So, Why That Mysterious $114 Billion Bank Deposits Withdrawal in Early January?

Published on naked capitalism, by Lambert Strether at Corrente, JANUARY 28, 2013.

It’s with some trepidation that I post something on actual finance, but the $114 billion withdrawal story struck me as strange at the time, and then… it vanished, as mysteriously as it had appeared. I don’t like patterns like that, or loose ends like that. So I’m putting the the mystery before the NC commentariat, in the hopes that they’ve got better answers, not than I do (that would not be hard), but than the business press did in their coverage. 

As the great Peggy Nooonan once remarked: “It would be irresponsible not to speculate!” … //

… I remember, vaguely, an extremely long New Yorker story that turned out to be about not finding a thought-to-be extinct bird in a swamp. This post is a little like that story, isn’t it? Still:1. A change of very great magnitude

  • 2. In an unexpected direction
  • 3. That nobody can explain

Is a story to watch, isn’t it?

NOTE * I’m not sure where this comparison comes from. “The Federal Reserve at one point injected more than $100 billion in additional liquidity, an unprecedented sum. At the core of it all was the disruption of interbank payments.” The Fed See Jeffrey M. Lacker. Payment System Disruptions and the Federal Reserve Following September 11, 2001. Federal Reserve Bank of Richmond, Richmond, Virginia, 23219, USA, November 17, 2003 [PDF] Not sure that “liquidity” is directly comparable to bank deposits, though. Maybe somebody who knows how to work the Fed’s site can give a better answer than I can … //

… (full text).

Links:

US banks shaken by biggest fund withdrawals since 9/11, on Russia Today RT, Jan 25, 2013:
US Federal Reserve is reporting a major deposit withdrawal from the nation’s bank accounts. The financial system has not seen such a massive fund outflow since 9/11 attacks …;

Anonymous – Operation Greenout, 1.38 min, uploaded by youcefdar,
October 20, 2011: Cause of the fractional banking system most banks wont cover all their deposits and create fiat money. So if 5-10% of all deposits of a bank would be withdrawn most banks will be run out of hard cash. The bank goes bankrupt and all other deposits lose their value, because this (fiat) money never was covered by hard cash;

Central banking with other people’s gold: A $368bn treasure trove in Lower Manhattan (Op-Ed), on Russian Today RT, Jan 23, 2013: Germany is repatriating its gold reserves from the New York Federal Reserve. This decision has created a frenzy in the gold market. But that is just the tip of the iceberg …;

same topic on Google web-search;

Purging Economics of Religion: A Rebuttal to Robert Nelson’s Defence of The Great Chain of Being, published on naked capitalism, by Philip Pilkington (a writer and research assistant at Kingston University in London), JANUARY 28, 2013;

Investigators seek to strip United Russia MP of immunity, on Russia Today RT, Jan 30, 2013;

Egypt’s Morsi rejects opposition calls for unity government as clashes claim more lives (PHOTOS), video 0.48 min on Russia Today RT, Jan 31, 2013.

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