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I know of three pawnshops that have had accounts frozen for similar things. Usually with regard to withdrawing cash from their own accounts so they can make cash loans to customers, which is why people go to pawn shops- for cash.

Withdrawing cash on a weekly or bi-weekly basis is considered "suspicious behavior" and sends up a red flag, regardless of the easily demonstrable paper trail of the need for the cash to run the business.

The bottom line is the bank freezes the accounts when they have a hefty cash balance, the pawn shop hires a lawyer, the govt. "settles" for anywhere from 25% to 50% of the balance then will unfreeze the account and the store owner has to move on to the next bank until, I'm speculating, the same thing happens with that bank.

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I am not a wealthy person by any stretch, but I like to deposit into my savings, and then only move it into checking when I need it. A small control on my impulses to buy foolish things at time. At least, I used to do this, before my bank sent me an angry letter about how I'd exceeded the maximum amount of monthly transfers from savings to checking accounts and had best not do so again.

This despite the fact that both accounts are linked through the same bank and solely in my name. I guess my $50.00 transfers were the path to money laundering. If you need laws and regulations of this level of absurdity to prevent banking issues, it may suggest to me that are banking system has become too needlessly complex.

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Saudi Arabia says it’s ready to meet any additional oil demand

We have 2 trading days left in the year. The question is; will the major indexes close in the red or green this year. As we sit before the market opens today;

S&P is up +.98%

Dow is down -.63%

Nasdaq is up 8.06% (this one should be good)

Russell 2000 is down -3.19%

Trannies down -13.65%

S&P futures down about 5 as I write this @ 8:54

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I hadn't heard anything about this in the MSM, but I find it very interesting. The Swiss are going to vote on ending fractional reserve lending by banks. Read the analysis for details and a brief explanation. The link to the story provided in the analysis is at the bottom of this post.

Will Swiss Vote On Ending Fractional Reserve Banking Affect Gold? January 4, 2016, 6:06 AM Arkadiusz Sieroń

Switzerland will hold a referendum to decide whether to ban commercial banks from creating money. What does it imply for the global economy and the gold market?

Switzerland is a fantastic country. It will conduct a second referendum on monetary policy in the recent history, after the Swiss people held a referendum in 2014 for the Swiss Gold Initiative requiring the central bank to increase its gold reserves to 20 percent.

This time the Swiss decide whether the Swiss National Bank should be the sole institution to be able to create money. It would mean a ban on the creation of money by commercial banks. In other words, Switzerland will hold a referendum for ending fractional reserve banking and implementing a one-hundred percent reserve system.

What would this imply for the global monetary policy and the gold market? Well, it is hard to say. On the one hand, if the vote passes, commercial banks will no longer have the power to create money through lending, which would strengthen the stability of the Swiss financial system and end, or at least reduce significantly, the severity of the business cycle. Therefore, the safe-haven demand for gold would decrease.

On the other hand, a 100-percent banking reserve, also called sovereign money, does not imply a return to sound money backed by the gold. It means that the Swiss National Bank would be the sole institution to manage the supply of fiat – electronic or paper – Swiss francs. The SNB has a relatively good reputation, however, the new monetary system could encourage the Swiss central bank to fill the void (as a reminder, in modern monetary systems commercial banks create about 90 percent of money) and to increase the pace of monetary pumping. In other words, money creation solely by the state does not guarantee financial stability and the lack of inflation.

Moreover, the ban on the creation of money by commercial banks would shake the entire modern financial system based on fractional reserve banking, which would increase the safe-haven demand for gold in the transition period. Also, with sovereign money the Swiss franc could probably become the most stable currency in the world (if it survives the transition period and the SNB conducts restrictive monetary policy), which would undermine the U.S. dollar and strengthen the yellow metal.

The take-home message is that the Swiss will hold another important referendum on monetary policy, i.e. they will decide whether to ban commercial banks from creating money. The impact of passing the vote on the price of gold is ambiguous, as it would depend on the SNB’s monetary policy (the pace of monetary supply and the exchange rate interventions) and the severity of the collapse of current financial system based on the fractional reserve system.

P.S. No date has been set for the referendum yet. We will monitor this issue and its impact on the gold market closely in our Gold News Monitor.

Thank you.

Arkadiusz Sieron

Sunshine Profits‘ Gold News Monitor and Market Overview Editor

VOLLGELDINITIATIVE SCHWEIZ: English -

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I hadn't heard anything about this in the MSM, but I find it very interesting. The Swiss are going to vote on ending fractional reserve lending by banks. Read the analysis for details and a brief explanation. The link to the story provided in the analysis is at the bottom of this post.

VOLLGELDINITIATIVE SCHWEIZ: English -

From ZH on Christmas eve FWIW: Switzerland To Vote On Ending Fractional Reserve Banking

FTA:

As Finanzen.ch reports, after 111,763 signatures urging a referendum were submitted, of which 110,955 valid, the Federal Chancellery announced on Thursday that the popular vote would take place. Under Switzerland's direct democracy, a referendum can be held if a motion gains 100,000 signatures within 18 months of launching.

No date has been set.

This got me to thinking; can you imagine America doing something like this? What would happen if it was even brought up here? I don't think most Americans would have the slightest clue what to think. And imagine what the idiots in DC would be spewing? The entertainment would be off the charts.

Futures perked up a tad; Dow down 291 @ 8:25

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Turn on Bubblevision tomorrow; they will parade a few dozen people an hour across the screen telling you to buy everything. It's all good. That sounds like sarcasm but it's not; this is their modus operondi. Why is that relevant? It isn't, but I had to say it cause it drives me nuts (a very short trip I might add). :-)

Note to self: check the 401k to make sure they didn't slip some turds back in the account (since we are in 2016). You got to watch'em, slippery little pricks.

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The Dow Jones was around 1,200 in 1980.

The Dow was around 3,800 in 1990

Then it was around 11,000 in 2000.

Pretty much tripling each decade for 20 years.

Now it is around 17,000 fifteen years later.

So in my opinion it is not that high priced.

I am not saying we are not due for some type of correction - say 20% but we had fallen so far in 2009 (down to 6,700 or so) it is not like we are way overpriced today and due for a crash.

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The Dow Jones was around 1,200 in 1980.

The Dow was around 3,800 in 1990

Then it was around 11,000 in 2000.

Pretty much tripling each decade for 20 years.

Now it is around 17,000 fifteen years later.

So in my opinion it is not that high priced.

I am not saying we are not due for some type of correction - say 20% but we had fallen so far in 2009 (down to 6,700 or so) it is not like we are way overpriced today and due for a crash.

I take the Dave Ramsey approach. If you are investing with plans on not tapping into it for at least 15-20 years, leave it alone. The market has shown the same pattern since the great depression. Investing in strong mutual funds will likely net you a great return if you can leave it in 20+ years.

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Nevsky to Shut Its $1.5 Billion Hedge Fund After 15 Years - Bloomberg Business

Why is this news? FTA:

“We have come regretfully to the conclusion that the current algorithmically driven market environment is one which is increasingly incompatible with our fundamental, research orientated, investment process," Taylor, the firm’s chief investment officer, said in a statement. “The bear market in emerging market equities, which began in 2011, may eventually engulf developed markets too.”

That may just be an excuse, but the more I see and read, the HFT crap has no place in the market - none.

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I hadn't heard anything about this in the MSM, but I find it very interesting. The Swiss are going to vote on ending fractional reserve lending by banks. Read the analysis for details and a brief explanation. The link to the story provided in the analysis is at the bottom of this post.

VOLLGELDINITIATIVE SCHWEIZ: English -

It has hit the MSM now, if you consider MarketWatch as MSM. Close I would say.

The banking system faces an existential threat — and it’s not bitcoin

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It has hit the MSM now, if you consider MarketWatch as MSM. Close I would say.

The banking system faces an existential threat — and it’s not bitcoin

this is interesting, but I don't think it's the right answer to instability. It's not partial reserve banking per se that leads to the instability - it's been two other things. First - In the post Depression/pre-derivative inter-regnum, the major source of instability was the use of the wrong model by central banks regulating money supply. The commitment to fixed interest rates instead of price stability as money supply control target is what caused most of the post WWII recessions as the Fed cyclically under and over supplied money. Friedman and the Chicago school finally got one of their own in at the Fed in Paul Volker and the Fed's emphasis shifted to where it should have been all long - control the CPI. But the 2nd newer source of instability now is the shadow banking system. It's all the liabilities out there not with partial reserve requirement, but NO reserve requirements that create most of the risk. The banks that held all those mortgages in 2008 weren't going to go down because they didn't have enough reserve margin against the direct loans, it was the multi-trillion dollar derivative house of cards that had been built with no reserve or multiplication limit that created the loss and loss potential that drove institutional collpapses.

So I don't think 100% reserve banking does much for you unless you find a way to kill all the forms of shadow banking that have, and will continue to find their way (with even more motivation) around a better regulated system. Kill partial reserve banking, you take most of the profit out of it, and make conventional banking an even less desirable business to be in compared to all the derivatives businesses you can invent.

And the problem is that the regulators are always going to be a step (or generation) behind what the derivatizers come up with next. This is a place where we might get a lot more bang for the buck in tax policy. Tax derivative income harshly if you want to cut down on the prevalence of derivative creation without having to try to find and regulate every form of it.

So if Switzerland does this, it will be a big deal for retail banking, but I doubt it will change anything fundamental unless there is something in there on stopping secondary securitization markets. The world has moved too far past the system that Charles II put in motion.

Edited by Gehringer_2

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this is interesting, but I don't think it's the right answer to instability. It's not partial reserve banking per se that leads to the instability - it's been two other things. First - In the post Depression/pre-derivative inter-regnum, the major source of instability was the use of the wrong model by central banks regulating money supply. The commitment to fixed interest rates instead of price stability as money supply control target is what caused most of the post WWII recessions as the Fed cyclically under and over supplied money. Friedman and the Chicago school finally got one of their own in at the Fed in Paul Volker and the Fed's emphasis shifted to where it should have been all long - control the CPI. But the 2nd newer source of instability now is the shadow banking system. It's all the liabilities out there not with partial reserve requirement, but NO reserve requirements that create most of the risk. The banks that held all those mortgages in 2008 weren't going to go down because they didn't have enough reserve margin against the direct loans, it was the multi-trillion dollar derivative house of cards that had been built with no reserve or multiplication limit that created the loss and loss potential that drove institutional collpapses.

So I don't think 100% reserve banking does much for you unless you find a way to kill all the forms of shadow banking that have, and will continue to find their way (with even more motivation) around a better regulated system. Kill partial reserve banking, you take most of the profit out of it, and make conventional banking an even less desirable business to be in compared to all the derivatives businesses you can invent.

And the problem is that the regulators are always going to be a step (or generation) behind what the derivatizers come up with next. This is a place where we might get a lot more bang for the buck in tax policy. Tax derivative income harshly if you want to cut down on the prevalence of derivative creation without having to try to find and regulate every form of it.

So if Switzerland does this, it will be a big deal for retail banking, but I doubt it will change anything fundamental unless there is something in there on stopping secondary securitization markets. The world has moved too far past the system that Charles II put in motion.

Control the CPI? You mean falsify, change, manipulate, alter, bastardize the CPI?

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this is interesting, but I don't think it's the right answer to instability. It's not partial reserve banking per se that leads to the instability - it's been two other things. First - In the post Depression/pre-derivative inter-regnum, the major source of instability was the use of the wrong model by central banks regulating money supply. The commitment to fixed interest rates instead of price stability as money supply control target is what caused most of the post WWII recessions as the Fed cyclically under and over supplied money. Friedman and the Chicago school finally got one of their own in at the Fed in Paul Volker and the Fed's emphasis shifted to where it should have been all long - control the CPI. But the 2nd newer source of instability now is the shadow banking system. It's all the liabilities out there not with partial reserve requirement, but NO reserve requirements that create most of the risk. The banks that held all those mortgages in 2008 weren't going to go down because they didn't have enough reserve margin against the direct loans, it was the multi-trillion dollar derivative house of cards that had been built with no reserve or multiplication limit that created the loss and loss potential that drove institutional collpapses.

So I don't think 100% reserve banking does much for you unless you find a way to kill all the forms of shadow banking that have, and will continue to find their way (with even more motivation) around a better regulated system. Kill partial reserve banking, you take most of the profit out of it, and make conventional banking an even less desirable business to be in compared to all the derivatives businesses you can invent.

And the problem is that the regulators are always going to be a step (or generation) behind what the derivatizers come up with next. This is a place where we might get a lot more bang for the buck in tax policy. Tax derivative income harshly if you want to cut down on the prevalence of derivative creation without having to try to find and regulate every form of it.

So if Switzerland does this, it will be a big deal for retail banking, but I doubt it will change anything fundamental unless there is something in there on stopping secondary securitization markets. The world has moved too far past the system that Charles II put in motion.

Wow! You wrote a book.

I will start with the money supply thing. Not sure I see it. Charts only go back to 1959 and the grey vertical lines are recessions;

m1.png

m2.png

Both of those look like a hockey stick with no slowing down in sight - anywhere. So I don't see much regulation of the money supply other than up.

Then there is this part:

And the problem is that the regulators are always going to be a step (or generation) behind what the derivatizers come up with next. This is a place where we might get a lot more bang for the buck in tax policy. Tax derivative income harshly if you want to cut down on the prevalence of derivative creation without having to try to find and regulate every form of it.

I agree they will always be ahead of (the regulators) but it won't matter. Even Alan Greenspan admitted he had no idea how all the exotic derivatives are created or worked. I don't know how you regulate or tax something nobody understands.

My proposal: blow yourself up and you will stay blowed up. That regulation works, and also sends a message - your next. If we would have done that in 09 the entire country would be better off today.

Yes, I do believe that - and Main Street would have felt pain, but not near as much as many thought - and the poorer you were - the less you would have felt it.

That's all I have time for for now.

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Speaking of regulating derivatives (I should have thought of this before - killed too many brain cells); there is an entire library of reading on that topic by doing a google search on Brooksley Born. Interesting stuff.

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No secret I'm not a fan of HFT; here is another reason why (not mentioned in the below article, but relevant);

Dear Retail Investor: Here's How Your Stop Orders Really Work | Zero Hedge

This is a short and sweet article quoting Nanex, who I consider credible, explaining how we (the retail guy (but are not all trades, trades?)) gets hosed.

It's not so much the part of the cent they steal from us with speed (trades settle .0000 today), it's the fact they take us out of our trade. I documented a stop hunt a while back, which is what Nanex is talking about.

I remember watching a trade for months before I put it on. This was a beauty. Took maybe a week and they ripped my stop out (stealing .0014 a share in the process (guessing of course)) but taking me out of the trade at the same time.

It turned out to be a 30 some percent winner over the next 6 months. Thanks.

Pricks

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Wow! You wrote a book.

I will start with the money supply thing. Not sure I see it.

m1.png

I think if you chart the CPI differential rate of increase, it's easier to see the price level gyration correlation to recession. Coming out of WWII, there is a run up in the CPI, and then a recession as the curve starts to seek back down - 4 times the pattern repeats before 1960 - then comes the huge Nixon/Carter inflation and the big recession when Volker hit the brakes in ~81 and the Fed finally pushed up interest rates to get them ahead of the inflation. Up until 1980 the Fed had pretty much been trying to target constant interest rates. Then in 90 you see the curve go up/down slightly and the small Bush I recession (which was caused as much as anything by GHWBs contractionary tax increases that ended the deficit for Clinton instead of monetary policy) - but in general the line is smoother and there are fewer recession after 1980. But then something funny happens in with the dot com bubble - not really that much inflation pressure before the dot-com crash or then before the 'big crash' either. By the dot com price level stability was decoupling from recession probability. The action was all off the old ledgers that the system had learned how to watch. Says to me that stability was no longer being controlled through the conventional banking system. Now for sure the Fed was pumping all kinds of money into the system after 2001 and your M1 shows that, and they had started slowing before the crash - which is what no doubt ended the party - but no effect is seen in price levels - because that money had all gone to feeding the securitized debt bubble. The old paradigm was busted.

fredgraph.png?graph_id=276733&width=320&height=240

The current situation looks ominous as well. The Fed has continued to pump money but again - little result seen in the price curve. Where is it going this time. If Reich is right it's just the rich getting richer and not spending it (corps with big cash balances as well). That is bad news for the rest of us, but at least it's an answer that doesn't imply another crash will be the result. But you just know that even if that is all true, there are still trillions leaking back into that no margin/no reserve shadow system every minute of every day.

Edited by Gehringer_2

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This is an absolutely must read; Mish's Global Economic Trend Analysis: Former Dallas Fed Governor Richard Fisher Goes to Squawk Box Confessional: "We Frontloaded a Tremendous Market Rally"; Transcript of Video

A little taste:

"We frontloaded a tremendous market rally to create a wealth effect ... The Federal Reserve is a giant weapon that has no ammunition left."

Risk off again (this is from earlier, but about the same now):

1.515-f.png

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