THE LIBERTARIAN ENTERPRISE
Number 562, March 21, 2010
"I'd had better hopes for America."
Special to The Libertarian Enterprise
You have to ask yourself the question, if the Federal Reserve Bank of New York imposes a reserve requirement of zero, then what does it mean "reserve bank"? We all know that the word "federal" actually means "feral" or wild, out of control, ever since Abraham Lincoln signed executive order number one on 15 April 1861 and declared war on the separation of powers.
Now comes testimony by Federal Reserve Bank chairman Ben "helicopters to throw money" Bernanke. Read it for yourself here.
"The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system."
You want to appreciate the beauty of this idea, for the nationalist banking gangsters. States impose minimum reserve requirements on the banks operating in their states, except for New York which seems to prefer that the privileged scum on Wall Street have no meaningful reserve requirement. Whereas a bank operating in Texas might be expected to ... See Moremeet a 20% reserve, and come under close scrutiny operating at less than 40% reserve, the nationally chartered banks, mostly operating from the New York "federal reserve" jurisdiction, have had a trivial reserve requirement. And now Bernanke asserts that it is imposing "distortions on the banking system"? How's that? What he means is that the power to create money out of thin air by banks should be unlimited. Which is, of course, an absurd standard: fraud to no limit. Yes, reserve requirements impose a cost, which is the cost of having reserves on hand to meet demand depositors when they demand their deposits. Which means you should take all your money out of New York based banks, right now.
"Then, in December 1990, the Fed cut the requirement on nonpersonal time deposits and on net Eurocurrency liabilities from 3% to 0%. In April 1992, it cut the requirement on transaction deposits from 12% to 10%."[LINK]
I think you'll find that most of the banks in question, the big banks with a licence from the FRB of NY are holding an average of liabilities that reflect a total functional reserve requirement of 1% or less. When the reserve requirement on some liabilities is zero, well, you just never know who is going to get left holding nothing when the music stops.
But, uh, you should probably predict that those in the banking community are going to "honour" their commitments to foreign banking gangsters before they do anything for local depositors.
If you are relying on Citibank, Bank of America, Wells Fargo, and the like, you really ought to be careful. It seems clear from their behaviour since 2007 that they do not have your best interests in mind.