Bank Closure Story Peddles Bailout Propaganda
A hoax Internet rumor that has been doing the rounds over the last few days posits that unless the House follows the Senate in approving the bailout bill tonight then all U.S. banks will be forced to close for one week. The scam is noteworthy because it echoes the fearmongering rhetoric being spewed by the White House, while the source of the claim leads back to an alleged FBI informant.
The fact that people are pulling their money out of the banks is undeniable, indeed, following the collapse of Lehman Brothers, even Yahoo.com carried a story admitting there was already a "slow motion run on banks".
Experts such as Mark Patterson, chairman of private equity fund MattlinPatterson, have warned that 300 to 500 U.S. banks are set to fail over the next three years and as a result absorb all of the FDIC’s pool of funds.
The Federal Deposit Insurance Corp., which guarantees individual accounts up to $100,000, only has about $50 billion to “insure” about $1 trillion in assets across the nation’s financial institutions.
The reality of the danger of a run on the banks in a time of financial crisis is all too real, which makes unsubstantiated Internet hoaxes all the more irresponsible. Indeed, a Hong Kong man who posted an Internet rumor claiming that a financial institution would be shut down was arrested this week. Another man was arrested on Saturday for urging people to withdraw money from a local bank that he claimed was about to be shut down.
There's a clear difference between warning people about how to secure their assets and outright scare mongering about runs on specific banks.
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Originating from a so-called "alternative news website" that has routinely proven to be a peddler of disinformation in the past, the rumor states, "Reliable word that Bank of America branch managers just received a message via the U.S. Federal Reserve Wire system from the US Federal Reserve instructing them to "perhaps be ready for a one-week universal shut-down of the banking system", including access to checking accounts, savings accounts, credit cards and ATM's."
"Additional word is that a silent run is taking place on many U.S. Banks with customers withdrawing huge amounts from all banks almost everyday," the claim reads. "My source says that unless Congress comes through with a plan which will stop the silent run, Banks will be forced to close to stop the run."
The most interesting aspect of the hoax is that it actually echoes rhetoric being used by the White House and the Federal Reserve in order to ram through the widely despised bailout bill, by using economic terrorism and the fear of total collapse of the financial system to get the message across, just as Bush, Bernanke and Paulson have been ferociously doing for the past two weeks.
No surprise therefore that we learn the source of the hoax is Hal Turner, who was exposed earlier this year as an alleged FBI informant posing as a white supremacist.
In January, hackers broke into Turner's computer server and found e-mails between Turner and an FBI agent who was apparently Turner's handler. Turner was providing information to the FBI agent about individuals who attended his neo-nazi rallies, along with a potential assassination plot against Senator Russ Feingold.
"Once again," Turner wrote to the agent, "my fierce rhetoric has served to flush out a possible crazy."
When he was confronted by his readers, Turner shut down his website and vowed to separate himself from the "pro-White" movement. His site later returned in the form of a blog hosted on blogspot.com.
The Southern Poverty Law Center documented the case in an article entitled, FBI's Use of Neo-Nazi Informant Knocked. Both the FBI and Turner have refused to comment on the allegations.
Considering the fact that Turner has been left alone despite arguing that killing certain federal judges "may be illegal, but it wouldn't be wrong" and outright calling for the murder of immigrants crossing border from Mexico, it's no surprise that his latest scam, despite its blatant illegality, will go unnoticed by the same authorities that Turner apparently accepts a paycheck from.
The SLPC article states,
So Turner's alleged relationship with the FBI apparently affords him immunity from any legal consequences of making death threats, just as neo-con radio talk show host Michael Reagan was left alone despite openly advocating the assassination of Mark Dice and stating "I'll pay for the bullets".
Despite its brazenly unreliable origins, the bank closure hoax has been cropping up in e mails, forums and blogs across the Internet, almost to the point of going viral.
The fact that the scam actually endorses the necessity of passing the bailout bill should tell us in no uncertain terms that it can be attributed to the same economic terrorists that have brow-beaten the American people with threats of a financial apocalypse if the bankers and the Wall Street crooks do not get their way.
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