With record youth unemployment, and many analysts now stating that the unemployment in many areas is (unofficially) worse than figures during the Great Depression, it should be no surprise to anyone that things are predicted to worsen over the course of the coming months and years.
But, for those who are not heavily invested in the markets, or considering retiring any time soon, the primary concern is the day-to-day banking we all rely on to manage our finances. Up until now there hasn’t been a great deal for the average customer to be concerned about when it comes to the act of depositing and withdrawing money, paying bills and saving for a rainy day. Apart from the increasing cost of living, of course.
While it may have been true before Saturday 24th September that the average citizen with money in the bank and a stable job didn’t have any immediately urgent concerns, things have now changed.
This week, Bank of America announced that it would begin charging customers a monthly fee of $5 for customers using a debit card. Yes, that’s a DEBIT card, the traditional form of plastic used by many who do not want, or cannot afford, the trappings of a credit card.
While on the face of it this probably doesn’t seem too concerning for the average person, for many who are already irate with the banking establishment and financial brands in general this could prove to be the final straw.
As news of these charges began to spread across the Internet when announced on Friday 30th September, the Bank of America website became unavailable. A message on the site read “This site is temporarily unavailable” with no explanation of the reason issued.
Tara Burke, a spokesperson for the bank, denied that this was as a result of hacking (Internet group Anonymous had previously attacked the Bank of America site in December 2010 and had threatened to do so again) but declined to explain what the cause was.
Why did things change on September 24th? This was the day that news finally broke regarding the ongoing Occupy Wall Street protests, as NYPD officers were filmed using pepper spray and considerable force against protesters.
While the ire of the protesters seems directed predominantly toward the Wall Street corporations who they say are unfairly influencing government to benefit themselves over the people, the reason this marks a watershed moment is because there is an additional protest movement working alongside them.
Several sites and Facebook groups have now risen up, encouraging people to take their money out of ALL large banking institutions in an effort to end their dominance over the economy. They are urging citizens to place their money in smaller, local institutions instead.
Why should this bother you? Because if these groups do indeed succeed in persuading millions of people to withdraw their money, there is a very good chance that Bank of America could collapse, and this would likely be repeated throughout the banking world.
The fractional reserve banking system means that only a percentage of stated assets are actually held by the bank, which is why many who arrive late during a run on a bank will likely find the tills empty when they get there.
This is a risky situation to be in, with the mere mention of a run on a bank often precipitating an actual run on a bank by those who know about the fractional reserve banking system. It’s almost self-perpetuating.
If you’ve been following the development of the protest movement in Wall Street, you’ll also likely know that this is now spreading to other states, with thousands of unemployed young people, union members, teachers, parents, grandmothers… all joining the protests. As word of this movement has spread, even without mainstream media reporting it, the crowds are growing.
On Friday 30th it is estimated that up to 30,000 people attended the Occupy Wall Street protest in Zuccotti Park, and this number is expected to grow in the coming weeks.
During the past week, several unions have voted to align themselves with the protest group. October 15th 2011 has been marked as a global day of protest around the world. And this is the time that Bank of America chooses to introduce a charge which has the potential to swell the anger of the average American even more.
So, what should the average banking customer do? I can’t tell you what you should do, but I can tell you what I am planning to do. I am currently looking at alternative places to put my money. I am looking at smaller institutions not exposed to the risks that the largest banking businesses now face. I am also keeping a watchful eye on the financial situation and not placing all of my faith in what the mainstream media is telling me. Paying attention to public sentiment is vital in these times, and the traditional TV media seems lacking in its representation of public opinion.
How long did it take you to see a report discussing the Occupy Wall Street protests which started on the 17th September? Would those same news networks really provide you with the adequate warning you would need if a major banking institution were to fail?
While now is not a time to panic or make rash decisions, it is certainly a time to sit up and pay attention to what is happening in the world around us. We certainly could be on the cusp of a revolutionary period, and while that may bring many joys and changes for people around the world, it is inevitable that there will be an economic cost. The question is whether that economic cost would be any more damaging than continuing with the current course of bailing out banks and seeing our pensions, savings and even our currencies losing their value.
