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Are Bank Safe Deposit Boxes Safe? No

Commodities / Gold & Silver 2009 Nov 02, 2009 - 06:02 PM GMT

By: David_Vaughn

Commodities

Best Financial Markets Analysis ArticleGot a lot of email when I suggested that safe deposit boxes are not safe from bank or government intrusion.

In most minds the “safe deposit box” is the “holy grail.”  Our comfort will always be OK as long as our safe deposit box remains safe from others ill intent.  Noticed the last few years how the Swiss Banks are no longer confidential places for one to store anything of value?  The US government has applied pressure on Switzerland to make available Swiss bank records at any time requested by the US Government. 


And in light of these facts you have the foolishness to believe your humble safe deposit box at the local corner bank is safe?  Give me a break.  Why is it that US citizens always seem to be behind the times when assimilating current information?  Well, I can understand this if the only news one watches is Brian Williams or Katie Couric.  I feel informed already.  Want to hear a sample of Ms. Courics world wide exposing articles seen and heard across the world?

“…parenting expert and author of "Queen Bees & Wannabes," talks about raising teenagers, what parents can do about bullying in schools…”

Definitely a worthwhile subject to study.  But on the evening world news?  Anyway.  Maybe you get my point.  Let’s get back to the story about the inviolability of the average bank savings deposit box. A lot of readers thought I was nuts when I told them their safety deposit bank boxes were not safe.  I sincerely encourage you to turn the channel and start following REAL news services instead of the big 3 at 6:30PM.  That is if you really want to learn what is going on today. 

It’s really amazing to me that the majority of citizens are not even aware of the fact that many of their personal freedoms that they took for granted yesterday are already gone.  Of course, this process is accomplished a little at a time and usually in the dark of night when everyone is asleep.  When finally discovered by the average man or woman on the street the shock is kind of like running to the linen closet and finding the last roll of TP gone.  What do you do?  From an email reader below.

David:
“I have always enjoyed reading your articles and have learned quite a bit from them.   However, I am a little perplexed about the portion that states"  "Hold your physical gold and physical silver and do not place any thing of value in your bank deposit box.  Already across the nation deposit boxes are being opened and the contents auctioned off by the banks to raise money.  Bank of American being one of these banks.  Again, do not place any thing of value in your bank deposit box.”  "I have what is called a safety deposit box and I do keep valuables in that box and it is hard for me to believe the contents could be confiscated and sold.  David, please explain!  Thank you Sincerely, Charles”

And below is another faithful believer!

David:
“You write that banks including B of A are seizing the contents of safety boxes and auctioning it off. I have not heard anywhere else that this is happening? Is it true? Can you verify this is so? Or is it only in cases where the rental fee is delinquent on a particular box? Surely this cannot be legal? Please assuage my shattered nerves!!! Pat”

Wow!  There are this many people that really believe their money to be safe in the hallowed walls of their local bank vault?  What fools these mortals be.

David,
“I was shocked to read in your article that “Already across the nation deposit boxes are being opened and the contents auctioned off by the banks to raise money.  Bank of America being one of these banks.”  “Would you please point me to your source for that?”   Thank you, David

Daddy always told me to trust my local bank. 

Dear Sir,
“My only question is, why are you in the privileged position to know exactly what is going on and we do not know it?”  Roelof

Uh, oh!!!  Someone has found out about my “privileged position.”  I watch other news other than what is fed as the evening slop at 6:30.  I love the email below. 

“I don’t think the US is anywhere near becoming a totalitarian country…”
Juan.

Welcome to the real world, Juan.  The world of the 21st century.  And another email reader below asks the most appropriate question.  At least this fellow below knows what’s really important.

David,
“Where are you finding the cheap beer?”  Greg

ABCNEWS - “Not-So-Safe-Deposit Boxes: States Seize Citizens' Property to Balance Their Budgets” “Resources to Search for Unclaimed Property in Your Name” 

“The 50 U.S. states are holding more than $32 billion worth of unclaimed property that they're supposed to safeguard for their citizens. But a "Good Morning America" investigation found some states aggressively seize property that isn't really unclaimed and then use the money -- your money -- to balance their budgets.”  “Not-So-Safe-Deposit Boxes San Francisco resident Carla Ruff's safe-deposit box was drilled, seized, and turned over to the state of California, marked "owner unknown." "I was appalled," Ruff said. "I felt violated."

“Unknown? Carla's name was right on documents in the box at the Noe Valley Bank of America location. So was her address -- a house about six blocks from the bank. Carla had a checking account at the bank, too -- still does -- and receives regular statements. Plus, she has receipts showing she's the kind of person who paid her box rental fee. And yet, she says nobody ever notified her. " “They are zealously uncovering accounts that are not unclaimed," Ruff said. To make matters worse, Ruff discovered the loss when she went to her box to retrieve important paperwork she needed because her husband was dying. Those papers had been shredded.”

“And that's not all. Her great-grandmother's precious natural pearls and other jewelry had been auctioned off. They were sold for just $1,800, even though they were appraised for $82,500. "These things were things that she gave to me," Ruff said. "I valued them because I loved her." “Bank of America told ABC News it deeply regrets the situation…”   “…Ruff is not alone. Attorney Bill Palmer represents her and countless other citizens in a class action lawsuit against the state of California. "They figured the safety-deposit box was safer than keeping it under the mattress," Palmer said. "In the case of a lot of citizens, they were wrong, weren't they?"

“California law used to say property was unclaimed if the rightful owner had had no contact with the business for 15 years. But during various state budget crises, the waiting period was reduced to seven years, and then five, and then three. Legislators even tried for one year. Why? Because the state wanted to use that free money.”

"That's absolutely correct," said California State Controller John Chiang, who inherited the situation when he came into office. "What we've done here over the last two decades has been dead wrong. We've kept the property and not provided owners with the opportunities -- the best opportunities -- to get their property back."

“Chiang now faces the daunting task of returning $5.1 billion worth of unclaimed property to people. Some states keep their unclaimed property in a special trust fund and only tap into the interest they earn on it. But California dumps the money into the general fund -- and spends it. "It's supposed to be segregated and protected," Palmer said.”

"California has taken all of that $5.1 billion and has used it as a massive loan." “California became so addicted to spending people's money, that, for years, it simply stopped sending notices to the rightful owners.”

“ABC News obtained a 1996 internal memo in which the lawyer for the Bureau of Unclaimed Property argued against expanding programs to notify rightful owners. He wrote, "It could well result in additional claims of monies that would otherwise flow into the general fund." 

“Seizing More Than Safe-Deposit Boxes.  It's not just safe-deposit boxes. A British man went to retire and discovered the $4 million in U.S. stock he had been counting on had been seized and sold for $200,000 years earlier -- even though he was in touch with the company about other matters. A Sacramento family lost out on railroad land rights their ancestors had owned for generations -- also sold off as unclaimed property. "If I had hung onto it, I would be a millionaire, multimillionaire," said John Whitley. "But that didn't happen because we didn't get to hold it."

“State Reforms. California's unclaimed property program was so out of control that, last year, the courts issued injunctions barring the state from seizing any more property until it made reforms.” 
“…all 50 states pay private contractors 10 to 12 percent commissions to locate and seize accounts for them. It's an inherent conflict of interest: the more rightful owners are found, the less money the contractors make.”  abcnews.go.com/GMA/story?id=4832471&page=1

“Well, At Least We Can Trust The FDIC.  Not”

 “I made a deposit of $141,000 with IndyMac. Even though the limit for insurability was $100,000, I felt comfortable. No huge bank had been closed for many years. Three weeks later, IndyMac bank went belly-up. I found out the day of closing (a Friday in July) that the bank would return $100,000 and would pay back another $20,000 as a "dividend" at the direction of Federal Deposit Insurance Corp. The following week, an FDIC agent told me an IOU would be issued to me; as the bank's assets were sold, I would be first in line to receive the rest of my money.”

“A month later, I spoke to an FDIC agent in Dallas who told me it was very "unlikely" that I would receive any more money.”

“She said the FDIC had already decided how much it would invest in that bank's closure and all but said the IOU was worthless. I see IndyMac's assets being sold now, and the bank continues to conduct business as usual. But I have had no communication and it's looking grim. The government keeps throwing money at financial institutions, but obviously nothing is coming my way.” -- Jackie, Dallas  finance.yahoo.com/banking-budgeting/article/108019/hair-raising-money-tales?”

Never would I have believed I would see the country moving so quickly down the path to obscurity.  A trillion here.  A trillion there.  And things will always remain the same.  Other countries love to purchase paper backed by nothing that is guaranteed to depreciate over time.  Yeah, right. 

World Finally Freed From Hate

Well, are you glad that the new hate crime bill has finally passed? 

Passed as an add on to the defense bill.  I’m a little confused though.  I thought every crime committed was based on a foundation of “hate.”  Some where here I don’t get it.  We know that every crime is generated by a heart filled by hate and anger…that is a given.  But how do we measure the level of evil and the intensity of the hate involved with every crime committed?  So the level of punishment will depend on the “type” of crime committed and to whom?  Well, how do we know that another crime committed for another reason might have had more hate and evil than the other crime committed? 

I guess as time marches on there will be a level of punishment dictated by the passion of hate and evil of the criminal.  We just are going to have to develop some type of instrument that will have the ability to measure the level of “hate” within a man or woman’s heart with every crime committed.  Seriously, how are we going to begin to “measure” hate?

These moves are effectively working to develop a caste system similar to India.  Don’t believe me?  Now, different degrees of punishment for criminals dependent on what class of victim they commit their crime against.  Sounds like discrimination to me.  Guess which class in the future criminals will be more apt to commit crimes against?  Naturally the class that bears the least degree of punishment.  Forget equality under the law. 

And How About All Those New Stimulus Jobs?

"If we don't have job growth, we can't have a strong, or even sustained economic recovery," said Stuart Hoffman, chief economist with PNC Financial Services.” "At this point, we're still losing jobs. For those who say the economy has already turned, I'm dubious about that," said Dan Seiver, a finance professor at San Diego State University.” money.cnn.com/2009/10/21/markets/thebuzz/index.htm?

Commercial Banks Next to Go Belly Up

Well, the number of failed banks has now risen to 115.  But don’t worry as the economy is getting better.  9 banks closed in one day on a Friday.  But don’t worry as the FDIC will protect everyone’s savings.  And the next bubble to snap?  And now it appears the commercial real estate loans will be the next bubble to pop.  But don’t worry.

Ever hear of C.S. Lewis?  Smart man.  Very perceptive.  Sounds like the man lived in our generation and not the last.

"Of all tyrannies a tyranny sincerely exercised for the good of its victim may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated, but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience." C. S. Lewis

Ready To Start Speculating In Gold Mining Stocks?

How do you know which junior mining stocks are quality and worth buying?  While there are many who believe management is the most important asset to a quality mining company…I say it’s whether or not they have the gold in the ground. 

Sure, management is extremely important, but so is the fact of whether or not the company has discovered an economically viable deposit.

I have seen many top notch managers who maybe find one good deposit in their lifetime.  A few who have repeated their success.   But why guess a mans yet undetermined future success?   Look for the company that has already proven they have the yellow stuff in the ground.  If it’s that good a find there is even the additional good chance the company may be bought out by a major for a premium. 

Jim Sinclair – “As gold makes its way past $1000 to $1650 and beyond, the order up to now has been Major Producers and the top half of Junior Producers benefiting…”  “Watch closely now as a shift takes place.” 

”…I anticipate that the bottom half of Junior Producers and the viable companies in Gold Exploration entities to outperform the top half of Junior Producers and Major Producers as the price of gold continues higher in late 2009 and 2010.”  ”History tells us this is how it has always happened, and I believe it will again.”  Respectfully, Jim Sinclair

Look for the gold in the ground.  “Proven & Probable” being the most respected and affirmed deposit.  This is the term the banks like best before lending money.

Excellent Gold Stocks to Buy

Last 10 companies reviewed this past year 2009.............%Gain or Loss…

Gold Letter (Scott “Free”)

David Vaughn
David4054@charter.net

The future legacy of the United States will be the refined art of financial leverage.

© Copyright 2009, Gold Letter Inc.

“The Worldwatch Institute, an organization that focuses on environmental, social and economic trends, says the current rate of global demand for resources is unsustainable.”  

The publisher and its affiliates, officers, directors and owner may actively trade in investments discussed in this newsletter. They may have positions in the securities recommended and may increase or decrease such positions without notice. The publisher is not a registered investment advisor. Subscribers should not view this publication as offering personalized legal, tax, accounting or investment-related advice. The news and editorial viewpoints, and other information on the investments discussed herein are obtained from sources deemed reliable, but their accuracy is not guaranteed. © Copyright 2009, Gold Letter Inc.

David Vaughn Archive

© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Charmaine
11 Nov 09, 23:18
Bank Safety Deposit Box is Not Safe

I have a safety deposit box at Wachovia Bank in Las Vegas. I just received a letter a couple of days ago that was dated a month ago that they had "inadvertently drilled open" my safety deposit box and "apologises for the inconvenience". When I called them, they said that it was a mistake. How could they have made a mistake like that, how careless. I don't trust Wachovia. I wonder what is missing now.


Kathleen
10 Mar 11, 11:01
Wachovia Bank in Las Vegas opened MY Safety Deposit Box

When Wachovia Bank in Las Vegas was open, they also drilled open my Safety Deposit Box and "apologized for the mistake" saying this never happens. Seeing Charmaine's comment that this happened to her too tells me that something was going on behind the scene. Then Wells Fargo took over Wachovia and they moved the boxes earlier than the letter said they would. I went to retrieve the contents and they were already moved. I am beginning to get very leary of having a safety deposit box!


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