Possible bank run on Dec 7th?

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silvervarg's picture
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Possible bank run on Dec 7th?

Eric Cantona in France seems to be a big name behind a propposed coordinated bank run on December 7th, 2010.

I believe this started as a french only action, possibly with vauge connections to the demonstrations against govement changes a few weeks ago.
There is also some indications that people in UK and US is to some degree is joining in on this internet coordinated bank withdrawal.

If this action will take place with enough people joining in it will really test the system of fractional reserve banking and also on the small amount of physical cash that the banks are holding. 

Check out this short youtube video:


What effect could this have?
Will banks just have to close down when they run out of cash?
If so, will people start a riot?
What if people make large electronic transfers to smaller banks. Will this make large banks insolvent? What effect would that have?
Will the effects be limited to French banks or are the large banks to interconnected that this will spread like a wild fire? IIf so, will it spread in the EURO countries only or will it keep spreading more, possibly to all of the worlds banks?  

Personally I am just puzzled. I don't fully understand why you want to do something like this, and I don't understand what consequences this will have.

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Re: Possible bank run on Dec 7th?

Leave it to the French to figure this one out. They have been very effective at this type of concerted protest, they have been doing it for years with pretty good results. They have figured out that the “system” is vulnerable to inflection points that can be exploited very easily when large groups of people engage in simple protests.

In the US, the mass media machine of the last few decades has spent millions indoctrinating Americans that such actions are futile, or the work of filthy communists.

Rest assured, this type of community action would bring the financial industry to its knees, and would do so in short order. Another tactic, if enough people just withheld say, December’s mortgage payment, how many banks could carry the float?

And while we’re at it, no more mortgage payments forthcoming until legal title is demonstrated on all property that is encumbered by a mortgage, oh and one more thing, all mortgages are now nationalized (they are anyway by Freddie and Fanny) but here is the kicker, since the Fed now owns them its time for our bailout- effective immediately all mortgages are converted to 1 ½% 30 year fixed. Think of the disposable income that frees up. (Recession – what recession)

And one more thing, you know all those jobs that are in China, and all those corporations like Google with a 2.4% effective tax rate on billions in annual income? Well from this point forward, no let’s say the first of the year, two simple rules. 1.) You sell it here you make it here – period. Rule number 2, You sell it here, and make it here, you pay tax on it here.

Laugh at that Mr. Bernanke. Tea Party my ass.

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Re: Possible bank run on Dec 7th?

The president will declare the ocassion by declaring a "bank holiday" to buy time to save the banks.    But the act will further  expose the fragile, leveraged nature of todays government created money systems.

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Re: Possible bank run on Dec 7th?

Vive la Revolution!

Eric Cantona BTW is one of my heroes, played footfall for Man U in the 90s and never minced his words even back the.  He has a real following in France, and he might just pull this off!

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Re: Possible bank run on Dec 7th?

This could be fun, Will i get the same effect if i pull out several thousand/day till the 7th?

robie

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Re: Possible bank run on Dec 7th?

The same suggestion is already spreading to the Netherlands (where I live) on social networks.

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Re: Possible bank run on Dec 7th?

Robbie, all

This does not sound like fun. It sounds like a possible triggering event. Much as I hate the banksters, we'd only be hurting ourselves with less prep time if this was the last straw that set  a SHTF scenario in motion. For the love of little green apples, this is not a GAME people.

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Re: Possible bank run on Dec 7th?

I apologize for making lite of an otherwise somber situation. Am curious if it could have any effect.

 

robie 

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Re: Possible bank run on Dec 7th?
safewrite wrote:

Robbie, all

This does not sound like fun. It sounds like a possible triggering event. Much as I hate the banksters, we'd only be hurting ourselves with less prep time if this was the last straw that set  a SHTF scenario in motion. For the love of little green apples, this is not a GAME people.

Were it to occur, it would indeed be devestating for all - mostly for the 90-95% of your fellow community members who didn't get to the bank before they ran out of cash.  Initially their anger would be directed at the bank but sooner or later they would be made aware of the fact that you got your cash out and were part of the cause of the bank failure that cost them everything other than an IOU from the FDIC.  You probably don't have bulletproof glass and a vault door to hide behind. 

I get a bit weary of those "demanding" a get out of jail free card on their mortgage.  You signed those documents, you were given a copy of those documents - what part of contractural obligation don't you understand?  Did you or did you not agree to the terms stated in the contract?  If you didn't, then why did you sign them?  Yes there are some serious paperwork deficiencies in SOME mortgages but certainly not all.  These deficienceis come to light mostly when the borrower fails to make his payments and it goes to a trustee sale.  I would get excited about this, except in most cases there is no equity - usually quite the opposite - the lender will take a substantial hit since the princiipal owed is most commonly much more than what can be realized from the sale.  Additionally many of these borrowers had no real stake in the property - that is there was little or no down payment.  Borrowing 50% on some hot stock (margining) can be quite risky.  Yet people gave no thought to borrowing 100% - talk about your ultimate leverage.Its like walking into a casino and borrowing $100 in chips. If you win, you payback the $100 and take the excess out the door with you.  But if you lose, do you want to walk out of the casino and not owe them anything?

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Re: Possible bank run on Dec 7th?

I don't know whether there will be a mass effect or not, but on a personal level I've been drawing down my HSBC accounts, mostly buying PMs.  Most of my remaining cash is in a community bank and credit union, both highly rated.  It just seems to be a conservative personally responsible thing to do.

Doug

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Re: Possible bank run on Dec 7th?

wow.  I'm not ready yet, and I don't want this to happen, but the very fact that it has traction  "out there", in this age of social media, may mean that it's too late.  Even those who don't want any part of a coordinated movement would be forced to remove money to protect themselves, truly it becomes a race between informed and not informed, and all shades in between.

very interesting though!

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Re: Possible bank run on Dec 7th?

Okay, Silvervarg, let me give you my take on the answers to your questions.

What effect could this have?
Will banks just have to close down when they run out of cash?
If so, will people start a riot?
What if people make large electronic transfers to smaller banks. Will this make large banks insolvent? What effect would that have?
Will the effects be limited to French banks or are the large banks to interconnected that this will spread like a wild fire? IIf so, will it spread in the EURO countries only or will it keep spreading more, possibly to all of the worlds banks?  

Personally I am just puzzled. I don't fully understand why you want to do something like this, and I don't understand what consequences this will have.

1. Q. What effect could this have? A. Worst case scenario? It could bring down the global banking system. (Some people want that. They think that the pain of a crash is necessary to bring about a more just society but a lot of innocent and vulnerable prople will die and I think that is an unacceptable cost.)  Medium case scenario? A bank holiday and another stair-step down toward the crash. Best case? You put off buying milk for a few days.

2. Q. Will banks have to close down when they run out of cash? A. That depends. Most transactions nowadays are with debit cards. Who knows? Banks might start handing out debti cards instead of cash. As long as folks can buy groceries and pay the rent, everything will be cool. If people are being civil and do not panic, life can--for now--go on. But if some transactions have to be made in cash there is a potential for panic. And then we'd best not underestimate the power of a group of angry or fightened people. But "banks running out of cash" happens all the time: try hitting an ATM at the end of a holiday weekend. My personal belief, and it is nothing more than that, is that the true panic will hit the USA when electronic benefit cards are not refilled by the government, when welfare and SSI disability and social security checks fail to arrive. Riots will not be far behind.

3. Q. What if people make large electronic transfers to smaller banks. Will this make large banks insolvent? What effect would that have? A. You think consumers haven't been making large electronic transfers to smaller banks already? I was with Citbank, for everything: CDs, checking, credit card, debit card, you name it. All but my credit card are now with a fiscally conservative small local bank. People are nervous. Nervous people put their money in the safest possible place. And as to making the large banks insolvent, they already are. Let me give you a taste of their Looney Tunes accounting methods. (Note this is a US example. I'd love some global ones.)  You have a credit card with a $5,000 limit. It's paid off: you owe them nothing. It still shows on their books as a $5,000 credit. This $5,000 potential debt is not actual reserves, but they treat them as such for accounting purposes. Lather, rinse, and repeat for every single customer they have and you have a towering mountain of phantom reserves. Add the defaulted mortgages where banks are left holding the bag. These show on their books for the full amount--as an asset--until the foreclosed homes are sold. No wonder many people in foreclosed homes are not being kicked out of their houses yet. These are yet more phantom reserves.  To sum up my answer: people are already making large electronic transfers from larger to smaller banks, the larger banks are already insolvent, and they are covering for that with fancy accounting and will continue to do so.

4. Q. Will the effects be limited to French banks or are the large banks to interconnected that this will spread like a wild fire? IIf so, will it spread in the EURO countries only or will it keep spreading more, possibly to all of the worlds banks?  A. The international fractional reserve banking community is in bad shape, everywhere. In fact, with the exception of the now defunct "investment banks" like Lehman Brothers, my understanding is that the European banks are in much worse shape. American banks are required to not lend at a ratio above 12:1 - that's $12 leant for every dollar in reserves. Set aside the quality of our "reserves" since they're not much better in Europe. Until the recent credit crunch, lending over in the Eurozone went at ratios like 50:1. To answer your question, I have no idea if this stunt will cause a fear contagion will spread from customers of the French banks. Just bear in mind that the health of the banks is a house of cards at the moment.

5. Personally I am just puzzled. I don't fully understand why you want to do something like this, and I don't understand what consequences this will have. This last item is a statement. But the implicit question is - why? Why would someone want to try and cause a run on the banks? (My personal belief is that it's painful to breathe the same air as those who would do something so stupid, but let's set that aside.)  For some of the "protesters" doing this, it's an act of defiance: "You banks are scr*wing me, so I will scr*w you." The unintended consequences of this may be profound, but a lot of people have no idea how things work. My personal belief is that these ignorant people may or may not be used as "useful idiots" - but I can see where there is a potential for those who want to topple our current system to want to fan the flames on this a bit.

But no one knows what will happen. That's why it's stupid. It might be like blowing up the water company to protest a high water bill, and then ending up with no water.

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Re: Possible bank run on Dec 7th?

If this happens it would be a great excuse to get rid of that pesky paper money.

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Re: Possible bank run on Dec 7th?

Well I suppose there is a reason why this sort of social protest is not done here in the US, but it is widespread in Europe, notably France. I’d say that Americans just don’t get it – at all. Yes, these types of things are self damaging, but the issue  (apparently) is not to search for some sophomoric process that does not harm anyone but the target, but rather to assert in the oppositions’ mind that there is a willingness to endure some discomfort in pursuit of higher objectives.

This is a very powerful strategy and one could well argue that it sets up a permanent and uncomfortable tension between parties with opposing objectives, and sets some clear expectations that the opposed is quite capable, but more to the point, willing, to use effective means to stand their respective ground.

It’s is interesting how this sort of topic more or less naturally morphs into a moral judgment, as bias emerges condemning those that might consider some type of protest along these lines simply morally deficient. Filthy socialists, et. al. Apparently there is something morally deficient about withdrawing one’s money from institutions that are failing at a rapid pace (149 so far this year). In light of recent events regarding clear title, one can be forgiven for questioning the process of property title, and it’s entirely fair to ask for a demonstration of the chain of title, irrespective of whether or not you are upside down in your mortgage.

The comments related to withholding one months mortgage payment I would interpret to be a direct challenge to the Fed’s strategy of bailouts to the banks, and overall monetary policy of ZIRP. There is also a reasonable question raised by Catherine Austin Fitts (among others) that material fraud was present during much of the lending that was going on during the last 5 or 6 years, in that important information regarding the ability of the borrower (any borrower) to pay based on forthcoming economic conditions well known by the lenders at the time.

If an investment group entered into some type of financial transaction wherein material fraud was present, there would be no question of moral deficiencies if they withheld a payment until clarity could be obtained, and a clawback if fraud could be proven. But for us citizens, apparently, none of this is available, we just have to suck it up and operate under an asymmetrical definition of moral responsibility, with us on the losing end.

No, withdrawing money and withholding a single mortgage payment is not illegal and not unreasonable considering the circumstances. And since the Fed is passing out nearly zero interest money, and they own the mortgages anyway (about 90% of them) then I’d consider it reasonable that we receive the same interest rate for our mortgages, plus a thin margin for the costs of servicing the loan. I’d say 1 1/2% is just about right. Such a reduction would almost certainly save the housing market, unleash millions of discretionary income into the economy, and kick start a vast and important industry back to life. Additionally, as a result of  the housing market recovery, those with negative equity would (eventually) be made whole, circumventing a very large problem with arguably no other solution. I do not see this as morally deficient, it’s simply renegotiating the terms of the loan, something every investor and businessman is well familiar with, using the Fed as a backstop this time for the borrowers and not the banks.

And with a mortgage holiday in effect, this would be a great time for the citizens to realize the power that they collectively hold, and use this opportunity to implement some fiscal policy changes that are moribund in the Dem vs. Rep stasis, in the form of retrieving some or all of those jobs in China, and reeling in abusive skirting of corporate taxation by large multi-nationals.

Well perhaps this is indeed overreacting, maybe the Tea Party and the conservatives are right, all we really need is a few tax cuts and a little less government, and perhaps some more of Blackhawk Ben’s magic, and it’s back to the go-go years.

Right?

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Re: Possible bank run on Dec 7th?

darbik, I understand your point.  I have a question for you.  What about money in corporate accounts?  We have, like saferite moved out of larger banks and cash savings personally...but there is no way I can see to protect our business assets.  If I take a check out on Dec. 7th to protest or take a check out now to protect ourselves later either way I'm taxed on this as income.  If I re-deposit the same amount a week later the IRS wants to know where it came from and tax me for it as revenue. I am more frustrated with the fact that my small business is treated like an illegal business if we use cash of any kind.  Why does the Government force businesses to use the banks??  I would like to keep our corporate assets in GOLD.  Can you imagine just how fast I will be audited if I withdraw cash, buy PM's and then NOT claim the money on my tax return?? I would like to pay my employees and vendors in cash. Not possible. 

I'm terrified of a bank run.  Not because I'm not prepared personally, but because all the years we have labored to build a business would be wiped out in one fail swoop.  A crash I saw coming, but could not prepare for because the Internal Revenue Service has me handcuffed to my bed while our house burns down.

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Re: Possible bank run on Dec 7th?

Romans, you’re right to be concerned. I own a corporation as well, so I’m familiar with the concern in general, but the specifics of your situation you’ll have to judge for yourself.

In a sole proprietorship, or subchapter S corp., simply withdrawing money from a business account does not necessarily trigger a taxable event. Conversely, simply withdrawing money on Friday and depositing on Monday is not considered income, if it was money already within the accounting system.

In theory, you are immediately exposed to a tax liability when you receive any payment from a customer, even if you do not deposit it. So the act of receiving payment is what triggers tax liability for income, not when or how you store it.

The concern would be in how the funds are characterized, as retained earnings, or as some other type of cash account. It is here that you would have to be careful, as I am not sure of the accounting rules for cash accounts in various classifications. At a minimum, I would think any funds classed as capital contributions, for example, could be subjected to taxation if you pulled them out as they were likely deferred from taxation when initially put into the business. Whether or not this would apply to an overnight transaction is a good question, but I doubt it. You’d have to ask an accountant.

Good points.

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Re: Possible bank run on Dec 7th?
yobob1 wrote:

You signed those documents, you were given a copy of those documents - what part of contractural obligation don't you understand? 

And can I photocopy $1000 bills to repay the banks with?  WHY is it their sole capacity to generate money out of thin air?

Bank lending is a CON...

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Re: Possible bank run on Dec 7th?
yoshhash wrote:

wow.  I'm not ready yet, and I don't want this to happen

You'll never be ready.

You don't wnat this to happen for purely selfish reasons.

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Re: Possible bank run on Dec 7th?
The "interesting" part in Eric Cantona statement is his idea to replace riots with attacks on the banks... This is could turn out to be an extremely powerful weapon against the system. Even if Cantona can't attract enough people this time, the idea is out there now and could be re-use by more convincing people in the future. Couldn't it be also the perfect terrorist attack? In a world where everybody is connected and panic can spread at the spread of light, this is really scary...
 
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Re: Possible bank run on Dec 7th?

One practical thing you can do on a daily basis is to use cash for purchases, instead of credit or debit cards. Each time you do this, it screws the bank cartel out of a parasitical, uncompetitive 3 or 4% fee.

For instance, I used to always purchase gasoline on a credit card. Now I pay cash. That's $200 a month of lost revenue for VISA.

Here a site with more details on how to do your part:

http://www.usecashmovement.org/

Smile"Use cash; starve a bankster." Smile

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Re: Possible bank run on Dec 7th?

we should stop talking about it and maybe it will go away....Embarassedthe more we write...the more we spread. scary.

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Re: Possible bank run on Dec 7th?

machinehead, gas for us is a business expense. 

The IRS keeps us slaves to the cards! 

I use cash for everything personal. Even cash my paychecks and pay bills with M.O.

But i'll get my hand slapped (chopped off) if I try to use cash at work.

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Re: Possible bank run on Dec 7th?
Romans12.2 wrote:

machinehead, gas for us is a business expense. 

The IRS keeps us slaves to the cards! 

I use cash for everything personal. Even cash my paychecks and pay bills with M.O.

But i'll get my hand slapped (chopped off) if I try to use cash at work.

I understand; businesses don't want to deal with petty cash. But I see people using debit cards for very small purchases, such as a cup of coffee. Banks encourage this with promotions ('free checking if you make 25 debit card purchases a month,' etc.).

Don't take the bait. For personal expenses, it's pretty easy to cut credit/debit cards out of the picture.

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Re: Possible bank run on Dec 7th?

  I found this kind of odd .... my small town banker only uses cash .   He never bats an eye when I get most of my money in cash .  And last week when  I did not have enough cash on me to make a purchase at walmart  I wrote a check .  The cash register kept spitting my check out and the computer  had trouble too . First wanted my drivers license ... not good enough they wanted a phone number . When my new phone number was not in their system  it asked for more proof .    I tell you with my crew I spend enough money there that they should roll out the red carpet not  have the computer treat you like a criminal .

 The place was packed today  would have thought it was payday or something .  

 Things are getting more interesting everyday .

FM

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Re: Possible bank run on Dec 7th?
machinehead wrote:

I understand; businesses don't want to deal with petty cash. But I see people using debit cards for very small purchases, such as a cup of coffee. Banks encourage this with promotions ('free checking if you make 25 debit card purchases a month,' etc.).

Don't take the bait. For personal expenses, it's pretty easy to cut credit/debit cards out of the picture.

The credit card companies managed to push through legislation that prevents the merchants from charging a fee to the customer for the costs of processing their card.  So as a merchant you have to increase prices to cover that expense - but the customer never sees it.  Most card users are ignorant of the costs their profligate  use of "plastic" impose on a merchant and they are ultimately paying for their convenience, "points", airline miles or cash rebates.  Cash customers are subsidizing serial plastic users unless the merchant chooses to offer a discount for cash or a check - very few do.

Hoping this might ever change is liking hoping Bernanke gets skewered and hung over a roaring fire as part of the New Reality Show.

I'm with you - cash (or check for monthly bills - no auto pay) for everything possible. Haven't found a way to pay Netflix without a card, though.

Damnthematrix wrote:
yobob1 wrote:

You signed those documents, you were given a copy of those documents - what part of contractural obligation don't you understand? 

And can I photocopy $1000 bills to repay the banks with?  WHY is it their sole capacity to generate money out of thin air?

Bank lending is a CON...

I'd suggest you copy $100 bills instead.  The $1,000 bill hasn't been in circulation for a long time and trying to spend one, real or photocopied, would raise a whole bunch of red flags.

I don't agree that bank lending is a con.  Fractional reserve lending is a con and it wouldn't mater whether that's under a specie backed or fiat currency - either would be exposed as a "fraud" in the event of a bank run.

Unless we are all prepared to revert to a total barter system, banks will be with us. 

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Re: Possible bank run on Dec 7th?

In New Jersey you get a lower rate on gas purchases if you use cash.

I used cash for business related gas for a very long time.  It does require meticulous attention to receipts,  but I know trucking companies who still use cash for gas......

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Re: Possible bank run on Dec 7th?

ZH picks up the story.....

Man U Player Of The Century Eric Cantona Appeals For Peaceful Revolution Against Banks, Calls For Europeans To Pull Their Money

 

A few weeks ago we noted that December 7 is becoming a grass roots "banker mutiny" day, in which citizens across Europe will pull money from their banks and thus force a pan-European bank run on what is already a bankrupt financial system, which survives each day only at the expense of the continent's increasingly indebted citizens, their life of increasing austerity, and of course, the US Federal Reserve and its final backstop. In some ways we discounted the potential reach of this movement. Enter Eric Cantona - just ask any sport afficionado who the most entertaining, flamboyant and skillful football player of 1990's Manchester United was and 9 out of 10 times you will hear that name. The icon (both in England and France) whose on field antics were only matched by his kung fu skills, and who has a massive popular following, has been recorded agitating viewers (many of them), to enact a bloodless revolution against French banks: "We don't pick up weapons to kill people, to start the revolution... the revolution is really easy to do nowadays. What is the system? The system revolves around the banks. It's based on the power of the banks... so it must be destroyed starting with the banks. This means that the 3 million people with their placards on the street... they go to the bank, withdraw their money from the banks and these ones collapse. 10 million people and the banks collapse and there is not real threat, a real revolution. We must go to the bank. In this case there would be a real revolution. It's not complicated. You simply go to the bank in your country and withdraw your money. If there are enough people withdrawing their money, the system collapses. No weapon, no blood, or anything like that." A peaceful anti-banking revolution, brilliantly explained so that everyone can understand.

But comprehension is only have the battle. The other half is getting of your ass. Which is why this will never work in the US. As for Europe, we will find out in 3 weeks...

What’s the first rule of Fight Club?

 

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Re: Possible bank run on Dec 7th?
darbikrash wrote:

ZH picks up the story.....

Man U Player Of The Century Eric Cantona Appeals For Peaceful Revolution Against Banks, Calls For Europeans To Pull Their Money

 

 banks collapse and there is not real threat, a real revolution. We must go to the bank. In this case there would be a real revolution. It's not complicated. You simply go to the bank in your country and withdraw your money. If there are enough people withdrawing their money, the system collapses. No weapon, no blood, or anything like that." A peaceful anti-banking revolution, brilliantly explained so that everyone can understand.

But comprehension is only have the battle. The other half is getting of your ass. Which is why this will never work in the US. As for Europe, we will find out in 3 weeks...

Well no blood no weapons.  It should be real coooool. What could go wrong? Put grandma and grandpa on the street.....Cull about 20or 30 percent of useless population..... Bunch of useful Idiots....  it's going to happen sooner or later.

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Re: Possible bank run on Dec 7th?

So how much needs to be taken out in total? Or what about on a per-bank basis? Can the banks use foreign reserves to buffer against any local action? Unless enough is taken out it just means a bunch of us are pointlessly walking around for a day or 2 with a wedge of cash (never a safe move).

 

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Re: Possible bank run on Dec 7th?

Now there's a website..............

BankRun2010

What do we want?

We, the citizens of the 21st century, heirs of generations who have sacrificed so that we may live free and dignified, demand the creation of a CITIZENS BANK- serving citizens, a bank that would put our money away from speculative fever, free of all financial bubbles designed to burst one day, free of operations that transform our loans & assets and use our debt to buy other assets.

We want banks that lend only the wealth they have. Banks that help small and medium enterprises to relocate jobs, &  bank lending at zero rate. (*) Banks that support projects that benefit citizens rather than the "market". Banks where we can deposit our money, which will then create a peaceful conscience within ourselves. Banks we will not have to be worry about. Banks whose success will sound the death knell of the merchants of death, disease and slavery. On the ruins of the old system, we want to build a banking system that will no longer sacrifice more human dignity on the altar of profit.

We, the people have finally been awakened by poverty and despair afflicting the most vulnerable among us - pensioners, welfare recipients or working poor - and is now threatening what remains of the middle class & entrepreneurs. Even these are exploited as milking cows, and we now simply want the cancellation of the public debts generated by the sick system that we no longer want. We do not want our taxes, our efforts, our resources to continue to feed this bottomless pit. We want to regain the power to coin money and free ourselves from the guidelines imposed on us by the European Union, which was built against the consent of the majority of people consulted by referendum, not to mention those whose country of origin have no organized popular consultation.

 


silvervarg's picture
silvervarg
Status: Bronze Member (Offline)
Joined: Mar 28 2010
Posts: 57
Re: Possible bank run on Dec 7th?

Big thanks everyone that has written in this thread, and Safewrite in particular for very good and structured thoughts on this subject.

So far I have tried to wait to give more people room to write in this thread, but now I will make this post and then try hard to be silent for a week.
To keep structure to the thread I will try to stick to the 5 questions structured by Safewrite. If it fits what you are writing in this thread please do structure your thoughs to these 5 questions.

Here is my personal answers to these questions:

Q1: What effect could the actions on Dec 7 have?
I believe the most likely scenario is (assuming that nothing is done to stop the actions. E.g. No bank holiday, and no stop of money transferes during Dec 7:th):
Banks will run out of cash and many of them will be in insolvent state after massive money transferes.
However banks will take actions to get back to allowed levels within a few days or a few weeks, and goverments will accept that they was insolvent for a short while without any major penalty.
Possibly some banks will be help from goverment or national banks.
Still this will hurt banks financially quite a bit, and some weak banks may eventually go under because of the losses they made.
Overall I think most banks will survive.
For the short time there will be a shortage of cash, so trade will be somewhat slower than normal.
This will also start discussions about the rules for the banking system that will lead to changes in the longer run.

Q2: Will banks have to close down when they run out of cash?
Only cash withdrawal will need to close.
If customers start to become angry because cash can not be withdrawn the physical bank offices could close to keep angry people out and keep bank staff safe. Banks will still be open for bussiness through Internet and all sorts of electronic transactions.

Q3: If large amounts are transfered from large banks, will they then become insolvent?
Safewrite pointed out that this has already been going on. However it has never been done at a fast rate over a short period of time.
As long as the banks get time to adapt they can sell assest (like loans) to get more liquidity. While this is generally bad bussiness it will fix the insolvency problem at a small loss of future income.
However if this happens very quickly and in many banks at the same time there will be huge number of sellers and very few buyers. When that happens the price will drop like a rock and banks will need to sell even more to cover the insolvency.
Perhaps you could repay your loan with 50 cents to the dollar when this happens because the bank needs the money?

Q4: Will effects be limited to French banks only?
Today we are pretty sure it will not be isolated to France. Both that the banks at very interconnected, and also because this bankrun2010 action is spreading other countries, so the action will take place in most countries at the same time.
Safewrite wrote: ..."my understanding is that the European banks are in much worse shape"...
I disagree on this point. One fact to make my point is the number of banks who has went under in the US compared to the very few banks in Europe that has collapsed since 2008. You do have a point that European banks may lend at a larger rate (up to 50:1 in some cases).
Another major difference is in the risk of lending with houses as security. Lets say you have a house loan of 200K euro and default on that and the house is sold by the bank for 180K euro. The remaining 20K euro would in US be the banks loss, but in most of Europe you would still own 20K euro to the bank, so the loss is for the customer.
The principal difference is that the house loan in US is made to the house, but in most of Europe it is made to a person with the house as an added security to the loan, and this reduces the risk for the bank a lot.
I believe that this last part of the system is better in Europe, but allowing up to 50:1 lend ratio is horrible. I believe that Basel III rules will lower this a bit, and banks have already been working to lower their ratios so they will be able to fullfill Basel III rules, so ratios are not as bad as 50:1 today.

Q5: Why would you do an action like this?
I believe this was answered quite well on the bankrun2010.com site.
As I think the risks with this action are so big I believe it is a bad idea to do. Still to protect your wealth the most reasonable thing to do would be to withdraw most of your money. The problem is that any such self-protection action will help the bankrun that I don't want to support.
If I still want to protect myself and hurt the banks a little less I could withdraw money as far ahead of time as possible, as this would hurt the banks less. It also has the advantage that you are likely to actually be able to withdraw cash. If many people think like me the ATM's will be working real hard in the next couple of weeks.

 

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