banks – Hellbound and Down

Europe’s Von Der Leyen Wants To Put Private Bank Deposits Under State Direction

How will we deal with private property in Europe in the future?

A highly complex debate follows from this question, one that European Commission President Ursula von der Leyen interpreted in her own very particular way on Friday. In a speech to French business leaders at the MEDEF’s La Rencontre des Entrepreneurs de France in Paris, the former defense minister talked about using EU citizens’ bank deposits to get the ailing eurozone, the European economy, back on its feet.

An unmistakable message: In the view of the EU’s chief Eurocrat, private property as a protective wall shielding citizens from an overreaching state has served its purpose as a pillar of civilization.

Central planning, subsidy madness – this is Brussels under the magnifying glass.

Certainly: In the face of towering government debt and capital flight from the old continent, in whose wake thousands of patents and tens of thousands of highly qualified professionals are being swept away, citizens’ wealth is bound to awaken political appetites. A ruthless expropriation or the decreed redirection of cash, as the finest bureaucratic German puts it, is supposed to solve the problems Brussels itself has caused through its stubborn climate policy, its overregulation and its continuing insanity of interventionism.

Von der Leyen was explicit before the business leaders: Europe has savings, she said, but unfortunately those savings are sitting on the sidelines. Ten trillion euros are sitting as cash savings in the hands of private households in bank accounts, lectures von der Leyen in the manner of a classic central planner who can no longer take her eyes off citizens’ wealth. The European economy must now put this capital to work for its companies, the chief bureaucrat decreed.

None of this merely sounds like Erich Honecker. Von der Leyen is increasingly turning into a socialist sister in spirit to this disastrous regime.

Von der Leyen is following the path of the German chancellor. Friedrich Merz, too, discovered the cash holdings of Germans as political capital for himself more than a year ago – thoroughly socialist, indeed almost dictatorial, the chancellor also pointed to the possibilities opened up by what he called an activation of this money.

Ursula von der Leyen and Friedrich Merz reveal not merely an ethical and ideological abyss; they are contemplating dictatorial control over the private wealth of citizens who are still sovereign.

Almost tragically comical is the economic ignorance of these two political protagonists of an EU that is now openly turning toward an illiberal ideology.

Bank deposits are by no means useless cash. From the perspective of the banking sector, customer deposits are a central source of refinancing and liquidity, embedded in the money and credit cycle and enabling the provision of loans. Bank credit in the modern monetary system does not simply arise from passing on existing deposits. Commercial banks create new bank money through lending, although this process cannot simply be understood as a mechanical “leveraging” of existing deposits. Customer deposits thus fulfill numerous functions, from private liquidity planning and cash holdings to the financing and management of banking processes.

Such a massive intervention in the highly complex and fragile liquidity and credit structure of the banking sector would not merely be a barbaric act of socialism – it would be a frontal assault on the functionality of the banking system as such.

Nevertheless, the EU will resort to massive interventions – financially, after all, they have run into a wall.

Starting in 2028, repayment of the €800 billion Eurobond “NextGenerationEU” will come due. Von der Leyen’s speech before business leaders was ostensibly directed at the private sector, but in reality it concerned the financing of the European debt club, which is now moving toward tapping every financial source that can help keep the Ponzi scheme of European credit alive – the activation of cash appears to be one of those sources.

France is caught in a debt spiral, with new borrowing amounting to 5.7% of GDP this year and a parliamentary deadlock that rules out any form of fiscal consolidation.

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The Entire Financial System Is Chained to Government Debt

The Bank for International Settlements is warning that near-record public debt and the growing role of hedge funds and other nonbank financial institutions have created what it calls a “fiscal-financial stability nexus.” That is sanitized bureaucratic language for a system in which governments, banks, pension funds, insurers, hedge funds, and central banks are all chained to the same mountain of sovereign debt. If government bonds begin to fail, the losses will not remain confined to some account at the Treasury. They will spread through the institutions holding the public’s savings and eventually force central banks to choose between the currency and the financial system.

Government debt is treated as the foundation of modern finance. Banks use sovereign bonds as collateral, pension funds hold them to match future obligations, insurers depend on them for income, and hedge funds trade them using enormous leverage through repurchase markets. Regulators assign government debt privileged treatment because they have declared it “risk-free,” but no investment is free of risk. The label exists because government needs financial institutions to purchase its bonds, and admitting that sovereign debt can become unstable would expose the fraud supporting the entire system.

The BIS estimates that the probability of a financial-stress event comparable to the Global Financial Crisis occurring within three months is roughly ten times higher when public debt relative to GDP is elevated. The probability rises from approximately 0.3% under lower-debt conditions to 3.8% when government debt is high. The risk increases further when nonbank financial institutions hold a larger share of the market because many depend on leverage and short-term funding that can disappear the moment bond prices move against them.

This is how a routine selloff can become a systemic event. Government bonds decline, yields rise, and leveraged funds suffer losses. Lenders demand additional collateral, forcing those funds to sell more securities into a falling market. Liquidity disappears, borrowing costs surge, and the losses spread to banks and other institutions connected through funding markets. Government then complains that the market is “dysfunctional” because investors are no longer purchasing its debt at politically convenient prices.

The central bank is forced to intervene because allowing the bond market to clear naturally could bring down the financial system. It purchases government securities, supplies emergency liquidity, and claims that the operation is temporary and has nothing to do with financing the state. Yet every rescue teaches the market that excessive leverage will be protected and teaches politicians that reckless borrowing carries no immediate consequence. This creates the next crisis by encouraging the exact behavior that caused the first one.

The BIS openly admits that repeated central-bank interventions can weaken market discipline over government spending. This is the vicious circle they cannot escape. Governments borrow excessively, bond markets become unstable, central banks suppress the instability, and politicians interpret the rescue as permission to borrow even more. The debt increases until each attempt to restore honest interest rates threatens the banks, pensions, and funds that were encouraged to hold it.

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Russia’s Bank Run — When Confidence Begins to Crack

A bank does not actually have everyone’s money sitting in a vault waiting to be returned. The entire system functions because everyone assumes they will not demand their money at the same time. Once that confidence begins to crack, the numbers on a balance sheet become secondary because people want CASH.

That is what we must now watch in Russia. Russians have been pulling billions out of the banking system, with demand for physical cash accelerating dramatically this summer. According to Russian Central Bank data cited in the press, nearly $3.4 billion was withdrawn during just the first two weeks of August after approximately $7.3 billion in July and more than $4.5 billion in June. The Central Bank itself reported that cash in circulation increased by roughly 700 billion rubles during July, compared with about 500 billion in June.

This does not mean the Russian banking system is collapsing tomorrow. Nevertheless, something much more important is taking place beneath the surface. Russians are becoming nervous about leaving their money inside the financial system. Rumors have circulated that the government could eventually freeze or commandeer private deposits to help finance the war, and once people begin questioning whether they will retain unrestricted access to their own savings, government assurances become increasingly meaningless. Fear of possible seizure has become one factor driving the movement into cash, alongside drone attacks, economic uncertainty, and disruptions to electronic payments.

This is always the danger with capital controls. Russia has already demonstrated that it will restrict access to money when the state believes national interests require it. Foreign-currency withdrawals remain restricted, and accounts belonging to various foreigners from so-called “unfriendly” nations have faced controls since the war began. Putin recently relaxed some restrictions affecting foreign depositors.

People forget that money is ultimately a question of confidence in government. You can raise interest rates to 20%, offer attractive deposits, and tell everyone that the banking system is perfectly safe, but none of that matters if people begin fearing that the state itself may change the rules. The greatest threat to a banking system is not necessarily bad loans. It is the realization among depositors that their money exists inside a political system whose rules can change overnight.

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Central Banking: The Scourge of Civilization

Apple builds and sells iPhones. I happen to own one of the older models, for the same reason I own a last-legs older model car. What if Apple could skip the build part and sell only the phone? The money saved would be an enormous boost to its bottom line. And if Apple passed the savings onto customers I could conceivably afford to upgrade.

Where would the phones come from? From a bookkeeping entry, of course.

Unfortunately, Apple’s customers are very demanding and want the real things, so the build operations will have to stay. Perhaps their executives looked upon another business and envied their ability to sell loans without drawing down their savings. Customer with good credit wants a loan? Create the amount with a few taps on a keyboard and send him on his way.

The customer will spend his newly-acquired money, thus keeping people employed. Since he has good credit, he will be able to make monthly payments, and the lender, the bank, will normally apply his payments to extinguish the loan, with the interest being the bank’s profit. Everyone’s happy and the economy keeps expanding until it busts.

Experts will diagnose the bust. The usual fiends will get blamed. Government will step in to cure the problem its monetary and banking interventions helped create. The economy will slowly recover and continue on the same path as before, meaning banks will continue extending credit from ether rather than savings.

How did this racket get started? It’s complicated. That’s one reason it works—the crime doesn’t exist if enough people don’t see it.

Gold and silver coins have long served as money, until more recent times. For government, gold became an economic culprit during the Great Depression, as explained by JM Bullion,

The Great Depression officially began on October 28, 1929, when the Dow Jones Industrial Average lost 13% of its value in a single day. The following day, it dropped an additional 12%, and in a matter of weeks, it was worth half as much as before.

In response, consumer confidence plummeted, and people began withdrawing their money from banks as quickly as possible. Banks, which work with reserves and don’t keep much of their deposits on hand, began closing their doors. (emphasis added)

Bank-created money was disappearing, and prices fell accordingly. Let’s expand on this.

The Federal Reserve Act of 1913 required the Fed to hold gold equal to only 40 percent of the currency it issued. By adjusting interest rates, the Fed could increase or decrease its stock of gold. Higher interest rates shifted “gold from the pockets of the public (both here and abroad) to the vaults of Federal Reserve district and member banks.” Conversely, lower rates drove gold from the Fed’s “coffers into the hands of the public both at home and overseas.”

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Mortgage program for low-income funded 2nd homes for millionaires

The Department of Agriculture’s Section 502 loan programs help low-income families buy homes with mortgages that don’t require a down payment. But in 2013, an investigation by Reuters found dozens of millionaires took advantage to purchase vacation and rental homes.

Though the millionaires later repaid their loans, the program as a whole covered $500 million in losses from defaults in 2013, or $715 million in today’s money.

That’s according to the “Wastebook” reporting published by the late U.S. Senator Dr. Tom Coburn. For years, these reports shined a white-hot spotlight on federal frauds and taxpayer abuses.

Coburn, the legendary U.S. Senator from Oklahoma, earned the nickname “Dr. No” by stopping thousands of pork-barrel projects using the Senate rules. Projects that he couldn’t stop, Coburn included in his oversight reports.

Coburn’s Wastebook 2013 included 100 examples of outrageous spending worth nearly $30 billion, including the loans for millionaires.

Search all federal, state and local salaries and vendor spending with the world’s largest government spending database at OpenTheBooks.com.

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Federal Housing Bill Pulte Responds to Reports of Sharia Compliant Home Mortgages

Federal housing regulator Bill Pulte on Thursday responded to reports of Sharia-compliant mortgage loans purchased by Fannie Mae and Freddie Mac.

Pulte says Fannie and Freddie don’t give out sharia-compliant-loans.

Guidance Residential, a private Islamic home-financing company, publicly states that it brings Freddie Mac and, according to another passage on its website, Fannie Mae, into its transactions as investors.

The company describes its product as “Islamic co-ownership financing.” Instead of issuing a conventional interest-bearing mortgage, Guidance says it purchases a home alongside the buyer. The buyer then gradually acquires the company’s ownership share while paying for the use of the remaining share.

Guidance says the arrangement was constructed to satisfy Sharia principles prohibiting riba, or interest. It also claims that its Sharia board and 18 law firms developed a contract under which Freddie Mac can participate without purchasing conventional debt.

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Your Bank Data Could Become A Profit Center – And You’ll Pay the Price

A forthcoming federal rule on open banking may allow banks to charge new fees for access to consumer data, a move critics say would harm consumers and runs counter to other parts of President Donald Trump’s agenda.

Open banking allows consumers to authorize banks and other financial institutions to securely share their financial data electronically with third-party providers.

Why now?

The White House was reviewing the anticipated rule from the Consumer Financial Protection Bureau as of last week, according to reporting by Bloomberg Law. The rule would help shape the federal framework for open banking in the U.S., building on a broad provision contained within the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Dodd-Frank was passed to enhance transparency and accountability and strengthen consumer protections in the financial industry after the economic crisis of 2008. The law is just under 850 pages long, and Section 1033 – which provides the legal basis for the open banking ecosystem that has evolved in the U.S. – was not one of its central provisions. Section 1033 is about one page long and it ensures that Americans have the legal right to access their own financial data upon request. Financial institutions must provide consumers’ financial data relevant to the sought-after financial product or service in “an electronic form usable by consumers.”

The law gives the Consumer Financial Protection Bureau broad authority to define and standardize this process, which is partly why affected industries have anticipated federal rulemaking on open banking for more than a decade.

The Biden administration issued the long-awaited rule in late 2024, which required banks to provide data directly to third parties authorized by consumers and prohibited banks from charging third parties fees for accessing the data, among other provisions. Banks pushed back, suing the bureau claiming it was exceeding the authority it was granted under Section 1033 and challenging those provisions in court.

Banks have said the rule would require them to build and maintain costly interfaces for third-party access while preventing them from being able to recoup those costs.

Last summer, JPMorgan Chase & Co. submitted proposed fees to data aggregators like Plaid for accessing Chase customers’ financial data.

The Trump administration has said the Biden administration’s rule was unlawful, “arbitrary and capricious” and began working on a rewrite of the rule last August. The lawsuit is essentially paused until the new rule is released, and the court ordered that enforcement of the Biden rule be stayed.

The Trump administration’s version reportedly includes a provision that would allow banks to charge volume-based fees to fintech companies to access consumer financial data, meaning banks could begin charging fintech companies once they make more than a certain number of requests for customer data.

Who pays the price?

News that the Trump administration’s rule would include a data-rationing provision prompted numerous objections from fintech companies and consumer advocacy groups, who argued that if banks didn’t pay for the data sharing, consumers ultimately will.

“Inevitably, if [the cost] is on the third party, it’s going to go back to the consumer,” said Todd Zywicki, a George Mason University law professor who formerly led a CFPB task force on federal consumer financial law and served in a leadership role at the Federal Trade Commission.

A third party is really a false choice, according to Zywicki, and between consumers and banks, he thinks banks are the much better option.

“The bank already has built-in incentives to collect the data, keep the data safely, use the data, and under law would already be required to share the data with consumers for them to be able to use it to shop for themselves,” Zywicki told The Center Square, “To then say, OK, now you have to also let Plaid access my data or Mint access my data, so they can go find me a better savings account than recommended to me or suggests this product instead of that product just strikes me as the only way to really make sense on this.”

The five largest banks in the U.S. reported a record-worthy second quarter. JPMorgan reported its highest quarterly profit in history, Goldman Sachs had its best second quarter ever, and Citigroup enjoyed its best quarter in a decade. Bank of America also posted strong results, while Wells Fargo beat Wall Street expectations. Collectively, they brought in $49 billion in profits.

Zywicki and other sources who spoke to The Center Square also maintained that banks have already done much of the work to build an open banking ecosystem and any costs they might incur to share data with more third parties would be relatively small.

“Banks already are collecting and holding information securely… They’ve already got to share the information for free with the consumer. It’s just a matter of whether a third party can get the information on behalf of the consumer,” Zywicki added.

But there’s another cost to consumers that could be even greater than any immediate impact on their wallets, advocates warn, and that’s the cost of continued fervent fintech innovation.

“We have already seen the nation’s biggest banks take advantage of regulatory ambiguity to impose fees and throttle access. Further uncertainty could stop the next great startup from forming and prevent consumers from accessing affordable financial products,” said Miranda Margowsky, head of communications for the Financial Technology Association.

Fintech innovation can do more than help consumers manage their finances. Startups like Carefull, a fintech company that analyzes customers’ financial activity for unusual patterns, can help detect warning signs of dementia or cognitive decline, potentially years before a clinical diagnosis.

“The goal here is to create a competitive framework where… small banks, for example, or fintech providers, or whoever can compete against the big banks that are currently holding the data,” Zywicki said. “It’s not really much of a fair playing field if banks can continue to use this information to market their [own] products.”

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Nation’s biggest bank warns of global food ‘crisis’ in 2027, citing bad weather and wars in Iran, Ukraine

Get ready for another round of sticker shock at your local grocery stores and food markets.

The nation’s largest bank has just put out a chilling report that confirms what I have been warning about since the first week of March: A global food shortage is coming, caused by war and bad weather, leading to widespread famine as we get into 2027.

In a report titled Food Security Is National Security: A Compounding Storm, a team led by London-based senior global economist Nora Szentivanyi warned that disruptions around the Strait of Hormuz and the emergence of a potentially historic El Niño could weaken crop yields, constrain agricultural production, and keep food inflation elevated through the first half of 2027.

While we in America, Canada and Europe can expect to pay higher food prices and may have to cut back elsewhere, other countries will be in worse shape. Think about the migration storm that will cause, as people in the Third World leave their countries and head for wealthier countries that have more food.

“Successive shocks since COVID have compounded, eroding food production capacity and keeping food price pressures elevated into 2027,” Szentivanyi said, warning that “this is not a short-lived shock; it has reduced the likelihood of near-term disinflation, and the food inflation cycle is likely to exert pressure through 1H27.”

JP Morgan Chase’s report on a looming food crisis rocked the internet as people posted on it across social media platforms today.

What this means is that a larger segment of the population is going to wake up and start stocking up. That means prices will go up even faster than they have been, as demand increases, and those prices will rise faster than they would have if the masses hadn’t been suddenly jolted into reality by an establishment institution like JP Morgan Chase and all the press coverage that entails.

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Freedom Convoy blacklist circulated to thousands of financial firms, records show

A federal blacklist containing personal information about Freedom Convoy supporters was circulated to potentially thousands of financial firms, according to new records uncovered by Blacklock’s Reporter.

Blacklock’s reports that regulators in Ontario distributed the information to between 1,000 and 2,000 brokerages and other firms, with no restrictions placed on further distribution.

The blacklist originated with the RCMP and included names, birth dates, telephone numbers and other personal information. Earlier parliamentary records showed it was distributed by unencrypted email to as many as 50 financial institutions, along with industry organizations and securities regulators.

The list was created after the Trudeau government invoked the Emergencies Act in February 2022. Authorities froze $7.8 million held in 437 bank and credit union accounts and cryptocurrency wallets associated with Freedom Convoy supporters.

The Federal Court of Appeal ruled in January that the government’s invocation of the Emergencies Act was unlawful.

Finance officials have also acknowledged the names on the blacklist were not verified.

“There was no verification,” then-assistant deputy finance minister Isabelle Jacques testified in 2023. “We didn’t do any follow-up.”

The revelations contrast with comments from then-finance minister Chrystia Freeland, who said in 2022 the RCMP had provided financial institutions with information on protest leaders, organizers and people whose trucks participated in blockades.

Blacklock’s previously reported parliamentary records showing the blacklist also went to Canadian operations of foreign financial institutions, including Bank of China, State Bank of India, BNP Paribas, Citibank, Habib Bank, ICICI Bank, Mizuho Financial Group and Wells Fargo.

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