I did not trust the banking system before I became involved in Y2K research, but I did not know the details of the fractional reserve system. It was through reading the GN website and other doommongers sites that I became educated in this area. While these guys were surely nuts, they did gave me information I did not have, and for that I am thankful.

Short of not having any of my money in the banking system, is there anything that can be done on a practical level to address this sham of a system? It alarms me that less than 2 cents of every dollar I deposit is really in my account, and it alarms me even more that if more than 1.5% of banks were to fail simultaneuosly, the FDIC could not cover them.

Is there a way of choosing a bank who keeps a larger percentage of deposits out of the hands of other banks?? Is there an SEC form I could review?? Your ball...........

-- FutureShock (gray@matter.think), March 21, 2000

Answers

Future Shock,

I think your question goes back to the basic argument before Y2K that "what if" EVERTHING demanded resources ( programmers, police, whatever) at the same time. The fact is, the events of the last several decades show that while it is theoretically possible for everybody to do the same thing at once, demanding money out of the bank or buying a package of toilet paper, the fact is, statistically it just doesn't happen. If it ever does, after the media hyped furor dies down, people will, I predict, just get board and focus on whatever next catches their fancy or fears.

I work at a bank, but don't care about banking. I'm a low level support person who could be working in any industry. The point is, I think many who don't like our current "system" simply pick banks, the "gubmint" and whomever else as targets for their negative feelings towards a society they don't like -- and wish they could separate from. I'm not being critical here, just pointing this out as an observation and conclusion I've made reading TB post thru the Y2K period.

I rally don't understand or care about banking very much. But I did want to comment that the sentiment underlying your post is I think behind why most at the old TB were drawn towards "prepping" for when "it was all going away". It's simply symptomatic of a desire to "opt out" of a system they don't like or feel comforatable or successful in. I wish lots of things were different in this world, but I find myself worrying less about things and focusing on living my life more rather than stewing in bile over whatever injustices I rightly or wrongly percieve in the world. Sometimes I've gotten myself all upset after listening to one side of a story only to find out i had been duped by someone with an ax to grind. Y2K taught me to be better at evaluating the source and what their motives are. Nice lesson I think will be usefull in this internet age where anybody can "publish".

Knowing this place, I'm sure some will scream "shill", but I'm not. I work for a bank -- ahve for five years -- but don't care what industry currently provides me a paycheck. I just wanted to suggest you examine the premises underlying your post. Basically, if it were not for relying on statistics and probability in the design of our society's products and institutions, everything from the electron gun that puts the screen image on your monitor, to traffic lights at intersections, to store inventory sytems to whatever -- would make life in our society as we know it impossible -- and the quality of life we enjoy MUCH lower.

Furthermore, I really don't think everything is an evil scam by TPTB. Of course, many here do no doubt. But this is just the same "are too/are not" argument that was framed as doomer vs. polly for the last however many months. Heck, I'm all for people believing what they want, just wish they were always clear in recognizing the suppositions they were logically building their arguments from. I do think debate or discussion of the underlying propositions behind arguments would be more enlightening to most of us rather than arguments focused on the logical edifices we create UPON our foundational suppositions.

IMO, FWIW

-- Bubba (bubba@bubba.com), March 21, 2000.

I have several options for you:

1) Run for Senate, win, become Chairman of the Banking Sub-committee and change all federal banking laws. This would require you to recruit several confederates in order to achieve a majrity in both the House and Senate.

2) Talk to your local bank president and request that he convince the Bank Board of Directors to increase their reserves in order to reassure you and help you to sleep better at night. If he is unwilling to do this suggest that the bank not spend money on promotional items such as free pens, notepads, etc. and dedicate the money budgeted for this to increasing bank reserves.

3) As an alternative to No. 2. Request to be appointed to the Bank Board of Directors. This will require you to recruit supporters for your policies similar to that outlined in No. 1.

or, this is my favorite:

4) Relax.

Hope this helps! :-)

-- Fiat money is here to stay (getreal@sheesh.com), March 21, 2000.

FS:

Short of not having any of my money in the banking system

You needed to look ahead back in 1980. If you had coverted all of your money to physical gold at that time, you would have met your above stated goal.

Best wishes,,,,,

-- Z1X4Y7 (Z1X4Y7@aol.com), March 21, 2000.

Every fiat money system ever devised has collapsed. Every one (and there have been hundreds).

But of course, this time it's different.

-- (@ .), March 21, 2000.

Futureshock,

Weiss Research rates banks, insurance companies, etc. for stability and risk, and seems to be highly regarded. Check them out at:

561-627-3300 (sales: 800-236-0407)

Short of taking as much money as possible out of the banking system, I don't see anyway of changing the status quo. It is a big scam and TPTB that are profiting from it aren't about to give it up. Any sort of political solution appears unlikely. A big bunch of bank failures in the future might wake people up one of these days. FDIC insurance is somewhat of a joke if we ever have widespread bank failures.

Owning T-Bills might be a good alternative to using banks. You can either own them through a Treasury-only fund such as USAA Treasury Securities Cash Fund, through your broker, or directly from the U.S. Treasury via their Treasury Direct program. If you own them through a T-Bill fund, remember you are only a creditor of the fund if it goes under, and don't own any specific T-Bills. If your broker goes under, unless the T-Bills are registered in your name, you would only be protected as a general creditor of the broker. I don't know if T-Bills are covered under SIPC insurance. Brokers staunchly resist your efforts to put your own name on any T-Bills that they hold for you. Maybe direct from the Treasury would be the way to go.

Most of the Treasury-only funds allow you to write checks against your account, so you might use this feature to transfer money into your checking account, as needed.

-- Flash (flash@flash.hq), March 21, 2000.

Sorry about the failed attempt to create a Hot Link and it's effect on the whole post. It's back to remedial ed for me!

The WEB address for Weiss Research is:

http://www.martinweiss.com

-- flash (flash@flash.hq), March 21, 2000.

2 Retired IRS Agents "EXPOSE" the income tax scam.

We are 2 retired IRS Agents and we have witnessed the IRS defrauding Americans for many years. It is destroying the freedoms of ALL Americans. It "MUST STOP" and it is now time to expose this fraud to ALL Americans.

We challenge you to ask ANY IRS Agent to show you a Statute that "REQUIRES" Americans to FILE Income Tax. They cannot find it. There is NO LAW that makes ANY American "liable" or "subject" to pay or file Income Tax. IRS fraud expert, Irwin Schiff 702-877-2833 offers a $5000 award to anyone who can find such a statute.

Bill Conklin from Denver offers a $50,000 reward. His phone number is 303-455-0837, in case you can find such a Statute. His web site is www.anti-irs.com He also offers a "free book" about the IRS that you can download and print up.

The IRS has for many years used Alcohol, Tobacco and Firearms Implementing and Enforcement Regulations (Title 27) to "ENFORCE" the Federal Income Tax (Title 26) and has used the ATF Regulations to fraudulently take homes and bank accounts away from Americans. Because the Income Tax is voluntary and un-Constitutional, the IRS Code has NO Enforcement Regulations! So in order to BLUFF Americans into paying Income Tax, the IRS uses Alcohol, Tobacco and Firearms Implementing Regulations to force and to defraud all Americans into paying Income tax that they are not required to pay.

The IRS is DEFRAUDING ALL Americans and is bankrupting and impoverishing America by "GIVING" all our Income Tax payments to the Federal Reserve Bank in payment for the "PHONY' Federal Debt. Look on the back of each and every check of Income Tax payment you have ever paid to the IRS. With the stamp shown below,the IRS has signed over ALL your Income Tax Payments to the Federal Reserve bank. YOUR INCOME TAX IS NOT USED TO RUN OUR GOVERNMENT. This fraud will BANKRUPT America.

The IRS has been defrauding Americans for many years. The IRS has even sent ALL your Social Security payments to the Federal Reseve Bank. Go check it out for yourself and then you will know FOR SURE that we are telling the TRUTH.

******************************************* THIS IS AN IRS CHECK ENDORSEMENT.

Pay any F.R.B. Branch or Gen. Depository for credit U.S. Treas. This is in payment of US. oblig; Must be paid in par N.P. Do not wire none-payment.20-09-0900 Dir.I.R.S. CTR. Kansas City, Missoury. *******************************************

The Federal Reserve Bank IS NOT a Federal bank, but is a private Bank owned by FOREIGN BANKERS who do not pay Income tax! Rothchild, (London), Lazard Bros. (Paris), Israel Seiff, (Italy), Kuhn-Loeb-Warburg,Lehman-Goldman-Sachs-Rockefeller, (New York). In fact, the Federal Reserve Bank has NEVER EVER been audited. Your Phone book PROVES that it is not a Federal Bank. They are listed in the Yellow Pages with all the other "PRIVATE BANKS." They put "Federal" in their name to deceive WE Americans. The Federal Reserve Bank is draining the American economy with the "phony" Income Tax.

AMERICA IS BANKRUPT WITH A $6 TRILLION "PHONY" DEBT.

The Federal Reserve Bank is destroying America! America "WAS" the richest nation on earth, until 1913, when the Federal Reserve Bank was created by foreign Bankers. This was passed in Congress on Christmas "EVE" 1913, when most Congressmen had gone home for Christmas. It was passed by Un-American Congressmen, who had been paid-off and bribed by the wealthy foreign bankers.

Now America is bankrupt with a $6 Trillion phony Federal debt, because EVERY single dollar in circulation has been "BORROWED" from the Federal Reserve Bank. The US Treasury prints our money and then "sells" it to the Federal Reserve Bank for the printing cost. The US Treasury then borrows it back and then we the people pay interest on the "FACE VALUE" of our money to the Federal Reserve Bank with our Income Tax payments to pay for the "PHONY" debt. This is the BIGGEST FRAUD in US history. This is a deliberate and planned bankruptcy to destroy America. Governments are the creators of money, and should not have to borrow it from a foreign private Bank.

Congressman Louis T. Mc Fadden, Chairman House Banking said..."The Federal Reserve Bank CAUSED the Great Depression by DELIBERATELY witholding money out of circulation"...Congressional Record May 23,1933. After 3 attempts on his life, Mc Fadden was poisoned at a banquet! Can you guess who killed him? They steal and plunder from America, but they even kill Americans.

Congress has been lying to you because it is mathematically impossible to pay off the debt or balance the budget with "BORROWED MONEY". President Woodrow Wilson confessed on his deathbed that he committed TREASON against ALL Americans. The Federal Reserve Bank will soon force America into bankruptcy when the interest on the debt has become un-payable. This will cause an economic collapse. This is when our corrupt Government will bring in the "New World Order" and we will be ruled by the United Nations. We will then lose our freedoms and Constitution.

We have already lost our Constitution and Common Law in the US Courts. All US Courts are now under Maritime Military Law with the New World Order, "Gold Fringed US Flag" (Army Regulations 260-10) "displayed" in every US Courtroom with a conviction rate of 97.3%. All US Judges have perjured their Oath to uphold the Constitution and are in CONTEMPT of the Constitution. Just seek the protection of the Constitution and the Judge will tell you to "shut up and sit down". This could NEVER happen in a Common Law Court.

All US Banks also display the Gold Fringed Flag. Many US Police Officers are starting to wear a gold fringed flag patch on their uniforms. Millions of Americans "unknowingly" pledge allegiance to the "Gold Fringed New World Order Flag" at schools, churches and scout meetings.

Our one dollar bill is proof of conspiracy by the Fed. Since 1935 our one dollar bill has had an "Occult" symbol of the all-seeing eye of the Anti-Christ that reads "Annuit coeptis novus ordo seclorum". Meaning "Announcing the birth of the New World Order". This is absolute proof of Conspiracy by the Federal Reserve Bank to destroy and enslave Americans.

AMERICANS,IT'S TIME TO GET "MAD AS HELL" AND FIGHT TO GET OUR COUNTRY BACK.

Henry Kissinger said, Nafta and Gatt are the major stepping stones towards the New World Order. Nafta and Gatt caused 28.6% unemployment in Clay County, Tennessee. In 3 years Nafta has cost Americans over 700,000 jobs and more to come! Congress has "SOLD OUT AMERICA.! By the way, what ever happened to the "CONTRACT WITH AMERICA?" How can they forget so easy? That was just a big farce!

America's Founding Fathers formed our Government to SERVE WE THE PEOPLE and to give us "FREEDOM". Our Government has defrauded WE THE PEOPLE and has turned this around and now ALL Americans are ENSLAVED by our Government by working 5 months EVERY YEAR to pay the Phony Income Tax. That should make you "MAD AS HELL. Read on and you'll get even MADDER.

Our Constitution, Section 9 reads......"No direct Tax shall be laid". This has NEVER been repealed. IT IS STILL LAW. This renders the 16th Amendment invalid. You cannot have two opposing statutes in the Constitution. The Income Tax is a Constitutional violation, if enforced by the IRS. Only if the tax is voluntary, can it be Constitutional.

The IRS Code, Title 26 has NEVER been enacted by Congress into POSITIVE LAW. The proof is in the inside cover of all Titles of US Codes at your local Library. Section 7401 of Title 26 claims that the IRS does not have the power to lien, levy or seize property WITHOUT a Court Order. The IRS NEVER uses Court Orders.

"Notice of Levy" or Lien is just that, a notice, THERE IS NO ACTUAL LIEN! The IRS cannot produce that document when you demand to see it.

Americans, you need to challenge the IRS when they try to take your property or bank account away from you without a Court Order. Without a Court Order they DO NOT HAVE JURISDICTION to take ANYTHING.

The IRS has been illegally stealing and plundering from Americans for decades. It is a known fact among IRS Agents that the IRS is responsible for over 500 suicides per month, over half the divorces and 3/4 of the bankruptcies.

THE IRS IS NOT A GOVERNMENT AGENCY.

The proof....IRS Agents cars DO NOT have Government EX-empt License Plates! Most IRS Agents have no clue why. All Government Agencies get "FREE" license plates. Why not the IRS? IRS Agents don't even know why. Most of them have no clue.

Many years ago the Telephone Company "gave" the IRS a Government listing, because of many complaints from people who could not find them in the phone book. The IRS was created through a Puerto Rico Trust and is no more Federal than the Federal Express! As a private Corporation, the IRS is NOT registered to do business in ANY State! Without a Business License, by Law they cannot legally be engaged in business. A "heavy graduated Income Tax" is the Second Plank of the Communist Manifesto by Karl Marx 1848! Income Tax is the very core of Communism.

The IRS is only a collection Agency for the EVIL Federal Reserve Bank. The US Tax Court is located in Washington, DC. and has NO branches in ANY State! This is because the IRS ONLY has Jurisdiction (Authority) in the District of Columbia. Challenge their Jurisdiction and refuse to pay their $65 filing fee and your case will be DISMISSED. They only have Jurisdiction "IF" you pay the filing fee, because then you have entered into their arena.

Many IRS publications and IRS Agents handbooks claim that the Income Tax is VOLUNTARY. The word "mandantory" cannot be found in the IRS Code, Title 26. Why do you voluntarily pay Income Tax? Nowhere in the IRS Code can you find a Statute that says that ALL Americans are required to pay Income Tax........NOWHERE!

The US Supreme Court has ruled in Flora vs. USA 362 U.S.145. that the Income Tax is VOLUNTARY. They ruled that..."Our Tax system is based upon voluntary assessment and payment, NOT upon distraint" (Force). Tax liability does not appear on the 1040 Form and is not "defined" ANYWHERE in the IRS Code.

Every Statute says, "IF YOU ARE LIABLE" then you have to do this and do that. They also state that, "if you have a Taxable year"....."IF" means that YOU have to determine IF.... So if you determine that you are Liable and that IF you determine that you have a Taxable year, then you can "voluntear to pay Income Tax. If you determine that you are not liable or that you do not have a Taxable year, you are not "REQUIRED" to pay the Tax.

It is "YOU" who determines that you are liable by voluntarily filing a 1040 Form. Americans make themselves liable by filing Income Tax. If you don't file, you're not liable. Off course the IRS will try to "bluff" you into filing by sending you phony enforcement letters, quoting ATF Enforcement Statutes and Regulations.

Before you stop filing, to give you piece of mind, we suggest you place all your assets in a Trust. Your assets should be in a Trust anyway for all kinds of circumstances and protection. If you have no assets, no sweat. Then claim 9 dependents and stop filing and paying Income Tax. Then wisely invest the money saved and then retire in style as a millionaire. Then you will not need Social UN-Security.

The IRS Code, Title 26, only applies to Tax payers and NOT to NON-Tax payers. Always respond to their letters with this statement and tell them they have no Jurisdiction over you. This is called "THE BIGGEST INCOME TAX LOOPHOLE". In fact that this the name of a book by Otto Skinner. $45. P.O.Box 6609, San Pedro, Ca. 90734. This is one of the best books on the Income Tax. Plainly said...."the Income Tax Laws DO NOT apply to you if you do not file a 1040 Return, because you are not a Tax payer". If you are not a Tax payer, you are not liable for the Tax.

YOU WAIVE YOUR CONSTITUTIONAL RIGHTS BY FILING INCOME TAX.

When you sign the 1040 Form under penalties of "PERJURY", you waive your Fifth Amendment Rights, which state that you CANNOT be compelled to give "POTENTIALLY" incriminating evidence against yourself. This makes the Income Tax Un-Constitutional, because the IRS requires that signature. They get away with this by declaring that the income tax is "voluntary". This is why the IRS Code Statutes say..."If you are liable"... Because if you pay Income Tax, you volunteer to pay. When you volunteer, then you make yourself liable.

The Fourth and Fifth Ammendment of the Bill of Rights give you the right to "refuse" to show your records during an audit. Only if you voluntarily show your records, can the IRS Agent audit them. Americans, STOP VOLUNTEERING anything the IRS asks you to do. They have absolutely No Jurisdiction and Authority over you.

THE IRS CLAIMS THAT OVER 50 MILLION AMERICANS DO NOT FILE INCOME TAX.

In 1991, the IRS reported that there were 163 Million Taxpayers. In a seperate report they claimed they received 111 Million Tax filings for that year. That is 52 Million that do not file Income tax. IRS Commissioner Peggy Richardson claimed in 1991 that one out of five has stopped paying Income Tax and that the Tax revolt is growing. None of them are in jail. Only a handfull is in jail because they yielded to IRS jurisdiction. In fact, you can only go to jail for falsifying Income Tax Returns, when you sign the 1040 Form under penalties of perjury. If you don't file, they DO NOT have jurisdiction. Without Jurisdiction they have no Case.

If they take you to Court,DO NOT HIRE A LAWYER. A Lawyer is an Officer of the Court and he will argue the Case for you because that is how he earns money. REFUSE to enter the Court and stay BEHIND the little fence and challege their Jurisdiction and DO NOT EVER argue the case. Once you argue the case, then you have yielded to their Jusrisdiction.

Become educated and eliminate fear of the IRS. Order the book "Economic Solutions" $8.95. Quality Press. 2888 Bluff Street. Suite 315. Boulder, Colorado. Also order "IRS under Indictment" and learn how to legally stop paying Income Tax. Advantage Publishing 1-916-222-4684.

Devvy Kidd, 12453 West Baltic Ave. Lakewood, Colorado 80228, also has very infomative books. Write her for a brochure!

Senator Henry Belmon in 1969 said....If Tax payers EVER discover that the IRS operates on 90% bluff, the entire system will collapse. Before 1940 there was no Income Tax. To finance World War ll, we paid a VICTORY TAX, which was repealed in 1944. Why are Americans still paying this VICTORY TAX? It is because Americans are COMPLACENT and have fear of the IRS, because the IRS has cleverly made Americans think that they are required to pay Tax.

Order Irwin Schiff's book, "The Federal Mafia" $25 from Freedom Books, Post Office Box 5326, Evansville, IN. 47716. This book is also a MUST. Irwin will show you that....No law requires you to file Income Tax returns! No law requires you to pay Income Taxes. No law requires you to keep books for Income Tax purposes. No law authorizes the IRS to audit you. No law authorizes employers to withold Tax from wages. Talk to Irwin about your Tax problem at 1-702-877-2833. Become educated and order his video's and audio cassettes. He can be found on the internet. His Web site is http:/www.ischiff.com If you have a computer, enter patriot, tax fraud, IRS fraud, etc, on your Search Engines and learn more of what we have been telling you in this letter.

PRESIDENT REAGAN CALLED FOR AN INCOME TAX REBELLION.

President Ronald Reagan, May 1983.... "Our Federal Tax system is, in short, utterly impossible, utterly unjust and completely counter productive. It reeks with injustice and is fundamentally UN-American! It has earned a rebellion, and it is time we rebelled.

Eliminate the IRS out of your life, explained on 2 video's,$40. 702-853-2342. IRS Jurisdiction investigated,$25, on video, call 801-377-0570. Weekly Newspaper "The Spotlight" exposes Government fraud. 1-800-522-6292. Their web site is www.spotlight.org

Congress MUST SAVE AMERICA and abolish the "GESTAPO" IRS, Federalize the Federal Reserve Bank, and throw out the foreign bankers from our money system and start printing interest free Constitutional money. (US Notes!) The Constitution only gives Congress the right to create our money and NOT a private bank, run by foreigners.

Income Tax will then no longer be neccesary. Excise Tax, Tariffs and Duties will then pay for Government. When the British Taxed the Colonies, John Adams, John Hancock and other Patriots had the "GUTS" to rebel against their 5% Tax with the Boston Tea Party and the American Revolution. Our country became free because of a 5% tax. Without these hero's we would still be paying Tax to the Queen of England. America needs HERO'S like that again to take our wonderful country back from the "BLOOD SUCKING MONEY CHANGERS".

Now Federal Taxes are up to 39.6%. THAT IS UNACCEPTABLE. All Americans MUST become Patriots and UNITE to restore Constitutional Government. Massive Civil disobedience is a "proper form" of Petition for Redress of Grievances and Political Protest. This is the ONLY way to wake up Congress. We Americans MUST force Congress to finally END the Income Tax scam. Imagine what your life will be like without Income Tax! You would be living a life of luxury.

AMERICA IS IN GREAT PERIL.

You MUST sacrifice your time and effort to help us inform other Americans. Being complacent will not save America. Americans have been complacent long enough. Send this message to all your local Politicians, friends, neighbors and relatives. Also send to your local Talk Radio's. When 100 million Americans stop filing Income Tax, the IRS will be powerless and Congress will be forced to stop the "phony" Income Tax.

Mark Twain..."In the beginning of a change, the Patriot is a scarce man, brave, hated and scorned. When his cause succeeds, however, only then the timid join him". Our great country needs true Patriots again. Our Government is totally out of control. Our Government was created to serve We The People. Now we Americans have become the slaves and servants of our Government. Americans are not free anymore.

Our Government forces all Americans to obtain a permit or a license to do ANYTHING. Without these Permits and Licenses we would be breaking the Law. WHAT KIND OF FREEDOM IS THAT? Licenses and Permits are used to control us and to steal money from us. Our Government has taken away our basic God given freedoms! Our Government has TOTAL control over Americans.

If you want to be free again, we Americans need to overthrow the MOST corrupt Agency first and that is the IRS.

As retired IRS Agents we learned long ago about IRS and Federal Reserve fraud. Because we love America, we MUST expose the IRS Monster we have worked for. It is YOUR Patriotic DUTY to help us spread this news to ALL AMERICANS. Please copy and mail to others! It's your patriotic duty! UNITED WE STAND, DIVIDED WE FALL!

Earl Sorensen & Fred Fuller.

-- snuggy (snuggy@aol.com), March 21, 2000.

What Snuggy just posted reveals the key strategy, and probably the only approach that can solve our problems. We need to begin an organized tax revolt, and the Internet would be an excellent tool to make this a reality. If we can get at least 50% of Americans to put their names on a petition saying we intend to withold taxes next year we could present this to congress and force them to negotiate a new system for us. This would probably mean that the country would go into a depression for a while, but we could come out of it with a financial system that rewards real work instead of corruption, where all money holds 100% of it's real value. If only a few individuals do this, they will be harrassed, prosecuted, or perhaps even killed. It's going to take a majority, but from what I see most Americans are fed-up (no pun intended) with the current system, and all they need to do is have the courage to make a stand.

-- Hawk (flyin@high.again), March 21, 2000.

Snuggy,

Your post speaks volumes about the memes running lose on this forum infecting some of the left over doomers and society haters from the Y2K non event. I won't bother to respond to specific points. Not because I can't. I have in the past. If I've learned one thing at TB2000 it's that those who don't like society and its institutions are quite closed minded to anything that doesn't support what they WANT to believe.

In the past I posted pretty convincing proof on some points of propaganda your post makes. What was the response pre-rollover? Those documents MUST be lies -- I don't believe them, and on and on and on -- showing the futility of trying to argue with someone who insist of believing what they want to believe in spite of clear evidence to the contrary. Kind of like those who insisted that Y2k was bad -- just being covered up by TPTB after rollover. Sad.

Life is too short to waste any more time on those who swallow the kind of garbage you post. If they choose not to seek out the truth, rather than believe the sorts of things you post, so be it. I just hope they don't go bonkers and hurt anybody! I've done my stint trying to reason with those who refuse to see or consider anything that doesn't fit their prefered notions. All I can say is I think those types of folks need mental health help. Life is way too short to spend it fuming over such garbage and nonsense. Guess folks like that will always be with us. I'll just minimize my interaction with them! Y2K pre and post rollover on TB was enough for me!

Good luck, you're going to need it!!!

-- Hello (hello@here.now), March 21, 2000.

>> Short of not having any of my money in the banking system, is there anything that can be done on a practical level to address this sham of a system? <<

The easiest partial solution is to divide your accounts among several banks, thereby disributing your risk against individual bank failure. There is also the solution (suggested above) of a money market account that is funded purely by T-Bills.

Another strategy might be to research any small local banks in your area to evaluate the strength of their loan portfolios, which are likely to be weighted toward local investments you are familiar with. Pick the strongest and get to know the officers of the bank.

Mostly, I'd say a diversified strategy is best.

-- Brian McLaughlin (brianm@ims.com), March 21, 2000.

Bubba-

Your post was very thoughtful and thought provoking. I agree that in the macrocosm, we are right to make certain assumptions based on statistics and probability in the design of our society's products and institutions. The end result of this analysis is usually utilitarian-trying to do the greatest good for the greatest number of people.

However, as with all utilitarianism, we have to be very careful that we are justifying any means to reach a specified end. In other words, there is a certain amount of "collateral" damage that is acceptable.

You seem to feel that my post is motivated by an underlying disatisfaction with the society in which I live-you are right, to a degree, but I am actually happy in my life and with the opportunities and blessings I have received-My distrust of banking comes from personal experience with their greed-recently someone I know got slammed with a $30 overdraft fee for being overdrawn by $0.29 cents- this may be a petty point, and one may argue this person should not have been overdrawn by even a penny, but it is still greedy.

I am not in any way a doomer toward banking-I simply do not believe that it is impossible that more than 1.5% of the banks could fail simultaneously-to paraphrase, There is a possibility that the statistics used to justify the amount of funds in the FDIC could be flawed, and that, even if it takes a hundred years, the number of banks failing at the same time could, at some time, drain the system.

To all the others that offered advise, thanks.

Fiat money is here to stay-thanks for the laugh

Hey IRS guys-where have you been?? I used to get annoyed at how many times you would post the above-now I am "honored" that you are in my thread and still lurking around!

-- FutureShock (gray@matter.think), March 21, 2000.

LOL!!

"Hello" = obvious gubbamint shill

One thing consistent about you gubs, you're not to damn bright.

"I won't bother to respond to specific points. Not because I can't."

Oh, I see, you've convinced me! And you call OTHER people's posts propaganda??? Haaa haaa haaa!!

-- Hawk (flyin@high.again), March 21, 2000.

Hawk,

To me, YOU are the poster child I was thinking of for the people I refered to in my above post. You see Hawk, last year I wasted hours trying to have rational, reasoned discussions with TB doomer types. It was amazing to me the mental leaps they would make to keep their prefered beliefs in tact in light of convincing evidence to the contrary.

You see Hawk, the reason I didn't and will no longer waste my time "debating" such issues is I know nothing will come of it. More to the point, I don't care what a few dissatisfied folks think anyway. Why should I? I will, however, put my two cents worth in when I feel like it.

In fact, I find it hard to believe you are for real, Hawk. You seem much too much a caractiture of many memes to actually be one real person! Even your accusing me of being a shill is classic TB doomer meme -- anybody that doesn't repeat the memes favored here MUST BE A SHILL -- certianly anybody that works at some organization of TPTB, right? Heck, I'll bet that pretty teller you try and flirt with is a shill! Watch out Hawk! She might brainwash you (but first, you would need to get some to wash!).

Hawk, I've already had one too many twin monologe "discussions" with folks like you to do so again.

Know this, Hawk -- "the truth is out there" -- seek and you will find -- or will you just continue to find what you seek at places like this from your meme cronies?

Know what, with you and those like you, I couldn't care less. Life is much too short to waste much of it on folks like you. I think talking to rocks is in about the same category.

Flame away, Hawk. This is all I have to say on the matter. If it wastn't an off day for me, I wouldn't have bothered saying anything at all. But hey, we all waste time now and then! have a nice life, Hawk. If you can, "poster boy". At least I know better than to waste time on folks like you, "poster boy". A lesson learned from Y2K.

P.S. Have you renewed your Gary North subscription yet? hahaha

-- hello (hello@hello.there), March 21, 2000.

"Know what, with you and those like you, I couldn't care less. Life is much too short to waste much of it on folks like you. I think talking to rocks is in about the same category."

Then why do you even bother to respond, much less even read threads on this subject?

Answer: Because deep inside you know that the New World Order is alive and well, and they are going to continue slowly taking over your life until they reach their goal of total control. But it gets pretty sophisticated and difficult for the likes of you to understand, much less accept as reality. You'll wait until you are nothing more than a mere slave, and then you'll simply cry, because you're too cowardly to do anything about it.

-- Hawk (flyin@high.again), March 21, 2000.

"Poster boy". LOL!

-- CD (Not @here.com), March 21, 2000.

Why not postpone your consumption so you never have to borrow, of course get rid of your high interest debt first, cut out your borrowing except your mortgage. If everyone followed suit the banks would have no customers for their fiat money.

With some sort of inheritance waiver it must be possible to get rid of the need to have a mortgage, still working on it.

-- richard (ohsirrichard@aol.com), March 21, 2000.

FutureShock:

A couple of points for your consideration:

[recently someone I know got slammed with a $30 overdraft fee for being overdrawn by $0.29 cents]

Maybe we can presume that the $30 fee represents some fraction of the cost to the bank to handle overdrafts -- of ANY amount. The computer gets a negative number, which triggers a process that costs time and effort. SIZE of negative number doesn't change the amount of time and effort. And for all I know, some of that $30 might be punative, to discourage people from making the bank "cover" for them very often. Moral: if your check will bounce, make sure it bounces by a LOT, and get your money's worth [grin].

[There is a possibility that the statistics used to justify the amount of funds in the FDIC could be flawed, and that, even if it takes a hundred years, the number of banks failing at the same time could, at some time, drain the system.]

Well, uh, no. We're talking here about three different amounts:

1) The amount each bank must keep in "reserve" and not lend out. The purpose of this reserve is the same as the purpose of the new cars on the dealer's lot -- there to handle stochastic variation in momentary demand. My understanding is that banks indeed DO occasionally overrun this reserve briefly, and transfer money around from other banks to cover the reserve in the short term (days, usually).

2) The nominal funding of the FDIC, as an "insurance policy" in case of bank failure. This is NOT equal to the reserve requirements of all insured banks together, nor is it related. The FDIC insurance fund is more eyewash than anything else, intended to pacify the public that *their* money won't be lost even if their bankers are very stupid or very unlucky and their bank goes broke.

3) The money available in case the *entire system* encounters heavy weather. This is the amount the politicians can possibly collect from the taxpayers, and actually happened during the S&L crisis almost a decade ago. Such events are NOT due to statistical anomalies. They are due either to really lousy banking policies (like the S&L crisis), or to a serious implosion of the economy.

Ultimately, money is a measure of economic health. When the economy suffers badly, it's like a falling tide lowering all boats. In the abstract, most of our "money" is in the form of equities -- the value of our stock and our physical plants (factories, land, etc.). And most of THAT isn't anything more than a *bet* on future performance. If loss of public confidence reduces economic activity and the velocity of money (as in Japan), the bet on the future loses, and the "money" vanishes like it never existed.

So if the economy implodes, in the worst case the taxpayers no longer have the money to pay in taxes to bail out the banking system, which is after all just another economic actor. The fractional reserve system is neither better nor worse than other possible systems in the face of an economic bust.

-- Flint (flintc@mindspring.com), March 21, 2000.

Flint:

Good point about the overcharge fees-that it takes the same amount of time to process the overdraft no matter the amount, but I would have to think that $29.00 of this figure is the punitive part-It cannot cost that much to turn the transaction. Positing that the charge is "punitive" does not dissuade me from thinking the banks are greedy- but I guess that is one of the things to accept in this capitalistic society which gives me the opportunities I have today in my life.

As to your other points, I am not sure I understand. Are you stating that if 2 out of every 100 banks were to fail within the next month, that the FDIC would have the funds? I may be lost because it is late and I am exhausted, but I believe the point I was making in my prior post was that someone decided that a certain amount of money, "X", would be sufficient in reserve, and that X was based on known risk factors. My question is can I trust from now until eternity that that amount of money is sufficient for a worst case scenario?

Were you saying the government would bail out the FDIC through taxes collected from us folk?? Just asking, no ironic tone of voice or judgement-I am on this board to get input and to have good-natured debate, and am more than happy when someone sees light that I do not.

Thanks for taking the time to post, Flint.

-- FutureShock (gray@matter.think), March 21, 2000.

FutureShock:

OK. I'll try again. One point at a time here (I hope), though they are of course interrelated.

[Are you stating that if 2 out of every 100 banks were to fail within the next month, that the FDIC would have the funds?]

Depends on the size of the failed banks. If the largest 2% failed, then the FDIC funds would probably fall short.

[...a certain amount of money, "X", would be sufficient in reserve, and that X was based on known risk factors.]

The FDIC funds are NOT related to the fractional reserve requirements in any way. The reserve is there to handle temporary, bank-specific, withdrawal peaks. If a withdrawal peak exceeds a bank's reserve, the bank does not fail, it simply borrows money to cover the withdrawal peak, which is usually quite temporary. Provided the bank has followed sound lending practices, it's still quite healthy and will be able to repay this loan within a day or two. The reserve requirement is intended to keep such instances to a minimum, but my understanding is that they still happen fairly often. No big deal.

[My question is can I trust from now until eternity that that amount of money is sufficient for a worst case scenario?]

No, of course not. Look, the largest danger a bank faces is excessive non-performing assets. That is, loans to people or companies that went bankrupt and can't repay the loan. There is an "ideal" percentage of bad loans a bank should make, which is not zero (if your loan requirements are that stringent, you're missing out on a lot of GOOD loans).

The FDIC insurance is intended to cover potential deposit losses by customers of banks that made too many bad loans and could not recover. The worst case is a sudden economic contraction, such that MANY companies go broke within a short period. In that case, ALL banks will have too many nonperforming assets and become insolvent. This danger is irrespective of fractional reserve policies. So long as banks lend money, this risk exists regardless of the reserve fraction.

[Were you saying the government would bail out the FDIC through taxes collected from us folk??]

Absolutely. That's just what happened in the S&L crisis, where losses far exceeded the FDIC funds. So money from the general fund was used to cover depositors' losses, as I recall to the tune of about half a trillion dollars. This requires (and got) an act of Congress.

The crux of the anti-fractional reserve argument is this: If you deposit a dollar in my bank, then by law it's your dollar. Now, I lend that dollar to someone else. By law, that someone else has equal rights to that dollar by the terms of the loan contract -- it's HIS dollar. In other words, TWO people have equal legal rights to the same dollar. So what happens if you decide you want that dollar back? Whose rights come first?

So what I do is keep a certain percentage of unloaned dollars, and that's the fractional reserve. If the somebody else goes broke or hasn't yet repaid your dollar, I still have dollars to honor your deposit. If too many depositors decide to withdraw at once, I borrow temporarily to cover my reserve fraction. If TOO MANY somebody elses go broke (I made too many bad loans), then the FDIC will cover your deposit. If the economy collapses, the *taxpayers* prop up the banking system and repay the depositors.

This system works well in practice, but doesn't change the fact that *two* parties have legal claim to the same dollar. In practice, we get around this legal fiction by a certain amount of bobbing and weaving. For example, you need to give me some advance notice before withdrawing a large amount. And for example, some loans have clauses permitting me to require immediate repayment of any remaining balance.

As a practical matter, it works fine. But of course such a system depends on normal economic patterns and gradual changes. And it can be swamped by sudden events like bank runs. But the only proposal I've seen that could withstand massive bank runs would prohibit banks from making any loans at all -- banks would simply be vaults charging you to protect your money. This is "safe" in the same sense that a car without wheels is "safe" -- you won't crash, but you won't go anywhere either. Neither will the economy.

-- Flint (flintc@mindspring.com), March 22, 2000.

Flint,

Excellent post! You described the situation quite well. I think -- although I'm no expert on banking -- even though I work at one.

Yesterday, on the drive home, an analyst mentioned on the radio he thought the FRB was perplexed because the economy doesn't seem to be responding to interest rate hikes the way it used to. He mentioned that people now have all sorts of sources for loans besides banks. Especially borrowing from themselves -- home equity, 401K's, stock appreciation, ect. He said he thought the FRB was still learning the "rules" of the "new economy" and hadn't figured it out yest from the standpoint of its policies to manage the economy. The radio person cited that the stock market went up at the anouncement that interest rates went up a quarter point. Someone else mused that people just seem to buy what they want -- like houses -- wether the rates go up on not. Instead of before where they might have "passed" at teh higher rates. Wonder if interest rates are no longer the management tool they used to be. Interesting concept, although I'm no economist.

Wonder what you thought. Thanks!

-- Lurker (Lurker@here.now), March 22, 2000.

Flint, I am 100% on the same page as you now. I do appreciate your time in addressing this issue, and appreciate your discourse in general on this forum.

Why do I come here? My life is incredibly busy, and I do not have time to converse with the type of folk I find here. I think this is a treasure, and look forward to its continued success.

-- FutureShock (gray@matter.think), March 22, 2000.