for any of the following side effects:
~Unwillingness to play ball with the big dogs
~Desire to sell all stocks
~Desire to own barbarous relics
~Desire to call the nearest media outlet with insider knowledge of widespread industry corruption
Looks like Piwowar just wants to protect the SEC's turf. Since the SEC is worthless anyway, how does that make him a good guy?
The FED/ESF has unlimited funds with which to work their magic. How can an unwanted market crash occur when they have already proven that they can bring dollars in the 10s of trillions to the fight? Derivatives seem to be a cheap way to exert control. Until the inflation caused by these efforts is manifest or until other players get tired of the pain I suspect the game will continue. I expect to see very high index prices before this is over...unless something unforeseen and somthing that cannot be fixed with 'more dollars' happens.
Zerohedge still operates as if there is a law and the law is being implemented.
Nobody cares about gates or no gates any longer.
This is central control.
Law is dead.
you could not be more wrong. if you are not in the 1% the law is alive and well and will kick your ass all over the place and have u piss broke and in prison in about 5 seconds. ask that black guy in NYC that got choked out by the cops for selling individual cigarettes without paying tax on them if the law is dead.
if you have enough $ and the right connections you can buy your way out of pretty much anything, It's a big club, and you ain't in it.
Yes, we have like 25 Million people that have been to Prison or are now in Prison.
And it is a Business. Private Prisons are growing as fast as Private Security firms did. Quotas. Got to have contractual minimum number of people in our private business.
or otherwise known as 'central command'
Europe is 90% communist
USA is 80% communist
"I'm back!" - Sheriff of Nottingham
NEO-FEUDALISM / FEUDALISM 2.0, Bitchez. The data fits this model better than any other "ism". Plan and act accordingly, or suffer the consequences.
@fonz: +100
Right. Communism, Neofascism, Neonaziism, Inverted Totalitarianism, Corporatocracy ...
We have a Military Republic. Democracy doesn't exist other than as a Carrot on a Stick to get you to go along with the Military Republic Empire.
No difference between the UK & the USA except we don't recognize the people that think they are "Royals" who interfere with our Government System (which was set up pretty well in the beginning)
You're wrong. In spite of the scandalous bill clinton and his partner in crime, they are considered Royalty by 43% of the murcan people.
So too, is the U.S. Government by those who do not work for a living but live completely on the taxpayer's dimes.
Depends on your definition of Royalty as one disbarred, disgraced, cigar licking vaginal secretions POTUS once said.
Bill Clinton is Disbarred. Wow. Maybe I heard it this year in reference to Barak & Michelle, but i forgot to check on it.
Norte Americans do love the British Royal Family. There is a sickness that comes from our childhood that does this. Patriarchy & Matriarchy on Steroids, or maybe when we hear the respect for Governors & Presidents, Priests & Clergy.
What strange world do you live in?
Americans couldn't give two shits about Royals outside of a cute baby.
I doubt most couldn't name one besides ex wife Diana.
Every time I see news stories about the Royals, I think So What.
But the Liberal Media or Propaganda machine fawns all over them. Maybe it is just an extension of the Academy Awards, Hollywood Extra, and the magazines that follow Celebrities.
You have to admit the LGBT and many US Consumers throw money around to visit LA TV Game Shows and fawn all over the Today Show in New York. Maybe these are the same idiots.
On the Other hand what about the people that Trust Obama and Priests to be alone with their kids.
US Debt Levels are Extremely High because people trust Politicians and they Trust the Financial People or the Consumer Culture. And they even Trust their Careers, 401Ks, and Pensions to big business employers - only to lose it all.
Why Trust the UK at all. Why have Royal Families at all unless they are only ceremonial and not Rich. If they are so Royal why don't they give their money to payoff household debt? Why doesn't the Vatican Give up it's wealth if it is "Full of Grace" and pay off household debt or create employment even. Why not fight financial corruption if the Nobles and Religious are so Great.
Royal family=glamourized welfare recipients on steroids. Your avg inner city welfare queen ain't got nuthin' on thrm.
Royal family=glamourized welfare recipients on steroids. Your avg inner city welfare queen ain't got nuthin' on them.
The only redistribution of wealth in this country is upward.
What be have is a crony-capitalist military surveillance republic. If You work for Blackwater/Xe/Academi or you're an exec at General Dynamics, Raytheon, or Lockheed Martiin (or one of its sub-contractors), you're doing alright.
HH, 9 and 10 etc
Get to know the people on your street, town, community. When SHTF, which, who can be relied on. Have stuff, skills, savvy to barter if necessary.
Bank ATM is last place you will want to be in SHTF.
I agree.
It's nice to know the people you might have to shoot.