Thursday, October 17, 2013

Is Your Money Really Yours?

JP Morgan Chase is the largest bank in the United States by assets and is the second largest in the world next to HSBC.  So it is very surprising that they have decided to put capital controls on some of their business checking accounts.  

They are restricting checking account activity to $50,000 dollars per month.  This sounds like a great deal of money until you consider how small businesses operate.  Sometimes they can pass a lot of money through their account from larger companies to various other businesses.  Also, the payroll of a business with a hundred employees could be well in excess of $50,000.  If Chase ties up the operating capital or payroll of a small business it could be devastating to the reputation and credit worthiness of that business.  They are also doing away with international wire transfers for customers of those accounts.  There was no explanation given as to why they do not want customers moving their money out of the United States.

Anthony Gucciardi of called the Chase information line.  The Chase employees their told him that even the top level managers at the call center did not know why these accounts had been restricted.

Fox News is reporting that JP Morgan Chase is "derisking" these accounts.  What this means, however, is rather vague.  The fact is though, that the largest bank in the United States is putting restrictions on their customers access and use of their own money.  

Much of the reporting on this sees the similarities between this and what happened in Cyprus.  In March of this year The Bank of Cyprus seized the accounts of their large depositors.  Some of them lost up to 60% of their account value.  It is interesting timing coming as it does at the same time as the U. S. debt limit was raised.  In this scenario, they are not allowing customers to move their money in preparation of either Chase of the U. S. government to seize the accounts.  

Other writers wonder what this says about the health of the nations largest bank and the health of the U. S. economy.  The obvious solution to this is for these business account holders to move their banking to another bank.  But could this merely be the beginning of a nationwide change in banking regulations that will soon see these restrictions placed on all business accounts at all banks at the request of the government.  

It is instructive to see who is reporting on this and who is not.  Few of the large news companies are reporting on this.  Those that are usually just quote the official sources.

If you have cash, now may be a good time if you are considering an investment in a hard asset like real property or here is some good advice;
Matthew 6:19-21 Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal, but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also.