Discussions of Mormons and Mormon life, Book of Mormon issues and evidences, and other Latter-day Saint (LDS) topics.

Thursday, March 23, 2017

As Good as Money in the Bank? Time to Worry More

A friend of mine, an attorney, had a job in California for a year and for convenience opened a bank account there with Wells-Fargo. He paid California income taxes that year, then left California and continued working in another state. He still had over $20,000 in his account. About three years later while he was in California again, he went back to a local branch office and asked to take his money out of his account. No need -- there was nothing left.

He learned that the State of California had assumed he was still working there and should have kept paying state income taxes as he had done one year, so they did the natural thing: estimated how much he should have been paying, then reached into his bank account and took their fare share, which turned out to be everything in the account. He was aghast. He explained (I think this was to a Dept. of Revenue official) that he had never been notified of any problem. Why hadn't he been warned? "Oh, if we warn people, they will move money out of their account so we won't be able to take it." No due process. The State will take it wants when it wants from your bank, based on whatever wild assumptions some bureaucrat makes.

The day before I heard this story from my friend, I was reading a newsletter from Simon Black of SovereignMan.com. His mother, a quiet, normal US citizen who has been a loyal customer of her local bank for 20 years or so, suddenly found her funds had been frozen by the bank. She couldn't make payments or take any money out. She learned that the bank had detected an "unusual transaction" and thus locked down her account. The unusual transaction? A $300 donation to support the Trump campaign. Definitely unusual, but not a direct threat to national security, regardless of how dangerous you think the new President is. I'm not sure how long it took or will take for her to get her money back, but that this can happen at all is troubling.

If your bank account(s) were shut down or emptied by some government or bank official on a power trip, or wiped out by a hacker, would you be able to get by while you tried to resolve the problem? Could you survive for couple of months without access to electronic funds? It's a question you need to ask yourself. Yes, food storage is going to be important in such times. But one of the other vital steps you should take right away is to store some cash in a safe place. Cash is freedom, which is why tyrants these days despise it and paint it as merely the tool of terrorists and drug lords. Cash can't be whittled away by negative interest rates (that insane, horrific idea is spreading to much of the world and may come your way soon) to support the spending dreams of tyrants. There is a war on cash globally, but for now, it's still legal in the US to have it and use it, so I recommend you get some.

Banks in the US are now viewed by the government as the first line of defense in tracking down criminals. They are required to turn over all sorts of personal information to the government and to make all of your funds available for their control, at their whim.The US has been lucky so far, but people all over the world have experienced the dangers of trusting banks. In Malta, a government that had spent way too much needed more, and simply gave itself the right to reach into bank accounts of high-income people (governments love to justify their actions by saying that their theft is only being done on the rich, to make them pay their fair share -- but almost all of us can be defined to be rich when thieves in power get greedy). In Greece and many other nations, economic crisis was met with sudden restrictions on how much could be taken out of a bank account. And in many, perhaps most US banks, if only about 1 or 2% of the average customers want to take out all their money, the bank could be brought to its knees.

In fact, in the US, the total amount of printed currency is estimated to be less than 5% of the digital assets people have, so imagine what would happen if a large number of people wanted to get their hands on actual cash instead of leaving money in a place where bureaucrats, errant bank officials, or hackers with the CIA's ultimate tools could reach in and take everything? There is not enough physical money to handle a relatively small exodus from digital accounts. There is not enough physical cash or bank capital to handle a significant economic crisis or a mild run on the banks.

When your money is in a bank, it's no longer your money being protected by the bank. It's money you have lent to the bank in hopes that it will be there when you need it. It's not enough to trust your local bank officials, even if they are remarkably honest people. You also need to be able to trust your government, and to trust the future of the US economy, if you want to trust that your money in the bank is safe. Until then, recognize that it can all vanish in a hurry, or maybe just a little at a time, but it's not nearly as secure as you might think.

There are other steps to consider. Multiple accounts might help. An overseas account in a much safer bank than typical US banks would be wise, but is now almost impossible for Americans due to the burdensome requirements the US government imposes on foreign banks in the name of cracking down on criminals (FACTA, etc.). There are a few places where it is possible, but generally nobody wants to talk to an American looking to have a Plan B for when the next economic crisis sweeps the States. As always, let me also suggest that if you can, some precious metals can be useful, maybe even stored in an offshore location like Singapore (Simon Black recommends that). And yes, please keep working on your food storage and emergency preparedness.

These things matter and can be a difference between disaster and mere grievance, or the difference between helping your family and your neighbors solve problems in times of trouble rather than being part of the problem.


JR said...

All of this illegal garbage is brought to the unwashed masses by the Communist Globalists.

How awful that your friend was robbed by the state of Commifornia. California has been run into the ground by the Communist Democrat party.

Many states are doing so much illegal stuff it is disturbing. This garbage has been going on, but became worse and more widespread under Obama.

Banks and mortgage companies are protected by the corrupt politicians of Washington District of Corruption, and can do whatever the Hades they want.

Anonymous said...

Just curious: were you foaming at the mouth while you typed that, JR?

Anonymous said...

Sadly for us, JR is right. Banks have become quasi-governmental institutions. About 80% of what they do is directed by government. Health insurance companies are quasi-governmental institutions. Congress wants more power and less liberty for individuals. It's the iron fist, more and more. This story is a clear example. Eventually there will be nowhere to run, nowhere to hide. Big Brother is watching, eavesdropping, and taking.

Anonymous said...

Jeff, nice try but you don't scare me. Your friend is obviously dumb. Get smarter friends.