Ellen Brown is an American author, political candidate, attorney, public speaker, and advocate of alternative medicine and financial reform, most prominently public banking.
Brown is the founder and president of the Public Banking Institute, a nonpartisan think tank devoted to the creation of publicly run banks. She is also the president of Third Millennium Press, and is the author of twelve books, including Web of Debt and The Public Bank Solution, as well as over 200 published articles.
She has appeared on cable and network television, radio, and internet podcasts, including a discussion on the Fox Business Network concerning student loan debt with the Cato Institute‘s Neil McCluskey, a feature story on derivatives and debt on the Russian network RT, and the Thom Hartmann Show’s “Conversations with Great Minds.”
Russian Roulette: Taxpayers could be on the hook for Trillions in Oil Derivatives
The sudden dramatic collapse in the price of oil appears to be an act of geopolitical warfare against Russia.
The result could be trillions of dollars in oil derivative losses; and depositors and taxpayers could be liable, following repeal of key portions of the Dodd-Frank Act signed into law on December 16th.
On December 11th, Senator Elizabeth Warren charged Citigroup with “holding government funding hostage to ram through its government bailout provision.” At issue was a section in the omnibus budget bill repealing the Lincoln Amendment to the Dodd-Frank Act, which protected depositor funds by requiring the largest banks to push out a portion of their derivatives business into non-FDIC-insured subsidiaries.
Continue reading report here: Russian Roulette with Taxpayers Money
Watch the following interview explaining the details about The Confiscation of Bank Deposits & the Derivatives Debt
On December 11, 2014, the US House passed a bill repealing the Dodd-Frank requirement that risky derivatives be pushed into big-bank subsidiaries, leaving our deposits and pensions exposed to massive derivatives losses.
The bill was vigorously challenged by Senator Elizabeth Warren; but the tide turned when Jamie Dimon, CEO of JPMorganChase, stepped into the ring. Perhaps what prompted his intervention was the unanticipated $40 drop in the price of oil. As financial blogger Michael Snyder points out, that drop could trigger a derivatives payout that could bankrupt the biggest banks. And if the G20’s new “bail-in” rules are formalized, depositors and pensioners could be on the hook.
The new bail-in rules were discussed in my last post. They are edicts of the Financial Stability Board (FSB), an unelected body of central bankers and finance ministers headquartered in the Bank for International Settlements in Basel, Switzerland. Where did the FSB get these sweeping powers, and is its mandate legally enforceable?
Those questions were addressed in an article I wrote in June 2009, two months after the FSB was formed, titled “Big Brother in Basel: BIS Financial Stability Board Undermines National Sovereignty.” It linked the strange boot shape of the BIS to a line from Orwell’s 1984: “a boot stamping on a human face—forever.” The concerns raised there seem to be materializing, so I’m republishing the bulk of that article. We need to be paying attention, lest the bail-in juggernaut steamroll over us unchallenged…
Continue reading from original source here: The Global Bankers Coup: Bail-In and the FSB
Credit ratings agencies’ frequent warnings regarding bail-ins in recent months have largely been ignored.
“Europe’s banks are vulnerable in 2015 due to weak macroeconomic conditions, unfinished regulatory hurdles and the risk of bail-ins” according to credit rating agencies.
In March of this year, credit rating agency Standard and Poor’s (S&P) warned that the move towards “bail-ins” and away from “bailouts” continues to evolve and pose risks to European banks and their credit ratings.
Bank of England plans to make bondholders and depositors bear the cost of bailing out failing banks, led Moody’s to downgrade its outlook on the UK banking sector this August. The rating agency said that it had changed its outlook for the UK financial system from “stable” to “negative”, citing the developing global “bail in regime” of creditor and depositor bail-in.
Moody’s have warned of bail-ins numerous times in recent months. In June of this year, Moody’s cut the outlook for Canadian bank debt to negative over the new ‘bail-in’ regime.
Depositors in some Cyprus banks saw 50% or more of their life savings confiscated overnight.
The truth is that banks in most western nations are vulnerable to bail-ins in 2015 and the recent G20 meeting in Brisbane was a further move towards the stealth bail-in regimes.
Continue reading here: European Banks At Risk Of Bail-Ins In 2015 – Moody’s and S&P Warn.
Rethinking a GOLD allocation !?
Several global banks have begun charging large customers to deposit their money in euros, a rare move that could have costly implications for investors and companies that do business on the Continent.
The actions are driven by policies from the European Central Bank, which in June became the largest central bank to impose a negative interest rate on deposits–meaning banks are paying to park their money with the ECB. The effort is designed to encourage banks to instead use that money to lend. When the ECB dropped those rates further in September, some banks started pushing those costs–or costs related to the rate cuts–onto customers.
Now, instead of paying customers interest on their euro accounts as they have done traditionally, some banks have started charging them. Bank of New York Mellon Corp. recently started charging 0.2% on euro deposits, the bank said Friday, and Goldman Sachs Group Inc. and J.P. Morgan Chase & Co. have also started charging clients, according to people familiar with the matter.
Meanwhile, Credit Suisse Group AG has told customers it will pass along negative interest rates on all currencies in which they apply, people familiar with the matter said, and has started charging on euro deposits.
The reversal is the most sweeping of its kind that many bankers and their clients say they can recall. The clients most immediately affected are investment firms, such as hedge funds and mutual-fund companies. Multinational corporations with sizable operations in Europe could also face additional costs, according to people familiar with the matter.
HSBC Holdings PLC will soon start charging customers with more than roughly 10 million euros in deposits, according to a person familiar with the matter. The move is intended to discourage a flood of deposits from institutional investors fleeing competitors that have already started levying charges on euro deposits, the person said. An HSBC spokesman said Friday the bank was “monitoring the situation.”
Continues on link below;
SEC Approves Tighter Money-Fund Rules
Plan Allows Funds to Temporarily Block Withdrawals in Times of Stress
Money market funds can impose a liquidity fee on redemptions if the fund’s weekly liquidity falls below the level required by regulations.
Redemptions may also be suspended temporarily. The SEC calls them redemption “gates.”
Institutional prime money market funds are required to float the net asset value, or NAV, rather than keeping share prices fixed at $1.
Note: An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in such a fund.
At a time when overindebted governments are making increasingly desperate grabs for their citizens’ money, keeping all your assets invested in one country—and denominated in one currency—is a very bad idea.
A vitally important question for you
Do you have a bank account in another country? If not, you should hurry up & get one.
Holding foreign currencies in an account outside of the United States is the way to go if you REALLY want to diversify your assets internationally—but in the last few years the US government has left no stone unturned to make it harder for investors to get a foreign bank account. It’s not too late, though—there are still feasible ways to open one. But you have to act quickly, before Washington enacts even stricter controls in a desperate grab for your money.
Most people know of the general investment benefits of not having all your asset eggs in one basket. This portfolio-diversification concept—investing in multiple asset classes—also applies to the political risk associated with your home country. It is a risk few people think about diversifying.
In short, internationalization is prudent because it frees you from absolute dependence on any one country. Achieve that freedom, and it becomes very difficult for any country to control you.
While diversifying political risk is something that everyone in the world should strive to achieve, it goes double for those who live under a government that is sinking deeper into fiscal trouble (e.g., most Western governments).
Here are a few compelling arguments on why you should diversify, diversify, diversify—across different countries, exchanges, currencies, banks, and asset classes.
1: IMF Endorses Capital Controls
Bloomberg reported that the “IMF has endorsed the use of capital controls in certain circumstances.“
“In a reversal of its historic support for unrestricted flows of money across borders, the IMF said controls can be useful…”
2: There Is Academic Support for Capital Controls
Harvard Economists Carmen Reinhart and Ken Rogoff suggest debt write-downs and ‘financial repression’, meaning the use of a combination of moderate inflation and constraints on the flow of capital to reduce debt burdens.
3: Confiscation of Savings on the Rise
The IMF, in a report entitled “Taxing Times,” published in October of 2013, on page 49, states:
“The sharp deterioration of the public finances in many countries has revived interest in a capital levy—a one-off tax on private wealth—as an exceptional measure to restore debt sustainability.”
A study from the IMF: The tax rates needed to for a sample of 15 euro area countries is 10% on households with a positive net worth.
Note: The tax would apply to anyone with a positive net worth. And the 10% wealth-grab would, of course, be on top of regular income taxes, sales taxes, property taxes, etc.
4: We Like Pension Funds
Unfortunately, it’s not just savings. From a paper by Carmen Reinhart & M. Belén Sbrancia:
A subtle type of debt restructuring takes the form of ‘financial repression.’ Financial repression includes directed lending to government by captive domestic audiences (such as pension funds), explicit or implicit caps on interest rates, regulation of cross-border capital movements, and (generally) a tighter connection between government and banks.
Yes, your retirement account is now a “captive domestic audience.”
“Directed” means “compulsory” in the above statement, and you may not have a choice if “regulation of cross-border capital movements”—capital controls—are instituted.
5: The Eurozone Sanctions Money-Grabs
Germany’s Bundesbank weighed in on this subject last January:
“Countries about to go bankrupt should draw on the private wealth of their citizens through a one-off capital levy before asking other states for help.”
And it’s not just in Germany. On February 12, 2014, Reuters reported on an EU commission document that states:
The savings of the European Union’s 500 million citizens could be used to fund long-term investments to boost the economy and help plug the gap left by banks since the financial crisis.
Reuters reported that the Commission plans to request a draft law, “to mobilize more personal pension savings for long-term financing.”
EU officials are explicitly telling us that the pensions and savings of its citizens are fair game to meet the union’s financial needs. If you live in Europe, the writing is on the wall.
Actually, it’s already under way… Reuters recently reported that Spain has introduced a blanket taxation rate of .03% on all bank account deposits, in a move aimed at… generating revenues for the country’s cash-strapped autonomous communities.
6: Canada Jumps on the Confiscation Bandwagon
You may recall this text from last year’s budget in Canada:
“The Government proposes to implement a bail-in regime for systemically important banks.”
A bail-in is what they call it when a government takes depositors’ money to plug a bank’s financial holes—just as was done in Cyprus last year.
The bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital.
What’s a “bank liability”? Your deposits.
Have you considered why the Foreign Account Tax Compliance Act was passed into law? It was supposed to crack down on tax evaders and collect unpaid tax revenue.
However, the result of FATCA keeps US savers trapped in US banks and in the US dollar, where the US could implement a Cyprus-like bail-in. Given the debt load in the US and given statements made by government officials, this seems like a reasonable conclusion to draw.
The new IMF proposal led with Christine Lagarde: Debt cuts for over-indebted states are to be performed more effectively in future by defaulting on retirement accounts held in life insurance, mutual funds and other types of pension schemes, or arbitrarily extending debt perpetually so you cannot redeem.
The new IMF paper describes in great detail exactly how to now allow the private sector, which has invested in government bonds, to be expropriated to pay for the national debts of the socialist governments.
The IMF working paper from December 2013 states boldly:
“The distinction between external debt and domestic debt can be quite important. Domestic debt issued in domestic currency typically offers a far wider range of partial default options than does foreign currency–denominated external debt. Financial repression has already been mentioned; governments can stuff debt into local pension funds and insurance companies, forcing them through regulation to accept far lower rates of return than they might otherwise demand.”
Already in October 2013, the International Monetary Fund (IMF), suggested the Euro Crisis should be handled by raising taxes.
The IMF lobbied for a property tax in Europe that should be imposed where there are no such taxes.
The IMF has advocated for a general “debt tax” in the amount of 10 percent for each household in the Eurozone, which also has only modest savings.
The money people have saved, the IMF maintains should be used for debt service by sheer force.
To reduce the enormous national debt, they maintain that government has the right to directly usurp the savings of citizens. Whether saving money, securities or real estate, about ten percent could be expropriated. This is the IMF view.
Because the government debt of the euro countries has increased a total of well over 90 percent of gross domestic product, they suggest that the people should sacrifice their savings for the benefit of the state.
Socialism is no longer to help the poor against the rich, but to help the government against the people. The definition has changed.
In January 2014, the Bundesbank joined the IMF project focusing on a “wealth tax”. In its monthly report they had announced:
“In the exceptional situation of an imminent state bankruptcy a one-time capital levy could but cheaper cut than the then still relevant options”
if higher taxes or drastic limitations of government spending did not meet, or could not be implemented.
In the latest June 2014 working paper of the IMF, they have set forth yet another scheme – extending maturity;
So you bought a 2 year note?
Well, the IMF possible solution would be to simply extend the maturity.
Your 2 year note now become 20 year bond.
They do not default, you just can never redeem.
Possible remedy. The preliminary ideas in this paper would introduce greater flexibility into the 2002 framework by providing the Fund with a broader range of potential policy responses in the context of sovereign debt distress, while addressing the concerns that motivated the 2002 framework.
Specifically, in circumstances where a member has lost market access and debt is considered sustainable, but not with high probability, the Fund would be able to provide exceptional access on the basis of a debt operation that involves an extension of maturities (normally without any reduction of principal or interest).
Such a “reprofiling” operation, coupled with the implementation of a credible adjustment program, would be designed to improve the prospect of securing sustainability and regaining market access, without having to meet the criterion of restoring debt sustainability with high probability.
Now the June 2014 report has a new, far-reaching proposal.
This shows how lawyers think in technical definitions of words. There is no actual default if they extend the maturity.
You could buy 30-day paper in the middle of a crisis and suddenly find under the IMF that 30 day note is converted to 30 year bond at the same rate!?
Telegraph Link: Tax Man Can Raid Your Bank Account
The tax authorities admitted this week that about 17,000 people a year would be targeted under the new measures, set out in the Budget and designed for use against people who owe them money….
David Cameron: Taxes will rise unless we can raid bank accounts
How much interest are you rewarded for the risk of confiscation by keeping your money in the bank?
Government’s answer, raise taxes !?
mmmm, Maybe that will stop the capital flight to safe offshore tax friendly jurisdictions with potential higher savings & investment returns.
The confiscation of depositor funds
The real story for taxpayers and depositors is the heightened threat to their pocketbooks of a deal that now authorizes both bailouts and “bail-ins”
The Unsettled Question of Deposit Insurance;
But at least, you may say, it’s only the uninsured deposits that are at risk (those over €100,000—about $137,000). Right?
According to ABC News, “Thursday’s result is a compromise that differs from the original banking union idea put forward in 2012. The original proposals had a third pillar, Europe-wide deposit insurance. But that idea has stalled.”
Two pillars are now in place” – two but not the third.
And two are not enough to protect the public.
As observed in The Economist in June 2013, without Europe-wide deposit insurance, the banking union is a failure…
“As things stand, the banks are the permanent government of the country, whichever party is in power.”
– Lord Skidelsky, House of Lords, UK Parliament, 31 March 2011)
On March 20, 2014, European Union officials reached an historic agreement to create a single agency to handle failing banks. Media attention has focused on the agreement involving the single resolution mechanism (SRM), a uniform system for closing failed banks. But the real story for taxpayers and depositors is the heightened threat to their pocketbooks of a deal that now authorizes both bailouts and “bail-ins” – the confiscation of depositor funds. The deal involves multiple concessions to different countries and may be illegal under the rules of the EU Parliament; but it is being rushed through to lock taxpayer and depositor liability into place before the dire state of Eurozone banks is exposed.
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