Monday, November 8, 2010

Is There a Secret Operation by the Fed to Limit the Amount of Cash Americans Can Hold?

Is the Fed running a secret operation to limit the amount of physical cash Americans can hold?

ZeroHedge is running this story as a potential shortage of ATM cash, but I read it as much bigger than that. It appears, the government is clamping down on the amount of cash in the system. Here's ZH:

....we have no way to confirm or refute the validity of this statement presented by a supposed ATM business insider on Steve Quayle.com...

From Steve Quayle:
"George, I work with a business partner in the [region redacted] . We have combined between us 180 ATM machines that we service, Cash Load. In order to do this we NEED to order the money, 20's only from several banks on a weekly basis. This is a considerable amount weekly, 380k plus. Here is the interesting piece that is developing: In the past several weeks 4 of the MAJOR banks have informed us that they can no longer provide us with the cash for our business. Now the problem is that it is OUR money we are taking out!

So speaking with bank "personnel" on the side my question was this, what is going on? how come we cannot take OUR money out? Answer: "they" are not authorized to hold, carry or have on hand anymore more than a certain amount of cash on hand! The amount we are getting, even though it is out of our account, they cannot order or have on hand that amount of cash at any time now. I am not talking small banks...large banks [large money center bank in America name redacted] etc...!

We can see our ability to keep these machines with available cash is becoming more and more difficult. This has taken place just in the past few weeks. By the way, these banks were willing to lose our full business due to this issue. Trying to work with smaller banks now...we will see how long!"
If this is true, and it has the smell of truth, it will obviously backfire when word gets out. If there is anything that will start a run for currency, it is the Fed not allowing bank holders to take their money out in the form of currency.

24 comments:

  1. Hm... why would they restrict this? What's in it for Fed? I mean, if I want to get out of Dollar... I could simply buy things (let's say Gold) via money transfer.

    Or is that the case? They want to see where people spend their money? OR... are they planning on restricting money transfers soon too? Will they force people to own dollars... making it impossible (or very difficult) to get out of it?

    ReplyDelete
  2. Just for anyone who is curious and did not already know this, there are currently limits in place at most banks that require you to give them 10-30days advance, written notice if you want to withdraw cash in amounts over $X. I am not sure if it's the same at all banks but I tried to pull a bunch of cash one day and they wigged out and said I hadn't filled out a form giving them notice and they might not be able to make good on my request that day.

    Now, these rules are there just to prevent banks from having to have tons of vault cash all day, everyday, which reduces loans they can make obviously, but these rules can easily be used to control people trying to make panic withdrawals from the system as well.

    ReplyDelete
  3. I know for a fact that this is true. BOA would not give me a loan using my CD as collateral. I was having work done in my house and needed the cash to pay the contractors. Realizing that I would have to break the CD, the contractor agreed to give me a discount if I paid cash. I went to BOA to break the CD and withdraw the amount of cash for the contractor. BOA said they DID NOT HAVE THE CASH! They said it would take a week to get it. Mind you, the amount was small, $4,000.00 and they did not have it. The rep called three other BOA branches and told me they did not have the cash either. Scary? You bet!

    ReplyDelete
  4. @Taylor Conant

    I don't think the problem was ordering cash, for these guys. They clearly write that they "order" money, afterall they own cash machines. This is appears to be a case that for whatever reason their banks aren't willing to give them sizeable amounts of cash.

    ReplyDelete
  5. Wenzel,

    Yeah, makes sense. I meant to add related info, not necessarily to comment on this specific scenario. I think you are right about what you said.

    ReplyDelete
  6. a number of country's are trying to introduce electronic cashcards including japan & korea,
    britain already tried but i got hacked to hell (Mondex)

    sweden is talking about outlawing cash transactions.
    (i dont know how this will work with tourists!)

    dont underestimate these bastards.

    if they can push electronic "purse" cards on everyone, then they can be disabled by serial/i.d. number at will if the government/police or whoever dont like you!

    ReplyDelete
  7. Is it possible there is simply high demand for cash (including a few large marginal hoarders) and there is an issue with supply rather than an overt change in policy? What happens if/when M2 explodes and the % physical cash backing it drops precipitously? Does anyone else find it perverse and arrogant to the extreme that the rulers won't even deign to print the phony warehouse receipts anymore?

    ReplyDelete
  8. Forced move towards a cashless society. They need the control and tax revenue.

    ReplyDelete
  9. This is most likely an attempt by the larger banks to put these guys out of business or hamper their business enough to prevent them from encroaching into one of the last bastions of great banking fees. After-all, why help a competitor?

    ReplyDelete
  10. Had a similar experience with BOA; tried to withdraw $10K and was told it would take several days. They were more than happy to offer a certified check for the transaction I was intending, but the seller wanted cash. Long story short, there are some simple reasons for not keeping large amounts of cash on hand - most small branches don't have the capacity for large vaults anymore, so cash storage is a bit of an issue. Second, since most transactions are acceptable with cash equivalents (credit, check, electronic transfer) and more convenient, they seem to take precedence. Realistically, I prefer cash simply because certain transactions are best left without records. Keeping some cash on hand is a prudent idea, just don't be too cavalier with how and where you store it. I would suspect that "cash" as we know it may be an idea that will eventually be shelved, intended or not. If there is an eventual adoption of a VAT-like system in the near future, cash will definitely go away so as to thwart barter and simple transactions (2nd hand stores, flea markets etc.).

    ReplyDelete
  11. I solved the problem(for me) 2yrs ago. I went to my bank(after two day notice so they could have currency shipped in)and closed money market acct and took my 60k out. It served two purposes. First I have control of the money. Second, They no longer have my cash resrves to lend out to 600k. Just doing my little part. If there is a run on the banks, they're be out of "cash" within a day.

    ReplyDelete
  12. It's also a way to keep you poor and desperate and obedient.

    ReplyDelete
  13. Just think, with all the statistics the government has access to, they know and can figure out all your finances. They can devise a system that takes all of the "necessities" costs, compiles them down to how much "extra" money you have on hand after all the taxes and bills and spending habits. They can scientifically manipulate your "allowances" for many things and reasons, like, to have a good lawyer, doctor, mechanic...ect.

    There are many reasons why they would manipulate such things. An example: The establishment does not like your opposition to their programs and mandates or injustices. You will need a good lawyer to fight off the many subtle ways they can attack you, their favorite...economical punishment. If they cant get you in the courtroom, they got you in lawyers fees. When the well is over used (your finaces), you will be defensless and at the mercy of more abuse. The point is that they know how to make sure you have enough to eek by, but not enough to challenge the authority of the state.

    Sorry so long.

    ReplyDelete
  14. Perhaps the government's War on Drug Policy has rubbed up against its Voluntary Tax Compliance Policy. By the time it is needed I am sure the credit card people will have developed the software to automatically generate all the 1099s we are going to have to submit for purchases.

    ReplyDelete
  15. All of the banks are limiting withdrawal amounts. The transfer transactions for private citizens is limited to one @ $10K a day. The banks probably haven't had the cash on hand for many years. The Obama Care bill is a TAX bill. If you want to pay your contractor in cash over $600, you'll have to declare that transaction with a 1099! It's part of the federal government's philosophy of tax and control. Currently, cash is fungible with no tracking device - frustrating the feds. They also want to prevent capital flight out of the country.

    ReplyDelete
  16. This is true as confirmed by our neighbor, a banker. What warped crap is our lovely government pulling on us? How are these arogant bastards going to hurt Americans this time?

    ReplyDelete
  17. This note to George was to George at urbansurvival (dot) com. This was copied from his site and posted on Quayle's.

    ReplyDelete
  18. Listen...how much more of this crap are we willing to take? I know this is an unconfirmed story but do you really think we are being told anything with regards to future monetary policies and the like? No, we are not.

    They are either pushing us over the edge purposely, or they believe we are all a bunch of passive beings without an ounce of fight.

    I say we fight. Enough is enough.

    ReplyDelete
  19. Cashless society coming soon.

    "Monetary policy" can be managed much more easily when there are only computer entries instead of actual cash, no?

    ReplyDelete
  20. biggest threats to the banks and the economy is an old-fashioned bank run. With all the news of the major banks being insolvent, how do we know there are not silent bank runs taking place even now? It's not like people have to physically go to a bank, where you would see the lines of people like in the old days. That is probably why ATM machines were crashing this weekend, they were running out of money. They still those machines as quickly as possible, and do nothing to discourage large withdrawals. If people actually started to fear that they couldn't get their money out, that all rush out tomorrow to withdrawal all their savings.

    ReplyDelete
  21. Wow, 20 comments in one day- this is obviously a big story that needs to get more attention. I'm going to forward it to a few people and see what kind of response it gets.

    ReplyDelete
  22. The whole thing smells fishy, and I mean in the way it doesn't sound truthful. I think the above article would have been written a bit more "professionally" if it was, and the names of businesses and banks would not be [redacted].

    ReplyDelete
  23. Antale Fekete wrote an article a few years ago about fiat. Making the argument that digital currency is the next Wiemar dollar. That cash would hold it's value, but those numbers in your bank account are worthless. That the fed has to actually back any fiat they print with collateral. So by introducing digital dollars they get around that. Not sure how true that is but I'm sure Prof Fekete knows more than I do about it.

    ReplyDelete
  24. I have had a similar situation...tried to cash a check for $2300 and TD CanadaTrust said they did not have that much cash on hand and the check would be held for 7 days...this was a cashiers check, which is the same as cash........

    ReplyDelete