Top Leaderboard, Site wide
July 28, 2014
Truthdig: Drilling Beneath the Headlines
Help us grow by sharing
and liking Truthdig:
Sign up for Truthdig's Email NewsletterLike Truthdig on FacebookFollow Truthdig on TwitterSubscribe to Truthdig's RSS Feed

Newsletter

sign up to get updates


Paul Ryan’s New Clothes
Wishful Thinking About Natural Gas




The Sixth Extinction
War of the Whales


Truthdig Bazaar more items

 
Report

The Confiscation Scheme Planned for U.S. and U.K. Depositors

Email this item Email    Print this item Print    Share this item... Share

Posted on Mar 28, 2013
eflon (CC BY 2.0)

By Ellen Brown, Web of Debt

(Page 3)

The Swedish Alternative: Nationalize the Banks

Another alternative was considered but rejected by President Obama in 2009: nationalize mega-banks that fail. In a February 2009 article titled “Are Uninsured Bank Depositors in Danger?”, Felix Salmon discussed a newsletter by Asia-based investment strategist Christopher Wood, in which Wood wrote:

It is . . . amazing that Obama does not understand the political appeal of the nationalization option. . . . [D]espite this latest setback nationalization of the banks is coming sooner or later because the realities of the situation will demand it. The result will be shareholders wiped out and bondholders forced to take debt-for-equity swaps, if not hopefully depositors.

On whether depositors could indeed be forced to become equity holders, Salmon commented:

Advertisement

Square, Site wide
It’s worth remembering that depositors are unsecured creditors of any bank; usually, indeed, they’re by far the largest class of unsecured creditors.

President Obama acknowledged that bank nationalization had worked in Sweden, and that the course pursued by the US Fed had not worked in Japan, which wound up instead in a “lost decade.”  But Obama opted for the Japanese approach because, according to Ed Harrison, “Americans will not tolerate nationalization.”

But that was four years ago. When Americans realize that the alternative is to have their ready cash transformed into “bank stock” of questionable marketability, moving failed mega-banks into the public sector may start to have more appeal.

Ellen Brown is an attorney, chairman of the Public Banking Institute, and the author of eleven books, including Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free. Her websites are webofdebt.com and ellenbrown.com. For details of the June 2013 Public Banking Institute conference in San Rafael, California, see here.


New and Improved Comments

If you have trouble leaving a comment, review this help page. Still having problems? Let us know. If you find yourself moderated, take a moment to review our comment policy.

 
Right 1, Site wide - BlogAds Premium
 
Right 2, Site wide - Blogads
 
Join the Liberal Blog Advertising Network
 
 
 
Right Skyscraper, Site Wide
 
Join the Liberal Blog Advertising Network
 

A Progressive Journal of News and Opinion   Publisher, Zuade Kaufman   Editor, Robert Scheer
© 2014 Truthdig, LLC. All rights reserved.