TD Bank Faces Historic Settlement & Could Collapse Following Money Laundering Charges

Should it Collapse we could see that $40,000 per ounce gold

The "Great Taking" thesis posits that a new legal framework is transforming the nature of bank deposits. Under this theory, all deposits are being pooled into a collective collateral pool, with ownership redefined through changes to security entitlement laws.

This pool is allegedly intended to shield banks from their massive derivative exposures.

Derivatives are financial contracts whose value is derived from underlying assets or benchmarks. The global derivatives market is estimated to be in the quadrillions of dollars, far exceeding the world's GDP. This enormous exposure potentially puts banks at risk, leading to the alleged creation of the collateral pool as a protective measure.

TD Bank, one of America's largest financial institutions, has recently encountered significant legal and financial repercussions due to its involvement in money laundering activities. In a historic move, the bank pleaded guilty to multiple criminal charges related to money laundering and violations of the Bank Secrecy Act (BSA). This marks the first time a bank has ever pleaded guilty to felony charges of conspiracy to commit money laundering.

As part of the settlement, TD Bank agreed to pay a staggering total of approximately $3.09 billion in penalties. This amount includes over $1.8 billion to the U.S. Department of Justice (DOJ) and $1.3 billion to the Financial Crimes Enforcement Network (FinCEN), which represents the largest penalty ever imposed on a depository institution in U.S. Treasury and FinCEN history.

The scope of TD Bank's violations was extensive and systemic. The bank failed to monitor around $18.3 trillion in transactions between January 2018 and April 2024, allowing approximately $671 million to be laundered through its accounts, including funds linked to international drug traffickers. Furthermore, TD Bank willfully neglected to file Suspicious Activity Reports (SARs) on thousands of suspicious transactions totaling about $1.5 billion.

In addition to the hefty financial penalties, TD Bank faces several other consequences. The bank has been placed under a five-year probationary term with multi-year monitoring requirements. Moreover, the Office of the Comptroller of the Currency (OCC) has imposed an asset cap of $434 billion until the bank can satisfactorily remediate its anti-money laundering (AML) compliance issues. This includes restrictions on various business functions and total consolidated assets.

The implications of this settlement are expected to be significant for TD Bank. The institution anticipates that its pre-tax net interest income could decline by up to $225 million in the 2025 fiscal year due to these restrictions. The asset cap may have an even more detrimental effect on TD Bank's stock price and overall value than the criminal and civil penalties themselves.

This unprecedented settlement serves as a stark warning to other financial institutions about the critical importance of maintaining robust AML compliance programs and highlights the severe consequences that can arise from failing to do so.

Banks are currently facing significant risks due to the highest unrealized losses in recent decades, primarily driven by rising interest rates. As of the first quarter of 2024, unrealized losses on investment securities for banks reached $517 billion, marking the tenth consecutive quarter of such losses.

These losses stem from the decline in value of fixed-income securities, particularly residential mortgage-backed securities, as interest rates have increased. The Federal Deposit Insurance Corporation (FDIC) has identified 63 "problem banks" facing financial challenges due to these unrealized losses

While most banks are well-capitalized enough to weather this situation, the combination of unrealized losses and potential exposure to uninsured deposits could pose significant risks, especially for smaller and regional banks

This situation could potentially squeeze banks' finances for years to come, affecting their ability to lend and potentially slowing economic growth.

Dr. Mark Werner's theory challenges the traditional view of bank deposits. He argues that when a customer makes a deposit, it's not truly a deposit in the conventional sense, but rather an unsecured loan to the bank.

This means that the depositor becomes a creditor of the bank, with the bank owing the deposited amount to the customer.

The bank can then use these funds for its own purposes, including lending to other customers or investing, while maintaining the obligation to repay the depositor on demand.

Throughout world history, periods of excessive financialization have often led to economic crises and the need for financial resets. When financial systems become overly complex and detached from real economic value, they tend to collapse under their own weight. During these times of crisis, gold and silver have traditionally played a crucial role in restoring stability and trust in the monetary system.

Gold and silver step up to perform accounting functions during financial failures for several reasons:

1. Intrinsic value: Unlike fiat currencies, gold and silver have inherent worth that isn't dependent on government backing.

2. Scarcity: Their limited supply makes them resistant to inflation and devaluation.

3. Universal acceptance: Gold and silver have been recognized as valuable across cultures and time periods.

4. Divisibility and portability: They can be easily divided and transported, making them practical for trade.

During financial resets, gold and silver often serve as a bridge between the old system and the new, providing a stable measure of value when other assets and currencies are in flux.

Here are three of the most significant bank collapses in world history, spanning more than 500 years:

1. The Medici Bank collapse (1494):
   The Medici Bank, founded in 1397, was one of the largest and most respected financial institutions of the Renaissance era. Its collapse in 1494 was due to a combination of factors, including bad loans, political turmoil, and mismanagement. The bank's failure had far-reaching consequences for the European economy and marked the end of the Medici family's political and economic dominance in Florence.

2. The collapse of the Fugger banking empire (1607):
   The Fugger family of Augsburg, Germany, built one of the largest banking and trading empires of the 16th century. Their bank financed European monarchs and even played a role in the election of Holy Roman Emperors. However, by the early 17th century, the bank faced mounting debts from unpaid loans to various European rulers. The death of the last Fugger banker in 1607 led to the gradual dissolution of the empire.

3. The South Sea Company bubble and collapse (1720):
   The South Sea Company, a British joint-stock company founded in 1711, caused one of the most infamous financial bubbles in history. The company's stock price skyrocketed based on speculation and fraud, before crashing spectacularly in 1720. This collapse led to a severe economic crisis in England and parts of Europe, ruining many investors and necessitating significant financial reforms.

4. The Savings and Loan Crisis (1980-1995): This prolonged crisis devastated the savings and loan industry. Between 1980 and 1995, more than 2,900 banks and thrifts with collective assets of over $2.2 trillion failed

5. The Global Financial Crisis (2007-2014): This crisis, triggered by the mortgage meltdown, led to the failure of more than 500 banks between 2007 and 2014, with total assets of nearly $959 billion. The most notable failure during this period was Washington Mutual (WaMu), which remains the largest bank failure in U.S. history with $307 billion in assets at the time of its collapse

In each of these cases, (except the last two listed) the aftermath of the collapse saw a return to more tangible forms of wealth, with gold and silver often playing a key role in reestablishing financial stability and trust.

These historical examples demonstrate the cyclical nature of financial crises and the enduring value of precious metals as a store of wealth during times of economic turmoil.

Several prominent U.S. monetary experts, including Judy Shelton, Jim Rickards, and Luke Gromen, have suggested that a portion of the money supply may need to be backed by gold to stabilize the financial system. They propose a model similar to BRICS nations, with around 40% gold backing.

Based on current money supply figures, these experts calculate that gold prices could potentially reach $40,000 per ounce to achieve this level of backing and restore stability to the monetary system.

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