G20’s New Financial Rules: Banks OWN Depositor’s Funds!

G20’s New Financial Rules: Banks OWN Depositor’s Funds! 

This is not a rhetorical question:
{Remember, All Wars Are Banker’s Wars}
What happens after the Poor, the Middle, and the Upper Classes realize that Government are lying, spying, stealing wealth, and propagandizing them?
When the wealthy start pointing to PROPAGANDA in their own nation then watch-out!
In other words, the only class remaining on top are a small group consisting of the Politicians, Central planners, Central bankers and a hidden tiny group of elites. A changing environment where even the club members, sycophants and defenders of the system are suddenly being “thrown under the bus” with the other outsiders and the poor populous.
Where once a 7-digit figure bank account entitled you to the club membership is now a 9-digit figure membership requirement; yes your assets must exceed 1 Billion dollars, and even this is subject to change!

1 free toIs the time upon us when the financial system finally crashes, as the people supporting it are not numerous enough?
The parasites have devoured their host.
Of course in the past this is when wars are declared.
But this time are there enough people willing to obey orders to fight for the government?

Perhaps the world will find out the answers to these questions very soon, as in this decade or maybe this year?


FDIC: “Resolving Globally Active Systemically Important Financial Institutions”

“The Got Gold Report’s Gene Arensberg today can’t resist taking a few cracks at one more “journalist” who eagerly disparages gold but can’t be bothered to put a single question to a primary original source of gold trading information, a central bank. Arensberg’s commentary is headlined “Arrogant Gold Bears Press in the Market and in Print” at it’s posted at the Got Gold Report here:

It’s really not journalism about gold, only propaganda, if it doesn’t try putting some questions to central banks about their surreptitious involvement in the market, such as the questions raised here:
http://www.gata.org/node/12395 ~CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc.”

Sunday, April 14, 2013

Arrogant Gold Bears Press in the Market and in Print

Bear Big Snarling Face onAn example of extremely bearish commentary out there, in this case from Dubai, with a few comments from GGR inserted for a different take. (GGR comments in red.)

Bullion bloodbath: 125-ton sell-order sets gold price for plunge

It may no longer be ‘safe’ to hold on to the ‘safe haven’ precious metal

By Vicky Kapur Published Sunday, April 14, 2013

Gold price suffered a massive decline of 5.6 per cent, or $87 per ounce, on Friday, crash-landing at a 22-month low of $1,477 per ounce.

Reports suggest that a 4 million ounce (124.4 tonnes) sell-order, worth $6 billion (Dh22 billion) at current prices, by a large investment bank spooked the markets and led to this decline.

“It appears that the significant selling pressure last Friday was amplified by a four million ounces (124.4 tons of gold) selling order, to be executed on Comex opening. This was clearly too much for a relatively empty market to handle, and the initial pressure resulted into waves of selling, which in turn attracted further selling all the way down,” Gerhard Schubert, Head of Precious Metals at Dubai-based Emirates NBD, wrote in his weekly report.

“The price for gold is now at par with the price for platinum. This is a very difficult report to write,” he penned at the beginning of his gold report.

Well, if rumours are to be believed, it’s going to be tougher still for him to write next week’s report.

(Ed. Tone setting remark. Reveals bias.)

For, Euro Zone’s troubled economy Cyprus is all set to add to that chaos by reportedly putting its €400 million (Dh1.93 billion) worth of gold on the block, in a bid to shore up its financial health.

(Ed. About 10 tonnes of gold by itself.  GLD offloaded about 47 tonnes this week alone in fear.)

In what analysts are terming as a make-or-break moment for the precious metal, gold has failed all safe haven tests and, for the first time in about two years, plunged below the $1,500 mark.

(Ed. Gold bears celebrating gold moving below $1,500, but it took gold 19 months to give back what it put on in 10 weeks in 2011.)

Indeed, it doesn’t seem too good for the gold bull. Gold last saw these levels in July 2011, after which it began its very fast and very steep incline to breach the $1,920/oz mark in September 2011.

Since then, however, the metal is now down by a quarter (23 per cent) – officially in a bear market. It was already, technically speaking, in a recession as the price of gold had shown negative growth for two consecutive quarters (Q4 2012 and Q1 2013).

With this most recent plunge, gold has wiped off almost two years of gains for its loyal investors, with those who pledged their hard-earned money in the safe haven precious metal now in negative equity.

(Ed. Translation: “Gold itself betrayed you, you stupid idiot.”  The selldown last week has nothing to do with the paper metal markets or very large hedge funds who also happen to be big supporters of the current U.S. president and somehow managed to escape the 2008 crisis unharmed and unprosecuted.  Nothing at all.)

To be fair, just last week we suggested that with the global economy getting back on track, and in the absence of a global shock like the Korean war, gold is set to fall back closer to levels that it saw before the 2008 recession took hold (read: Gold recovers to $1,581, but here’s why it may crash to $1,000).

(Ed. Global ecomomy getting back on track?  Only a shock of the magnitude of the Korean War will save gold’s plunge to pre 2008 levels.  Really?  Believe the illusory improvement in equity markets  if you wish, but when the stimulus is withdrawn or no longer works,  it won’t be long before the world is focused once again on competitive fiat currency debasement (currency wars), impossible to repay enormous soveriegn debt and public loss of confidence in irredeemable, under backed fiat currency, which is a primary driver of the gold price.)

“The gold market has, more or less, officially slid into a bear market. The popular definition of a bear market is when the commodity in question not only trades but closes at a level of at least 20 per cent under its all-time highs. The reverse psychology indicates that only a close above $1,776 would re-establish the bull market,” wrote Schubert.

(Ed. Schubert’s price symbolism does not go unnoticed here.)

That level, for one, looks more elusive than ever. “It appears that any price rally in the near future can and will only be described as short covering rallies,” says Schubert.

(Ed. Therefore do not believe gold rallies going forward. They would only be short covering, not real demand.)

“I do expect the market to see some short covering next week, as the market closed on the multi-year low. The former support area of $1,526 will become now a formidable resistance area. However, technical selling can be expected on Comex opening on Monday, based on models, which have received sell signals based on last Friday’s close,” he says.

So what happened last week?

While there are many reasons, a couple of factors were the most overbearing on gold price.

One, Cyprus seems set to offload €400 million (Dh1.93 billion) of its gold reserved in a last-ditch attempt to save face – and its economy. And if Cyprus does so, there is no reason why other Euro Zone economies in the same dire straits – Italy, Portugal, Spain, Hungary, Slovenia… there are plenty in line – won’t do it.

(Ed. Hyperbolic fear mongering.  If anyone believes the Italians would sell their gold at the behest of the E.U. think again.  They would more likely tell the E.U. to take a flying, uh, … leap at the moon.)

In addition, if they really ‘have’ to sell their family silver, it will make sense for other beleaguered European economies to sell it now rather than after the Cyprus sell-off has pushed gold further down. That is going to see a scramble among European nations as to who sells earlier, and that can’t be good news for the price of gold. In fact, it will be very bad for it.

(Ed. Don’t you love the reference to Cyprus selling a measly 10 tonnes of metal as being able to drive the market down, when the story begins with a 124.4 tonne sell-at-open order or  after one ETF (GLD) has sold more than 200 tonnes since this gold pullback began in December and 46.75 tonnes this week alone?  Right, like it is going to start a panic sale among E.U. countries, each trying to hit the bid before the others.  … That our collective inteligence is under assault here does not go unnoticed.)

“It [The Cyprus sell-off] is a make-or-break moment for gold… if the market can’t handle the reallocation and Cyprus, then there is really a need for a bear market,” Milko Markov, an investment analyst at SK Hart Management, has been quoted as saying.

And it isn’t just Cyprus and other euro Zone nations’ potential dumping of the yellow metal that is putting negative pressure on gold prices.

On Wednesday, leaked minutes of the latest US Federal Open Market Committee (FOMC) meeting showed that several members of the committee now believe that the benefits of quantitative easing programme are diminishing, and that costs of the $85 billion per month bond purchases outweigh the benefits.

(Ed.  That really was an ‘odd coincidence.’  When was the last time the Fed minutes were released early to way short gold hedge funds?  As Don Corleone might have said, “I don’t believe in coincidences.”  With so many former Goldman execs now in government, with one important Goldman expat heading up the Commodity Futures Trading Commission, we need not fear any inquiry into that, um, … cluster-blunder.)

Bernanke Ben fingersThis means that this flow of surplus dollars into the market – quite a few of which found their way into gold investments – will stop, leading to demand drying up for the yellow metal.

The US Federal Reserve has, so far, poured more than $3 trillion of easy money into the US since December 2008, when the first round of quantitative easing program was unleashed.

Now that the US Fed is making noises about cutting off that lifeline, gold price will get a nasty shock when – not if – the QE programme comes to a logical end.

(Ed.  Q.E. is what is creating the illusion of improvement.  If it is removed, even briefly, the improvement will quickly recede, leading to more Q.E.  That’s why some are calling it “Q.E. Infinity.”)

Blankfein Lloyd scowlAdditionally, a number of analysts including investment banks Goldman Sachs and UBS have recently further slashed their average gold price forecast for 2013. Goldman Sachs has cut its 2013 average gold price forecast for a second time within just six weeks, this time from $1,610/oz to $1,545/oz. UBS seems to be a gold price optimist, but it too has slashed its forecast from $1,900/oz to $1,740/oz.

(Ed.  Vicky, you left off the modifiers “heavily short” and “book-talking” in front of Goldman Sachs.  An oversight?)

These downgrades are linked to the possibility of an early end of the US Federal Reserve-funded QE programme, which comes with gold-negative factors such as investment flowing into equities, low inflation, improving economic growth, and a stronger US dollar.

(Ed. As J. Kyle Bass might say, “It’s all unicorns and rainbows and all is well in the world.”  Never mind the $13t explosion to the four largest central bank balance sheets and Japan’s one-quadrillion yen debt bomb about to detonate, and so on. Right now the future looks as bright as the flash over Hiroshima on 6 August, 1945 as “Little Boy” literally atomized.)

With loads of investors dumping paper gold (ETFs) in record numbers during the first three months of 2013, the writing is on the wall for the future of gold.

(Ed. Nice job, Vicky.  In a tomahawk sort of way.  Ursa Major greetings from a skeptical Texan, should you happen to read this time wasting response. No one would welcome a return of the gold price to “pre-2008 levels” more than I, but I just do not share your “optimism” the price of gold will get there. But do keep the pressure on, please.  For those of us now on the sidelines (with short term trading), you are working for us! … Longer term:  Got gold?)
(Images added, including the wheelbarrow full of $ Marks, could soon become wheelbarrows of dollars and pounds.)

Source for the Emirates story:  Emirates247.com

Original story at this link.


Posted by Gene Arensberg at 09:57:13 AM in Got Gold Blog, Vulture In Review


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16 comments on “G20’s New Financial Rules: Banks OWN Depositor’s Funds!
  1. RonMamita says:

    Is U.S. and U.K. the next Cyprus?
    by Marinka Peschmann http://canadafreepress.com/index.php/article/54158

    While you were sleeping, leaders of the so-called “free world” have been actively transforming their financial systems and now it appears that everybody’s bank account is fair game.

    Could the U.S. and the U.K. become the next Cyprus where private bank deposits are seized to recapitalize failed banks? According to a report written by the Federal Deposit Insurance Corporation (FDIC) and the Bank of England called: “Resolving Globally Active, Systemically Important, Financial Institutions,” the answer is yes.

    The 15-page report, dated December 10, 2012, was written, according to its executive summary, to address: “the importance of an orderly resolution process for globally active, systemically important, financial institutions (G-SIFIs),” after the 2007 financial crisis. Since then the United States and the United Kingdom have been working together to develop resolution strategies that could be applied to their respective largest financial institutions.

    The following comes from page 3, Section 12 and 13 of the report:

    12. Under the strategies currently being developed by the U.S. and the U.K., the resolution authority could intervene at the top of the group. Culpable senior management of the parent and operating businesses would be removed, and losses would be apportioned to shareholders and unsecured creditors. In all likelihood, shareholders would lose all value and unsecured creditors should thus expect that their claims would be written down to reflect any losses that shareholders did not cover.
    Under both the U.S. and U.K. approaches, legal safeguards ensure that creditors recover no less than they would under insolvency.

    13. An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company into equity. In the U.S., the new equity would become capital in one or more newly formed operating entities. In the U.K., the same approach could be used, or the equity could be used to recapitalize the failing financial company itself thus, the highest layer of surviving bailed –in creditors would become the owners of the resolved firm. In either country, the new equity holders would take on the corresponding risk of being shareholders in a financial institution. Throughout, subsidiaries (domestic and foreign) carrying out critical activities would be kept open and operating, thereby limiting contagion effects. Such a resolution strategy would ensure market discipline and maintain financial stability without cost to taxpayers.

    In the event of a bank failure, if taxpayer money is not used to bail the bank out, and the bank is not allowed to fail, then like what happened to Cyprus depositors, U.S. and U.K. bank deposits (unsecured debt, the new shareholders) could be seized to re-capitalize the bank.

    How could what happened to Cyprus be allowed to possibly happen in the U.S.? The credit goes to the Dodd-Frank Wall Street Reform and Consumer Protection Act that President Barack Obama signed into federal law on July 21, 2010.

    As the Resolving Globally Active, Systemically Important, Financial Institutions report explains on pages 3-4 Section 14 and 15:
    Legislative frameworks for implementing the strategy

    14. It should be stressed that the application of such a strategy can be achieved only within a legislative framework that provides authorities with key resolution powers. The FSB (Financial Stability Board) Key Attributes have established a crucial framework for the implementation of an effective set of resolution powers and practices into national regimes. In the U.S., these powers had already become available under the Dodd – Frank Act In the U.K., the additional powers needed to enhance the existing resolution framework established under the Banking Act 2009 (the Banking Act) are expected to be fully provided by the European Commission’s proposals for a European Union Recovery and Resolution Directive (RRD) and through the domestic reforms that implement the recommendations of the U.K. Independent Commission on Banking (ICB), enhancing the existing resolution framework established under the Banking Act. The development of effective resolution strategies is being carried out in anticipation of such legislation.
    U.S. regime

    15. The framework provided by the Dodd–Frank Act in the U.S. greatly enhances the ability of regulators to address the problems of large, complex financial institutions in any future crisis …

    While Canadians demand answers from their leaders (see Judi McLeod’s Is Canada the next Cyprus?), now Americans and the British must also demand answers from theirs. If explanations are not forthcoming is it safe to say that the warnings in the scriptures (Rev. 13) are coming true, and we are on the verge of entering the era of one world government? If so, prepare accordingly. You have been warned.


  2. […] and the changed bank rules (See: http://www.fdic.gov/about/srac/2012/gsifi.pdf ) or read my post: Banks OWN Depositor’s Funds! The Taxi-driver was shocked, but hopefully I was able to calm his fears and he will research it […]


  3. […] am tired of writing about this, however I realize that the currency controls is a slow creep. Little by little and year by year […]


  4. […] Wars and Looming Financial Collapse Institutional Watch: Financial Control Tug-O-War G20’s New Financial Rules: Banks OWN Depositor’s Funds! Is a Global War Being Waged Today? […]


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