There appears to be a move to limit and even fine cash deposits of certain amounts. Considering a bank can make at least ten times the value of deposits as new loans, generating enormous profits, why would they want to limit cash deposits? Quite possibly this is a move to hedge against bank runs in the future. The Greek crisis, which unfolded in earnest over the summer could have been a beta test for the limitation of cash withdrawals, as citizens were unable to pull more than a certain amount out of ATMs.
Justification by the industry is that the cost of maintaining cash in banks is too much to bare, but again considering how much profit can be generated at these institutions, this is deception or a cover story for the imploding banking industry.
Related $11 Trillion Dropped Out of the Stock Market Last Quarter | Crash in October 2015? 9 Of The 16 Largest Crashes In History Have Come This Month
The hidden powers of this world have been working to institute a cashless technocratic monetary system because it is one of the best ways to control a population; anyone acting against their agenda would have their lifeline of cash cut off electronically. Considering how much modern life is dependent on money, the ability to freeze accounts with the press of a button would place enormous power in the hands of our would-be masters; even more than they already have. Limiting cash deposits seems to be step towards a cashless agenda.
Related How and Why “The Money Masters” Took Control (Full Documentary)
But as the above linked article reveals, the control system of money requires participation. If knowledgeable and wise people created their own debt-free money system it would effectively end the rule of the bankers, so long as it was honest, fair and not-for-profit. We’ve always had this power, but it similarly requires participation of the masses. Therefore spreading knowledge and awareness is one of the best tools we have at our disposal.
Few could have envisioned it even just a few years ago, but it’s happening now, and on an ever-widening scale. More big U.S. banks are shunning cash, because the banking system has become so dependent on other “assets” that large cash deposits actually pose a threat to their financial health, according to The Wall Street Journal.
State Street Corporation, a Boston-based institution that manages assets for institutional investors, has, for the first time, begun charging some customers for making large cash deposits, according to people familiar with the development.
And the largest U.S. bank in terms of assets — JP Morgan Chase & Co. — has dramatically cut “unwanted” deposits to the tune of $150 billion this year alone, in part by charging customers fees.
What gives? What kind of world do we live in when banks no longer want cash?
As the WSJ reported:
“The developments underscore a deepening conflict over cash. Many businesses have large sums on hand and opportunities to profitably invest it appear scarce. But banks don’t want certain kinds of cash either, judging it costly to keep, and some are imposing fees after jawboning customers to move it.”
As usual, the problem originated largely in Washington, D.C.
Criminalizing cash?
The paper said the banks’ actions are being driven by low interest rates (set by the Fed) that eat into profits, as well as “regulations adopted since the financial crisis to gird banks against funding disruptions,” adding in a separate report that a number of large financial institutions have become more dependent on buying and selling stocks, bonds and commodities like oil.
The latest round of fees for large deposits stems from regulators’ deeming them risky. They are sometimes dubbed hot-money deposits that analysts believe is likely to flee quickly in a crisis (think runs on Greek banks recently, which the government eventually curbed).
Agreed upon a year ago in September and managed by the Federal Reserve and other regulators, the rule covering liquidity coverage ratios forces banks and financial institutions to retain high-quality liquid assets — like central bank reserves and government debt — to cover anticipated deposit losses over a 30-day period (creative way for the federal government to continue financing its overspending — by forcing private banks now to hold government debt). Under the rules, banks are required to retain up to 40 percent against certain corporate deposits and as high as 100 percent against some hedge fund deposits, WSJ reported.
“At some point you wonder whether there will be a shortage of financial institutions willing to take on these balances,” Kelli Moll, head of Akin Gump Strauss Hauer & Feld LLP’s hedge-fund practice in New York, told the paper.
Moll added that the subject of where to actually put cash has become something of an interesting conversation as hedge funds are turned away by the traditional banking sector.
Dodd-Frank is to the financial industry what Obamacare is to health care
WSJ further explained the phenomenon and fallout:
“Jerome Schneider, head of Pacific Investment Management Co.’s short-term and funding desk, which advises corporate and institutional clients, said that as a result of the bank actions, he and his customers have discussed as cash alternatives boosting investments in U.S. Treasury bonds, ultrashort-duration bond funds and money-market funds.”
“Clients have been put on warning,” Schneider said, when it comes to cash.
The rules essentially criminalizing large depositors of cash stem from the 2010 Dodd-Frank financial “reform” law — a “reform” that did to the banking industry what Obamacare has done to the health care industry.
The law’s two primary authors — Democrats Chris Dodd of Connecticut and Rep. Barney Frank of Massachusetts, both of whom are now out of Congress — were also backers of Clinton-era housing rules said by experts to have caused the 2008 financial crisis. So, in essence, Dodd-Frank is punishing banks for rules that the two of them (along with most other Democrats and too many Republicans — and Bill Clinton’s signature on the legislation) actually caused.
In the meantime, there appears to be no end to the federal government’s meddling in both the financial industry and just about every other facet of American life.
Causing more problems than it solves — that’s a classic congressional move.
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