The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks. (Lord Acton)
As reported on Zero Hedge over the weekend, a Swiss pension fund manager calculated that he could save his clients a substantial amount of money by withdrawing cash from his fund's bank account, which was yielding a negative interest return, and depositing the cash in an insured vault. Exercising his fiduciary responsibility, he notified his bank of an impending large withdrawal of CHF. The bank rebuffed the fund manager's request, informing him:
We are sorry, that within the time period specified, no solution corresponding to your expectations could be found.
One banking expert argues that the bank's action "is most definitely not legal" because the pension fund holds a "sight account," which gives the holder the right to withdraw cash on demand. The president of the pension funds association (ASIP), Hanspeter Konrad sees in this incident the hand of the Swiss National Bank, which wants to discourage the hoarding of cash as a means of circumventing negative interest rates. Accordingly, "The National Bank has therefore recommended to the banks to approach withdrawal demands in a restrictive manner."
As Hans Giger, professor emeritus at the University of Zurich, points out, however, while the SNB may “issue directives to the banks in the collective interest of the Swiss economy,” it is not allowed to influence the contract between a bank and a pension fund. The banks themselves are responsible for how they act on the directives.
That even a Swiss bank should, on its own hook, refuse cash payment to a holder of a demand deposit should not be surprising. As Murray Rothbard has shown, fractional-reserve banks since their inception have continually connived to restrict cash payments to their depositors either by lobbying government for legal suspension of payment or by adopting quasi- or extra-legal methods of discouraging withdrawals. Indeed, this was the modus operandi of both Scottish and U.S. banks during their respective eras of so-called "free banking."
The above originally appeared at Mises.org.
Anaconda's constrict in logarithmic waves to cut off oxygen to a victim until it succumbs. The current attack started in 1995 and has seen the constriction of our freedom proceed in waves so slowly that the public is generally unaware they should be afraid. The public can never learn to fear what it has no frame of reference to understand.
ReplyDeleteI looked at this strategy from a multi-generational standpoint by examining the U.S population distribution by age for men and women back to to 1900. I then overlaid restrictions on our freedoms starting with the Federal Reserve, IRS, the Narcotics Act, until a total of 35 restrictions were plotted on the chart. What stood out was that these restrictions on our freedoms came in generational waves that were veiled to the general population by the loss of prior generations memories of freedom. This generational attack has gaps that allow the population to become complacent and unprepared for the covertly designed multi-generational narrowing of freedom in America.
Let me explain this problem from a different standpoint. A 95 year-old has different frame of reference for their understanding of individual freedom compared to a 70 year-old, 45 year-old, and 20 year-old. The current group of teenagers has virtually no understanding of what they have lost compared to my frame of reference at age 61. It is sad but I believe we are undergoing a malevolent attack on our societal memories, and understanding of freedom
The final thought I want to address is my concern that mass immigration is being used as a weapon on our societal memories, and frame of reference of individual freedom. I believe Washington is allowing mass migration from oligarchical, and dictatorial nations in order to dilute the national frame of reference of freedom in order to destroy it. I fully understand that this may be considered hearsay to many libertarians, but I want people to be aware that Washington has no lucid motivations. Philosophical complacency is deadly when facing an established serial killer.
Interesting perspective, and insightful.
DeleteMany libertarians oppose open immigration, especially into a welfare state.
I lived in China for the most of 2012; in a small city in the south central part of the PROC. Guilin, a city with 6 million residents. Very beautiful, very touristy. Cash was king there.
ReplyDeleteIf you gave a merchant a credit card, you received the deer in the headlights response; they seldom knew how to process it.
I had an account at the Bank of China. One afternoon, I stood behind a young man; maybe a merchant or a real estate developer or maybe just a citizen buying an expensive automobile. When he emerged from behind the teller cage, he was carrying a large plastic shopping bag which was filled with bundle after bundle of of 5,000 Chinese Yuan Renminbi bills in 100 Yuan denominationsf. I would estimate he had over 50K USD in the sack. He calmly walked out the front door of the bank, no protection, no fanfare.
Both examples demonstrate just one of the freedoms Chinese citizens enjoy, which clocks much higher on the personal freedom scale than those we allegedly enjoy in the USSA.