Words from Sinclair

KUCH

History indicates that loans will be reset to equal the depreciation in the dollar thereby leaving the debt at a similar value to what is was before the hyperinflation during the "Great Leveling," leading to the "Great Reset." The idea is that you will pay off your $50,000 mortgage with one maple leaf is historically fallacious.

This economic trick has the same chance of working as does your deposits of $250,000 in ten banks, and your expectation of being repaid by the FDIC $2,500,000 in a banking systemic failure. You will not be.

jmski52

The idea is to pay off the load before the reset. The mortgage is a contract, and if you can fulfill the terms of the contract with cheaper dollars during the ramp-up phase, you should be ok.

Based on what we've seen so far, I have no doubts that they will continue to protect the bankers with no consideration for people who work for a living. Play smart.

secondrepublic

My signature line links to an article - written 100 years ago - discussing exactly this, as it happened after the French Revolution. The big banks, and indeed Fannie Mae and Freddie Mac, which are gov't entities, aren't going to allow hyperinflation to wipe away normal people's debts. They'll figure out a legislative "fix."

FullCameo

Thanks for posting this this Kush.

The thought of this happening makes me sick. Even if your mortgage is 100% paid before a "reset", they'll just jack up property taxes for those homeowners.

KUCH

Now the question becomes, should one sell their gold/silver to pay off a mortgage? Yes, taxes are going up no doubt bout that one.

PerryHall

<< <i>History indicates that loans will be reset to equal the depreciation in the dollar thereby leaving the debt at a similar value to what is was before the hyperinflation during the "Great Leveling," leading to the "Great Reset." The idea is that you will pay off your $50,000 mortgage with one maple leaf is historically fallacious.

This economic trick has the same chance of working as does your deposits of $250,000 in ten banks, and your expectation of being repaid by the FDIC $2,500,000 in a banking systemic failure. You will not be. >>



So, will savings accounts, CD's, etc also be reset? If not, another good reason not to hold paper assets.

s4ny

The FDIC has never failed to repay an insured deposit.

In the 2008 financial
crisis every insured deposit was covered. You also saw the extreme steps
the Treasury and Fed took to minimize the effects of the crisis.

derryb

<< <i>The FDIC has never failed to repay an insured deposit.

In the 2008 financial
crisis every insured deposit was covered. You also saw the extreme steps
the Treasury and Fed took to minimize the effects of the crisis. >>


The Treasury and the FED clearly prevented FDIC failure in 2008 by preventing bank failure. Think they would get away with doing it again? I don't.

cohodk

Many banks did fail in 2008-2010. There were even weekly threads in this forum discussing such.

In the future more banks will fail, but banking will always survive.

If there is another financial crisis expect gold to fall considerably, just as it did in 2008. This is when you buy, not wishing/praying, for an event in the future. One could have bought silver in 2008 at the same levels as years earlier. History will repeat.

derryb

The small banks that did fail were absorbed by other banks keeping the deposits (and the FDIC) whole. The FDIC is in no position to cover a major bank failure or numerous small ones. Anyone who does their homework knows this.

jmski52

In the 2008 financial crisis every insured deposit was covered. You also saw the extreme steps the Treasury and Fed took to minimize the effects of the crisis.

Homeowners who dutifully paid their mortgages and taxes subsidized underwater homeowners and corrupt bureaucrats. Bankers who mismanaged their lending programs and unscrupulously took advantage of unsophisticated buyers were bailed out, and were then paid wonderfully high bonuses with taxpayer money.

"We had to suspend free market capitalism, in order to save it" was the biggest financial lie of the century. The only crisis was in how many bankers might have been held accountable if they hadn't been bailed out.

JohnnyCache

22 smaller sized banks have failed so far just this year.

Somewhat more interesting when you consider the same number of banks, twenty two, failed from 2001 to the beginning of the banking crisis fallout in 2007

The National Bank of El Paso TX
The Community's Bank Bridgeport CT
Sunrise Bank of Arizona Phoenix AZ
Community South Bank Parsons TN
Bank of Wausau Wausau WI
First Community Bank of Southwest Florida
Mountain National Bank Sevierville TN
1st Commerce Bank North Las Vegas NV
Banks of Wisconsin d/b/a Bank of Kenosha Kenosha WI
Central Arizona Bank Scottsdale AZ
Sunrise Bank Valdosta GA
Pisgah Community Bank Asheville NC
Douglas County Bank Douglasville GA
Parkway Bank Lenoir NC
Chipola Community Bank Marianna FL
Heritage Bank of North Florida Orange Park FL
First Federal Bank Lexington KY
Gold Canyon Bank Gold Canyon AZ
Frontier Bank LaGrange GA
Covenant Bank Chicago IL
1st Regents Bank Andover MN
Westside Community Bank University Place WA

fdic failed bank list


JC

cohodk

<< <i>22 smaller sized banks have failed so far just this year.

Somewhat more interesting when you consider the same number of banks, twenty two, failed from 2001 to the beginning of the banking crisis fallout in 2007

The National Bank of El Paso TX
The Community's Bank Bridgeport CT
Sunrise Bank of Arizona Phoenix AZ
Community South Bank Parsons TN
Bank of Wausau Wausau WI
First Community Bank of Southwest Florida
Mountain National Bank Sevierville TN
1st Commerce Bank North Las Vegas NV
Banks of Wisconsin d/b/a Bank of Kenosha Kenosha WI
Central Arizona Bank Scottsdale AZ
Sunrise Bank Valdosta GA
Pisgah Community Bank Asheville NC
Douglas County Bank Douglasville GA
Parkway Bank Lenoir NC
Chipola Community Bank Marianna FL
Heritage Bank of North Florida Orange Park FL
First Federal Bank Lexington KY
Gold Canyon Bank Gold Canyon AZ
Frontier Bank LaGrange GA
Covenant Bank Chicago IL
1st Regents Bank Andover MN
Westside Community Bank University Place WA

fdic failed bank list


JC >>



Johnny, you werent here when we had a weekly poll on the number of banks that would fail. It usually averaged about 4-6 per week and many predicted the end of the banking system then. Four year later, we're all four years older.

derryb

<< <i>22 smaller sized banks have failed so far just this year.

Somewhat more interesting when you consider the same number of banks, twenty two, failed from 2001 to the beginning of the banking crisis fallout in 2007

The National Bank of El Paso TX
The Community's Bank Bridgeport CT
Sunrise Bank of Arizona Phoenix AZ
Community South Bank Parsons TN
Bank of Wausau Wausau WI
First Community Bank of Southwest Florida
Mountain National Bank Sevierville TN
1st Commerce Bank North Las Vegas NV
Banks of Wisconsin d/b/a Bank of Kenosha Kenosha WI
Central Arizona Bank Scottsdale AZ
Sunrise Bank Valdosta GA
Pisgah Community Bank Asheville NC
Douglas County Bank Douglasville GA
Parkway Bank Lenoir NC
Chipola Community Bank Marianna FL
Heritage Bank of North Florida Orange Park FL
First Federal Bank Lexington KY
Gold Canyon Bank Gold Canyon AZ
Frontier Bank LaGrange GA
Covenant Bank Chicago IL
1st Regents Bank Andover MN
Westside Community Bank University Place WA >>



All of these failed banks were acquired by other banks and the FDIC didn't not have to payout any of the deposits. The FDIC and failed banks are two different things as long as there remains an acquiring bank or a government bailout for those not acquired by another bank. The FDIC is a marketing gimmick to convince Americans their bank deposits are "safe." Now that Cyprus has demonstrated that bank account holders are nothing short of creditors, expect a next banking crisis to see quick and deep customer withdrawals.

roadrunner

Johnny, you werent here when we had a weekly poll on the number of banks that would fail. It usually averaged about 4-6 per week and many predicted the end of the banking system then. Four year later, we're all four years older.

Johnny probably already knows that the FED handed out TRILLIONs to the big banks and thousands of the their "friends" around the world (foreign banks, corporations, charities, etc.). Without that assistance provided by the
US govt (ie taxpayer) ALL of the biggest banks would have failed taking 65% of the banking system down with them. The most important banks did indeed technically fail but J6P bailed them out without ever knowing it. Only
a stroke of a pen in some back room of the Treasury or FED prevented a complete collapse of the banking sector. It's more pure luck that we're all here 4 yrs later with the system still supported. JPM, Citi, BoA, and GS didn't
realize at the time that killing Lehman Brothers was basically killing themselves. Bailing them out of their stupidity and high risk-taking so that they could do it all over yet again from 2009-2013 borders on the absurd. The bankers
would rather flush the entire country down the drain before allowing banking to fail and lose their bonuses.

cohodk

Cyprus=USA?

Really?

derryb

<< <i>Cyprus=USA?

Really? >>


Bank account holders are creditors to that bank regardless of where that bank is located. Cyprus opened our eyes (those capable of having them opened) to this fact. See if your optometrist can provide some help.

By law, when you put your money into a deposit account, your money becomes the property of the bank. If the bank goes belly up you get it line with everyone else who loaned the bank money. Since, by law, the FDIC is required "to keep a balance equivalent to only 1.15 percent of insured deposits" you're best hope is that it is just a small 'belly-up." Otherwise, if you're lucky you will get pennies on the dollar. After all banks are only required to keep pennies on the dollar of what they take in deposits. "Fractional banking" will become your worst nightmare.

cohodk

I see and understand (probably more than you do), the goings on in International banking. This is why I question your stance that the USA and Cyprus are equal.

Its interesting that since the Cyprus "situation", PMs have lost purchasing power versus the Euro. Probably just a conspiracy to allow the Russians to convert their "losses" into cheap gold, right?

derryb

I did not say USA and Cyprus are equal. I said bank account holders are considered creditors just as they were in Cyprus. The sun shines in China and it shines in the USA. Your rationale dictates I am saying China and the USA are equal. You should quit interpreting others' comments, especially when the words are clear, and focus on what was said. Twisting words does not change them. If you're gonna disagree just for the sake of doing so, at least disagree with what was said, not with what you want to believe was said. Anyone with a good understanding of international banking should fully understand that bank account depositors, regardless of what country, are considered creditors of their respective bank.

jmski52

The trends are toward means testing and redistribution of wealth. Some folks don't think that they are susceptible, but that's why the gov. is leaning more toward big databases and reliance on tax policy for implementation.

Dare I say it that even the best day traders will find that their profits just don't add up the way they expected. It'll be a shock alright.

cohodk

Derryb, you made the comparison to US and Cyprus banks, not I. Yes, the USA and Cyprus have banks, but that does not mean the banking systems are the same. There are hundreds, if not thousands of documents (not blogs) readily available that detail the banking and economic systems in both countries.

Which brings up the other comparison you use about the sun, USA and China, which I feel is extremely purposeful and an excellent analogy for this discussion. Yes, the sun shines on both the USA and China and fortunately for this discussion both countries lie within the same latitudes so the sun shines with the same intensity on both countries. The common assumption is that since both countries share the same amount of sun, just as the US and Cyprus has banks, that each should be similar. So why does not China have the same agriculture as the USA? You correctly point out that just because two countries share something in common, they are not the same. There are many geographic differences in the USA and China, just as there are many socio-economic differences between the USA and Cyprus.

The Cypriot banks were really Russian money laundering banks. Unfortunately the common Cypriot suffered as a result of global sanctions on the Russians.

s4ny

The Treasury and Fed would rescue a large bank again, same as before.
The TARP program was very successful and profitable for the US Government.

If necessary, the Fed or Treasury would loan money to the FDIC so that no
insured depositor suffers a loss.

No insured depositor lost a penny in a FDIC insured bank account.

Kip

People still reading JS?...bummer

derryb

<< <i>Derryb, you made the comparison to US and Cyprus banks, not I. Yes, the USA and Cyprus have banks, but that does not mean the banking systems are the same. There are hundreds, if not thousands of documents (not blogs) readily available that detail the banking and economic systems in both countries.

Which brings up the other comparison you use about the sun, USA and China, which I feel is extremely purposeful and an excellent analogy for this discussion. Yes, the sun shines on both the USA and China and fortunately for this discussion both countries lie within the same latitudes so the sun shines with the same intensity on both countries. The common assumption is that since both countries share the same amount of sun, just as the US and Cyprus has banks, that each should be similar. So why does not China have the same agriculture as the USA? You correctly point out that just because two countries share something in common, they are not the same. There are many geographic differences in the USA and China, just as there are many socio-economic differences between the USA and Cyprus.

The Cypriot banks were really Russian money laundering banks. Unfortunately the common Cypriot suffered as a result of global sanctions on the Russians. >>


Are bank depositors in reality creditors of the bank whether in Cyprus or the US? Of course they are. Depositors actually loan the bank money when they deposit money in the bank. . . and the bank loans most of it out to others. It's gone.

And in a like manner, promises are made by each government to insure the bank deposits since most of the deposits are no longer held by the bank. Their ability to do so remains to be seen. Cyprus was unable to fullfill its promise so it used the "they are bank creditors" to not honor their insured deposits promise. Will the US do the same when faced with more failure than the FDIC can cover? Since the FDIC is only required to maintain a fund that equals less than 2% of bank deposits they will have little choice as did Cyprus.

MilesWaits

Read down for his views on Gold....Paul Singer says...

cohodk

Since the FDIC is only required to maintain a fund that equals less than 2% of bank deposits they will have little choice as did Cyprus.

The FDIC has an unlimited letter of credit with the US Congress. Only congressional approval would cause the FDIC to fail. You think Americans would allow that?

derryb

<< <i>The FDIC has an unlimited letter of credit with the US Congress. Only congressional approval would cause the FDIC to fail. You think Americans would allow that? >>


That's your argument against a Cyprus style "bail-in" when an underfunded FDIC doesn't have enough money to cover lost bank accounts?

Americans will allow whatever they are told to allow. They have thus far.

cohodk

No, that's not my argument.

I highly doubt there will be any Cyprus style crisis.

The USA will not self-destruct.

derryb

The USA will not self-destruct. However it's has been proven that it's banking system is quite capable of doing so. Greed and corruption my friend. Combined with runaway debt the perfect storm approaches once again. Until these issues have been corrected, our banking system will continue to keep dancing on the edge.

Overdate

If I recall correctly, small depositors were protected in Cyprus. I would guess that the same thing would occur if there were a similar crisis in the United States. A small depositor's vote is worth as much as a large depositor's vote, and small depositors outnumber large depositors by a wide margin.