This page has been archived and commenting is disabled.

Why Banks Rob Depositors: "Because That's Where the Money Is"

Tyler Durden's picture




 

Submitted by David Smith via MoneyMetals.com,

One of America's most notorious bank robbers, Willie Sutton (1901-80), is said to have remarked that he robbed banks "because that's where the money is." In a strange twist, the banks themselves are now beginning literally to rob their own customers.

The theft occurs via the innovative practice of "paying" (i.e. "charging") negative interest rates on savings and checking account balances combined with account maintenance fees. Cash strapped Greece is looking to go even further – charging customers for daring to withdraw cash! So what gives here?

Banking Policies Are Becoming Injurious to Your Financial Well-being

Since the global financial near-collapse of 2008, Central Banks, led by the U.S. Federal Reserve, have tried to solve the problem of faltering economies, excessive debt creation, government deficit spending and a deflationary landscape by flooding the system with fiat money, literally created out of thin air.

Their reasoning is that the problem of excessive, unpayable debt can be solved by creating still more debt!

If you had trouble paying off a $300,000 dollar home mortgage, would borrowing another $200,000 to continue making payments help you solve your dilemma? Of course not. You would simply owe a total of $500,000! Yet this is exactly what many of the world's leading financial wizards have been doing to keep government budgets afloat for the last 7 years.

In an effort to stimulate the economy and encourage consumption, the Federal Reserve has lowered interest rates well below where they would be if allowed to fluctuate based on free-market forces like business and consumer demand.

This has taken us to a Zero Interest Rate Policy (ZIRP), which by definition is theoretically the lowest rate that a central bank can impose as part of its strategic agenda. The closer rates get to zero, the fewer options monetary planners have at their disposal to attempt to stimulate economic demand.

Altering Your Behavior

The effect of excessive money creation has been compared to the liquid sloshing around in a giant punch bowl.

And since interest rates are so low, investors must take on more risk in the search get greater returns. Across the globe, this new money – in an uncontrolled manner – seeks out profitable venues for growth.

A great deal of the central bank-created paper/digital money thus ends up chasing finite amounts of art, real estate, collectibles, or financial assets like stocks or bonds. This has sparked the latest stock market bull runs in one country or another, leading to new and unsustainable bubbles.

Afterwards, the supposedly most-connected person on the planet – the U.S. Federal Reserve Chairman – always seems to be surprised.

The War against Cash

While investors are chased into higher risk assets in search of yield, we are witness to a simultaneous "war on cash."

Governments around the globe have lowered the amount of cash a person can withdraw without attracting the attention of authorities, who snoop on you to make extra sure you aren’t dealing drugs or selling weapons to terrorists. France, Sweden, Denmark, Israel are just the most recent to have announced this change.

With the formation of groups like the Orwellian “Better Than Cash Alliance,” plans are underway to eliminate cash altogether and leave the public with little choice but to keep all their money in a digital account. While using only electronic money may seem to be more "efficient," it makes it possible for authorities to track all of your financial dealings AND even allow banks to impose a Negative Interest Rate Policy (NIRP) upon you.

Without measures to prevent block them, account holders with cash balances might choose to withdraw and hoard paper currency. That would be the simplest way to escape negative interest rates.

But with funds trapped inside of bank accounts, bankers could simply deduct the negative rate charge from each customer’s balance. (Question: Would not such "digital cash balance robbery" be just a modernized version of what Willie Sutton was doing back in the day?)

Targeting You for Outright Theft through NIRP or Asset Forfeiture

And then there are the rising abuses of Civil Asset Forfeiture. If you're stopped on the road and have a few thousand dollars on you – no matter that you might be going to buy a used car or plan to make some purchases during an extended vacation… the police can easily deprive you of the cash, without even charging you with a crime.

In recent years, Civil Asset Forfeitures have reached the scale of billions of dollars. And police departments come to depend on this tempting "revenue stream," creating the perverse incentive to seize even more.

Following a lengthy investigation last year, The Washington Post reported,

“There have been 61,998 cash seizures made on highways and elsewhere since 9/11 without search warrants or indictments through the Equitable Sharing Program, totaling more than $2.5 billion. State and local authorities kept more than $1.7 billion of that while Justice, Homeland Security and other federal agencies received $800 million. Half of the seizures were below $8,800.”

"Monetary thinkers" feel things would be so much more efficient -- for the government -- if we all went totally to digital accounts. No need to carry cash around or pay bills by mail. The authorities will know exactly how much money you have and what you spend it on, placing your balance under their control at the press of a button.

 

Coming Soon to a location near you?

The legend of the Greek craftsman Daedalus is relevant today. He learned how to fly and taught his son Icarus – cautioning him not to get too close to the sun at the risk of melting the wax on his wings.

Immensely powerful central bankers believe that they can safely "fly high" with their monetary policies. But like Icarus, who flew too close to the sun and plunged from the sky when his contraption fell apart, so too do our monetary authorities run the risk of similar demise – and taking the rest of us down with them.

Financial Repression Has One Logical Outcome...

In a recent article at mining.com, David Levenstein really nails it, saying:

"Financial repression has long been a driver of demand for physical precious metals. This demand will accelerate as measures become more draconian. Some bank customers… will decide that bullion is a better option than sitting on piles of depreciating paper currency or paying banks to hold deposits... Historically, only gold and silver have been trusted private stores of value as well as a hedge against political, financial, and economic turmoil. In such an insane environment, gold and silver will become the only real trusted alternative to fiat currencies. And, as more new capital flows into physical bullion, its price will soar."

Got gold? Got silver? Got common sense?

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sat, 06/27/2015 - 16:46 | 6242255 two hoots
two hoots's picture

That is always the case, when money pools, someone (Fed, banks, legislators, Treasury, IRS, manipulators) is coming after it. 

Sat, 06/27/2015 - 22:20 | 6243191 Little Doll
Little Doll's picture

My last pay check was $9500 working 12 hours a week online. My sisters friend has been averaging 15k for months now and she works about 20 hours a week. I can't believe how easy it was once I tried it out. This is what I do... http://bit.ly/1LCjofJ

Sat, 06/27/2015 - 16:44 | 6242260 Smuckers
Smuckers's picture

Gradually, then suddenly.

 

Timewise, I think we're at the comma.

Sat, 06/27/2015 - 17:21 | 6242324 Creepy A. Cracker
Creepy A. Cracker's picture

So frick'n STUPID.

If you hate banks, DON"T USE THEM!!!!  Use your community credit union.  Use your family.  Use your friends.  Don't borrow.  Keep all of your cash under your mattress.  Keep all of your gold under your mattress. Play the "markets."  Start your own financial institution - just don't call it a bank because you'll have to hate yourself then kill yourself.

What a bunch of frick'n whiners.  Don't use the banks if you hate a late fee on your credit card payment. Or, and this might shock some... PAY ON TIME.

I use multiple banks and a credit union.  I am perfectly happy with every one of them.  I know the fees and don't get pissed if I set things up so that they can charge me.

The Fed, where they are "printing" money, devaluing your earnings and money - different story.

Sun, 06/28/2015 - 03:14 | 6242440 F0ster
F0ster's picture

The point I think you're missing is that by removing physical cash from the system means that Central Banks and profligate Governments are trying to prevent the natural response (bank runs) from their calculus. The problem thus enables the afore mentioned criminals to run up more sovereign debt to create a military dictatorship that ultimately becomes terminal to a healthy Society. Bank runs are the existing check on banker and Gov extremism / fascism, by removing this option from the people it is akin to dictatorial control over we the people!

Sat, 06/27/2015 - 18:43 | 6242616 two hoots
two hoots's picture

Government mandated direct deposits (no lobbying here?) makes your suggestion very difficult for many people. 

Sat, 06/27/2015 - 16:58 | 6242263 Bighorn_100b
Bighorn_100b's picture

If my balance drops below 25K then I get charged $25.00 a month til my balance is over $25K.

I do get 100 free trades a year in my brokerage account. Free checking, and a fake smile from the teller.

Just went there today and pulled half my checking account balance just in case. I don't keep any more money in the bank than I have to.

Sat, 06/27/2015 - 17:54 | 6242431 NoDebt
NoDebt's picture

I haven't had a "bank account" in the traditional sense of the word since 1996.  I haven't paid an account fee in probably 10 years and I don't have a balance anywhere near 25K in my monthly running account.  No ATM fees in probably the last 8 years, either.  

Sat, 06/27/2015 - 18:41 | 6242611 VelvetHog
VelvetHog's picture

Good man!

Sat, 06/27/2015 - 16:47 | 6242266 ThroxxOfVron
ThroxxOfVron's picture

"the banks themselves are now beginning literally to rob their own customers. "

 

The banks have been robbing their customers since fractional reserve was employed.

The banks 'lent out' more paper than there was Gold.  

The bank frauds were caught out and had to start paying interest to wise depositors to keep from being lynched.

Sat, 06/27/2015 - 17:19 | 6242341 SWRichmond
SWRichmond's picture

Burn, baby, burn!

Sat, 06/27/2015 - 16:47 | 6242267 Atomizer
Atomizer's picture

Do you remember when bankers gave you a toaster when setting up a new bank account? Oh, the irony. 

Sat, 06/27/2015 - 17:03 | 6242310 Realname
Realname's picture

The banks knew you were 'toast' once you opened that account. They were laughing all the way to the, umm...you know the rest.

Sat, 06/27/2015 - 17:10 | 6242320 Ralph Spoilsport
Ralph Spoilsport's picture

Those 5-tube clock radios were popular give-aways too. The one we got had a handy outlet to turn on a percolator when the alarm went off. It caught on fire after a few weeks - you get what you pay for.

Sat, 06/27/2015 - 20:38 | 6242951 RafterManFMJ
RafterManFMJ's picture

Bet thank bank had a brisk business in new home mortgage originations; pretty clever of them.

Sat, 06/27/2015 - 22:45 | 6243175 bluskyes
bluskyes's picture

TD used to hand out Ipods, Cash, and lots of other things for opening an account with them. 25 year customers got service charges, and blank stares

Sat, 06/27/2015 - 16:48 | 6242273 Newsboy
Newsboy's picture

Holding physical cash, how quaint.

What? Try the card again!

Sat, 06/27/2015 - 17:23 | 6242361 chunga
chunga's picture

Once you hear a bunch of pollyticians coming out against this cash ban talk you'll know it's too late.

After that, a cash license will be instituted. Anybody caught with cash w/o a license is in big trouble. People like them will get licenses, everybody else...no. This will be done to "protect the little guy" that "plays by the rules" who is getting harmed by incorrect use of cash.

In keeping with the trend lately, it won't be long before the case is made that cash is also fuels racism and hatred.

Sat, 06/27/2015 - 17:44 | 6242409 Skateboarder
Skateboarder's picture

Nice picture chunga. ;-)

Cash license sound like a very tryannically logical next step.

Next stop: Barterville.

Sat, 06/27/2015 - 17:52 | 6242437 disabledvet
disabledvet's picture

A "fee for cash usage" won't go over too well at Wal Mart.

They only employ....mmmmm...800,000 people give or take.

Sat, 06/27/2015 - 18:03 | 6242488 seek
seek's picture

Walmart will get a rebate on the fee. Mom and pops won't. Just the way TPTB likes it.

Sat, 06/27/2015 - 18:34 | 6242586 ILLILLILLI
ILLILLILLI's picture

Read "The Day The Dollar Died" by JohnGaltFla...he nails it.

Sun, 06/28/2015 - 09:28 | 6243877 Atomizer
Atomizer's picture

That is a great story. The way he leaked chapters was brilliant. ^^^

Sat, 06/27/2015 - 17:48 | 6242422 disabledvet
disabledvet's picture

Hence it is the GOVERNMENT that is robbing the saver and NOT the Bank.

The Bank merely lends to the Government at interest while the Government "deposits" cash "for free" in the so called "Bank."

So "Hymie Dimon" gets his Government Check while Detroit goes up in flames. (And now Baltimore apparently.)

Hebes and the money...never changes and never will.

AMERICANS however do produce actual money of value...DOLARES in the form of...well, "taxable events" is one (very good) measure.

Clearly "small business creation" leaves a lot to be desired this go around...but the USA has no problem producing excess liquidity.

Indeed the USA may have a problem with DEFLATION here as the value of actual cash dollars continues to pressure markets and "so called Banks."

Sun, 06/28/2015 - 12:20 | 6244653 detached.amusement
detached.amusement's picture

since the gov acts only in accordance with directives approved by the banksters, your comment has a rather large logical hole in it.

Sat, 06/27/2015 - 16:49 | 6242275 smacker
smacker's picture

"Cash strapped Greece is looking to go even further – charging customers for daring to withdraw cash!"

This is not new. Thai banks have been charging a fee for ATM cash withdrawals since about 2010.

The fee probably varies but I recall THB 300 per transaction.

Sat, 06/27/2015 - 17:02 | 6242308 davidalan1
davidalan1's picture

Something i learned at a recent stint as an ATM technician that 99% of people dont know. When you use an ATM you not

only agree to pay the said "fee", but there is an equal banking fee you agreed to pay in the small print of your credit card.

SO if the ATM machine says $2.oo fee you also get charged an unseen $2.00 bank fee they dont tell you about,  uh huh

Sat, 06/27/2015 - 17:12 | 6242323 Seek_Truth
Seek_Truth's picture

One look at my bank account(s) tells me that that is either not the case with all banks, or that my bank(s) eat that cost.

I only bank with banks that provide 100% free checking. If they change their policy, I change my bank.

And that is my experience since ATMs were introduced in the 1980s.

Sat, 06/27/2015 - 17:46 | 6242414 OldPhart
OldPhart's picture

My bank gave me a card that refunds any ATM surcharge.  If the fee is $3.00 I get an immediate credit of $3.00.  Pulling cash from any back is convenient.

Sun, 06/28/2015 - 07:24 | 6243680 smacker
smacker's picture

My own experience of pulling cash from ATMs abroad using a "debit" card, not a "credit" card is that the bank often now charges a fee as I described earlier. But there is also a VISA/MasterCharge fee for the transaction (typically 1%-1½% and then there is the currency "conversion rate" which in itself is another charge since they apply poor rates.

Bottom line: there are up to three fees to pull cash from ATMs abroad.

Mon, 06/29/2015 - 12:37 | 6249868 fallout11
fallout11's picture

This is completely true, even if you never leave your own country but merely wire or send money abroad (such as to pay for a good or service). In addition to the currency exchange fee, and the fee for the payment itself, credit cards will treat any "cash" payment as a cash advance (more fees, plus usually a higher % rate on the balance of that transaction), and if you used a debit card congrats, another fee. Finally, the interest on the transactional amount is now often compounded daily.....so even if you pay it off each month, you've already paid interest on the amount.  

Sat, 06/27/2015 - 18:38 | 6242598 VelvetHog
VelvetHog's picture

Wells Fargo started charging for cash withdrawls if you were using a teller window in about 1989.  5 bucks a pop. Cunts.

Sun, 06/28/2015 - 09:27 | 6243870 Jumbie
Jumbie's picture

No they don't.

Sun, 06/28/2015 - 13:54 | 6245249 Ralph Spoilsport
Ralph Spoilsport's picture

Nope.

Sat, 06/27/2015 - 16:55 | 6242289 Ralph Spoilsport
Ralph Spoilsport's picture

Credit Unions.

Sat, 06/27/2015 - 18:09 | 6242495 shouldvekilledthem
shouldvekilledthem's picture

Same scamfiat with all its flaws. Bitcoin is the only exit from this clusterfuck.

Sat, 06/27/2015 - 16:58 | 6242296 davidalan1
davidalan1's picture

So if i rob a bank Im a criminal, but.....

Sat, 06/27/2015 - 17:00 | 6242302 VWAndy
VWAndy's picture

There is embracing the suck, and then there is being the suck.

Sat, 06/27/2015 - 17:16 | 6242326 blindman
blindman's picture

financial predators be feeding,
like orca on seal pups. the pups
innocent and thinking they are
safe in their little training pools.
.
Deadly Islands: Killer Whale Island
https://www.youtube.com/watch?v=xG_ywVjAo-s
.
"she's in the pool!" d.s.

Sat, 06/27/2015 - 17:27 | 6242371 moneybots
moneybots's picture

"Afterwards, the supposedly most-connected person on the planet – the U.S. Federal Reserve Chairman – always seems to be surprised."

 

They need to go to acting school, so they can make it look more believable.

Sat, 06/27/2015 - 17:42 | 6242405 pitz
pitz's picture

Banks don't take 'deposits'.  They merely borrow from their customers, and their customers are unsecured creditors.

Sat, 06/27/2015 - 17:53 | 6242415 Kirk2NCC1701
Kirk2NCC1701's picture

... Got NORMALCY BIAS?  Got Stockholm Syndrome? 

[1]  Normalcy Bias + Stockholm Syndrome = Sheeple Syndrome 

Kirk out 

Sat, 06/27/2015 - 17:50 | 6242427 livestrong
livestrong's picture

Wouldn't be surprised if the gov, the fed, and banks fight currency hoarding by discounting cash based on the year denominated on the bill.  When you attempt to deposit or pay for something with a bill over two years old, sorry...you get penalized 10%.  Your dollar bill is only worth 90 cents.

Sat, 06/27/2015 - 18:43 | 6242589 VelvetHog
VelvetHog's picture

...is only worth 3¢.  The Federal Reserve started working on that a long time ago.

Sat, 06/27/2015 - 18:16 | 6242507 ThrowAwayYourTV
ThrowAwayYourTV's picture

Gold hasn't really done it for me. I think sometimes about trading some silver for gold but then I go back to thinking that silver will be easier to make a deal with.

Need a tooth worked on? Here's 10-15 silver rounds mr. dentist. Need a good bottle of rye whiskey? Heres a nice silver round for you mr whiskey dealer.

But gold? How exactly do you get change from a $2000 oz of gld for that 5 gallons of gas you just bought off the gasoline black market.And if you give em $50 worth of gold, it might blow away in the wind.

I dunno. Gold? Maybe for the big boys but I'm jst a small fishy.

 

Sat, 06/27/2015 - 20:12 | 6242881 BidnessMan
BidnessMan's picture

Be a fishy at the lake where you had the boating accident

Sat, 06/27/2015 - 22:08 | 6243171 bluskyes
bluskyes's picture

combi-bars

Sat, 06/27/2015 - 18:33 | 6242582 VelvetHog
VelvetHog's picture

Gold's great, but if the dung hits the fan and you need me to fix your well pump that's gone tits up you'll have to find a different currency.  I don't accept gold, thanks.

Sat, 06/27/2015 - 19:12 | 6242714 VWAndy
VWAndy's picture

Some biodiesel maybe? Or perhaps some cheese. Beer?

Sat, 06/27/2015 - 19:28 | 6242763 VelvetHog
VelvetHog's picture

Beer!

Sat, 06/27/2015 - 19:37 | 6242792 VWAndy
VWAndy's picture

Why yes Cold Beer as a matter of fact. Just thought Id mention its real Cold Beer. Say two full kegs get you workin on my problem today?

Sun, 06/28/2015 - 00:53 | 6243457 Chuck Walla
Chuck Walla's picture

Tampons... Like gold in a crisis. Can't fail.

FORWARD SOVIET!

Sat, 06/27/2015 - 18:42 | 6242614 Fun Facts
Fun Facts's picture

Show me a big bank CEO and I'll show you a criminal.

Sat, 06/27/2015 - 19:33 | 6242768 VelvetHog
VelvetHog's picture

Show me a CEO and I'll show you a criminal.

 

There. Fixed. Amerika!!!

Sat, 06/27/2015 - 19:14 | 6242719 skbull44
skbull44's picture

While I agree that precious metals are a great alternative to fiat currency to store one's wealth, what happens when the government steals everyone's precious metals similar to FDR's Executive Order 6102 in 1933...

Sat, 06/27/2015 - 19:50 | 6242823 blindman
blindman's picture

obedience vs disobedience to tyranny?
hmmm?

Sat, 06/27/2015 - 22:03 | 6243159 northern vigor
northern vigor's picture

They can have my PMs...as soon as they drain that lake where my boat sank, in that terrible mishap.

Sat, 06/27/2015 - 19:54 | 6242833 adr
adr's picture

I had $200 in a savings account at a bank I never really used anymore. Without my knowledge they instituted a $2.50 per month service fee if you didn't make a deposit every month. 

I probably did get a letter I never opened thinking it was junk mail. After four years I no longer had $200 anymore. It was supposed to be a savings account. An account you don't touch. 

Fucking thieves.

Sat, 06/27/2015 - 20:53 | 6242984 GRDguy
GRDguy's picture

Geez, have we all forgotten that book: The Best Way to Rob a Bank Is to Own One: How Corporate Executives and Politicians Looted the S&L Industry [William K. Black] Same circus today, different clowns.

Sun, 06/28/2015 - 12:37 | 6244756 MEFOBILLS
MEFOBILLS's picture

The author of this article does much conflation:

 

When the bank creates a loan, it deposits the new credit into an account.  This is on-account money, and is a liability to the bank.  If banker pay’s interest to on accounts, the interest comes from somebody else who is paying on one of their loans.

When you convert your digital bank credit to cash, what was sourced digitally and is intangible, becomes tangible.  The dollar bills are then FRN’s.

FRN’s are backed by TBills or Gold Certificates held at a FRN bank.  Each unit of FRN currency must be redeemable by law and is first lien on these Treasury certificates.

Follow the logic:  Digital creation of bank credit through hypothecation is the first instance.  97 percent of the money supply is bank credit created in this fashion.   Second instance:  The credit is converted from its digital form to paper tangible form.  Third instance:  In a push comes to shove scenario, the paper FRN’s are first lien on Reserve bank primary assets – their foundational TBills.

http://carl-random-thoughts.blogspot.com/

If one digs deep enough, one will discover that all money is law.  Smoke and mirrors are there to confuse and obfuscate; banker games are a Con – a rental racket designed for wealth extraction.

 

In Britain, Cash is Currency and issued as seigniorage by Government.  In U.S. the cash is first lien on TBills at Reserve Banks.  

Sun, 06/28/2015 - 12:54 | 6244862 MEFOBILLS
MEFOBILLS's picture

Credit is something due.   When you borrow a lawnmower, you are a lawnmower debtor and you owe your lawnmower creditor.  Upon return of the lawnmower, the credit debt contract is canceled.

 

Bank credit is paid off with money.  Bank credit is paid off with money.  Bank credit is paid off with money.  Credit and money are two very different things.

At the end of the month when you pay off your credit card, you may think you are using money, but you may be using other credits.  This is how far down the con has gone.

Real legal money is Treasuries that are backed by Law, and that law in further is related to taxation authority.  Or, when the men in blue with their guns point them at you and demand the contract be settled.

The money of account in the U.S. is FRN's, which have first lien of bank treasuries.  Legal bank treasuries are the basis for fractional reserve system, and the Treasury can recall them, thus collapsing the Federal Reserve (private bank credit) System.  

Banning of Cash removes banker liability to pay their credit in FRN's.  The money of account, if cash is banned, then becomes bank credit and bankers then think they completely own the money supply.

They cannot completely own the money supply due to the pesky Constitution.

 

Do NOT follow this link or you will be banned from the site!