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Former money manager Ann Barnhardt,
who in November of 2011 made the
decision to cease operations of her brokerage firm and return funds to her customers citing “systemic”
problems within the entire financial industry, has issued a new warning about
the stability of US banks and the safety of individual deposit accounts.
The warning, stemming from a recent federal appeals
court ruling surrounding customer funds lost during the 2007 collapse of
Chicago futures broker Sentinel, indicates that individuals who lose
deposited funds because a financial institution improperly manages that
money, even if those funds are supposed to be “segregated” from
other operations of the firm, are essentially left with no recourse if the
firm goes belly-up. According
to the court, a
misallocation of those customer funds, “is not, on its own,
sufficient to rule as a matter of law that Sentinel acted ‘with actual
intent to hinder, delay, or defraud’ its customers.”
The implications of the ruling, according to Barnhardt, will affect the monies of all private
individuals who have seen their deposit accounts wiped out in the collapse of
firms like John Corzine’s MF Global and put all deposit account holders
in the country at risk should their bank be faced with a financial windstorm:
The NFA in collusion with the banksters,
government and judiciary have achieved their goal. The entire concept of
“customer segregated funds” is officially, completely, legally
dead.
Guys, it is OVER. I know that many of you are still cowering
in normalcy bias, unable to deal with reality, unable to face the world as it
is, but you have GOT to snap out of it. The marketplace is DESTROYED. You
CANNOT be in these markets. All legal protections are now officially gone.
…
The federal appeals court ruled yesterday that not
only does BNYM stay at the front of the line, but that using customer
segregated funds as collateral is NOT a crime, and that co-mingling customer
segregated funds with proprietary funds is NOT fraud.
…
What this means is that even if Jon Corzine is
somehow dragged into court by private citizens, because you know damn good
and well that the Justice Department will never, ever touch him, Corzine now
has a legal precedent, likely from a bribed or otherwise coerced Federal Appeals
Court, explicitly stating that an FCM can use customer deposits to pay its
debts, and that the customers themselves are subjugated and have basically no
legal right to their own monies, no matter what the law says, or what legal
assurances, claims or guarantees are made to that customer about their funds
held with an FCM or any other brokerage or depository institution. The
“secured” party at the front of the line will always be
the mega-bank who made the fraudulent loan using the stolen customer funds as
collateral.
In other words, all customer funds in the United
States are now the legal property of JP Morgan, Goldman Sachs, BNYM, or
whichever megabank is the counterparty on the loans the FCM or depository
institution takes out in order to fund its mega-levered proprietary in-house
trading desks.
Source: Ann
Barnhardt via Steve Quayle
The ruling is specifically designed to protect large
financial institutions that have (purposefully) mismanaged customer funds and
used the hard-earned life savings of Americans to gamble on equities,
commodities and bond markets. If those firms happen to make the wrong bet, as
MF Global, Sentinel and a handful of others have recently done, depositors
who have placed funds with the banks under the belief that their bank account
is securely protected from trading liabilities are now completely exposed and
liable for the incompetence and negligence of those who engage in market
trading.
This latest ruling combined with recent actions by
the Federal Reserve and other government regulators suggests a massive fraud
has taken place and the financial system itself is under extreme strain with
the potential to make the financial collapse of 2007/2008 look like just a
training exercise.
In recent days, for example, it’s come to
light that the government has secretly called on the country’s five
major banks to prepare
themselves for collapse by creating stress recovery plans to be used in the event of worst case scenarios.
A few weeks ago, the Federal Reserve also implemented
a new policy for money market funds held by financial institutions. Per the
new policy, money market funds, which account for some $2.7 trillion in
deposits across the United States, can
be frozen in the event of an emergency or financial panic. This means that if and when the system does go
into a tailspin, at exactly the time people will want to pull their money out
of their bank account, they will be restricted from doing so.
These latest actions by government regulators,
judges and financial institutions point to one thing: that we have an
unprecedented financial collapse in the making. If such a financial crisis
comes to pass it is clear that the policies and procedures now in place will
transfer the legally owned deposits and money market savings of individual
Americans into the hands of the banks at which those funds are kept.
Get Your Money Out.
Consider alternate, collapse-centric
investment strategies and what is money when the system as we know it falls apart.
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