Yesterday we saw reports from Info Wars about a letter received from a Chase business banking customer limiting cash use per cycle to $50,000 and forbidding international wire payments. On the surface the letter looked legit (after having received hundreds of such letters over the years) but was this customer in particular having some specific problem (such as bad credit or some red flag in bank algo)?
Subsequently, other sites confirmed based on clients who had Chase accounts and had received similar letters (template letter). Today, from Alex Jones:
UPDATE: Alex Jones: The fact that these letters were being sent out to Chase customers was confirmed at the time that we published, but in the last 24 hours we have confirmed that even large businesses doing international transactions have also received the same letters.
I personally visited Chase Bank and inquired about setting up an account and asked if I could wire money out of the country or withdraw the amounts of cash listed in their letter. I was told no, and that I would have to “qualify” with them for a special type of international bank account and would have to deposit huge amounts of money and pay fees to be able to access those services.
Anyone with a Chase account should be concerned, and consider using another bank. But the bigger question is this a unique Chase policy, or part of a US bank industry policy?
Certainly it would be impossible to run an import driven economy with a trade deficit when making international payments is impossible or government controlled. Based on the above testimony it would indicate that special designated accounts will be allowed to make payments to facilitate trade, which would also indicate this is designed to keep ‘hot money’ from flowing out of the US banking system in the event of a crisis.
Ironically this news broke yesterday before the Congress passed the bill raising the debt ceiling and ending the government shutdown, although in the letter it states such controls will take place beginning November 17th, 2013.
Also ironically, China is accelerating their process of relaxing capital controls and opening up their markets. Yesterday it was announced offshore Yuan can be invested in Chinese securities in the UK, Hong Kong, and Taiwan. China has been establishing Yuan swap agreements with major Forex trading centers.
JPMorgan has now denied this is a form of ‘capital controls’ but their response has to do with verbiage, they call it ‘derisking.’
In any event, we can expect more types of ‘derisking’ scenarios from US banks, the only solution is to be outside the system, by having your own financial institution, based outside the US.
GIH Members please read the following GIH report if you have not already:
GIH Surviving The Crisis An investors guide – Globalintelhub.com exclusive report how investors can protect themselves from financial crisis
Chase Capital Controls Research
Further info has been provided by these sources:
JPMorgan Chase (JPM) says news reports circulating on the Internet that the bank is exerting new capital controls on certain bank accounts are an overreaction to a “streamlining” and “derisking” process Chase says has been underway for several months.
The reports indicate the bank has moved to limit cash withdrawals and wire transfers for certain business customers starting on November 17, including Chase BusinessSelect checking and Chase BusinessClassic checking. The bank has sent letters to certain customers saying they will be unable to send and receive domestic and international wire transfers, and “cash activity” will be limited to $50,000 per statement cycle, including cash deposits, night drops, and ATM and cash withdrawals.