If You Heed The Information In This Article, It Could Save Your Assets
CONFIDENCE = Suspicion Asleep
Webster defines the word confidence as: "full trust, belief in the trustworthiness of a person or thing."
About 30 years ago, as a result of being a gold mining stock specialist, I was invited to a seminar at a gold mine in Southern California. The keynote speaker was John Exter.
Mr. Exter had recently retired as VP of City Corp., the large banking conglomerate. Previously he had been in charge of the transfers of gold in Fort Knox, was the person who founded the Central Bank of the Philippines, also the founder and first Governor of the Central Bank of Ceylon. In addition to these prestigious positions, he was a member of the Council on Foreign Relations. Mr. Exter was obviously well connected in banking, gold and international relations.
One of the most important comments he made in his address was that the key to stability in the banking system was embodied in one word – confidence. He went on to say that when, not if, confidence in the banking system evaporated, the banking scheme would be over, because "confidence is suspicion asleep." He had no doubt that we would live to see the day when suspicion would awaken.
Mr Exter is now in his nineties, and I predict that if he lives another six months, circumstances will prove him to have been a prophet, because the "…belief (of the citizens of the world) in the trustworthiness of…" the banking game is about to vaporize.
To support my prediction, the following items are submitted.
On 1/13/99, CNN published the results of their poll, which showed that 53% of Americans plan to withdraw extra cash by year-end. On 2/4/99, ZD Net ran a survey that showed 48% of those polled, plan to pull 40% or more of their money out of the banks by year end. On 2/17/99, Koskinen said, "We can print more money than Americans can withdraw." On 2/24/99 Greenspan said not to worry – "Don't withdraw currency." If Koskinen is right, why did Greenspan need to tell you not withdraw your money? If Koskinen is right, why did the bankers go ballistic when GTE recommended its customers pull cash out of banks (on 2/6/99)?
If, in fact, the banks will have $200 billion in currency on hand for those who are suspicious about their bank savings, and will "…print more money than Americans can withdraw," why are bankers sponsoring such a high-powered propaganda campaign to "educate" the public as to how safe the banking system is? Could it possibly be that they suspect that CONFIDENCE in their banking game is shrinking and suspicion is awakening?
In an effort to stifle such, the Federal Reserve Bank (FRB) notified the US citizens in 1998, that they would print up another $50 billion (in addition to the $150 billion allegedly on hand) to meet any unusual demand for cash in late 1999. Also in 1998, the Central Banks of England (33% increase in currency), New Zealand and Canada made similar announcements.
So far this year the following countries Central Banks have made these announcements –
2/16 -- South Africa's Central Bank will stockpile currency
4/8 -- the Bank of Japan will stockpile $331 Billion worth of Yen
6/26 -- New Zealand's Central Bank will DOUBLE their currency
7/17 – Malaysia prepares for bank runs by printing more money and will
close their banks from Dec. 31 through Jan. 3
7/23 – Hong Kong Central Bank announces they will increase their currency
by 100% to 160% by year end
Prediction -- other such announcements will be forthcoming.
Meanwhile, the president of the Canadian Bankers Association has announced that "Customer's money will be safe in their Canadian bank accounts." Isn't that the definition of a bank in the first place – a safe place for our money? Don't you wonder why they feel the necessity to make such an announcement?
Incidentally, most people assume that they have the right to demand currency when they make a withdrawal from their bank accounts. No, no, tain't necessarily so, according to Don Childears, President of the Colorado Bankers Association. As quoted in the Denver Business Journal, he stated; "…banks have a legal right to offer other forms of payment (such as)…cashier's checks or wire transfers." He also stated, "What the public needs from the banking sector on Y2K is courage. Courage to tackle the problem, first of all, whatever the cost, and courage to stand by that effort. It must communicate the unequivocal message that it is ready and offer the proof. CONFIDENCE will follow." Sure. When the banks cannot offer proof that they are ready, what little confidence is left will turn to suspicion and then evaporate. When that occurs, watch the lines start to form – around the world.
The following is the text of a newsletter which was just sent to my clients. I trust it will be helpful to any and all readers on the Net.
THE PROMISE (WHICH CANNOT BE KEPT) OF YOUR BANK DEPOSIT INSURANCE The Federal Deposit Insurance Corporation (FDIC) is based upon a promise, which cannot be kept!
Most of you don't know me very well, and have no particular reason to believe what I've learned during my 41 years in the investment world (the first 27 of which were spent as a stock broker who made a lot of money for clients in gold mining stocks from 1967 [when gold was $35/oz] until 1980 [when gold went over $700/oz]). But, I hope and pray that you will trust me now, and heed the information of this letter, whether or not you ever do any future business with me.
For over 300 years the "State" has been in bed with the commercial banks of the world, and cut a deal regarding your savings. This is how it works: the "State" grants licenses to certain private groups to write "fractional reserve" debt contracts, and grants the banks legal, monopolistic sovereignty over the money of the various nations. Then the banks lend out the savings you have deposited, yet, at the same time, tell you that you can withdraw it whenever you wish! Sounds like magic, doesn't it. But, it gets even better (for the banks).
Under the current rules, your local bank keeps about a 1% reserve of your account at the US's Central bank, namely the Federal Reserve Bank (FRB). This is called "fractional reserve" banking (in the extreme). The most concise explanation of fractional reserve banking I've ever seen can be found at: garynorth.com
This also means that your bank can lend out a little less than 99% of your savings, which they tell you can be withdrawn by you at any time, yet they lend your money to other people on 3-5 year car loans and 20-30 year home mortgages. Neat trick, eh?
Of course, your bank tells you that the Federal Deposit Insurance Corp. (FDIC) will pay you up to $100,000 if they should have any liquidity problems. But what they don't tell you is that of the total insured accounts in the US, there is only about 1.5% of all savings that are covered by this FDIC FRAUD! So, if 3% of all the depositors demand their savings, there will be no money in the banks (1%) or FDIC (1.5%). Or, if everyone demands 3% of their savings, the banks will have no money for the remaining 97%!
And, as if that weren't bad enough, we now have the complication of the Y2K computer glitch. The world's Central bankers and large money center bankers probably didn't know of the Y2K computer problem until 1995 and your local banker found out about it in 1996, but most of them still don't really understand. However, the Central bankers do. The inability of computers to settle accounts threatens the survival of the payments system, namely your savings and checking accounts.
I've been saying this for about three years now, but several clients have asked for authoritative evidence. So, here is an extract from Planning by Financial Market Authorities for the Year 2000 (Feb. 1999), co-published by the Bank for International Settlements (BIS), the Central banker's central bank. You may read the entire report on the "web" at: bis.org
"The Year 2000 problem is unprecedented in scope. Computer software and embedded computer chips throughout the world are potentially at risk of malfunction unless they are repaired before 2000. Extensive remediation efforts and testing programs are naturally the best means for mitigating the problems, and it is important that these efforts continue. However, the sheer number of systems potentially affected suggests that some Year 2000 problems will be missed or that new problems will be inadvertently introduced through the remediation process. In addition, even the best testing program may not detect all potential errors, so some uncertainty will remain regarding Year 2000 readiness up to and possibly after the century rollover itself. In other words, it is inevitable that there will be some Year 2000-related disruption, although it is not possible to predict with certainty how serious or widespread this disruption will be (p.15)…" (emphasis added)
There is no trace of confidence here -- none of the banks "are on track." Compare this language with the PR propaganda from your local banks. And, on 7/15/99, this headline appeared: "Most big cities lag in Y2K fixes." Trust me, they don't just "lag," the major cities aren't going to make it - and neither will the banks!
This "Planning…" report admits the truth: central bankers will go into 2000 not knowing if these systems are fixed, in fact, some problems are "inevitable." They know that 99% of them are NOT fixed, worldwide. In fact, the Federal Reserve Bank of San Francisco sent the following bulletin to all its member banks on Friday, 6/18/99, all of which you can read at: frbsf.org
Synopsis of the bulletin, in which they advised all their banks to:
Sell securities - anything maturing after 12/31/99 should be sold.
Raise liquidity - call in loans, sell assets, raise and store cash in the bank vault. (Yes, they said store cash!!!)
Close extended lines of credit - shut off potential drains of capital. Let businesses know now that there may be no liquidity after Y2K. Cut off their lines of credit now.
Find collateral to use to raise more cash. (Including bank real estate, office furniture – anything that can be pledged now to raise cash)
The foregoing items are from an edited version of the 7/2/99 issue of Gary North's Remnant Review. To obtain a copy of the entire article, call (410) 234-0691. Perhaps they will send you a complementary issue.
THE FEDERAL RESERVE BANK WARNED YOUR LOCAL BANKS: WHY DON'T THEY WARN -- YOU?
They tell their "club" members (member banks of the Federal Reserve Banking System) to get out of the market now to avoid the turmoil at the beginning of the year, i.e., SELL ASSETS and RAISE CASH NOW!
The FRB is warning fellow bankers to plan for the worst case Y2K scenario. My question: if this was good advice for members of their "club," why wouldn't it also be good advice for businesses and individuals? And why are the PR releases from your local bank to you so different from the private warnings being issued by the FRB to your local bank? I'll tell you why. Any official who admits that people should sell assets and raise cash now could trigger a panic bank run. That's why you're on your own -- until they close!!
No one with enough influence to create a worldwide bank run can now afford to tell you the truth. What they do for you is to hold community propaganda forums to convince you not to panic.
I think it's a positive sign that the Federal Reserve is urging local banks to be prepared for the worst. Are you?
As I stated in my last newsletter, "When the banks are closed, it will be too late!!" You may not believe "they" will allow your banks to close, but are you absolutely certain? If you do take your money out and nothing disastrous occurs, your only loss is a little interest. If you don't take your money out and your bank does close…what do you think will happen to your principal?
My dear client/friend – whether you ever acquire another coin or can of food from me again or not, I urge you, yes, I beg you to SERIOUSLY CONSIDER taking a substantial portion of your savings out of the banking system and putting the cash in a safe place until at least next February!!!! Its your money – it's your decision, BUT PLEASE – don't wait until the lines start forming!!
Feel free to call me at 800:44-77-911 if you would care to discuss this crucial matter.
Sincerely,
Jack Weber
August, 1999
This newsletter is NOT copyrighted. Please feel free to give a copy to anyone you care about.
P.S. A long time ago, George Bernard Shaw quipped, "You have a choice between trusting the natural stability of gold or the honesty and intelligence of the members of government (or banks?), and, with all due respect for those gentlemen, I advise you, as long as the Capitalist System lasts, vote for gold."
Jack Weber's Biography: y2ktimebomb.com |
