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Old 12-02-2011, 01:57 AM   #1
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bank holiday

It seems that bank holidays will be likely in our future, so I thought it would be worth while to discuss them.

If they do occur, are they generally called for by the government, or do the banks themselves decide to be closed to avoid a run?

How long could we expect a "typical" bank closure to last?

Are all accounts frozen so that you can't move money around electronically?

Would it apply to credit unions and brokerage accounts too?
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Old 12-02-2011, 09:31 AM   #2
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Not to argue, but why do you think so? My feeling is somewhat different here. I think that unless and until we are in the Wiemar/Zimbabwe state or getting close, that there will simply be enough printed and handed to them (nudge, wink) for the banks to let you have your quickly devaluing nominal back, you know, all that government backing junk. I kind of doubt they'll let the underfunded FDIC fail any more than they let Fannie and Freddie fail with much less policy guarantee on them.

Or, one could suppose it's already happening? I suppose a key market would be net funds on deposit - if that started going down quick we'd be in a bank-run status.
The way they (are allowed to) cook their books on other things, you'd have to wonder if that number is one of the cooked ones.

As long as they see any hope of keeping it together, it seems the pols will do "whatever".
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Old 12-02-2011, 09:36 AM   #3
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Generally, when a bank holiday occurrs, there is no warning or announcement.

This is what happened in Argentina during the 2001 currency collapse:

(Part 1 of 12)

(Part 2 of 12)

(Part 3 of 12)

(Part 4 of 12)

(Part 5 of 12)

(Part 6 of 12)

(Part 7 of 12)

(Part 8 of 12)

(Part 9 of 12)

(Part 10 of 12)

(Part 11 of 12)

(Part 12 of 12)
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Old 12-02-2011, 09:55 AM   #4
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I think that the treasury and fed are plugged into the system enough to provide pretty much all the liquidity banks could possibly need. I also think they have every intention to avoid bank runs and closures and will do whatever it takes to prevent them.. If we get to that point, they have lost control of the system entirely and you can pretty much kiss your cash goodbye.
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Old 12-03-2011, 02:16 PM   #5
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Bank runs are contagious guys, and if one starts in the Euro periphery, it can and will quickly spread. I don't think the U.S. will permit a bank holiday, but they might prohibit large withdrawls of money. While it would technically be a pseudo holiday, I think they would get away with it long enough to allow the system to stabilize.
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Old 12-03-2011, 02:37 PM   #6
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"Since all our money is loaned onto existence, our economy has to grow exponentially. Martenson proves this point empirically by showing a 99.9% fit of the actual growth curve of the last 40 years to an exponential curve"

Since our money printing grows exponentially, we will at some point have to launch replacement currencies. This will require a 'bank holiday' and the Argentine example shows us what can happen.

Hopefully we have all read Ferfals diary / blog of what happened in this scary time and have taken in his conclusions as to what he would do in a repeat situation
see - http://www.chrismartenson.com/blog/47085

Back around the time the system broke and Lehmans went down, there were lots of rumours regarding banks getting signs from HQ to put in the branch windows saying 'closed until further notice' ..... now eff off and dont bother us.
But we were also reading about the 'Amero' being run in the background as a shadow currency .....

I see Bank Holidays as inevitable just the timing thats open to discussion.
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Old 12-03-2011, 06:25 PM   #7
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thank you

thank you for posting the series of videos.
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Old 12-03-2011, 07:05 PM   #8
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RB2U,
I believe, as I think you do, that shit will hit an equilibrium level, whereby there is simply soo much money in the system and prices begin the exponential rise. That hwole idea scares the holy hell out of me to be frank about it.
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Old 12-03-2011, 07:38 PM   #9
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dontdebase and PMBug,

Great thread, thanks for starting and putting up the videos, which of course will take a LONG time to watch (especially from here in Peru -- on a visit to our bearing company). Great comments too.

---

My take on a Bank Holiday is that it COULD happen. I like to think in terms of probabilities... Probably will NOT happen, but that probability is real hard to quantify. And the downside of a Holiday are bad. Credit cards probably would not work either. I tend to agree with our amigos above who say such a Holiday is not likely, that they will print.

But, I don´t KNOW what will happen. That´s why I keep more $FRNs around than most. Three - six months living expenses if you can.

Past three years or so I am always a little nervous when I am away from my gold...
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Old 12-03-2011, 08:01 PM   #10
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Somewhat relevant, a talk by Kyle Bass on impending doom. I'm going to have to watch the above vids again myself (been awhile). Remember, though, things are a little different for a country like the US that (currently) has reserve currency status. The effects of our printing are less at first, because of that. When (not if?) we abuse that, we lose that status, which takes awhile for everyone go gang up and figure a replacement. When that happens - katie bar the door - the SHTF and it happens very very fast, and it's too late to un-print all the money at that point. But my best guess, and that's all it is, is that they print, hand it to the banks, you get your nominal amount back - but it just won't buy as much as it did when you put it in there. Maybe a lot less.


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Old 12-03-2011, 08:07 PM   #11
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Originally Posted by dontdeBasemebro View Post:
If they do occur, are they generally called for by the government, or do the banks themselves decide to be closed to avoid a run?
Since the govy is ultimately run by the banks, the banks will decide, rather than the government.


Nathan Mayer Rothschild:
“Give me control of a nation’s money and I care not who makes the laws.”

“I care not what puppet is placed on the throne of England to rule the Empire, …The man that controls Britain’s money supply controls the British Empire. And I control the money supply.”
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Old 12-03-2011, 08:21 PM   #12
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Well, of course, the banks will tell the government to decide and announce of course.
So to the sheep, it will appear to be the government's call, as usual. Wonder how much better things would get if that simple relationship was unmasked credibly for all?

Probably create quite the rough spot at first when people realized the government isn't in charge of things, and hasn't been for quite some time.
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Old 12-03-2011, 08:55 PM   #13
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Originally Posted by DCFusor View Post:
... Remember, though, things are a little different for a country like the US that (currently) has reserve currency status. ... When (not if?) we abuse that, we lose that status, which takes awhile for everyone go gang up and figure a replacement. When that happens - katie bar the door - the SHTF and it happens very very fast, ...
China has been planning, pushing and working towards undermining the dollar's resserve currency status for several years now. I chronicled a bit of it in the total perspective vortex thread and the thread about the Pan Asian Gold Exchange (PAGE).

If the middle east decides to start trading oil in Renminbi or Euros (or gold or whatever), the dominos will fall. Iraq tried it and that didn't work out too well for their political class. Iran is now doing it and they are next on the list.

I haven't heard much more about the rest of the gulf states' efforts to escape the yoke of the dollar since 2009, but rest assured that they are keenly aware of this issue and will be watching the Fed and the dollar closely.

One other key difference you didn't mention DCF was that the USA has a much, much larger ownership of firearms than any other country in the world:


Rate of Civilian Firearm Possession per 100 Population

http://www.gunpolicy.org/

There is a reason the government has been so hell bent on creating a draconian DHS apparatus and now pushing to authorize the use of the military to engage civilians within our borders.
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Old 12-03-2011, 09:03 PM   #14
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Does anyone know if China has a Rothschild/IMF central bank?
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Old 12-03-2011, 09:57 PM   #15
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Originally Posted by DCFusor View Post:
Well, of course, the banks will tell the government to decide and announce of course.
So to the sheep, it will appear to be the government's call, as usual. Wonder how much better things would get if that simple relationship was unmasked credibly for all?

Probably create quite the rough spot at first when people realized the government isn't in charge of things, and hasn't been for quite some time.
It is very obvious to you and I and many here at PMbug, but very unobvious to 90%+ of the people out there, as you inferred above.

I often wonder how much ruckus there would actually be if this type of info was clearly exposed to the masses in general.

It is amazing how apathetic so many people are these days (fluoride anyone?). We have all tried sharing info like this to friends/family/strangers and while some people receive it gladly, many others basically shrug and get a glazed look.

I hate to say it but in reality the mainstream media grip and the propaganda programming is so strong that it would take a minor miracle to wake up the sheep and my pondering about what would happen is likely just a theoretical exercise.

The sliver of good news is that there are more people waking up slowly but surely.
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Old 12-03-2011, 10:34 PM   #16
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PMBug, now THAT is a great graph (guns owned per 100 people). Hey we beat Yemen and Serbia! Both very weaponized places.

I have read about a group called Oath Keepers, who are a group asking the police and military to not obey unconstitutional orders (like seizing guns from the citizenry or beseiging cities after TSHTF).

I THINK the website is oathkeepers.org.
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Old 12-04-2011, 01:03 AM   #17
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I forgot to mention that gun thing, I suppose because they are just part of the norm for me around here - I build them myself for long range shooting competition, load my own ammo, and all that, just a normal thing and many of my neighbors at least reload so as to have better ammo, and to make more shooting affordable - here, it's like golf is in other places, a reason to get together with the other well-off sorts and shoot the breeze and make deals and whatnot. I wonder though - about all the gun people I know are truly non-violent types (nothing to prove), it would take quite a bit for them to use one in anger. Most don't even hunt, and we live in hunting heaven here. Some don't even shoot the penguin targets with handguns, because they don't want to get into the habit of shooting human-like things at all reflexively (I am one of those, a bullseye works for me just fine). I'm sure any of us could, in the extreme, but it'd have to be the real extreme. So far, I think that's all good.
But since they are everywhere, literally, they become something we don't think about all that much as weapons related to human targets. A hunter dropped by this morning, and we jointly admired his 7mm mag by Weatherby - pretty gun, light, powerful, accurate. Didn't talk about possible uses on other than deer. He'd just taken an unusual for here 260 yd shot with it, and if I may pun, "dead on". Since that deer was on my land, he'll be sending my freezer a little present. Nice!

Viewing those vids on Argentina (not done yet), wow, in some ways real similar to here. It is of course possible to privatize state outfits in a good way - but they sure didn't do that, that was crony capitalism in the extreme. We seem to be catching up, though by a slightly different path. I wonder if anyone has pulled off the public-private transition in a good way historically. I know the Soviets didn't either.

Funny how we just did the same thing, in effect - stuck people with the bills - but called it socializing the private debts of banks. Same thing, different spin.

It took me a long time to realize how bad our government had been corrupted. As a consultant, most of my business was with large firms, but most of those were privately held, well run, and in no way corrupt, so I felt that must be mostly true of all of them. I worked at the very top - ownership level, and all my customers were really stand-up guys - which showed - their employees flat loved them.

When I did do work for the really bigs (Microsoft, Texas Instruments, Microchip), of course I didn't get in at board level like I did with the mere billion dollar outfits, so I didn't see any shenanigans - only that they were more troublesome as customers due to not working from the top with them, so there was always that "have to check with the higher ups" BS going on with them.

But various things have opened my eyes, the homework I do for trading being one (follow the money), and the fights over "EYE PEE" another (best laws money can buy).

I'm aware that a lot of people want to get off the US buck as the reserve currency and that some deals have been done already. It's amazing how much inertia there is on that one, though. I think it will take some time, unless we do some really egregious stuff to speed it up (and we might). But the writing is definitely on the wall there, just that it's not happening tomorrow or this year most likely.

And I think that if we are going to have a truly bad situation here, that will be the thing that finally triggers it, else we're just going to have a long, bad, painful slog. The boiling frog syndrome.

Now that will make PM's really a good bet should it happen, and it's likely to happen after some time. If that happens alone, and the whole fiat world doesn't collapse, then everyone with a stack is going to look like a genius. However, should it get a lot worse than that - no or almost no oil, JIT general systems fail, disorder, starvation - and it's possible, though more of a tail risk, then other things will look even smarter, again all in my rarely-humble opinion.

Diversity!

Now, about that boiling frog. I read a post somewhere where someone said if X happens, that'll be when they buy that land and bug out. I really have an issue with that, based on my own experience of doing just that when times were better than they are now, not worse. It takes time to find land, time to find a seller at a price, time to find the good stuff, and most important of all - time to learn how to live on it decently, add whatever infrastructure it's missing and a long list of related tasks. Those first few years were pretty tough for me, and as a younger, more vigorous guy. My take on that one is - if that's what you'd do then, why wait? Do it now! Have the adventure while things aren't that bad yet, when you can really do it and be a success at it. If you were going to do it anyway...again, go ahead, I give you permission!

The more of us like minded people who are truly set up to handle anything, the better for all, or so I think. Most people rationalize that yeah, it'd be tough, and they're almost making it picking up pennies in front of the steamroller we all know is coming - better the devil they know for now. But what if you slip? That steamroller is coming for certain in whatever form.

I point this out over and over, not as a fear monger, but to share the fact that since I did it, and finally got it all working for me, my life has improved so much as to be hard to describe how much better it really is. No more butt-kissing for me. No having to seek approval from anybody. No need for a credit rating. Knowledge that almost no matter what happens, I'll be fine, and will even be able to help the less prepared. I'm living good now - no need to wait for things to get bad to have the excuse!

But as I mentioned above, unless you have infinite dough (and maybe even if you have quite a lot) it takes work and it takes time to learn the new skill set and get it all going for ya. Waiting for the last second is therefore not wise if this sort of bugging out is in your plan-space. It won't be easier if the world is collapsing around you and things can't just be ordered on the web and sent to you by UPS. No way you're going to make a plan on paper that handles it all - you have to learn this one in the old hard-knocks fashion. I know I did my homework, but still didn't know enough about country living until I was trying to do it. Luckily, since I wasn't part of a flood of people all trying to do it at once, the locals kind of adopted me and took me under their wings to teach me how.

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Old 12-04-2011, 02:07 AM   #18
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Not to ramble indefinitely, but I just realized the key words here are "crowded trade". That's what a bank run is. That's also what a land run is. You don't do well in crowded trades - the exit ramp is finite. Whether it be stacking PM's or some other form of preparedness - the "pre" is the key.

In good times, it took me 6 months to find the good land at an affordable price, and a few years after that to convince people to sell "the land next to mine" that was the truly good stuff. If a whole herd of people came down here looking, well, we'd have to just pen ya up like we do with the other herds, for awhile. Something to think about. And not all the good land is just for sale even if you offer 10x it's nominal worth in a stack - people are quite sentimental in the country, and would probably admire your stack, then show you theirs and grin - but you wouldn't get what you wanted. Even here - where all water flows out of Floyd county, land with springs (no well needed) isn't everywhere, and commands a premium. Land that's croppable (other than cattle) also. A lot of it isn't for sale at the real estate agent - it happens because people like you and know you're looking, you get a call. Just FYI, not to get too horribly off topic (sorry 'bout that).
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Old 12-04-2011, 09:25 AM   #19
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In Germany, the goverment launched bank holidays in 1948 to institute monetary reform. The conversion ratio from the old currency to the new one was calculated to devalue savings, i.e to steal purchasing power from the citizens. Remember, bank holidays can not only be used to stop runs on the banks. They can also be used to devalue the savings of people overnight.
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Old 12-04-2011, 09:31 AM   #20
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Originally Posted by DCFusor View Post:
... that gun thing, ... I wonder though - about all the gun people I know are truly non-violent types (nothing to prove), it would take quite a bit for them to use one in anger. ...
The folks you know, who are already close to self-sufficient in the country, may not be driven over the edge, but folks in the suburbs who are wholly unprepared, will have a much harder time dealing with the loss / theft of almost everything they own.

Once they realize that banging pots in the streets (ala Argentina) isn't going to resolve anything, I suspect they will get desperate. And call me jaded, but I see American society as a whole right now as entirely too entitled and selfish.

Originally Posted by DCFusor View Post:
... Viewing those vids on Argentina (not done yet), wow, in some ways real similar to here. ...
It is a very good film. Well worth watching and considering the parallels and lessons that apply to our current situation.

Originally Posted by DCFusor View Post:
... It took me a long time to realize how bad our government had been corrupted. ...
They jumped the shark with TARP in '08. They pulled back the curtain at that point as far as I'm concerned.

Originally Posted by DCFusor View Post:
... I'm aware that a lot of people want to get off the US buck as the reserve currency and that some deals have been done already. It's amazing how much inertia there is on that one, though. I think it will take some time, unless we do some really egregious stuff to speed it up (and we might). But the writing is definitely on the wall there, just that it's not happening tomorrow or this year most likely. ...


I see events accelerating, but do believe it's going to play out over another 2-5 years if we maintain our present course. I fear that we are running out of options for escaping the end game that awaits us. Right now, I see Ron Paul's proposed solutions ($1 T spending cuts plan, HR 1098, etc.) as the best hope for avoiding catastrophe.

Originally Posted by DCFusor View Post:
... Now, about that boiling frog. I read a post somewhere where someone said if X happens, that'll be when they buy that land and bug out. I really have an issue with that, based on my own experience of doing just ...
Sage words of experience. I'm not waiting for the water to get too hot. I just don't have the means to make the jump yet.
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