Socio-Economics History Blog

Socio-Economics & History Commentary

Bob Chapman: Engineered Collapse To Bring About World Government!

November 9, 2010 Posted by | Economics | , , , , , , , , , | 1 Comment

QE 2.0: The Last Gasp of a Monetary System!

November 9, 2010 Posted by | Economics | , , , , , , , | 1 Comment

Citi: Central Banks Are Going To Start Dumping Dollars In The Coming Weeks!

  • A global monetary crisis is dead ahead ! People who think that only America will go down are wrong! The UK and Japan are also creating money out of thin air via QE. The ECB will follow suit soon, actually it is quietly buying up sovereign bonds already. The USD collapse will be the start of the worldwide currency meltdown! Got gold yet?
     
    Citi: Central Banks Are Going To Start Dumping Dollars In The Coming Weeks
    QE2 is likely to serve as a reminder to central bank reserve managers that they still have way too many dollars, and that they need to diversify away. That’s the argument from Citi’s Steven Englander:
     
    With FOMC out of the way and largely meeting expectations, investors are looking for what comes next. We think that reserve managers will contribute to the next stage of USD weakness as QE2 confirms their worst fears about the Fed’s intentions and the quality of their reserves portfolios. To exacerbate their concerns, Global reserves have been growing very rapidly, on a headline basis about 11% over the last year and now are close to USD9trn (Figure 1). While Chinese reserves growth gets a large amount of attention, other countries reserves are growing similarly rapidly.
     
    We believe this growth is involuntary and the implication is that central banks have a very large overhang of USD reserves. We think it is likely that reserves growth has picked up sharply over the last month and will lead to renewed dollar selling. The Fed’s QE2 announcement, while not a shock, just serves to remind reserve managers that they will have even more dollars in their portfolio if they do not move aggressively.
     
    The historical record suggests that under these circumstances they are very likely to be dollar sellers in coming weeks. Needless to say, all the analysis in this note is based on publically available data. Moreover, we find that our results are more robust when based on aggregates rather than data published by any individual central banks, so none our analysis refers to any one central bank.
      
    How much selling might we see?
     
    With almost USD9 trillion in global reserves, a ten percent shift in the USD reserves share would require selling USD900bn. Even if only USD6trn is actively managed, the USD600bn shift needed to get to this USD share, even assuming that is occurred in an environment in which reserves were not growing, is enormous. Were reserve managers to begin to sell in size, the impact on the value of the USD would be enormous, and there is a fair chance that they would move prices faster than they could sell their USD stock. So, on the whole they have been hesitant sellers. QE2 may make the selling pressure more intense now. With the prospect that the Fed will be aggressively printing money and effectively financing the US budget deficit, reserve managers now have to ask themselves whether their situation will be better down the road than it is now. If not, and especially if they see risk of even further expansion of QE down the road, the incentive is to move sooner rather than later even if it is painful in terms of prices moving away from them.

end

November 9, 2010 Posted by | Economics | , , , , , , , , , | Comments Off on Citi: Central Banks Are Going To Start Dumping Dollars In The Coming Weeks!

Ron Paul: This Monetary System Can’t Last!

November 9, 2010 Posted by | Economics | , , , , , , , , , | 1 Comment

Bernanke’s Inflationary Binge Could Spark A Currency War And Ruin The Dollar!

  • All these talk about stimulating the economy via QE2.0 is BS! QE does not help the real economy. People are out of jobs, U6 unemployment is about 22.5% (www.shadowstats.com). How does a rise in asset prices help these people? About 42.5 million Americans are on food stamps. How does increasing inflation help these people? Helicopter Ben Bernanke is talking a load of heretical economic bull crap.
     
  • I do not believe that Helicopter Ben is stupid. His real intention is to destroy the USD and thereby destroy all the debts owed. He is head of the largest and most powerful privately owned Illuminist central bank, the FedRes. His task is to initiate the destruction of the current world financial and monetary order and lay the ground work for the New World Order. The endgame is a One World Currency, Global Central Bank and World Luciferian government. 
     
    Bernanke’s inflationary binge could spark a currency war and ruin the dollar 
    Bernanke’s monetary shenanigans are building up a host of problems, domestic and international. In the next 8 months or so he plans to pump nearly $900 billion dollars into the US economy with the intention of lowering interest rates to the point where business borrowing and consumer spending will be sufficiently stimulated to trigger a recovery. (If only it were that simple.)
     
    This policy amounts to criminal negligence. If Bernanke were a surgeon he would be doing jail time. To get a grip on the magnitude of Bernanke’s folly let’s go back to 2007 when the Fed’s balance sheet stood at $900 billion. By 2009 it had jumped to $2.3 trillion, an increase of 136.7 per cent. The excuse was that a massive monetary injection was needed to prevent an economic collapse. I for one never believed that the US was in danger of a deflation-driven implosion. I also warned that the consequences of any rescue package would be to slow if not prevent the necessary economic adjustments from taking place.
     
    So what did America get for Bernanke’s swift monetary rescue? Unemployment stuck at 9.6 per cent with the broader measure standing at 17 per cent. His response is not to reason why but to once again step on the monetary accelerator. Brilliant. Absolutely brilliant.
     
    Let see what “Helicopter” Ben’s vulgar Keynesianism might mean for Americans. Short-term debt used to be the Fed’s main monetary instrument. Thanks to Bernanke most of the Fed’s Treasurys are now long long-term with about half exceeding five years. Bernanke has to know that in the current situation holding long term securities involves great risks. At the moment the rate stands at just over 4 per cent. You don’t have to be an expert in finance to realise that a rise to 6 per cent would slash the value of these holdings, wiping out several times over the capital on the Fed’s balance sheet.
     
    But why should this happen? Because Bernanke — the architect of this policy — has implemented a monetary strategy that must eventually drive up interest rates if not checked. And right now, there is nothing checking him. Flooding the economy with dollars is bound to arouse inflationary expectations. This will lead to rises in the yield of long-term bonds which in turn will drive down bond prices (there is a strict inverse relationship between the yield of a bond and its price) turning the Fed’s balance sheet into an ocean of red ink.
     
    It has been suggested that before inflationary expectations can take root the Fed could soak up the “excess liquidity” by selling bonds. But this would have the effect of raising rates by pushing down bond prices.
     
    But the above is only part of the Fed’s sordid tale of gross monetary incompetence. Bernanke has two objectives: one is to raise prices at home and the other is to devalue the dollar. Running down the dollar is bound to have severe international ramifications and this why Bernanke’s policy provoked global outrage with the Germans calling him “clueless” and China warning that it might have use capital controls to protect itself. As Guido Mantega, Brazil’s finance minister, said: “Everybody wants the US economy to recover, but it does no good at all to just throw dollars from a helicopter.” I do not know of a single country that has supported Bernanke’s rabid inflationism.
     
    The fear is not that driving down the dollar — “exchange dumping” — will inflame world-wide inflation (this is not the ’60s when a flood of Eurodollars ramped up European money stocks) but that it will greatly disrupt international trade by sparking a “currency war”. If Bernanke succeeds his victory will only be temporary. Other countries are not going do nothing while he uses inflation to price their producers out of US the market as well as other foreign markets, not to mention their own domestic markets. They have a number of weapons at their disposal, none of them good for international trade.
     
    Everyone knows that inflation means a depreciating currency, with dollars buying less and less as prices continue to rise. But if rising prices put people back to work so would cutting real wage rates. After all, one of the effects of inflation is to widen profit margins and cut the real cost of labour, therefore make it cheaper to hire. But like just about everything else in economics, it’s not quite this simple. Unfortunately for Americans — and the rest of the world — Bernanke doesn’t know that: he is still wrapped up in the Keynesian multiplier, the Phillips curve and LM-IS analysis. No wonder he cannot get it right.
     
    Bernanke does not stand alone. Olivier Jean Blanchard, the International Monetary Fund’s chief economist, recently stated that it wouldn’t be the “end of the world” if the Fed stimulated the rate of inflation considering the threat of deflation. Bernanke’s printing greenbacks like crazy and this twerp warns about deflation. As expected, Blanchard is another Keynesian.
     
    No one with a decent knowledge of the history of inflation denies that loose monetary policy can create a boom. On the contrary, this is precisely why we have booms and busts, as explained by the Austrian school. If Bernanke succeeded in using inflation to slash unemployment and expand production, the victory would be short lived. Accelerating inflation would see interest rates eventually climb as the price premium increased, and the dollar would start falling even faster than Bernanke could tolerate. Sooner or later the Fed would once again have to slap on the monetary brakes.
     
    Inflation does not create real wealth and jobs — it destroys them. This is a fact that Keynesians seem genetically incapable of grasping.

end

November 9, 2010 Posted by | Economics | , , , , , , , , , , , , | Comments Off on Bernanke’s Inflationary Binge Could Spark A Currency War And Ruin The Dollar!

Dan Norcini: Gold And Silver Are Moving As Currencies!

  • Gold sliced through US$1400/oz and silver rocketed past US$27/oz. It is as though there were no resistance. Both are flashing wildly: they may go hyperbolic soon! The world is facing a global currencies’ devaluation against gold and silver. Both went up even though the USD strengthened. The smart money is realizing that should the USD strengthen against the EUD, the European smart money will buy gold. The USD is just another piece of toilet paper fraud. The flight to USD, quality in times of duress no longer applies. A perceptible change in psychology is evident. Dan Norcini (www.jsmineset.com):
      
    It is fascinating watching the transition occurring in the gold market from purely a dollar related phenomenon to one in which it is moving as a currency in its own right. Early in the session, the Euro was under strong pressure that brought in a general wave of selling into both gold and silver, even as silver was making a fresh 30 year high. That selling took both metals down on the day, with gold in particular seeing more weakness than silver. About mid-morning however, buyers showed up in size and brought about an abrupt about-face in both markets with silver roaring above $27.50 and gold clearing $1400 with relative ease.
     
    To see these markets shrug off Dollar strength is just one more indication that they are moving on their own merits and that those buying them in such quantity are looking well past any short term blips in the Dollar. What we are seeing is further evidence that the current global monetary system is under extreme stress and many investors world-wide are rapidly losing confidence in both it and its managers. This is the reason that the perma bears in both metals are in serious trouble for they are now coming face to face with a crowd that is not the least bit impressed by their ability to formerly engineer price sell offs. Buyers are in control and the bears damn well know it.
      …..
    “Bubble, bubble, toil and trouble; fire burn and cauldron bubble”. I’ve taken a few liberties with Shakespeare’s witches in Macbeth (Double, double) to illustrate that if the Fed has desired to puff up another bubble, they have gotten their wish but for the rest of us who have to live with their mendacity, it will end with toil and trouble. I say, “mendacity”, because it is a lie that inflation can be controlled. Now the Fed may believe their own lies but the truth is that they cannot control the fears and suspicions of the public who have now lost confidence (that ethereal, fleeting substance which cannot easily be defined but once forfeited is nigh impossible to regain) in their attempted management of the economy. We will yet see more woes resulting from this ill-conceived course which is going to contribute to the eventual ruin of the Dollar and with it, our way of life.
      …..
    Technical levels in gold are as follows: Resistance should appear near the $1,420 level. Above that $1,440 comes into play. Downside initial support lies close to $1,380 followed by $1,370 and then $1,355.
     
    Silver is blowing through upside resistance levels so quickly that is almost seems futile to list them. $30 now seems easily attainable given the ease with which it knifed through $27. Indeed, silver is moving in what can now be described as parabolic fashion based on the steep angle of ascent on the technical price charts. Open interest readings do not yet indicate a commercial signal failure is occurring but there are evidentially shorts that are getting their heads handed to them and are bailing out. It might be the swap dealers who based on the last COT report were attempting to move towards being flat but they do not hold the lion’s share of the short positions in the market. The big “commercial” class is the ones I am watching for signs of throwing in the towel. Personally I do not see how they can go much longer given the size of that naked short position and the enormous paper losses that they are incurring in what is left of their dwindling trading accounts. We all know that they are extremely well capitalized but someone as well capitalized as they are continues to buy so it is now a matter of how much more pain they can withstand.

end

November 9, 2010 Posted by | Economics | , , , , , , , , , | 1 Comment

China Says Fed Easing May Flood World Economy With ‘Hot Money’!

  • It is absolutely certain that trillions of USD will flood into Asia and the emerging markets. Any country that allows the Illuminist banksters to buy their country up with funny money is certifiably stupid. Floods of funny money will drive asset prices up and play havoc with interest rates. When these ‘Monopoly’ monies are withdrawn, asset prices will collapse, the economy will tank and banking system go under. Financial world war has started.
      
    China Says Fed Easing May Flood World Economy With ‘Hot Money’
    Nov. 8 (Bloomberg) — Chinese Vice Finance Minister Zhu Guangyao said the U.S. Federal Reserve’s decision to pump $600 billion into the economy might “shock” emerging markets by flooding them with capital.
     
    The first round of quantitative easing, as the Fed policy is termed, in 2009 was justified because the global economy lacked liquidity, Zhu told reporters in Beijing today. With a recovery now under way, new purchases of Treasuries to inject funds into the financial system may be destabilizing, he said.
     
    “Around the world we have $10 trillion of hot money flowing around, more than the $9 trillion in hot money at the beginning of the global financial crisis,” Zhu said. The U.S. “has not fully taken into consideration the shock of excessive capital flows to the financial stability of emerging markets.”
     
    Zhu’s comments underscore concern around the world that the Fed’s decision will benefit the U.S. at the cost of stability and growth elsewhere. Chinese and European leaders have said they plan to discuss the impact of quantitative easing at the Group of 20 summit this week in Seoul as well as the dangers of competitive currency devaluations.
     
    German Finance Minister Wolfgang Schaeuble compared the Fed move to China’s currency policy, which involves hundreds of billions of dollars in U.S. dollar purchases to prevent rapid appreciation of the yuan. “The instruments are different but the goal is the same,” he said in a Nov. 5 speech in Berlin.
     
    “This is a U.S. countermove in the global beggar-thy- neighbor process,” said Michael Pettis, a finance professor at Peking University and a former managing director at Bear Stearns Cos.
     
    Germany, Brazil
    Brazilian Trade Minister Welber Barral said Nov. 3 that Latin America’s biggest economy is “concerned” with the new quantitative easing, also calling it a ‘beggar-thy-neighbor policy,’’ a term used to describe a policy where a country seeks gains at the expense of others. The U.S. was pursuing a “weak- dollar policy,” Japan’s Prime Minister Naoto Kan said on Nov. 4.
     
    “The international financial markets do not lack capital, what is lacking now is confidence,” Zhu said. Yet the Fed’s policy has also brought out competing viewpoints in the Chinese government, even within single ministries. Wang Jun, like Zhu a vice finance minister, said at a finance ministers meeting in Kyoto Nov. 6 that a “quantitative easing policy that’s aimed at boosting the U.S. economy will help the revival of the global economy tremendously.”
     
    Zhu, speaking today, echoed comments made by Vice Foreign Minister Cui Tiankai on Nov. 5, who said the Fed “owes us some explanation on their decision on quantitative easing.”
     
    U.S. Responsibility
    “At this point we believe the United States has not fully realized its responsibility to stabilize global financial markets as a main reserve currency issuing country,” Zhu said. While Zhu focused his concern on the impact of the Fed’s easing policy on developing economies, quantitative easing may also make it harder for some European countries to repay their debts, Nobel Prize-winning economist Robert Mundell said in a Nov. 3 interview in Beijing.
     
    Quantitative easing is “terrorizing” the world economy and will lead to depreciation of the U.S. dollar, pushing down prices in Europe and exacerbating the continent’s sovereign debt crisis, Mundell said.
     
    The European Central Bank’s mandate to control inflation would likely hamper it from stemming the euro’s rise, while the currency’s gains would “likely lead to deflation,” said Mundell, who received the prize in 1999 and is known as the intellectual father of the euro. Falling prices would increase “the real value of indebtedness.”
     
    China, Commodities
    China needs to stop hot money from entering the nation to prevent a “crisis,” independent economist Andy Xie said at a forum in Beijing today. Smaller economies have raised concerns about the inflow of capital driving currencies, stocks and property prices higher.
     
    The Taiwan dollar is close to its strongest since 1997, capped by suspected government intervention. South Korea’s government said it would curb volatility in the foreign-exchange market caused by speculative fund flows. Hong Kong’s Financial Secretary John Tsang said last week that the government “will not hesitate” to curb asset price inflation.

end

November 9, 2010 Posted by | Economics | , , , , , , , , , | Comments Off on China Says Fed Easing May Flood World Economy With ‘Hot Money’!

World Bank Chief Surprises With Gold Proposal !

  • The world is moving toward a One World Currency. This will likely be backed by gold. No country will accept another piece of fiat currency created out of thin air! Closer and closer we are getting to the global currency crisis!
      
    World Bank chief surprises with gold proposal
    The world’s largest economies should consider gold as an indicator to help set foreign exchange rates, the head of the World Bank said on Monday in a proposal that threw open the acrimonious currency debate days before a summit of G20 nations.
     
    Writing in the Financial Times, World Bank President Robert Zoellick called for a new monetary system to replace the floating rates adopted in 1971 known as Bretton Woods II. In typical Zoellick style, the proposal before the G20 leaders’ summit in Seoul is aimed at fueling a broader debate on currencies that goes beyond competitive devaluation wars.
     
    The price of gold powered to an all-time high above $1,400 an ounce on Monday, despite a bounce in the U.S. dollar, on concern about a weakening trend in the dollar, after the U.S. Federal Reserve last week resumed buying Treasury bonds to inflate its
    money supply.
     
    The former U.S. trade representative, who served in several Republican administrations including Treasury, said the new system “is likely to need to involve the dollar, the euro, the yen, the pound and (a Chinese yuan) that moves toward internationalization and then an open capital account”.
     
    “The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values,” he added. Zoellick did not spell out in detail how this system might work, but said it would help to rebuild the confidence of financial markets and the general public in the global monetary system after the financial crisis.

end

November 9, 2010 Posted by | Economics | , , , , , | Comments Off on World Bank Chief Surprises With Gold Proposal !

BOJ in Uncharted Waters With Its Unconventional Policy!

  • Japan is in economic trouble because of the strong Yen. They know it. They have announced QE in muffled/obfuscated language. It is obvious they are following the currency debasement route. I do not blame them entirely because China is still largely hanging onto its USD-CNY peg. The Chinese are caught in a vice of their own making. If they allow the USD-CNY to drop drastically, it will result in massive losses in their US$1.5T reserves holdings.
     
  • The world is heading towards a massive blowout of historical proportions. Your kids will be talking about this coming earth-shaking global monetary crisis many years into the future. This is a non linear, phase change event. Suddenly, ‘overnight’ the world will change so drastically as to be unrecognizable. Old premises and rules will no longer apply. Hunker down for this coming financial, economic and monetary tsunami. Got Gold yet?
      
    BOJ in uncharted waters with its unconventional policy
    The Bank of Japan is entering uncharted waters with its decision to implement “unconventional” monetary-easing programs to help lift the economy out of deflation. In coming days, the BOJ will begin to purchase government bonds, using part of the 5-trillion-yen ($61.47 billion) fund it has added to the 30-trillion-yen fund for open-market operations. It will also dip into the 5-trillion-yen fund to buy risky financial assets directly from the markets, starting by mid-December. It will be the first time for the central bank to do so.
     
    The BOJ set aside 500 billion yen to buy financial assets such as exchange-traded funds (ETFs) and Japanese real-estate investment trusts (J-REITs) directly from the markets.
     
    In its monetary policy meeting last week, it upheld the monetary-easing programs it decided on last month. Among them were a return to its virtually zero-interest rate policy and setting up the 35-trillion yen fund, of which 5 trillion yen is set aside for the purchase of government and corporate bonds as well as less conventional instruments.
     
    The BOJ is now seen as a “frontrunner” by its U.S. and European counterparts for its so-called quantitative monetary-easing policy and steps to buy potentially risky financial instruments. It represents a reversal from the past view shared by those central banks, which used to criticize the BOJ’s monetary policy as ineffective in propping up the Japanese economy.
      ….
    His past remarks before he became governor of the BOJ showed that Shirakawa was rather skeptical about quantitative monetary easing. He not only questioned the effect of easy credit in terms of stimulating the economy but also raised concern that money-easing could allow people who do not need money to have access to it. A former member of the BOJ’s Policy Board said Shirakawa also had reservations about the central bank purchasing potentially risky financial assets. “Governor Shirakawa was cautious about such purchases because it could skew the allocation of the central bank’s funds,” the former member said.
     
    Rather, the BOJ was forced to break new ground to lift the country out of recession and deflation because all other traditional measures have proved futile. Under the current program, the bank placed no cap on buying government bonds, unlike before. Theoretically, the move could be taken as an indication of the bank’s readiness to pump funds into the markets by buying up as much government debt as it wants.
     
    Each month, the BOJ buys 1.8 trillion yen in governments bonds from financial institutions. The amount comes to more than 20 trillion yen a year, or nearly half the amount of new deficit-covering government bonds issued annually. A clause in the public finance law in principle prohibits the central bank from buying state bonds directly from the government.
     
    It is designed to prevent the government from going on a bond issuing spree, relying on the BOJ to finance it, and keep at bay inflation resulting from a flood of funds circulating through purchases of government debt. Kazuhito Ikeo, a professor of finance at Keio University, called for a Diet debate over the clause because the bank’s purchases of huge sums in government bonds could be construed as a sort of monetization.

end

November 9, 2010 Posted by | Economics | , , , , , , , | 1 Comment

ATMs Crash Across The Country After “Bank Holiday” Warning!

  • Are we close to a global monetary crisis? Yes! It will likely be triggered by a sharp devaluation of the USD. I have been tracking all the buzz in online forums the past few nights over ATM and online banking problems. I cannot say for sure that the feedback is real. However, I have concluded that Americans are in for a rude banking and financial shock.
     
  • Be prepared, things are not looking up. It is time to stock up on food (6 months) and hold some cash on hand. Put your savings in physical gold and silver. It is obvious from statements this past few days that the world is going towards a new monetary gold backed system.
      
    ATMs Crash Across The Country After “Bank Holiday” Warning 
    Twitter aflame with reports of Wells Fargo, Chase and Bank of America customers being unable to withdraw cash
    Following rumors of a “bank holiday” that could limit or prevent altogether cash withdrawals later this week, Twitter and other Internet forums were raging yesterday about numerous ATMs across the country that crashed in the early hours of Sunday morning, preventing customers from performing basic transactions.
     
    It’s unknown whether the crashes were partly a result of a surge of people trying to withdraw their money in preparation for any feared bank shutdown, or if mere technical glitches were to blame. The fact that the problem affected numerous different banks in different parts of the U.S. would seem to indicate the former.
     
    The Orange County Register reported that the problems were “part of a national outage” which prevented people from performing simple transactions such as cashing checks and withdrawing money.
     
    “Computer issues” were blamed for similar issues in Phoenix Arizona, while in Birmingham Alabama, Wells Fargo customers’ online banking accounts and ATMs displayed incorrect balances.
     
    The banks primarily affected were Wells Fargo, Chase and Bank of America, but
    according to blogger Phil Brennan, who studied Twitter feeds and other Internet message boards that were alight with the story, numerous other financial institutions were also affected, including US Bank, Compass, USAA, Suntrust, Fairwinds Credit Union, American Express, BB&T on the East Coast and PNC.
     
    “Twitter is going crazy with reports of ATMs and online accounts going down as of 01:00 hours EST of the 7th of November 2010,” writes Brennan. “This is happening to many banks all across America. Some are trying to say that it is a computer glitch to do with the change in Daylight Savings Time, but I will call BS on this as we manage to put our clocks back over here in the UK without knocking out ATMs and online accounts nationally.”
     
    Brennan questions whether the outages were the first warning shots in a move to “devalue the dollar,” just days after Federal Reserve chairman Ben Bernanke sparked an international currency war by announcing that the Fed will buy $600 billion of U.S. government bonds over the next eight months.
      
    Any perceived inability of banks to deal with a sudden demand for cash would undoubtedly place in peril the United States’ triple A credit rating and spark a fresh dollar crisis.
     
    “In the light of what is going on geopolitically, I am still very suspicious about the reasons for this mass downtime of ATMs and Online Accounts, adds Brennan. “There is still a very distinct possibility that November the 11th will turn into an extended Bank Holiday so I would advise all those who can get their money out of their banks to do so, even if you have to pay your upcoming bills manually.”
     
    As we reported last week, the “bank holiday” rumor has reared its ugly head once again, after a story emerged that a pastor was told by one of the managers of a prominent east coast bank that banks would close for an undetermined amount of time, and that when they reopened, “all withdrawals by checks would be limited to $500 per week – no matter what the balance in the account is.”
     
    Though the story is still an unconfirmed rumor, banks have been preparing for limiting withdrawals.
    As we reported back in February, Citigroup sent an advisory to its customers at the start of the year which stated that the bank reserved “the right to require (7) days advance notice before permitting a withdrawal from all checking accounts.” The advisory stoked fears that financial institutions were preparing for bank runs.
     
    While we still think this new bank holiday rumor will subside as the previous two did earlier this year and last, in the current economic climate it would be foolish not to keep at least a small amount of your savings in physical cash. The current financial turmoil has been likened with the post 1929 period, during which newly elected
    Franklin Roosevelt declared a “bank holiday” that lasted four days, therefore such a scenario is not without historical precedent.

end

November 9, 2010 Posted by | Economics | , , , , , , , , | Comments Off on ATMs Crash Across The Country After “Bank Holiday” Warning!