What happened in Cyprus? Is that going to happen in other countries?" "Absolutely."
'The
idea that we have, that we are absolved of responsibility for our own
financial future - in other words: if we're stupid enough to put money
in a bank, that has too poor of an equity slice, the bank goes upside
down....we're unsecured creditors of a moron, which makes us a double
moron. We ought to be punished for that stupidity." - Rick Rule
Rick Rule - totally wrong. You are assuming that the current Bank model is the right one. It is a morphed shadow of what came out of the Great Depression.
ReplyDeleteIt was created by the moneyed interests, when they changed the rules and allowing saving banks to become trading banks. This is totally suicidal for a system that runs on confidence.
Savings banks are designed to provided security for the general population, and therefore should be ultra-conservative, highly regulated, and guaranteed by government. They are a quasi government agency.
Trading banks are altogether different. Why accept the current paradigm ... its just plain stupid and so short sighted. To consider a depositor as an un-secured creditor is just dumb, and quite evil. Unsecured creditors always get done over.. In the banking system, they are nearly always the little people .. the average worker.
As a result of the great depression, old people used to bury their money in boxes or otherwise keep it out of the banks. It took the reforms of the 1930s to restore confidence.
Surely, wisdom would dictate that a crisis of confidence is again coming, and it would be highly prudent to fix the problem 'BEFORE' it manifests itself in a crisis of confidence.
This presupposes that those in power really care, and that they will not profit from a crisis. Poor assumptions really...for the solution is not rocket-science.
You are right .. but so is Rick Rule. He is not saying that the system is good, but that it is rigged. Therefore, if you have money in the banking system you may find in a crisis that you will be treated as an unsecured creditor. Eg. Cyprus et al.
DeleteI agree that the system needs to be fixed now, but the question is whether those with the vested interests have the incentive to do so.