Banking Restrictions - Examples -

[dbarberic]

I'm looking for other examples of banking restrictions with the idea that it may provide some potential "forecasting" of anticipated liquidity issues in the US banking system and may point to specific banks.

We already know about the Citibank cash withdraw limit that was placed to prevent people from withdrawing more than $10,000 a month in three-day free inter-institutional transfers, or more than $2,500 a month in one-day IIS transfers.
http://tinyurl.com/2reuoo

Now, I found that AMEX is has placed a limit on purchases of travelers checks to $1K every two weeks.
http://tinyurl.com/2dd8zn

Has anyone else out there encountered examples of banking restrictions recently placed or has experienced withdraw restrictions yourself?

[dbarberic]

Re: Banking Restrictions - Examples -

Let me add another one:

Annual Purchase Limit For Savings Bonds Set at $5,000
http://www.treasurydirect.gov/news/p...chaselimit.htm
FOR IMMEDIATE RELEASE
December 3, 2007
The annual limitation on purchases of United States Savings Bonds will be set at $5,000 per Social Security Number, effective January 1, 2008. The limit applies separately to Series EE and Series I savings bonds, and separately to bonds issued in paper or electronic form. Under the new rules, an individual can buy a maximum of $5,000 worth of electronic and paper bonds of each series in a single calendar year, or a total of $20,000, in single ownership form. If paper bonds are issued in co-ownership form, the limit applies to the first-named co-owner. All limits are based on the issue price of the securities.

[Guest]

Re: Banking Restrictions - Examples -

Dbarberic -

Based on your original posts on this topic, I started doing a little digging around and got 'anxious' also. Just to let you know I'm taking your advice - proceeding on some personal changes which were prompted by your heads-up.

[dbarberic]

Re: Banking Restrictions - Examples -

I've read some other internet hearsay where individuals are claiming they are having difficulty in moving money around or withdrawing large sums of cash (>$1K). Not that they are denied by the bank, but that banks are making them wait days before the transaction or they and adding layers of supervisor approval to slow/delay it.

This is by George Ure:

Translation: Banks appear to be slamming the exits shut so that in event of a bank run, you won't be able to get your money out faster than the Fed and Treasury can print up a solution.

"If that's their game, then the next thing we will see is restrictions on cashiers checks and any other bearer instruments..."

A quote from a reader of his website:

"I know where its going (liquidity crisis) and agree with you. A week ago I had to wait an hour to get a certified cashiers check cashed at my bank It was only for $8k and I was depositing over $2k and they still wouldn’t do it without Calling the other bank.

It seems like the banks are using stall taticts to try and prevent withdraws, in addition to rules such as what Citi implemented.

I started a thread to see if other iTulip posters can collaborate some of this information and if they are seeing similar things at their own institutions.

[whitetower67]

Re: Banking Restrictions - Examples -

I was able to withdraw $3K for a trip to Vegas this past weekend with no problem.

Further, the issues discussed above (Amex traveler's checks and waiting for bank approval to cash a cashier's checks) concern bank and wire fraud issues -- they don't have anything to do with liquidity concerns.

Although some banks will fail because they have too much exposure to SIV crap on their books, I'm far more worried about taking my paycheck home in a wheelbarrow, i.e. of hyperinflation, not depression.

[Guest]

Re: Banking Restrictions - Examples -

A great analogy would be wading through a really thin soup of plaster of paris. You know, the stuff they make casts out of for broken bones?

When you mix it really really thin, it stays liquid for the longest time - but then at a certain point a chemical reaction sets in and literally in about ten to fifteen seconds, it "sets" - anything wading happily through that soup is frozen in mid-stride.

My internal radar has gone off on this topic in recent days - it rarely does, and I've learned to trust it. I'm a believer! Forewarned is forearmed.

I never thought I'd wind up wearing a tinfoil hat about anything, but it stands to reason that currency controls are going to go in at some point - and it'll happen just as quietly and stealthily as the gold run that busted out in late August - no warning.

[dbarberic]

Re: Banking Restrictions - Examples -

I'm not trying to pull fire alarms, cause panic, stroke fear, or fold tin foil hats for my fellow iTulip-ers.

I just want to gather facts that will either collaborate or refute the three specific examples I dug up and/or the hearsay I've read on other sites.

[grapejelly]

Re: Banking Restrictions - Examples -

1. You will flourish if you have assets that are real, as opposed to financial.

2. People are so conditioned to the US dollar and I don't see it collapsing any time soon.

3. But in real terms, it is in a long term slide to worthlessness.

4. I have read that banks are telling their standby business line of credit borrowers not to borrow if at all possible. I can see this as important to the banks because the LOCs are quite large. Consumer debt is a different story and I wouldn't expect vault cash and such to be restricted at all. To many alarm bells would go off if this happened in any major way.

5. The simple plain fact is that they may restrict cash until the printing presses can catch up but that isn't very long...

[Guest]

Re: Banking Restrictions - Examples -

Grapejelly -

So the "lockdown" or "freeze in cash availability" is going to really occur in availability of the "other cash", i.e. PM's at some point? Not available anywhere, at any price?

It sounds extreme. Sound's like goldbug daydreaming wish fulfillment - but you look around and conditions sure seem to be leaning toward that scenario a little bit more every year now. Eventualy, when the paper money rivers get swollen enough ...

[FRED]

Re: Banking Restrictions - Examples -

Wonder how many iTuliper are willing to take part in an experiment. Each month starting in Dec. take $5K out of the bank then put it back in again the next day to see what issues, if any, come up. Given bank interest rates, this can't cost much. Over time–we'll tabulate the results–it will tell us a lot about what's going on in the banking system. Thoughts?

[c1ue]

Re: Banking Restrictions - Examples -

2. People are so conditioned to the US dollar and I don't see it collapsing any time soon.

People in the US, yes.

People outside of the US, no.

I noticed last year that Ebay auctions out of China were no longer denominated in USD; they were split between AUS$, Euros, and GBP for a while but settled on GBP. 6 months ago they switched over the AUS$.

This is particularly interesting as nominally the auctioneer bases are out of Hong Kong.

This is one of my signals for currency preferences outside of the US.

Also read the road trip commentary on Russia I put up last week.

This is not to say that the US$ will collapse soon - I merely point out that outside of those mercantile country-level interests, the people who actually deal with foreign exchange appear to be very swift to switch currencies of preference.

The only inertia I can count on outside of above stated mercantile country-level interests is the fact that the US is the largest economy. Thus it is Americans who comprise the inertia, and the question then is how their inevitable reduction in spending will affect the American economic place in the world order and therefore the amount of 'mass' underlying this inertia.

To extend the analogy further, should spending slow (velocity - not exactly in the monetary sense), this would also reduce inertia given p = mv.

[WDCRob]

Re: Banking Restrictions - Examples -

Do I have to put it back?

[Spartacus]

Re: Banking Restrictions - Examples -

FRED, if I were in the US I would be EXTREMEMLY reluctant to do this, especially on multiple occasions.

as I understand it this kind of thing can be used by law enforcement "profiling" to tag one as a suspected drug dealer or money launderer.

Even ignoring the recent changes in the US, that 2 decade old law enforcement activity has had severe repercussions on many innocents.

The reporting limits at one time were $10,000 but I believe they've evolved over time.

Wonder how many iTuliper are willing to take part in an experiment. Each month starting in Dec. take $5K out of the bank then put it back in again the next day to see what issues, if any, come up. Given bank interest rates, this can't cost much. Over time–we'll tabulate the results–it will tell us a lot about what's going on in the banking system. Thoughts?

[FRED]

Re: Banking Restrictions - Examples -

Do I have to put it back?

Nah. Just keep taking $5K out of the bank every month and tell us how long it took and what hoops, of any, you had to jump through. Then stuff it under your mattress next to your Glock and your Eagles.

[FRED]

Re: Banking Restrictions - Examples -

FRED, if I were in the US I would be EXTREMEMLY reluctant to do this, especially on multiple occasions.

as I understand it this kind of thing can be used by law enforcement "profiling" to tag one as a suspected drug dealer or money launderer.

Even ignoring the recent changes in the US, that 2 decade old law enforcement activity has had severe repercussions on many innocents.

The reporting limits at one time were $10,000 but I believe they've evolved over time.

We looked into the law and to the best of our understanding the way it works is that you can take up to $10K out of the bank without the bank having to report the event. But if you take, say, $5K out of the bank twice in order to purposely get around the bank reporting requirement, you are breaking the law. How they determine your intent is a mystery, but our intent is to measure bank cash withdraw policy behavior over time.

It's your money. The degree to which members of free society are willing to change legal behavior for fear that the state is going to treat the behavior as criminal is a measure of despotism. Failure to resist the temptation to fear government is an invitation to despotism.