Recently by Mark Nestmann: No Statute of Limitations for Failing To File U.S. Tax Returns
Once you deposit money in a bank, from a legal standpoint, that money is no longer yours. Instead, the bank owns it. You are an unsecured creditor. What’s more, in the event of future bank failures, the U.S. government has now confirmed that rather than paying off depositors, it may instead force them to submit to a “bail-in” regime similar to what recently transpired in Cyprus.
Only a few years ago, U.S. banks paid interest rates of 4% or higher on savings accounts and certificates of deposit. If it were still possible to obtain these returns today, U.S. depositors might decide that the risk of becoming a “bail-in” victim would be worth it. However, the typical interest rate on a U.S. savings account today hovers around 0.25%. This paltry return hardly compensates for the risks associated with a possible bank failure and subsequent bail-in.
Because of the skewed risk-reward ratio associated with deposits in U.S. banks, many depositors have decided to redeploy these assets. Some depositors have moved their savings to stronger banks. Others have decided to save the old-fashioned way. They now keep at least some of the money that they once deposited in banks in cash stored in a safe at home or other secure location.
Unfortunately, this strategy poses its own risks due to federal and state civil forfeiture laws. Law enforcement agencies consider cash holdings inherently suspicious. Under the topsy-turvy legal process of civil forfeiture, they can seize your cash if they believe that it’s somehow connected to a crime.
link: http://archive.lewrockwell.com/nestmann/nestmann61.1.html
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