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When the Next Crisis Hits, the Monetary Gates Will Close on Accounts
Going forward it will be more and more difficult to get your money out of the financial system.
The reason for this concerns the actual structure of the financial system. As we've outlined previously, that structure is as follows:
1) The total currency (actual cash in the form of bills and coins) in the US financial system is a little over $1.36 trillion.
2) When you include digital money sitting in short-term accounts and long-term accounts then you’re talking about roughly $10 trillion in “money” in the financial system.
3) In contrast, the money in the US stock market (equity shares in publicly traded companies) is over $20 trillion in size.
4) The US bond market (money that has been lent to corporations, municipal Governments, State Governments, and the Federal Government) is almost twice this at $38 trillion.
5) Total Credit Market Instruments (mortgages, collateralized debt obligations, junk bonds, commercial paper and other digitally-based “money” that is based on debt) is even larger $58.7 trillion.
6) Unregulated over the counter derivatives traded between the big banks and corporations is north of $220 trillion.
When looking over these data points, the first thing that jumps out at the viewer is that the vast bulk of “money” in the system is in the form of digital loans or credit (non-physical debt).
Put another way, actual physical money or cash (as in bills or coins you can hold in your hand) comprises less than 1% of the “money” in the financial system. Suffice to say, one of the biggest concerns for the Federal Reserve is what would happen if a significant percentage of investors decided to move into physical cash.
Indeed, this is precisely what happened in 2008 when depositors attempted to pull $500 billion out of money market funds.
A money market fund takes investors’ cash and plunks it into short-term highly liquid debt and credit securities. These funds are meant to offer investors a return on their cash, while being extremely liquid (meaning investors can pull their money at any time).
This works great in theory… but when $500 billion in money was being pulled (roughly 24% of the entire market) in the span of four weeks, the truth of the financial system was quickly laid bare: that digital money is not in fact safe.
To use a metaphor, when the money market fund and commercial paper markets collapsed, the oil that kept the financial system working dried up. Almost immediately, the gears of the system began to grind to a halt.
When all of this happened, the global Central Banks realized that their worst nightmare could in fact become a reality: that if a significant percentage of investors/ depositors ever tried to convert their “wealth” into cash (particularly physical cash) the whole system would implode.
As a result of this, the Fed and the regulators are looking to implement moves that would make it much harder to move money into physical cash.
If you find difficulty in taking my word for this, consider the recent regulations implemented by SEC to stop withdrawals from happening should another crisis occur.
The regulation is called Rules Provide Structural and Operational Reform to Address Run Risks in Money Market Funds. It sounds relatively innocuous until you get to the below quote:
Redemption Gates – Under the rules, if a money market fund’s level of weekly liquid assets falls below 30 percent, a money market fund’s board could in its discretion temporarily suspend redemptions (gate). To impose a gate, the board of directors would find that imposing a gate is in the money market fund’s best interests. A money market fund that imposes a gate would be required to lift that gate within 10 business days, although the board of directors could determine to lift the gate earlier. Money market funds would not be able to impose a gate for more than 10 business days in any 90-day period…
Also see…
Government Money Market Funds – Government money market funds would not be subject to the new fees and gates provisions. However, under the proposed rules, these funds could voluntarily opt into them, if previously disclosed to investors.
http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370542347
In simple terms, if the system is ever under duress again, Money market funds can lock in capital (meaning you can’t get your money out) for up to 10 days. If the financial system was healthy and stable, there is no reason the regulators would be implementing this kind of reform.
This is just the start of a much larger strategy of declaring War on Cash.
Indeed, we've uncovered a secret document outlining how the Fed plans to incinerate savings to force investors away from cash and into riskier assets.
We detail this paper and outline three investment strategies you can implement right now to protect your capital from the Fed's sinister plan in our Special Report Survive the Fed's War on Cash.
We are making 1,000 copies available for FREE the general public.
We are down to the last 15.
To pick up yours, swing by….
http://www.phoenixcapitalmarketing.com/cash.html
Best Regards
Phoenix Capital Research
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"When the Next Crisis Hits, the Monetary Gates Will Close on Accounts"
If you have your wealth in paper, you better have a rope or nailgun at the ready come TEOTWAWKI.
"If you don't have it, you don't got it."
Liberty is a demand. Tyranny is submission..
One day soon only ounces and calibers are going to matter.
Oooh, ten days, I'm so scared.
But I can see it on my computer screen....
I cannot see yours, but I can see mine....
.....there it is, hahaha
[click]
And it's gone.
$1.36T equals only 0.4% of "financial system". So, basically, in the event cash withdrawls are limited it doesn't really help with shit but maximizing the population's suffering. Nice.
And the options markets will be closed so the puts can expire.
" that digital money is not in fact safe. "
Not only is it "not safe", it's not even 'money', it's an obligation to pay money, it's DEBT!
That's what populates every deposit account of every type, 'bank debt', their legal obligation to pay upon demand or over time 'money' they don't have and will not be able to get.
It's 'Fiat Paper Money', and those fukers can't even afford that to pay you! So, they make up fuking rules so they don't have to!
Is that not the funnest shit ever?
The Ban on Cash - Part II
The only thing that can backstop phony digital money, or in simpler terms, a "promise to pay" is human capital, which is a nicer way of saying "slavery".
Debt = slavery.
10 days, or until the riots start. The government can control things until they do something that pisses the majority of the sheep off and even a sheep stampede can be a dangerous thing.....
When the SHTF the initial 10 days will be extended another 10 days, then another 10, then 30 days, then until lifted. It's what our statist a**holes do to us.
Our alleged leadership will find out how much power they don't have.......
yadayadayada. Just BTFD
Filling out my tax forms over 2014, for the first time i had to report if i had €1000 or more cash at hand. War on cash indeed. Don't underestimate these cocksuckers.
Get out of paper, slowly but steady, every month, every week, every day.
'They' are working on it; bail ins till you drop.
If you understood legal tender money, you would know that "bail-Ins" are an idiotic notion.
Deposit accounts contain no money, they are credited accounts, which means they represent Bank Debt.
How in the hell can a bank bail itself out with its Own Debt?
Answer: It Can't. All it can do is default on its obligations.
The proper terminology for this particular brand of FRAUD would be Partial or Selective Default.
And hope that it frees up enough capital assets to cover what remains of their debt in deposit accounts.
"The total currency in the US financial system is a little over $1.36 trillion"
I wonder what the available amount really is, after adjusting for Casinos, drug dealers, and piles of cash in foreign countries, etc?
The $1.36-Trillion includes Casinos, drug dealers, and piles of cash in foreign countries.
There may be a few billion that is out and about that is unaccounted for, not enough to cause problems for anyone other than the Fed, which is financially on the hook for every note issued into circulation.
Hmmm.. So that means about $800bn cash in bank tills, mattresses, retail safes, and so on.
About 330 million peeps in the usa.
So around $2500 cash/coin per prson in the event of digital cash evaporation (Corzine effect)?
Not that much.
Time to sell the beeny baby collection & fill up the safe, I think.
No, over half of the $1.36 is held overseas, leaving about $550-Billion in the U.S. with about $300 to $350-Billion out and about circulating in the economy, leaving about $200 to $250-Billion in the banking system to service $11-Trillion in deposit debt.
Your 'cash per person', is funny stuff....
"The total currency in the US financial system is a little over $1.36 trillion" I wonder what the available amount really is, after adjusting for Casinos, drug dealers, and piles of cash in foreign countries, etc?"
50 Cents...Oh wait!