Given the recent spate of bank runs in China it may be worth looking again at the risks involved in keeping your money in a NZ bank.

For example did you know:

If your NZ bank fails your deposits can be confiscated. 

Called ‘bail in’ or Open Bank Resolution (OBR) by the Reserve Bank, your deposits can be used to support the failing bank.  Like the confiscation of billions of dollars in Cyprus during 2013 there is no guarantee that any of your deposits would ever be returned.

As the Australian Citizen’s Party reports:

The RBNZ prides itself on its hard-line insistence on strict “market” discipline for the banks. It justifies the OBR bail-in system, for instance, by defining a depositor not as someone who has entrusted their money to the bank for safekeeping, but as an “investor” who has “freely invested in a private institution and has enjoyed a return on that investment whilst accepting the risks associated with the investment”.

This definition does not reflect how bank customers understand the relationship, which is one based on trust; moreover, it is a joke when assessing the “return” the “investors” have supposedly “enjoyed”: miserly deposit interest rates in no way compensate for the risk of bail-in. Worse, most Kiwis have no idea that their deposits can be bailed in (just as they had no idea that their deposits weren’t guaranteed), so how can they be expected to make a proper assessment of risk?
 
When you deposit money in a bank the bank owns that deposit.

As this article The Conversation points out:

Depositors are vulnerable because once their money is with a bank, it no longer legally belongs to them. It belongs to the bank which can use it for its own commercial purposes.

Banks have fragile business models.

The same article explains the inherent fragility of the banking business model, especially if there is a run on the bank.

Because they borrow short (through deposits which are repayable on demand) and lend long (through mortgages and other loans that are repayable at a fixed date in the future). Banks do not hold sufficient funds to repay all, or even most, of their depositors at once.

In contrast ownership of digital currencies like RedPill rests entirely in your hands.  Only you have access to your account.  The downside is that if you lose your account details you have no way of retrieving your funds.  Accepting this responsibility can help avoid the risks of keeping money in the bank.

Learn more next Wednesday at 7pm

Branton Kenton-Dau is inviting you to a scheduled Zoom meeting.
 
Topic: Is your money safe in the bank?
Time: Jul 29, 2020 07:00 PM Auckland, Wellington
 
Join Zoom Meeting
https://zoom.us/j/92020462328?pwd=bG8zMnczU3hReUNPSDduU0Z6ZFpJZz09
 
Meeting ID: 920 2046 2328
Passcode: 8npizn

Bloomberg and Zero Hedge report more bank runs in China, the world’s largest banking sector. The recent runs highlight the fragility of the fiat financial system.  China is now aggressively censoring any online media that discusses China's questionably solvent banks. 

The run in Hebei came after authorities kicked off a pilot program to limit large transactions in the province.  Like Cyprus in 2013 where the government took billions from people’s bank accounts the Hebei program demonstrates the risk people face using banks. Authorities have shown their wiliness to take whatever action necessary to support the fiat system.  In contrast a digital currency like RedPill not only has no central control, but no one has access to funds except the account holder. 

Could this ever happen in NZ?  Before 2020 who would have believed the NZ government would shut down the country and suspend human rights over a virus? 

Are you worried about your job, your pension, your business or your investments?  Maybe not worried enough.

In this video from USAWatchdog.com Alasdair Macleod, Head of Research at Goldmoney.com outlines the liquidity crisis in the gold market and how combined with the current banking crisis could lead to the USD inflating into worthlessness by the end of the year. 

Some of the video is technical.  If you want the sound bite listen from 10.30 to 14 minutes where he explains what is happening in the global financial system. 

Macleod says, “The price is already on its way to infinity or, put more accurately, the dollar is on its way to zero.  The question I think you really want to know the answer to is how long will that take?  In my view, not very long.  Probably by the end of the year…”

Ten days into the launch 183 Kiwis have received their 10,000 RedPill money free, no strings attached. To celebrate here are eight of the very best things about New Zealanders creating their own stable money.  To learn more join me on Zoom this Thursday 16th July at 7pm.  Details at the end of this post.

Security – The value of RedPill does not depend on the NZ Reserve Bank or the fiat financial system.  RedPill users give RedPill its value by agreeing to use it once all have been issued at 1,000 RedPill = 1 oz of gold – about NZ $ 2.60 (US $ 1.70) per RedPill at today’s prices.

Stability – Because gold has for thousands of years kept a stable value, linking the value of RedPill to gold means that RedPill is expected to be able to buy the same goods in 5, 10 or 30 years’ time as it does today. 

Honest – This stable value means no inflation.  That keeps transactions between people honest.  No one gains because the money devalues.

Robust – RedPill is owned by the Kiwis who use it.  There is no central control by banks or government.  It is also hard capped.  No more RedPill can ever be created.  Once all RedPill are issued to 750,000 Kiwis that is it.  Unlike the New Zealand dollar, there is no Reserve Bank that can debase the currency by printing more.

Empowering – RedPill reminds people of a very simple truth that was never taught at school – only people give value to money.  Not the government.  Not the Reserve Bank.  If New Zealander’s stopped using the NZ dollar as people in France stopped using Assignats (French currency) in 1789 that would be it – nothing the government or Reserve Bank could do would restore that value.  (The French government tried to bully people into using their money upon pain of death but it made no difference.  The people won in the end.)

Enlightening – Realising that all along that you and I are the ones with the financial power is an enlightening experience.  RedPill demonstrates we are waking up to what we truly are.  If we succeed in creating stable money for New Zealand what else can we do?

Lifeboat – many believe current financial system is dead in the water.  It does not matter how much new money the Reserve Bank and other central banks print to shore up the system.  Too much debt can never be repaid by the real economy.  Printing more money simply increases this debt.  It is a no-win situation.  Enter RedPill.  For those who own and use it RedPill provides a means of being paid and shopping if fiat money hyper-inflates to worthlessness.  Alasdair Macleod, Head of Research at Goldmoney.com believes the USD could hyper-inflate by the end of the year.

Been Done Before – There’s nothing new about RedPill.  It’s all been done before:

• For thousands of years people have given gold its stable value and are doing so again with RedPill
• Bitcoin has shown people can give value to digital money without central authority
• In 1922 Germany people choose to give Gold Loan Bonds a stable value even though they had no more collateral than the hyper inflating mark.
  
  

RedPill is money for New Zealand owned by New Zealanders.  We start using it when all RedPill have been issued.  It is a simple as that!
 

The world’s financial markets upon which the economy, your livelihood and pension depends are already history. 

The most important thing to realise right now is that like the Titanic the world’s financial system has already struck ice.  The hulls are filling with water and the ship will sink.  RedPill money, stable, owned by Kiwis with no central control may quite literally be your lifeboat.

Please do not take my word for it.  Here are some comments from those who understand the financial system the best:

9th April 2020
We are witnessing the Great Monetary Inflation (GMI)—an unprecedented expansion of every form of money unlike anything the developed world has ever seen.   Legendary Hedge Fund Manager Paul Tutor Jones

13th April 2020
We will follow the Fed and other DM central banks by purchasing what they’re purchasing, and assets that rhyme with those. Rich Rieder, BlackRock, the world’s largest asset manager with $7 trillion assets under management.  (I.e. the only thing that matters now is how much money central banks are pumping into the system.)

27th April 2020
We will never return to free market capitalism Scott Minerd, Chief Investment Officer of Guggenheim Investments

While the band playing on deck creates the illusion of normalcy the outcome is inevitable.  The world’s financial markets upon which the economy, your livelihood and pension depends are already history. 

Ever increasing amounts of government money is being printed to delay the moment the ship breaks in two and heads for the ocean deep.  That is the moment that government money hyper-inflates into worthlessness.  Alasdair Macleod, Head of Research at Goldmoney believes this could happen by the end of 2020.

So where is the lifeboat?

750,000 Kiwis can now receive 10,000 RedPill free, no strings attached by simply entering the address of their Waves wallet into the RedPill website.  Once all RedPill have been issued it can be used to pay for goods and services using the QR code from your mobile phone.

Because the value of RedPill is not tied to the financial system it could be your lifeboat.

Most passengers on the Titanic lost their lives.  Many did not believe a ship that size could sink and did nothing to save themselves.  For others there were simply not enough lifeboats.

Unlike government money, including the New Zealand dollar, RedPill money is hard capped – no more RedPill can ever be issued.  This avoids the risk of hyperinflation by printing more.

Unlike government money RedPill is linked to gold.  Once all RedPill are issued we suggest people use them so that 1,000 RedPill = 1 oz of gold.  That is about NZD 2.60 per RedPill at today’s prices. 

Because the value of gold has medium and long term stability this means that RedPill has not the same tendency hyper-inflate but buy the same goods in 5, 10 and 30 years’ time as it does today. 

In the past periods with stable money linked to gold (the gold standard) have been the most prosperous in history and have coincided with greater social justice.

Unlike government money RedPill has no central authority.  No one controls the money except the people who use it.  Once all RedPill have been issued my role as the issuer comes to an end.

Unlike government money in your bank account your RedPill are anonymous.  You only give us your Waves wallet address to receive your 10,000 RedPill.  We have no way of telling who you are and why should we know?

Unlike government money only you control your RedPill account.  This keeps your money in your hands.  In Cyprus in 2013 the government took billions of dollars from people’s bank accounts which they have never recovered.

RedPill represents what you can do to help yourself and New Zealand.  All RedPill need to be issued before we start using it.  So tell text and email your friends.  Give them a seat in the lifeboat.