“Possession Is Nine Tenths Of The Law” The New Rule For Bank Deposits

20 Mar


Pandora’s Box has been opened.

And all the demons of lawlessness – shrieking “Do what thou wilt” and “Might beats Right” – have flown out.

From the New Zealand Herald:

Kiwis with money in the bank could see their nest eggs and savings dwindle in a government move the Greens say is a “Cyprus-style solution” to help out failing banks.

New Zealand banks are readying their IT systems for Open Bank Resolution, a Reserve Bank policy that in extreme cases like insolvency would see a bank’s losses shouldered in part by its shareholders and creditors – including everyday depositors.

The Reserve Bank has the power to freeze bank deposits but up to now has lacked the technical infrastructure to implement it – hence their requirement for banks with retail deposits of more than $1 billion to change their systems and meet their requirements by July 1.

Under the policy, which can only be activated by the Minister of Finance, if a bank fails a statutory manager is appointed to calculate the bank’s liabilities.

The statutory manager can then freeze a percentage of customers’ bank deposits to cover those liabilities before it reopens the next trading day.

But the Green Party’s co-leader Russel Norman said OBR was a “Cyprus-style solution” that would see small depositors suffer to fund big bank bailouts.

“Bill English is wrong to assume everyday people are able to judge the soundness of their bank,” he said. “Not even sophisticated investors like Merrill Lynch saw the global financial crisis coming.

Prime Minister John Key said the OBR policy was a “last-resort facility” and when told that few people seemed to know about it he responded that it was unlikely to be used.

Yeah right.

Where have we heard that before?

Oh yes, that’s right. Cyprus.

Where the Finance Minister told the people on March 1st that: There is really no more stupid an idea even to consider […] a haircut on bank deposits.”

Only days later, a 10% “haircut” on deposits is a very ‘live’ option.

Now you know just how much you can trust the politico-bankster “unholy alliance” to safeguard your savings.

There is an old saying: “Possession is 9/10ths of the law.”

Clearly, this “logical rule of force that has been recognized across ages” is now the new (old) standard for law and order.

They have it. And you don’t.


Find somewhere else to stash your cash.

8 Responses to ““Possession Is Nine Tenths Of The Law” The New Rule For Bank Deposits”

  1. JMD March 20, 2013 at 12:21 pm #

    Just FYI, Crowley’s ‘Do what thou wilt’ was never intended to mean – do whatever the hell you want, but more like ‘Your true will shall be the whole of the law’. I’ve always liked that.

    Aleister Crowley was interesting chap, but I didn’t make it past the first few pages of the ‘Book of the Law’, I guess it wasn’t my true will. He did write a very enjoyable novel called Moonchild though.

    I even went to a ‘cabal’ of Crowleyans once, at Summer Hill in Sydney, but lost my ‘enrollment’ form on the way home, so I figured it wasn’t a good idea to go back. True story.

    My take on this ‘deposit levy’ is that small depositors are the least likely to cause problems as & when the banks need to reduce their liabilities to match the real value of their assets. As you say, expect more of this news.

    • The Blissful Ignoramus March 20, 2013 at 12:59 pm #

      Unfortunately – as with much of the Bible and other religious texts – what is “intended” and what is interpreted are often very different things. FWIW, even your interpretation of Crowley’s intent strikes me as essentially giving licence (law) to a 100% self-centred attitude to life. No wonder such statements / commands are intoxicating.

  2. anonemiss March 20, 2013 at 12:30 pm #

    I am afraid you are mixing two different things, if a bank fails and shareholders/bondholders are wiped out then its proper, legal and fair to hit the depositors.

    The problem with Cyprus is that shareholders/bondholders were not wiped and everyone, even those who put their money in safe banks, were acquired to pay to save the second biggest bank from collapse (the government injected capital in that bank for 84% of shares just last summer). I explain my position on Cyprus here.

    Sure governments have been encouraging people to deposit their money with banks, but ultimately when you put your money in a bank you are trusting the bank. Banking is a choice and many in third world countries don’t trust the banks, that’s why Indian households are the world’s biggest holders of gold.

    Demanding that the government, i.e. taxpayers, bailout depositors who sought high interest in shaky banks is not fair. Did you know that Cypriot banks offered 4.5% while German banks offered 1.5% interest?

    • The Blissful Ignoramus March 20, 2013 at 12:54 pm #

      Sure governments have been encouraging people to deposit their money with banks, but ultimately when you put your money in a bank you are trusting the bank.

      Therein lies The key point. The masses, far from being fully and honestly informed of the ‘risks’, are on the contrary duped (“con-fidence”) – by many and varied means – into trusting both the banks and the politicians. The average person in the street does not comprehend any of the mechanisms you’ve described (shareholders, bondholders). They take it “on trust” that banks are safe places to hold their money.

  3. Phil March 20, 2013 at 2:07 pm #

    Hi BI
    Thanks for your return to blog posting.

    I really enjoyed “A tale of Usury”. The leather coin tale helped to understand further your new monetary idea.

    I would like to add two ideas. Residential property should be a consumable item not an asset. It is largely because banks are allowed to leverage against resi property that money can be expanded so dramatically. Of course this is to the detriment of those looking to buy somewhere to live. Resi property is one of our basic needs.

    Also corporations should be restricted to specific purposes and or time periods like they were centuries ago. The purpose of an incorporated entity should be to handle projects too big for individuals, partnerships or small business case by case. They were not intended to be the carte blanche leviathans that they are today.
    pls see. http://theeconomiccollapseblog.com/archives/corporatism-a-system-of-control-designed-by-the-monopoly-men-of-the-global-elite
    and http://truth-out.org/index.php?option=com_k2&view=item&id=735&Itemid=228

    Am really enjoying your writing.

    Cheers Phil

    • The Blissful Ignoramus March 20, 2013 at 4:14 pm #

      Thanks Phil. Both of those topics I’d not spent much time pondering, and none researching. Thanks for the prompt and starter links – any others on those topics will be appreciated.

      • Phil March 20, 2013 at 4:44 pm #

        Cheers BI

        Similar to your used car salesman just trying to get by within the matrix i have seen mum and dad property investors drawn into greed type behavior. They start to act commercially towards tenants occupying their properties often forgetting that they too are people just getting by. This is just the system guiding their actions in their attempt to get ahead.

        If property were a consumable, without bank finance, prices would be much lower for a start. A typical “home” might be three times the cost of a car for instance. If any person wanted to buy a “home” they would extend their own credit as you propose with NO usury. Then work it off with labour.

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