Now Banks Can Legally Steal Retirement Accounts
02 September 2012
GFP Note: Following up on the article I just posted
(Sentinel ruling may hurt MF Global clients), this article reiterates that, thanks to the "Sentinel Ruling" banks can use customer funds to pay off creditors during times of duress and that customers might never get their money back because that money became the property of the bank.
Source: Fyx News
By Dominique de Kevelioc de Bailleul Wednesday, August 15, 2012 10:49:49 AM
“If you don’t understand what ‘get the hell out’ means, there’s not much I can do for you,” Ann Barnhardt passionately told blogger Warren Pollock, as she warned viewers of systemic failure in the U.S. financial system, as well as the certainty that American savers will be robbed of their retirement, brokerage and savings accounts in the process.
Barnhardt, the former commodities broker, cites the latest and hushed court ruling in the 2007 case of a failed Chicago-based futures brokerage firm Sentinel Management Group—another Ponzi bankruptcy, according to her, totaling $600 million of segregated customer funds tied up in bankruptcy awaiting determination of whether those segregated funds will be used to pay off a “secured position” of a $312 million loan held by Bank of NY Mellon. According to a federal appeals court ruling, Thursday, Bank of New York Mellon’s secured loan will be put ahead of customer segregated accounts held by Sentinel—a landmark ruling that turns individual segregated accounts into the property of a third party under circumstances of duress. In other words, if a financial institution fails, clients, depositors and pension funds may not get some or all of their money back in a bankruptcy. In essence, under the ruling, Securities Investor Protection Corporation (SPIC), Federal Deposit Insurance Corporation (FDIC) and other insurance programs no longer will/can protect customer funds, leaving millions of investors, depositors and retirees unaware that they are no longer account holders of their own funds, per se, but, instead, have suddenly become stockholders of the institution with which they have deposited their money.
Copy of the Sentinel Ruling from the U.S. Court of Appeals, Seventh Circuit. Barnhardt goes on to say that many emails she receives from readers of her blog mock her as a Cassandra, but the woman who warned last year of the coming failures and the government’s disregard of the basics of Common Law have been proved correct. Customers who thought their money was insured with MF Global, PFGBest and, now, Sentinel, were not insured after all, and will lose some or all of their money due to a bankruptcy of the firm in which they’ve placed faith.
She reiterates from numerous previous interviews: run for the hills with your money. The federal appeals court ruling in the case of Sentinel demonstrates that financial institutions have suddenly taken precedence over segregated customer funds, including their largest customers of all—pension funds.
Few know that the game has changed, and the lack of mainstream media coverage of the shock ruling from the seventh circuit court highly suggests fears within the Fed of a full-blown bank run if the news of Sentinel’s case were to become a front-page headline, underscoring the fragility of the banking system of the United States. “Insurance is designed to cover discreet, individual catastrophes. Okay? If one bank fails, the FDIC can come in and backstop that one bank, no problem,” Barnhardt explains.
“What do you think is going to happen if the entire system collapses? What happens, do you think, if, even, let’s say 25 percent of the banks or the banking capacity in the United States fails?” she asks, rhetorically. “We are now talking trillions and trillions of dollars in deposits.” In fact, the FDIC shows $15.3 billion (Q1 2012) available to insure approximately $4.7 trillion of deposits (last reported, Q4 2008), or an insurance pool equivalent to one-third of one cent (0.0033) held at the FDIC for each dollar insured within the banking system. Presently, the FDIC cannot make whole on even one percent of bank deposits covered under its insurance program, though it claims to cover up to $250,000 for each account, a promise that surely will be broken (at least when compared with today’s purchasing power of one dollar) during a systemic banking system failure, according to Barnhardt. “The analogy is to the fire department,” she adds. “The fire department work great if one house is on fire. What happens if the entire city, if every structure in the city is on fire?”
Barnhardt concludes her interview with two thoughts:
Firstly, in a democratic republic, collectively, Americans are ultimately responsible for the financial system by voting for “psychopaths” to guard against allowing other psychopaths to run the banking system. The coming financial collapse would not be possible with an informed and vigilant electorate, according to her. Secondly, Barnhardt, a devout Christian, prays for people to wake up in time to protect themselves before the collapse takes place, which she says could be tomorrow, or as far out as two years from now.
http://soundofheart.org/galacticfreepress/content/now-banks-can-legally-steal-retirement-accounts
