Bail-Out Is Out, Bail-In Is In

[marmar]

Bail-Out Is Out, Bail-In Is In
Posted on Apr 30, 2013

By Ellen Brown, Web of Debt

This piece first appeared at Web of Debt.

“With Cyprus . . . the game itself changed. By raiding the depositors’ accounts, a major central bank has gone where they would not previously have dared. The Rubicon has been crossed.”
—Eric Sprott, Shree Kargutkar, “Caveat Depositor”

The crossing of the Rubicon into the confiscation of depositor funds was not a one-off emergency measure limited to Cyprus. Similar “bail-in” policies are now appearing in multiple countries. (See my earlier articles here.) What triggered the new rules may have been a series of game-changing events including the refusal of Iceland to bail out its banks and their depositors; Bank of America’s commingling of its ominously risky derivatives arm with its depository arm over the objections of the FDIC; and the fact that most EU banks are now insolvent. A crisis in a major nation such as Spain or Italy could lead to a chain of defaults beyond anyone’s control, and beyond the ability of federal deposit insurance schemes to reimburse depositors.

The new rules for keeping the too-big-to-fail banks alive: use creditor funds, including uninsured deposits, to recapitalize failing banks.

But isn’t that theft?

Perhaps, but it’s legal theft. By law, when you put your money into a deposit account, your money becomes the property of the bank. You become an unsecured creditor with a claim against the bank. Before the Federal Deposit Insurance Corporation (FDIC) was instituted in 1934, U.S. depositors routinely lost their money when banks went bankrupt. Your deposits are protected only up to the $250,000 insurance limit, and only to the extent that the FDIC has the money to cover deposit claims or can come up with it. .....................(more)

The complete piece is at: http://www.truthdig.com/report/item/bail-out_is_out_bail-in_is_in_20130430/?ln

[MisterP]

1. bipartisan to-axe list:

1 high-speed rail, especially where it's wanted, needed, and a good idea
2 Glass-Steagall
3 USPS
4 Medicare
5 Social Security
6 FDIC

and your choices are a guy who promises to end the New Deal and a guy who praises it but will axe it because nobody will complain when they're the one doing it

[Addison]

2. Money in the bank

I don't have much money in the bank, but that hardly matters -- if the FDIC ultimately can't bail out insolvent banks, and those banks run off with their customers' deposits, we'll all be paddle-less up you know what creek.

[Newest Reality]

3. Thanks for this one.

Precarious situation? Bad smell to it.

Our New Deal is Homeland Security which kind of fits considering the major fleecing in progress.