Posted on 06/30/2013 6:06:03 AM PDT by SeekAndFind
Did you actually believe that they were not going to use the precedent that they set in Cyprus? On Thursday, EU finance ministers agreed to a shocking new plan that will make every bank account in Europe vulnerable to Cyprus-style bail-ins. In other words, the wealth confiscation that we just witnessed in Cyprus will now be used as a template for future bank failures all over Europe. That means that if you have a bank account in Europe, you could wake up some morning and every penny in that account over 100,000 euros could be gone. That is exactly what happened in Cyprus, and now EU officials plan to do the same thing all over Europe. For quite a while EU officials insisted that Cyprus was a "special case", but now we see that was a lie. International outrage over what happened in Cyprus has died down, and now they are pushing forward with what they probably had planned all along. But why have they chosen this specific moment to implement such a plan? Are they anticipating that we will see a wave of bank failures soon? Do they know something that they aren't telling us?
Amazingly, this announcement received very little notice in the international media. The fact that bank account confiscation will now be a permanent part of the plan to bail out troubled banks in Europe should have made headline news all over the globe. The following is how CNN described the plan...
European Union finance ministers approved a plan Thursday for dealing with future bank bailouts, forcing bondholders and shareholders to take the hit for bank rescues ahead of taxpayers.
The new framework requires bondholders, shareholders and large depositors with over 100,000 euros to be first to suffer losses when banks fail. Depositors with less than 100,000 euros will be protected. Taxpayer funds would be used only as a last resort.
According to this new plan, bondholders will be the first to be required to "contribute" when a bank bailout is necessary.
Do you want to guess what that is going to do to the price of European bank bonds?
Shareholders of the bank will be the next in line to get hit when a bank bailout happens.
After that, they will go after those that have more than 100,000 euros in their bank accounts.
EU officials say that such a plan is needed because bailing out banks with taxpayer money was creating too many problems...
The European Union spent the equivalent of a third of its economic output on saving its banks between 2008 and 2011, using taxpayer cash but struggling to contain the crisis and - in the case of Ireland - almost bankrupting the country.
But a bailout of Cyprus in March that forced losses on depositors marked a harsher approach that can now, following Thursday's agreement, be replicated elsewhere.
Oh wonderful - the "Cyprus solution" can now be "replicated" everywhere in Europe.
This plan will now be submitted to the European Parliament for final approval. The goal is to have this plan finalized by the end of this year.
If you have a bank account in Europe with over 100,000 euros in it, get your money out now.
I am not sure how else to say it.
In Cyprus, there were retirees and small businesses that lost hundreds of thousands of euros overnight.
Do not let that happen to you.
And without a doubt, we are going to see a lot of banks fail in Europe over the next few years. This will especially be true once the next great financial crisis strikes.
But even though we haven't even gotten to the next great financial crisis yet, the economic depression in Europe just continues to get even worse. Just consider these facts...
-Car sales in Europe have hit a 20 year low.
-Overall, the unemployment rate in the eurozone is sitting at 12.2 percent. That is a brand new all-time record high.
-An average of 134 retail outlets are shutting down in Italy every single day. Overall, 224,000 retail establishments have closed down in Italy since 2008.
-It is being projected that Italy will need to ask for an EU bailout within 6 months.
-Consumer confidence in France has dropped to an all-time low.
-The unemployment rate in France is up to 10.4 percent. That is the highest that it has been in 15 years.
-Government is now responsible for 57 percent of all economic output in France.
-In May, household lending in Europe declined at the fastest pace in 11 months.
-During the first quarter, disposable income in the UK declined at the fastest pace in 25 years.
-It is being projected that the unemployment rate in Spain will hit 28.5 percent next year.
-Just a few years ago, the percentage of bad loans in Spain was under 2 percent. Now it is sitting at 10.87 percent.
-The national debt in Spain has grown by 19.1 percent over the past 12 months alone.
-The Greek government says that the Greek economy will shrink by 4.5 percent this year.
-It is being projected that the unemployment rate in Greece will rise to 30 percent in 2014.
And it certainly does not help that China has essentially declared a trade war on Europe. That is not going to help struggling European industries at all.
I hope that more Americans will start paying attention to what is happening in Europe. The crippling economic problems that are sweeping across that continent will come here too.
And at some point there is a very good chance that we will also see Cyprus-style bank account confiscation in this country.
So don't put all of your eggs in one basket. It is good to have your assets spread around a bunch of different places. That makes it much harder for them to be wiped out all at once.
What we are watching in Europe right now is really unprecedented in modern times. They are declaring open season on large bank deposits. In the end, a lot of people in Europe are going to lose a lot of money.
Make sure that you are not one of them.
Ok now, we ARE talking about Europe here, So what do you think the ‘Unintended Consequences’ are going to be with this sort of plan?
My first guess is that the Grey and Black market is going to see a major expansion and that the people will start thinking that Organized Crime really isn’t so bad considering the ‘bite’ they take is so MUCH LESS than the governments ‘bite’.
Time to invest in Mattress Manufacturers.
Too bad Cameron is so gutless. If he invaded Brussels right now and arrested every last member of the Commission, “Parliament”, Council of Ministers and whatever other bureaucracy exists there, he could bend the EU to his will and get it out of the hands of the socialist elite. But he so desperately wants to be one of them instead . . .
Since there are €500 bills, you can easily stash a million euros in a small safe deposit box.
Banks offer so little in interest, even on large sums, that there’s little point to letting them borrow your money in order to loan it out to others tenfold. Keep a couple grand in a big bank for ATM convenience, but otherwise put it in a credit union or in coffee cans buried in the back yard.
It's amazing that so many people still don't understand the distinction between "money" and "wealth".
Anything that can be deleted by a keystroke is not "wealth".
Also with extremely low interest rates there will be a temptation to hide cash in the mattress or eve the bank’s safe deposit box to store money rather than deposit accounts.
I’m not sure of the rules and laws they have regarding Safe Deposit Boxes in Europe, but here in the U.S. the DHS can order your box to be opened and they can order the bank to NOT tell you that it occurred or that anything was removed from your safe deposit box.
King Obama’s plan for America. It will probably happen after gun confiscation gets a firm hold. America is converting to a dictatorship.
Actually, the unintended consequences will be black banks. Some individual with credibility will act as a bank for those who do not trust the legal banks.
Importantly, this will generally not be a government currency bank, but one that holds convertible assets other than cash. For example, right now the fine art market is booming, because the wealthy see art as asset protection.
But for those who need currency protection, since currency is interchangeable, it would be hidden in the “data stream” and “buffers” of some currency “river”. The money would be continually in transit until needed, then instantly available.
Leaving the EU governments to rant and rave like France, at the unpatriotic nature of the sheep who refuse to sit still and be painfully shorn.
It’s interesting but all of these machinations are beginning to remind me of some of the Dystopian novels of the last few decades especially the ones where ‘someone’ or a bunch of ‘someones’ get together and form a sea-borne nation that relies on ‘freedom of the seas’ to get out from under the thumbs of the Landlubbers and their rapacious governments.
But getting back to black banking and wealth conservation efforts. Good luck is all I can say, what one person can figure out is sure to be made illegal and subject to total confiscation by one government or another. Especially as those Governments are rapidly running out of ‘other peoples money’.
Someone yesterday mentioned Caligula and his policies in Rome. This is beginning to look sort of familiar I think.
Overall a very good article.
It did, however, miss one very important fact dealing with the Cyprus banking disaster. It was reported that the major Cyprus banks had closed all of their internal branches but kept several of their international branches open.
This meant that the average “Joe Pglumber” couldn’t withdraw any of his money but the international fat cats and criminal elements could and did.
a market solution would be
throw out all the “tax payer” rescues and the regulations designed to prevent them or mitigate the affects of them
require that banks obtain “insolvency” insurance from private insurers
those insurers will set THEIR standards and make THEIR demands on what it will cost the banks for their insurer to “rescue” them and how much of a rescue they are insuring
yes, we, the bank customers, will be the eventual payers of those fees, passed on to us in the financing & banking fees the banks charge us
and, as part of that market solution we will be able to chose the banks who obtain the best “insolvency insurance” premiums from the insurers, increasing the incentive for banks to strive to obtain them
with NO “regulator” set standards of “reserves” and “capitalization”, because government is not standing on the sidelines to “rescue” them
The trouble with the dystopian projects is that they were open to the public and advertised. A real effort would strongly shun both of those things, because it would only work when it was invisible.
Instead of Caligula, I would instead look to the reign of China’s first emperor, Qin Shi Huang. Focused on unifying his empire, the positive things he did were standardization of the written language, weights and measures, to start building the great wall, and things of that sort. But he also set up the world’s first modern style police state.
He decided that China’s history should begin with his reign, so he ordered the destruction of all history books and for thousands of scholars to be buried alive. His secret police kept extensive dossiers on everyone, and they used an enormous network of informants. Local petty officials had the power of life and death over others.
When he died, lots of his top officials met quick ends, and much of his police state machinery was disabled.
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