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Insecure: Global Banking’s Reach Exceeds Its Grasp
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Despite a growing pushback against the effort, the rush among international bankers to do away with high-valued currency denominations, the next step in their goal of a cashless society, continues apace.

Having dismissed the concerns of privacy advocates and the like by linking the elimination of paper money to the global war on terrorism, the focus seems to be on arguing how simple the process would be, in an era of ubiquitous credit cards and digitally-linked bank accounts, and how little downside there would be.

To understand the weakness of the existing digital banking system, however, one need only look at the grand-daddy of all big international banks, the Federal Reserve Bank of New York, to see massive problems underlying the system.

February 5, the first Friday of the month, saw the Federal Reserve Bank, and more precisely its customer, the central bank of Bangladesh, ripped off to the tune of $81 million. No one knows who took it, or where the money ended up, and nearly two months later, everyone is engaging in finger pointing.

So what happened? In short, digital banking happened, as hackers put in numerous requests to the Federal Reserve, trying to get them to transfer roughly $1 billion out of Bangladesh’s account, in a flurry of Friday requests. Why Friday? Because Bangladesh is a majority Muslim nation, Friday marks the beginning of their weekend, so any automated notices they received went unread until the first weekday, Sunday. But Sunday is a weekend in New York, so the two banks couldn’t really discuss the theft until Monday, and by then, the money was long gone.

Of the $1 billion in requests, only $81 million went through by then, with another $20 or so million stopped by Deutsche Bank, which noticed an obvious spelling error in one of the requests, and halted it. The rest of the money went through, hit casino accounts in the Philippines, and just disappeared.

Bangladesh is asking the Philippines to look into the matter, but casino regulation in the country is such that the thieves could easily have deposited $81 million with a casino, took it out in chips, cashed the chips in, and made the money totally untraceable. They wouldn’t necessarily have even needed to convert the money into physical cash, once it disappeared onto the casino floor it was as laundered as possible.

The Federal Reserve, for its part, insists the thieves used perfectly legal transfer requests, and that they did nothing wrong. Individual victims of identity theft and credit card scams may find this excuse extremely familiar.

Bangladesh is a large nation though, and despite its abject poverty, a fairly large customer of the Federal Reserve Bank, and when you’re talking about tens of millions of dollars, it is no surprise they are planning to sue the New York bank to get their money back.

The legal underpinnings of such a lawsuit are unclear, given the relative newness of digital banking, but several experts have said they believe Bangladesh has a decent case, on the notion that a large depositor at a huge global bank should have a reasonable expectation of some level of security in that deposit.

The expectation of such security though, appears wholly unfounded, as the Federal Reserve was only too happy to throw a central bank’s money into the account of a random casino, and allow it to disappear into the aether, subsequently washing its hands of the incident.

The promise of a cashless system allowing easy paper trails for governments to follow similarly didn’t pan out, allowing some insight into the first country the money ended up in, but then losing track of it almost immediately.

This banking system is clearly not secure as it is, and imposing it on the American public as a de facto monopoly would further weaken the incentives to make improvements. To trust the entire economy with it is pure folly.

I’ve already opined about the calamity of a cashless society from a moral perspective, allowing unchecked government intrusion which would mean the virtual obliteration of personal privacy, and by extension, the destruction of a truly free market.

But a cashless society with an insecure digital system is doubly cursed, both obliged to participate in a system which gravely undermines their personal liberty, and to watch with no real recourse as their wealth is siphoned off by thieves.

After all, a big central bank like Bangladesh can throw a few million dollars at lawyers to get the Federal Reserve to reimburse them for shoddy security. The number of individuals who could afford that level of legal access is small indeed, and the number who could afford it after being robbed even smaller.

Jason Ditz is news editor at Antiwar.com, a nonprofit organization dedicated to the cause of non-interventionism. His work has appeared in Forbes, Toronto Star, Minneapolis Star-Tribune, Providence Journal, Washington Times and Detroit Free Press.

 
• Category: Economics • Tags: Banking Industry, Government Surveillance 
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  1. Fascinating to learn that the $81 million may have so quickly disappeared through casinos in the Philippines. I look forward confidently to the US using its clout, in this case supported not just by the UK but China, Japan and….. Bangladesh to enact stringent restrictions on every activity which would allow such money laundering with security to be given by a lot of the potential players against failure. E.g. the casinos licenses might be forfeited and sold if they breached the rules in a case where, say $5 million or more was laundered.

    • Replies: @Anonymous
  2. How long would it take for a substitute cash to be provided? Someone will do it and lawyers will find loopholes in any laws which are intended to punish it.

    Start with simply using another country’s currency which has plenty of precedents. For the usual uses of cash it wouldn’t matter that it was not strictly legal tender in the country where it was used.

    So the USG makes it an offence to use renminbi or shekels as currency in the US. And it makes it illegal to trade in bank notes as chattels (bad luck for the numismatists who would then have to hire a lobbyist to get exceptions made for them) so they can’t be used in pseudo barter transactions.

    Still won’t work. Goldman Sachs will issue tokens which entitle the bearer to obtain a nominated quantity of Yuan (renminbi – would someone care to explain proper usage?) from the Bank of China.

    Well that’s a start anyway. I think the memory of Prohibition would come back to forestall effective efforts to kill surrogate currencies.

    • Replies: @TomSchmidt
  3. …And when the power goes out? Disaster areas, say, hurricane or earthquake when the power goes out for days, longer even? EVERY transaction gotta be electronic in this brave new world? Nobody can make friendly little five or ten dollar bets, not to mention the amount of illegal gambling people partake in- March Madness office pools, Superbowl at bars with the number boards and things like that? Kids, five years old, they all gotta carry cards? 5, 10, 25 cent candy, little coin op machines… done for? Can’t mow a neighbor’s yard, shovel snow? Homeless and beggars… so they’re gonna fix that problem first right? Yeah right. You’re on vacation and your wallet gets stolen? Computers go down? Oh, out of luck everybody. You could come up with dozens and dozens of those kind of reasons- then you got your big stuff as power the article. Bank tellers, sure you still need some- but, maybe those jobs made up taking down and fixing all the shit that went wrong digitally? Can they really pull this off? Would this cause such an uproar it might get real ugly, real quick? Sheesh, this might actually wake up the critical mass needed to make real change when people realize just how perversely insane and corrupt our world is. Maybe local, alternate currencies blow up the monopoly central banks have on money. Now that I think about it- bring it on!

    • Agree: Wizard of Oz
  4. anonymous • Disclaimer says:

    The writer’s name is mispelled at the bottom of the piece.

  5. Rehmat says:

    Bangladesh is not the first victim of the Zionist-controlled Federal Reserve’s Onzi Scam.

    In 2013, Germany’s Bundesbank decided to repatriate its 674 metric tons (out of 1,500 metric tons) of gold from the New York-based Federal Reserve Bank by 2020 to restore public confidence in the safety of Germany’s gold reserves. However, to its great shock, it found out that most of its gold deposits were missing.

    In the past, Saddam Hussein, Qaddafi, Hugo Chavez and Tehran had demanded the repatriation of their national gold deposits from the United States – and remember what happened to them.

    https://rehmat1.com/2013/08/21/federal-reserve-and-the-missing-674-tons-gold/

  6. mtn cur says:

    I carry cash and a Ruger bought with stimulus money to limit card use to keep criminals out of my accounts. Imagine my surprise at the government thinking I use cash to protect against the government. Will the real criminals please stand up. Against the wall.

  7. mtn cur says:

    Gold makes good non toxic fishing sinkers; however, a very heavy copper jacket is required for non toxic bullets. Silver bullets are better and can be used on CEOs,. investment bankers and real estate developers . Note that that air force uses gold in the visors of jet pilots.

  8. @Wizard of Oz

    US silver coins have a face value that is 1/10th of the silver value. One could issue deposit certificates for silver coins that allow you to control $90,000 in cash value while reporting only $9000 in currency value. I wonder how one might do this?

  9. Agent76 says:

    The title of this article is spot on! Even more than folks realize until you review this, and I encourage everyone attempt verification as I do for everything before posting any information.

    A surprisingly small number of corporations control massive global market shares. How many of the brands below do you use? It is a Small World at the Top, and the largest banks hold a total of $25.1 trillion dollars or enough to fund the federal U.S. government for over 7 years or roughly $3500 per person on earth.

    Here is the .01% list: Which Corporations Control the World?

    http://www.internationalbusinessguide.org/corporations/

  10. Agent76 says:

    March 9, 2016 Who Controls the Central Banks? Mark Carney, Governor of the … “Bank of Goldman Sachs” By Prof Michel Chossudovsky, who publishes Global Research.

    In the event of a vote in favour of Brexit, The Governor of the Bank of England Dr. Mark Carney reassured the British public: “we will do everything in our power to discharge our responsibility to achieve monetary stability and financial stability…”

    http://www.washingtonsblog.com/2016/03/controls-central-banks-mark-carney-governor-bank-goldman-sachs.html

  11. Agent76 says:

    Guess what is coming as well? As of August 14, 2015, DNA Buccal Collection kits have ‘ONLY ONE’ blue EasiCollect device containing one FTA card. Kits that contain two blue Easicollect devices will still be accepted by the Federal DNA Database Unit for processing but will no longer be shipped out. Please proceed with collections according to the instructions enclosed in the kit as you normally would, using the one blue Easicollect device.

    DNA—Federal DNA Database Unit (FDDU)
    Mission

    The NGI system, developed over multiple years, is an incremental replacement of the Integrated Automated Fingerprint Identification System (IAFIS) that provides new functionality and improves existing capabilities.

    http://www.fbi.gov/about-us/cjis/fingerprints_biometrics/ngi

  12. Anonymous • Disclaimer says:

    The War on Cash will have it’s guerrilla forces. Just back from Africa where everything is done in local cash and cross border trade done in USD 50s and 100s.

    Cash talks. Bankcards, Bitcoins and BS walk.

    For me bankcards are for online payments. For eveything else there’s cash.

  13. Anonymous • Disclaimer says:
    @Wizard of Oz

    @Wizard of oz
    “E.g. the casinos licenses might be forfeited and sold if they breached the rules in a case where, say $5 million or more was laundered”

    LOL- ain’t gonna happen.

    Casinos are a major source of tourism (and other) income, and they won’t be regulated as long as the country wants to compete with the burgoning business of gambling in Asia.

    http://www.rappler.com/nation/21209-ph-casinos-exempt-from-tougher-anti-money-laundering-law

  14. annamaria says:

    The US should be called the Empire of Federal Reserve.
    A nice explanation of how the banksters have bought POTUS to ensure their wellbeing despite of everything: http://www.counterpunch.org/2016/04/01/the-lies-of-neoliberal-economics-or-how-america-became-a-nation-of-sharecroppers/

    “Obama was picked by Rubin of Wall Street to promise was he was going to really do. It was what any president today is going to do: A politician’s job is to deliver whoever voted for you to your backers, who are on Wall Street… Their job is to bail out Wall Street and make the people pay… The Federal Reserve has given Wall Street $4.5 trillion. That $4.5 trillion could have been used to write down the debt. And then we wouldn’t have a problem. Then everybody would have a lower costs of living. The $4.5 trillion could have been spent into the economy…
    And what does Wall Street do? It lends out money. So the solution to the debt problem that we’re in – debt deflation – is to lend even more money. That’s what makes the economy a Ponzi scheme…
    Wall Street campaign contributors have a veto over who you’re going to appoint as Secretary of the Treasury. They want the the Attorney General to make sure that nobody has to pay the price for financial crime.”

    • Replies: @Agent76
  15. Agent76 says:
    @annamaria

    You are spot on annamarina! 4-2-2016 Understanding the New World Order – The Who, What, How and Why

    “A brief glance at history will tell you that emperors and tyrants have been trying to expand their power and influence over greater and greater areas for centuries. It just happens that today it can be done on a global scale like never before…”

    http://humansarefree.com/2016/04/understanding-new-world-order-who-what.html

  16. Agent76 says:

    4-2-2016 Understanding the New World Order – The Who, What, How and Why

    “A brief glance at history will tell you that emperors and tyrants have been trying to expand their power and influence over greater and greater areas for centuries. It just happens that today it can be done on a global scale like never before…”

    http://humansarefree.com/2016/04/understanding-new-world-order-who-what.html

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