This article on CBC news, was brought to my attention via “Ed Steer’s Gold & Silver Daily”, a newsletter I receive daily. Ed is an Edmontonian, and his newsletter has worldwide importance. One of his readers (Henry Federau) noticed this article on the CBC website. I made a graphic image copy of it, because it’s important and I fear it will be deleted too fast from the CBC website. Ed’s introductory title says “Canadian Government looking at ‘Cypress Solution’ for Canada’s Big Banks”.
What this means, if a bank gets in trouble, they can steal money out of the chequing and savings accounts of their clients. Bank deposits aren’t “your money” anymore, they’re considered loans to the bank, ie, “Liabilities” in legal terms.
So if you start hearing politicians say publically that Canadian banks are safe, you’ll know it’s time to quickly move your money to an offshore bank somewhere.
Click the link below, to see the CBC article.
The actual words in the budget page 144-145 are: “The Government proposes to implement a “bail-in” regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liability into regulatory capital. This will reduce risks for taxpayers. The Government will consult stakeholders on how best to implement a bail-in regime in Canada. Implementation timelines will allow for a smooth transition for affected institutions, investors and other market participants.”
Update. Well, today this story is getting bigger. Zero Hedge mentioned it, and posted an article about moving money offshore. They particularly mentioned ways to send money, “unofficially”, into offshore bank accounts: 1) Smuggle Gems (wearable expensive), 2) Phoney Lawsuit, 3) Snail Mail (problematic, I think ‘currency detectors’ are monitoring for the metal strips embedded in our bills. I’ve had money ‘lost’ while passing through Edmonton’s post office.), 4) Money Swap, 5) Secrets in a suitcase (how is that different from smuggling?)
Update 2. Look at this: if Basel III group sets a common “percentage of peoples deposits to steal” to keep a bank from going bankrupt, it will surely apply to Canada also. Your chequing accounts, your RRSP mutual funds, etc.. could all be frozen, then indefinitely releasing only a fraction you’re allowed to ever spend. I truly think people should cash-out their RRSPs, pay the tax, buy gold and silver coins with the rest. Today, gold is 1570 CAD per ounce. Silver is 27.2 CAD per ounce. Read this in the future, and see if I’m right.
I only support the theoretical aspect of the Government of Canada will not print money to save a bank ( although, I think our politicians would cave to threats from Goldman/JPM ). But a bank shouldn’t steal or freeze deposits to save itself. It should just go bankrupt.
Think about it. Was this a random sentence in a budget? Of course not. A bank CEO or two, told the Minister of Finance, to get prepared.
May 22, 2013 update. Now the European Union is preparing to do the same.
So my advice to my friends, don’t keep any bank account over $100,000. If your RRSP is holding more than that, split it into two accounts in 2 different banks.