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Conspiracy Nation -- Vol. 1 Num. 46
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("Quid coniuratio est?")
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[CN Editor -- I cannot vouch for the accuracy of *all* of the
following. It may or may not be true, I just don't know.]
[The following is a transcript of a recorded phone message put
out by a group in Chicago called "Citizens' Committee to Clean Up
the Courts [CCCC]." (312) 731-1100 and (312) 731-1505.]
Hi! Sherman Skolnick, Citizens' Committee to Clean Up the Courts,
9800 Oglesby.
When it comes to financial matters, far too many people believe
in fairy tales.
Fantasy #1: It is O.K. to enter your bank account and put it into
mutual funds. After all, mutual funds are safer than the stock
market. And also, mutual funds are run by skilled managers. *Oh
yeah?*
The facts: In the 1920s and early '30s a lot of folks put their
money into "investment trusts." Few checked out the by-laws. When
redemptions fell below a certain point, the trusts were frozen.
Those left in the pool often ended up with close to zero.
Investment trusts did have a lot of leverage: going up and
slamming down.
The 1930s and investment trusts left such a bad smell, after
World War II the name was changed to "mutual funds." Plenty of
mutual funds use paper and computer tricks to boost the so-called
yield. The dirty, dangerous game is called derivatives: a game
within a game within a Chinese box trick.
Fantasy #2: Banks are safer now than the 1920s and early '30s
because there is Federal Deposit Insurance [FDIC].
Fact: About 14 thousand banks with about a trillion dollars of
deposits are supposedly protected by FDIC which has approximately
$10 billion in reserves. Another insurance company with that kind
of rotten ratio would be declared bankrupt. So the FDIC logo on
the bank door means *nothing!*
Fantasy #3: It's safe to keep your valuables in a safe deposit
box. After all, it's inside a bank!
Fact: The safe deposit box vault is a separate company, not
linked to the bank. The FDIC does not cover the vault company. In
the 1930s, many deposit boxes were raided by bank officials when
the banks went under. Few complained. After all, who wanted to
prove what was inside their box? Some were hiding their valuables
from ex-wives and tax collectors.
The sons and daughters of such bank pirates later, after World
War II, formed state banks and savings and loans with the stolen
goods.
Fantasy #4: A mutual fund advertising it is made up of U.S.
government bonds is 100 percent safe. *Oh yeah?*
The facts: Many offer attractive yields boosted with derivatives
monkey-business tricks. Like other funds, these will freeze
redemptions at a certain point, *and* -- you'll get zero.
Fantasy #5: U.S. government bonds are safe. *Oh yeah?*
Fact: In recent years, Japan has purchased about two-thirds of
new issues of U.S. Treasury notes and bonds. Japan's purchases,
and those of Saudi Arabia, are the only ones the U.S. secretly
promises to redeem in gold. The U.S. Treasury, however, does not