More from AFE, following on from yesterday’s client note:
…today we have been sent a paper from one of our clients which was distributed by [Swiss Financial Market Supervisory Authority] FINMA all the way back in June 2011 regarding the Swiss SIFI banking policy framework which calls stealing depositor funds to save a failing bank an “elegant” solution. The mindset which accompanies this attitude is frightening to contemplate.
Of note is that depositors are being referred to as creditors, and that deposits are considered debts of the bank. The theory they are operating on here is that any account which bears interest is actually an investment, subject to any risks the bank is willing to take. This is a huge paradigm change from the traditional view of most people who believe that the banks are there to safe-keep their funds.
The people have been led – like sheep to the slaughter – to believe in this. Now, which coven of high priests have preached that traditional view, down through the previous century or two, from their High Altars of Authority, do you think?
Simon Heapes, AFE’s Treasury Director says, “In Australia and NZ, you cannot have an account that does not accrue interest. They simply will not open the account unless you sign the agreement which indicates the account will bear interest. Therefore you have legally become an investor with the bank, and your deposits are liable for helping to bail out your bank if it gets into trouble. Because you are a joint investor with the bank therefore you have effectively given the bank your money for investment purposes which is an unknown risk by most depositors if the investment or investment entity (bank) fails!
Additionally, the moral hazard created here is that lawmakers are forcing the liabilities for risky decisions taken by bankers directly onto innocent depositors who ultimately pay with their savings for irresponsible behavior of bank decision makers.
Should these policies be written into EU law, it will make losses for large depositors a permanent part of future banking crises. Of course the timing of this is quite good, just in time to bail out banks in Spain, Portugal, and other EU countries where the crisis has been put into stasis until some genius figured out hey, you can just steal it from the depositors.
As I have long argued, the “modern” global monetary system is fundamentally flawed – that is, if you hold the view that a system which is designed to enslave the people and nations of the world through debt, maximise income and real asset wealth inquality over time, and so enable a small ruling class of elite “owners” of all the world’s assets and resources, is a “flawed” design. Of course, if you are one of those in that ruling class, then you will see the system as inherently good. And if you are one of the many species of remora, attached by your sucker to the shark’s belly, benefiting from a free ride, and protection, while living off either the scraps of your host’s feeding frenzies, or, by eating its faeces, then you too will see the shark-like, predatory monetary system as inherently good.
The flaws are structurally embedded in the design. Thus, it can not be fixed. It must be replaced in toto.
These flaws include fractional reserve banking, endogenous money creation (ie, banks create new money by making loans, “reserves” if any are acquired via the central bank later), centralised (private) control, and above all, usury (offering and charging “interest” of any kind). It is a system that is, by design, destined for exponential “growth” (due usury) of currency supply, and ultimate collapse … with the elite money-lenders – the system architects – acquiring all the real assets of the world along the way. And thus, enslaving the world to their every whim.
We can now see more clearly that end coming into view.