Bailout Will allow banks to hold ZERO PERCENT reserves!!!!

[thomaspaine23]

Current Law would allow Zero percent on Oct 1 2011

New law allows this to take effect on Oct 1 2008.

SEC. 202. INCREASED FLEXIBILITY FOR THE FEDERAL RESERVE BOARD TO ESTABLISH RESERVE REQUIREMENTS.

Section 19(b)(2)(A) of the Federal Reserve Act (12 U.S.C. 461(b)(2)(A)) is amended--

(1) in clause (i), by striking `the ratio of 3 per centum' and inserting `a ratio of not greater than 3 percent (and which may be zero)'; and

(2) in clause (ii), by striking `and not less than 8 per centum,' and inserting `(and which may be zero),'.




In Bailout bill it is Section 128 Acceleration of effective date.


We are sooooo screwed.

 

[BeFranklin]

Reserves are usually the amount of paper money the bank has on hand, but I wonder how this affects the amount of gold they are keeping?

 

[thomaspaine23]

Reserves are usually the amount of paper money the bank has on hand, but I wonder how this affects the amount of gold they are keeping?

Applies to any reserves. So Banks don't have to hold anything at all.

 

[CasualApathy]

Can anyone say Hyperinflation?

 

[damania]

Reimplementing Glass-Steagall Act?

Atrocious!! Either they're accidently destroying the country or they're doing it with intention.

We're going in the reverse direction with even less regulation. Why should we put up with this?

You'd think they'd reimplement the Glass-Steagall Act after all the trouble we've gone through?

 

[LibertyEagle]

link?

 

[BeFranklin]

Applies to any reserves. So Banks don't have to hold anything at all.

Gold reserves (or gold holdings) are held by central banks as a store of value. In 2001, it was estimated that all the gold ever mined totaled 145,000 tonnes.[1] One tonne of gold equated to a value of US$29.66 million as of July 2008 ($922.40/troy ounces)[2]. The total value of all gold ever mined would be $4.3 trillion at July 2008 prices.

Hey, we could pay for the bailouts with this!

 

[FindLiberty]

Maybe they plan to make up their losses with volume... after the next "rescue".

I've always thought we should have to pay a bank to protect and store our money (Constitutional coins made of PMs). However, that 0% reserve would have to be 100% reserve.

Smells like hyperinflation is getting shoveled our way. Maybe this will facilitate throwing all the bums right out of office.

 

[thomaspaine23]

link?

http://money.cnn.com/2008/09/28/news/pdf/index.htm

Section 128 - Acceleration of effective date,

changes date to Oct 1st 2008

for this:

SEC. 202. INCREASED FLEXIBILITY FOR THE FEDERAL RESERVE BOARD TO ESTABLISH RESERVE REQUIREMENTS.

Section 19(b)(2)(A) of the Federal Reserve Act (12 U.S.C. 461(b)(2)(A)) is amended--

(1) in clause (i), by striking `the ratio of 3 per centum' and inserting `a ratio of not greater than 3 percent (and which may be zero)'; and

(2) in clause (ii), by striking `and not less than 8 per centum,' and inserting `(and which may be zero),'.


TITLE 12 > CHAPTER 3 > SUBCHAPTER XIV > § 461

Amendment of Subsections (b) and (c)

Pub. L. 109–351, title II, §§ 201–203, Oct. 13, 2006, §§ 201–203, 120 Stat. 1968, provided that, effective Oct. 1, 2011, this section is amended— (1) in subsection (b)(2)(A), by striking “the ratio of 3 per centum” and inserting “a ratio of not greater than 3 percent (and which may be zero)” in clause (i) and by striking “and not less than 8 per centum,” and inserting “(and which may be zero),” in clause (ii); (2) in subsection (b)

 

[MsDoodahs]

The choice was a depression or a hyperinflation.

They chose hyperinflation.

The only question I have at this point is why?

What caused them to choose hyperinflation?

What does THE GOVERNMENT get out of it?

 

[BeFranklin]

The choice was a depression or a hyperinflation.

They chose hyperinflation.

The only question I have at this point is why?

What caused them to choose hyperinflation?

What does THE GOVERNMENT get out of it?

Out of their debt. Inflation is a tax on money itself.

 

[ladyjade3]

Exactly. $9 trillion in debt? Easy. Just print up $9 trillion. National debt problem solved.

 

[matthylland]

From the 106 page PDF I have of the bill...that is not in it.

 

[newyearsrevolution08]

It makes sense, they stop the printing of new bills, allow the older bills to get disbursed until the next large bank run BUT the problem there is with no reserves there is nothing to give the people and then they can introduce the e-bill or amero or whatever currency they want next and then blame it on all the banks for not keeping any reserves and then buy them all up as well.

People will eat it up as well, the new currency to bring our country out of the slump she is currently in, maybe even allow people to exchange their frn's for the new currency and get 10% on top of their "dollar deposit" while they make the switch.

There will be a ton of incentives for everyone to go to the new currency, odds are it will be more clean to produce (electronic and hard drives), more safe for transactions because there will be someone who can go in and out at will due to the new "safe transaction for America" bill everyone voted for. Odds are companies will get incentives to changing payroll into the new currency as well.

Remove the old currency by blaming it on banks and investors and then tell the American public how they need to ACT NOW and jump into this new currency or we will collapse! Everyone will say o.k. and fold, hell they might even give up their gold as well so that it can be the temporary "reserve" for the e-currency until they steal that like they did our last reserves. Then the cycle will continue, only now it won't need printing to get more funds circulated so it can be instant collapse at any time.

Sounds crazy and it all starts by them taking over the housing, education, defense, health funding and then take the banks and collapse the dollar.

 

[thomaspaine23]

From the 106 page PDF I have of the bill...that is not in it.

http://money.cnn.com/2008/09/28/news/pdf/index.htm

Page 91 of bill Section 128 Acceleration of Effective Date.
Applies to USC 12 section 461

Current Law is Here:

http://www.law.cornell.edu/uscode/html/uscode12/usc_sec_12_00000461----000-.html

search for Zero (This was due to go in effect Oct 1 2011) changed to 2008 in bailout bill.

 

[Razmear]

The choice was a depression or a hyperinflation.

They chose hyperinflation.

The only question I have at this point is why?

What caused them to choose hyperinflation?

What does THE GOVERNMENT get out of it?

With hyperinflation if a loaf of bread costs $1000 then wages should hyperinflate to compensate, but if my mortgage payment stays the same then I only need to earn 9 loafs of bread to finish paying off my house.
So maybe hyperinflation would be better?

btw, I failed economics 3 times, so I'm probably very wrong about this.

eb

 

[apc3161]

With hyperinflation if a loaf of bread costs $1000 then wages should hyperinflate to compensate, but if my mortgage payment stays the same then I only need to earn 9 loafs of bread to finish paying off my house.
So maybe hyperinflation would be better?

btw, I failed economics 3 times, so I'm probably very wrong about this.

eb

When inflation increases, creditors get screwed and debtors gain as you just pointed out.

If I sell shoes, and say get $10 per shoe in profit, and then decide to borrow, $1,000, it will take me 100 shoes to pay of my debt.

If there is huge inflation, everyone starts charging more for shoes, say $100, now it only takes 10 pairs of shoes to pay off my debt.

Governments play this tactic pretty often. They are facing mounting debts, so they artificially deflate the value of their currency, making it easier to pay off the debt.

 

[HOLLYWOOD]

I would like to take out a LOAN of 30 times on the amount of Social Security TAXES I and my EMployers have paid over the years.

I'll just keep borrowing to pay the minimum interest payments...

But Congress... I just want to Live like all you Rich Folk in Washington DC, Wall Street, and Corporate America.

 

[enjerth]

There is one way to combat this 0% reserve rule.

Well, they'd still have 0% in reserves... if everyone took out all of their deposits.

 

[Original_Intent]

With hyperinflation if a loaf of bread costs $1000 then wages should hyperinflate to compensate, but if my mortgage payment stays the same then I only need to earn 9 loafs of bread to finish paying off my house.
So maybe hyperinflation would be better?

btw, I failed economics 3 times, so I'm probably very wrong about this.

eb

What happens in the above situation is the bank demands payment in full (they can do that with something like 30 days or 90 days notice).

Then you can't get another loan and they own your house OR if you can get a new loan it is at an interest rate adjusted to compensate for the hyperinflation.

Everyone says banks don't want foreclosed homes on their books, but personally what if they took over your home and then let you pay rent to stay there? Sounds pretty much like the feudal lord/serf system whuc us exactly what these guys would like - world domination.