TiCKeTS FoR THe
FiaT BaBY...
Submitted by williambanzai7 on
05/20/2013
WB7: We are now over 35,000 views on last
week's post concerning the mystery of deposit confiscation: Here
As a public service, I would urge all of you
to do whatever you can to spread that article whether by email, social media
and/or, yes, paper and ink.
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No BaNK DePoSiTS WiLL Be SPaReD FRoM CoNFiSCaTioN
Submitted
by williambanzai7
on 05/15/2013
‘As
alert Zero Hedge readers are aware, this week the EURO Politburo is busy
debating the dodgy subject of deposit "bail-ins."
The
following article very succinctly explains this odious mode of fractal fractional
reserve end-game chicanery.
The
author encourages all of you to share it with others.
WB7
NO
BANK DEPOSITS WILL BE SPARED FROM CONFISCATION
By
Matthias Chang Esq, futurefastforward.com (with
author's permission)
I challenge anyone to prove me wrong that confiscation of bank
deposits is legalized daylight robbery
Bank depositors in the UK and USA may think that their bank
deposits would not be confiscated as they are insured and no government would dare
embark on such a drastic action to bail out insolvent banks.
Before I explain why
confiscation of bank deposits in the UK and US is a certainty and absolutely
legal, I need all readers of this article to do the following:
Ask your local police, sheriffs,
lawyers, judges the following questions:
1) If I place my money with a
lawyer as a stake-holder and he uses the money without my consent, has the
lawyer committed a crime?
2) If I store a bushel of
wheat or cotton in a warehouse and the owner of the warehouse sold my
wheat/cotton without my consent or authority, has the warehouse owner committed
a crime?
3) If I place monies with my
broker (stock or commodity) and the broker uses my monies for other purposes
and or contrary to my instructions, has the broker committed a crime?
I am confident that the answer
to the above questions is a Yes!
However, for the purposes of
this article, I would like to first highlight the situation of the deposit /
storage of wheat with a warehouse owner in relation to the deposit of money /
storage with a banker.
First, you will notice that
all wheat is the same i.e. the wheat in one bushel is no different from the
wheat in another bushel. Likewise with cotton, it is indistinguishable. The
deposit of a bushel of wheat with the warehouse owner in law constitutes a
bailment. Ownership of the bushel of wheat remains with you and there is no
transfer of ownership at all to the warehouse owner.
And as stated above, if the
owner sells the bushel of wheat without your consent or authority, he has
committed a crime as well as having committed a civil wrong (a tort) of
conversion – converting your property to his own use and he can be sued.
Let me use another analogy. If
a cashier in a supermarket removes $100 from the till on Friday to have a
frolic on Saturday, he has committed theft, even though he may replace the $100
on Monday without the knowledge of the owner / manager of the supermarket. The
$100 the cashier stole on Friday is also indistinguishable from the $100 he put
back in the till on Monday. In both situations – the wheat in the warehouse and the $100
dollar bill in the till, which have been unlawfully misappropriated would
constitute a crime.
Keep this principle and issue
at the back of your mind.
Now we shall proceed with the
money that you have deposited with your banker.
I am sure that most of you
have little or no knowledge about banking, specifically fractional reserve
banking.
Since you were a little kid,
your parents have encouraged you to save some money to instil in you the good
habit of money management.
And when you grew up and got
married, you in turn instilled the same discipline in your children. Your faith
in the integrity of the bank is almost absolute. Your money in the bank would
earn an interest income.
And when you want your money
back, all you needed to do is to withdraw the money together with the
accumulated interest. Never for a moment did you think that you had transferred
ownership of your money to the bank. Your belief was grounded in like manner as
the owner of the bushel of wheat stored in the warehouse.
However, this belief is and
has always been a lie. You were led to believe this lie because of savvy
advertisements by the banks and government assurances that your money is safe and
is protected by deposit insurance.
But, the insurance does not
cover all the monies that you have deposited in the bank, but to a limited
amount e.g. $250,000 in the US by the Federal Deposit Insurance Corporation
(FDIC), Germany €100,000, UK £85,000 etc.
But, unlike the owner of the
bushel of wheat who has deposited the wheat with the warehouse owner, your
ownership of the monies that you have deposited with the bank is transferred to
the bank and all you have is the right to demand its repayment. And, if the
bank fails to repay your monies (e.g. $100), your only remedy is to sue the
bank and if the bank is insolvent you get nothing.
You may recover some of your
money if your deposit is covered by an insurance scheme as referred to earlier
but in a fixed amount. But, there is a catch here. Most insurance schemes
whether backed by the government or not do not have sufficient monies to cover
all the deposits in the banking system.
So, in the worst case scenario
– a
systemic collapse, there is no way for you to get your money back.
In fact, and as illustrated in
the Cyprus banking fiasco, the authorities went to the extent of confiscating
your deposits to pay the banks’ creditors. When that happened, ordinary
citizens and financial analysts cried out that such confiscation was daylight
robbery. But, is it?
Surprise, surprise!
It will come as a shock to all
of you to know that such daylight robbery is perfectly legal and this has been
so for hundreds of years.
Let me explain.
The reason is that unlike the
owner of the bushel of wheat whose ownership of the wheat WAS NEVER TRANSFERRED
to the warehouse owner when the same was deposited, the moment you deposited
your money with the bank, the ownership is transferred to the bank.
Your status is that of A
CREDITOR TO THE BANK and the BANK IS IN LAW A DEBTOR to you. You are deemed to
have “lent” your money to the bank for the bank to apply to its banking
business (even to gamble in the biggest casino in the world – the global derivatives casino).
You have become a creditor, AN
UNSECURED CREDITOR. Therefore, by law, in the insolvency of a bank, you as an
unsecured creditor stand last in the queue of creditors to be paid out of any
funds and or assets which the bank has to pay its creditors. The secured
creditors are always first in line to be paid. It is only after secured
creditors have been paid and there are still some funds left (usually, not
much, more often zilch!) that unsecured creditors are paid and the sums
pro-rated among all the unsecured creditors.
This is the truth, the whole
truth and nothing but the truth.
The law has been in existence
for hundreds of years and was established in England by the House of Lords in
the case Foley v Hill in 1848.
When
a customer deposits money with his banker, the relationship that arises is one
of creditor and debtor, with the banker liable to repay the money deposited
when demanded by the customer. Once money has been paid to the
banker, it belongs to the banker and he is free to use the money for his own
purpose.
I
will now quote the relevant portion of the judgment of #3b4d81;">the House of Lords handed down
by Lord Cottenham, the Lord Chancellor. He stated thus:
“Money when paid into a bank, ceases
altogether to be the money of the principal… it is then the money of the banker, who is bound to return an equivalent
by paying a similar sum to that deposited with him when he is asked for it.
The
money paid into the banker’s, is money known by the principal to be
placed there for the purpose of being under the control of the banker; it
is then the banker’s money; he is known to deal with it as his
own; he makes what profit of it he can, which profit he retains himself,…
The
money placed in the custody of the banker is, to all intent and purposes, the
money of the banker, to do with it as he pleases; he is guilty of
no breach of trust in employing it; he is not answerable TO THE PRINCIPAL IF HE
PUTS IT INTO JEOPARDY, IF HE ENGAGES IN A HAZARDOUS SPECULATION; he
is not bound to keep it or deal with it as the property of the principal, but
he is of course answerable for the amount, because he has contracted, having
received that money, to repay to the principal, when demanded, a sum equivalent
to that paid into his hands.” (quoted in UK Law Essays, #3b4d81;">Relationship Between A Banker
And Customer,That Of A Creditor/Debtor, emphasis added,)
Holding
that the relationship between a banker and his customer was one of debtor and
creditor and not one of trusteeship, #3b4d81;">Lord Brougham said:
“This trade of a banker is to
receive money, and use it as if it were his own, he becoming debtor to the
person who has lent or deposited with him the money to use as his
own, and for which money he is accountable as a debtor. I cannot at all
confound the situation of a banker with that of a trustee, and conclude that
the banker is a debtor with a fiduciary character.”
In
plain simple English – bankers cannot be prosecuted for
breach of trust, because
it owes no fiduciary duty to the depositor / customer, as he is deemed to be
using his own money to speculate etc. There is absolutely no criminal
liability.
The trillion dollar question
is, Why has no one in the Justice Department or other government agencies
mentioned this legal principle?
The reason why no one dare
speak this legal truth is because there would be a run on the banks when all
the Joe Six-Packs wise up to the fact that their deposits with the bankers
CONSTITUTE IN LAW A LOAN TO THE BANK and the bank can do whatever it likes even
to indulge in hazardous speculation such as gambling in the global derivative
casino.
The Joe Six-Packs always
consider the bank the creditor even when he deposits money in the bank. No depositor
ever considers himself as the creditor!
Yes, Eric Holder, the US
Attorney-General is right when he said that bankers cannot be prosecuted for
the losses suffered by the bank. This is because a banker cannot be prosecuted
for losing his “own money” as stated by the House of Lords. This is because when money is
deposited with the bank, that money belongs to the banker.
The reason that if a banker is
prosecuted it would collapse the entire banking system is a big lie.
The US Attorney-General could
not and would not state the legal principle because it would cause a run on the
banks when people discover that their monies are not safe with bankers as they
can in law use the monies deposited as their own even to speculate.
What is worrisome is that your
right to be repaid arises only when you demand payment.
Obviously, when you demand
payment, the bank must pay you. But, if you demand payment after the bank has
collapsed and is insolvent, it is too late. Your entitlement to be repaid is
that of a lonely unsecured creditor and only if there are funds left after
liquidation to be paid out to all the unsecured creditors and the remaining
funds to be pro-rated. You would be lucky to get ten cents on the dollar.
So, when the Bank of England,
the FED and the BIS issued the guidelines which became the template for the
Cyprus “bail-in” (which was endorsed by the G-20 Cannes Summit in 2011), it was
merely a circuitous way of stating the legal position without arousing the
wrath of the people, as they well knew that if the truth was out, there would
be a revolution and blood on the streets. It is therefore not surprising that
the global central bankers came out with this nonsensical advisory:
“The objective of an effective resolution
regime is to make feasible the resolution of financial institutions without
severe systemic disruption and without exposing taxpayers to losses, while
protecting vital economic functions through mechanisms which make it possible
for shareholders and unsecured and uninsured creditors to absorb losses in a
manner that respects the hierarchy of claims in liquidation.”(quoted in #3b4d81;"> #3b4d81;">FSB Consultative Document:
Effective Resolution of Systemically …)
This is the kind of complex
technical jargon used by bankers to confuse the people, especially depositors
and to cover up what I have stated in plain and simple English in the foregoing
paragraphs.
The key words of the BIS
guideline are:
“without
severe systemic disruptions” (i.e. bank runs),
“while
protecting vital economic functions” (i.e. protecting vested interests – bankers),
“unsecured
creditors” (i.e. your monies, you are the dummy),
“respects
the hierarchy of claims in liquidation” (i.e. you are last in the queue to be paid,
after all secured creditors have been paid).
This means all depositors are
losers!
Please read this article
carefully and spread it far and wide.
You will be doing a favour to
all your fellow country men and women and more importantly, your family and
relatives.’