Will They Take All Your Money?
Will They Take All Your Money? by Jeff Thomas for International Man
Why not? It’s not yours.
Most people assume that, if they have money on deposit in a bank, they own that money. That’s not necessarily the case. Decades ago, some of the world’s most powerful countries began to pass legislation that, if you deposit money in the bank, it becomes the property of the bank. In those countries, if you open a bank account and make a deposit, you sign off legal title to that cash. It becomes an asset of the bank.
The reason they got away with this obvious “theft through legislation” was that the banks were required to henceforth regard your deposit as a debt in your favour. So, technically, you were still owed the money as a bank liability, even though it was no longer truly yours.
On the surface, the change of ownership may seem to be a moot point, as, surely any bank would allow you to withdraw whatever you have deposited, or there would be a run on the bank and the bank would fail.
Well, that’s a definite “maybe.”
What if there were a financial crisis, such as in Greece, where an anticipated run on the banks was circumvented by freezing all accounts, then partially reopening them? If that were the case, the bank in question could allow small amounts of cash to be withdrawn by its depositors each week or each month until the crisis had been safely averted.
Surely, that would be a good thing to do, yes?
Well, there might be a problem there. It’s just possible that the bank would decide that it was enjoying the revised relationship, that it would like to continue to take in deposits the normal way but only pay out “allowances” to depositors as it saw fit.
And that’s just what’s happened. The end of the Greek banking crisis has never been acknowledged, and depositors have to accept whatever the banks choose to allow them to withdraw, long after the crisis ended.
If other banks, throughout the world, were to do the same as Greece, depositors would, in effect, be on an “allowance” from the bank.
But if that were the only concern, depositors could feel assured that, as their deposits were a liability on the bank’s books, the debt to them would remain, albeit without the depositor having free access to the deposit.
Well, unfortunately, the US came up with an idea that further lessened the chances of bank deposits being redeemed at some point.