Have you ever seen pictures from the 1930’s where depositors by the 1,000’s stood outside of locked doors pinning to get in to get their money? We also saw this sporadically in 2008 (Northern Rock and others) and more recently in Cyprus. Back in the 30’s it happened when there was a “whiff” that a bank had issued too much credit against their “deposits” (gold), in modern times it has happened when the “investments” of a bank were thought to be in jeopardy.
Of course here in the U.S. we never had to worry about bank runs because of the FDIC right? They will step in and cover everything…even though they have a whopping $25 billion to cover multi trillions of dollars of deposits. The reality is that FDIC in the instance of a systemic “run” would be powerless to stop any run because should one begin, it won’t be your “grandparents” run. Will you ever see lines again outside of banks? I highly doubt it. I doubt it because things have changed, changed in the types and manner of deposits. What I mean here is that banks don’t rely so much on “deposits” anymore and certainly not “retail” deposits anyway.
Any bank run will be done electronically while you are sleeping or not. Corporations, sovereign wealth funds and even sovereigns themselves will electronically “run the system” and withdraw funds at the speed of light…and these entities don’t “stand in lines!” In reality though, we are and have been for a couple of years watching a “bank run.” The “real run” has been not on digital and freely created money, it has been on real money itself. Have you wondered why the LBMA suddenly showed a 1.3 million ounce drop in stocks from one month to the next? Or why the COMEX inventories have had massive outflows and almost no inflows of gold? Or the ETF’s, GLD has lost 40% of its stack over the last year. Why do you suppose Germany asked “politely” (almost timidly) for 20% of their gold back from the N.Y. Fed, why do you suppose this is? Actually, in my mind the question would be, why do you suppose it WOULDN’T be? The latest evidence of this “bank run” comes from none other than JP Morgan; they have lost 643,000 gold ounces from their “eligible” vault in just 3 trading days. This was “exact weight” in “kilos,” …and who are the buyers of “kilos” as opposed to “ounces?” China?
In any case, unless you are blind, mentally impaired or just plain don’t want to see it; the current action in the gold market is that of a “run.” No, you don’t see long lines of panicked people hoping to get their “money” (though we have seen many lines of buyers outside of jewelry stores in China, India and throughout Asia) because as I just said earlier “this is not your grandparent’s bank run.” We have watched as, and it has become common knowledge that the Chinese and Indians alone have imported the equivalent to total global gold production for the last several years and that total “mined” supply could in no way meet total demand. I just wrote the other day about the gold flowing into Asia that “it had to come from somewhere right?”…and it does, it is…right before your eyes if you are looking. Not only is it coming from where you can see, it is and has been coming from where you can’t see which is why the N.Y. Fed can’t deliver Germany’s own gold back to them.
Using the most basic common sense, if the Fed would like gold (the dollar’s archrival) to stay under the radar then why wouldn’t they just ship the 300 tons that Germany requested and be done with it? Why would they string this small sum (20% of the total supposedly held) out over many years and let the “conspiracy nuts” have any fodder at all? Drumroll please…because the gold is gone! How hard is it to put this 1+1=2 together? This to me is absolute proof positive that the “run” that has obviously been going on is reaching a critical mass. You see, in the past the excess demand had to be satisfied from somewhere but not a “public somewhere” which is what the COMEX, LBMA, the ETF’s and individual vaults are. This “somewhere” was most obviously the central banks and the NY Fed in particular…but, maybe they have already run out of most if not all of their stacks which is why we now are seeing the “bank run” publicly.
This is not rocket science folks, this is just plain common or street smarts that apparently are not taught in Yale or Harvard economic books. These books only teach “oh, they would never do this” (or maybe they are manuals on “how” to do this since Washington and Wall St. are packed full of ‘well-heeled and schooled elites’). Like it or not, the mother of all bank runs is happening right before your eyes. You have a choice, you can act (or may already have) or not. You can believe what they tell you or follow what your “common sense gut” are telling you. The danger is that the “run” ends, the doors are locked and you are on the outside looking in at those who are making the rules for the future gold tied currency system!