Traditional Banks: The Ticking Time Bomb Threatening Your Savings! Avoid Crypto and Go for The Gold & Silver
Don't Hold Any Funds in The Bank North of What You Don't Mind Losing Entirely. If you want Privacy and a Decentralized System then Avoid Crypto and Go Gold and Silver ONLY.
Banks are in Big Trouble right now
There is a Zero Reserve Requirement - A zero reserve requirement means banks are not required to hold any fraction of deposits in reserve. This allows banks to lend out all depositor funds, maximizing their lending capacity. However, it also increases the risk of bank runs, as banks may not have sufficient liquidity to meet withdrawal demands. Without reserve requirements, there is no mandated buffer to absorb potential losses or liquidity shortfalls. Consequently, a zero reserve requirement system relies heavily on capital requirements and central bank intervention to maintain financial stability and prevent systemic crises
Banks are the Surveillance Arm of the IRS. YOU HAVE LOST YOUR RIGHT TO PRIVACY - Banks are required by law to report certain financial transactions and activities to the IRS and other government agencies for anti-money laundering and tax compliance purposes. They collect extensive personal and financial data from customers during account opening and ongoing transactions, which is shared with authorities upon request. Banks file reports like Currency Transaction Reports for cash transactions over $10,000 and Suspicious Activity Reports for suspicious activities, essentially monitoring customer finances on behalf of the government. Recent allegations suggest the IRS may be using AI systems to analyze bank data and customer transactions en masse, raising privacy concerns about warrantless financial surveillance. This level of cooperation between banks and the government allows authorities to track financial activities but also enables potential overreach and violation of civil liberties
When you Deposit Money in the Bank it is no longer your money - When you deposit money in a bank, you are essentially making an unsecured loan to the bank. Banks operate under fractional reserve banking, meaning they only hold a fraction of deposits as reserves and lend out the rest. Your deposit becomes an unsecured debt obligation for the bank, with no collateral backing it. This poses counterparty risk, as the bank could potentially default or become insolvent, leaving depositors unable to fully recover their funds. In extreme scenarios like bank runs, where many customers attempt to withdraw funds simultaneously, banks may lack sufficient liquidity to meet withdrawal demands due to the unsecured nature of deposits
Under the guise of “Know Your Customer” KYC and “Anti Money Laundering” AML Banks have entered the Dystopian Surveillance State. They use KYC and AML as obstacles to Freeze Your Assets. - Banks collect extensive personal and financial data from customers under KYC and AML regulations, including details like name, address, employment information, source of funds, and transaction patterns. This information is not only used for identity verification but also reported to government agencies like the IRS for monitoring purposes, essentially turning banks into surveillance arms of the state. Banks must file reports like Currency Transaction Reports for cash transactions over $10,000 and Suspicious Activity Reports for any activities deemed suspicious, allowing authorities to track customer finances. Recent allegations suggest the IRS may be using AI systems to analyze this bank data en masse, raising concerns about warrantless financial surveillance and violation of privacy. The level of cooperation between banks and the government under KYC/AML enables potential overreach and infringement on civil liberties of depositors.
Some of this text is redundant intentionally.
RE: privacy and the potential misuse of customer data by banks
Banks collect extensive personal information from customers during account opening and ongoing transactions for KYC and AML compliance. This includes details like name, address, date of birth, social security number, employment information, source of funds, and transaction patterns. Banks are required to report cash transactions over $10,000 and suspicious activities to the IRS using forms like 8300 and 3949-A.While intended to combat financial crimes, this data collection and reporting raises privacy concerns. Banks essentially act as extensions of the IRS, monitoring and sharing customer financial activities without explicit consent. The IRS can request additional records from banks, further violating privacy.
The Massive Red Flag Risk of Fractional Reserve Banking
Your point about fractional reserve banking is also relevant. Banks only hold a fraction of deposits as reserves and lend out the rest. So customer deposits are essentially unsecured loans to the bank. In a bank run scenario where many customers attempt to withdraw funds simultaneously, banks may not have sufficient liquidity to meet demands, necessitating withdrawal limits to prevent insolvency.
Decentralized Systems
Gold and Silver are the only 2 ways to go: (Real Estate doesn’t pass the test either)
Gold and silver bullion are indeed among the few truly decentralized assets that offer privacy and lack counterparty risk, for the following reasons:
No Centralized Authority: Gold and silver are not issued or controlled by any central authority or government. Their supply is limited by what can be mined from the earth, making them decentralized and immune to manipulation by a single entity.
Privacy: Physical bullion transactions can be conducted privately and anonymously without requiring personal information disclosure, unlike traditional banking systems that collect extensive data for KYC/AML purposes.
No Counterparty Risk: When you hold physical gold and silver bullion, you own the assets outright. There is no counterparty or third party that can default on their obligations or freeze your assets, eliminating counterparty risk present in other investments like stocks, bonds, or bank deposits.
Immutable and Indestructible: Gold and silver cannot be created or destroyed artificially. Their physical properties make them immutable and indestructible, unlike fiat currencies or digital assets that can be inflated or hacked.
5 Alarm Fire
AVOID CRYPTO
AVOID CRYPTO
AVOID CRYPTO
AVOID CRYPTO
AVOID CRYPTO
LEGAL ISSUES SURROUNDING CRYPTOCURRENCY
Public interest in Cryptocurrencies, such as Bitcoin and Ethereum, has recently surged as multiple industries have been exploring how to capitalize off the new technology. As public interests increase, new uses for cryptos develop almost every day. As new uses of cryptocurrencies emerge, so too do its potential legal liabilities. In this article, we take a look at some common legal issues related to cryptocurrencies.
CONTRACTUAL ISSUES
One of blockchain technology and cryptocurrencies’ most striking features is their self-executing “smart contracts.” Smart contracts are a set of promises, usually specified in a digital format, that act as the basis upon which the parties in a transaction fulfill their specific promises. A smart contract automatically pays the other party when they perform their contractual duties. Due to smart contracts’ unique nature and inherent complexity, whether they fit into the legal framework of traditional contract law is difficult to determine.
The United States has no federal contract law that applies to the country as a whole. Accordingly, contract law varies from state to state. Plus, as of October 2020, no federal law or guidance explicitly defines smart contracts’ or their legal validity. The only exception is the Electronic Signatures in Global and National Commerce Act of 2000, which provides limited legal validity to smart contracts. Since smart contracts’ legal validity is unclear, however, they are likely to result in lengthy litigation processes.
JURISDICTIONAL ISSUES
The main idea behind blockchain technology that underpins cryptocurrencies is that it involves no way to pinpoint a ledger’s actual location. Accordingly, transactions conducted on blockchain offer greater privacy than transactions conducted on traditional platforms. But this advantage poses a complex jurisdictional challenge. First, since the nodes of a crypto transaction are located in different jurisdictions, they may be subject to conflicting legal frameworks. Second, the “residence country” for cryptocurrency software is difficult to determine due to the ledger’s lack of a physical location. Third, blockchain’s transnational nature makes determining applicable laws and selecting the correct jurisdiction for blockchain disputes exceedingly difficult. For any national regulator, enforcing laws among blockchain users, transactions, or projects is a herculean task because of the technology’s cross-border reach.
DATA THEFT AND FINANCIAL FRAUD
Data theft and financial fraud are additional pressing legal concerns surrounding cryptocurrencies. The blockchain’s promise of anonymity—and its apparent freedom from regulations—can entice many users who are involved in illegal activities to use cryptocurrencies for their financial transactions.
In 2017, a researcher at Cornell University identified a serious security flaw in the Ethereum blockchain that put $250 million at risk of theft. Similarly, crypto wallet maker Ledger recently compromised 1 million email addresses in a data security breach. Access to the personal information—such as full names, postal addresses, and phone numbers—of Ledger’s 9,500 customers was also stolen. Whether existing data laws can address data theft and financial fraud originating from cryptocurrencies remains unclear.
PRIVACY CONCERNS
Privacy concerns are closely related to data theft in the cryptocurrency space. As we’ve seen, one of the main reasons for introducing cryptocurrencies like Bitcoin was to provide anonymity in transactions between users. However, Chainalysis showed this anonymity to be threatened by the continuous improvement in blockchain analytic tools. The blockchain analytics firm claimed that it can trace the vast majority of Zcash and Dash transactions, making “privacy coins” a misnomer.
The United States has no comprehensive federal data protection framework. Instead, sector-specific privacy and data security laws and regulations apply—such as the Gramm-Leach-Bliley Act, the Health Insurance Portability and Accountability Act (HIPAA), and the California Consumer Privacy Act (CCPA). The United States’ existing privacy and data security laws and regulations do not address the privacy concerns that have arisen due to blockchain technology. For example, blockchain technology’s distributed peer-to-peer network architecture is widely considered to contradict the CCPA’s traditional notion of a centralized, controller-based data processing system. In other words, the CCPA’s assumption of centralized controller-based processing is inapplicable to cryptocurrencies because it disregards the decentralized nature of the new technology.
MONEY LAUNDERING
Several commentators suggest that cryptocurrencies provide criminal organizations with a new way to commit fraud, money laundering, and a host of other financial crimes. This criticism stems from cryptocurrency traders’ ability to remain totally anonymous. Indeed, cryptocurrencies have been used for “dark-market sites,” where criminals can buy and sell illegal items with little chance of being identified. In fact, various governmental agencies have labeled drug dealers that exchange drugs for cryptocurrency as the “new generation of criminals.”
In 2019, blockchain analytics firm Chainalysis estimated that criminal entities transacted $2.8 billion in Bitcoin exchanges, up from around $1 billion in 2018. Before criminals can convert their illegally acquired cryptocurrency into cash, they have to convert it into liquid cash. The popular exchanges for this conversion are subject to anti-money-laundering rules that require firms to identify their customers. But Chainalysis researchers suggested that criminals have found a way to circumvent these rules using over-the-counter trading (OTC).
TAX IMPLICATIONS
For US federal income tax purposes, cryptocurrencies are property—not currency. This distinction means that US taxpayers cannot use cryptocurrency as a functional currency for Internal Revenue Code purposes. However, US taxpayers are obligated to report transactions involving cryptocurrencies in US dollars on their annual tax returns. This requirement means that US taxpayers should determine their cryptocurrencies’ fair market value (by converting the virtual currency into US dollars) on each transaction date. As a result, properly reporting cryptocurrencies to the IRS is burdensome for individual taxpayers because they must diligently record the price at which their cryptocurrencies were bought and sold.
Moreover, the United States classifies cryptocurrencies as capital assets. Therefore, individual investors are liable to pay capital gains taxes on any profits they realize via cryptocurrencies. This obligation applies whether or not investors purchased their cryptocurrency from the United States or from another country. Nevertheless, whether US investors who purchased their crypto holdings on foreign exchanges are required to fulfill additional reporting requirements in filing their taxes remains unclear.
INTELLECTUAL PROPERTY
Cryptocurrencies are becoming rather popular among intellectual property (IP)–intensive sectors, including the pharmaceutical, automotive, luxury, and consumer goods industries, where goods’ traceability is important, and counterfeit or “gray” goods are a concern. The use of cryptocurrencies in IP-intensive industries raises concerns about: (1) IP ownership and authorship, (2) controlling and tracking the distribution of registered or unregistered IPs, and (3) establishing and enforcing IP agreements, licenses, or exclusive distribution networks through smart contracts. For example, considerable uncertainty surrounds who exactly owns blockchain technologies and cryptocurrencies.
LEGAL AND REGULATORY CONCERNS FOR INVESTORS
Since February 2020, cryptocurrencies such as Bitcoin have been legal in the United States—and in most other developed countries, such as the United Kingdom, Japan, and Canada. However, although the IRS considers Bitcoin and other virtual currencies legal, some concerns still surround their legal validity.
Cryptocurrencies are not backed by any centralized issuing authority and intrinsic goods, such as gold or silver, do not underly cryptocurrencies’ value. Instead, their value totally depends upon the value that other owners and investors ascribe to them. Since they are not backed by any centralized regulatory body, investors may have few legal resources if any complications arise from their crypto transactions or ownership.
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Bank runs. Market volatility. Panic in the streets. When I say we’ve been here before, I don’t just mean 2008 or 1929. One of the earliest recorded bank runs dates back to the 14th century. Italian city-states like Florence and Venice sat at the crossroads of trade routes between Asia and Europe and were financial hubs. In the early 1300s, the “Peruzzi” family quickly became one of the most powerful and wealthy in Florence, through a highly profitable textile trade that focused on imported English wool.
As their wealth grew, so did their banking network, extending throughout Europe and even to England’s King Edward the Third. King Edward at the time was embroiled in a series of expensive wars with France, which the Peruzzi's increasingly bankrolled. Unfortunately, King Edward’s appetite for battle and glory was bigger than his purse, and when he failed to pay his debts in 1345, the Peruzzi bank took a massive financial hit.
Word soon got back to Florence about the deadbeat English king. Depositors panicked, rushing to withdraw their florins before the Bank of Peruzzi ran out of funds. A bank-run ensued and, soon after, the House of Peruzzi was ruined.
The reason you’ve probably never heard of the Peruzzi's until now has quite a bit to do with the Florentine family that rose to power soon after their fall. The House of Medici [meh·duh·chee] became one of the wealthiest and most powerful families in Renaissance Europe in part by learning from the Peruzzi’s mistakes. Where the Peruzzi's focused heavily on speculative investments and individual clients (ahem, Edward the Third, ahem), the Medicis diversified their portfolio across a range of industries and regions, which protected them from risk and market volatility.
Fast-forward to today and the same pitfalls that the Peruzzi’s faced exist for modern banks that rely on overextended credit and speculation.
I mean, what is crypto if not today’s version of English wool? And whether you’re the House of Peruzzi or Silicon Valley Bank, one thing is clear. Stay the heck away from the King of England.
source of this segment - https://www.gzeromedia.com/gzero-world-clips/medieval-italy-the-peruzzis-the-world-s-first-bank-run
Jon Forrest Little sounded the alarm over 2 years ago , the podcast is snipped just in time for this 1 minute crypto warning
https://youtube.com/clip/UgkxpbkoC__5vp0EiQ12nE2KvtSA6Gji5YwE?si=CWpGsSgZqsWeePUk