Best of the Week
Most Popular
1.The Gallery of Crowd Behavior: Goodbye Stock Market All Time Highs - Doug_Wakefieldth
2.Tesco Meltdown Debt Default Risk Could Trigger a Financial Crisis in Early 2015 - Nadeem_Walayat
3.The Trend Every Nation on Earth Is Pouring Money Into - Keith Fitz-Gerald
4.Do Tumbling Buybacks Signal Another Stock Market Crash? - 26Mike_Whitney
5.Could Tesco Go Bust? How to Save Tesco from Debt Bankruptcy Risk - Nadeem_Walayat
6.Gold And Silver Price - Respect The Trend But Prepare For A Reversal - Michael_Noonan
7.U.S. Economy Faltering Momentum, Debt and Asset Bubbles - Lacy Hunt
8.Bullish Silver Stealth Buying - Zeal_LLC
9.Euro, USD, Gold and Stocks According to Chartology - Rambus_Chartology
10.Evidence of Another Even More Sweeping U.S. Housing Market Bust Already Starting to Appear - EWI
Last 5 days
The Colder War: How the Global Energy Trade Slipped From America's Grasp - 30th Oct 14
Don't Get Ruined by These 10 Popular Investment Myths (Part VIII) - 29th Oct 14
Flock of Black Swans Points to Imminent Stock Market Crash - 29th Oct 14
Bank of America's Mortgage Headaches - 29th Oct 14
Risk Management - Why I Run “Ultimate Trailing Stops” on All My Investments - 29th Oct 14
As the Eurozone Economy Stalls, China Cuts the Red Tape - 29th Oct 14
Stock Market Bubble Goes Pop - 29th Oct 14
Gold's Obituary - 29th Oct 14
A Medical Breakthrough Creating Stock Profits - 29th Oct 14
Greenspan: Gold Price Will Rise - 29th Oct 14
The Most Important Stock Market Chart on the Planet - 29th Oct 14
Mysterious Death od CEO Who Went Against the Petrodollar - 29th Oct 14
Hillary Clinton Could Be One of the Best U.S. Presidents Ever - 29th Oct 14
The Worst Advice Wall Street Ever Gave - 29th Oct 14
Bitcoin Price Narrow Range, Might Not Be for Long - 29th Oct 14
UKIP South Yorkshire PCC Election Win is Just Not Going to Happen - 29th Oct 14
Evidence of New U.S. Housing Market Real Estate Bust Starting to Appear - 28th Oct 14
Principle, Rigor and Execution Matter in U.S. Foreign Policy - 28th Oct 14
This Little Piggy Bent The Market - 28th Oct 14
Global Housing Markets - Don’t Buy A Home, You’ll Get Burned! - 28th Oct 14
U.S. Economic Snapshot - Strong Dollar Eating into corporate Profits - 28th Oct 14
Oliver Gross Says Peak Gold Is Here to Stay - 28th Oct 14
The Hedge Fund Rich List Infographic - 28th Oct 14
Does Gold Price Always Respond to Real Interest Rates? - 28th Oct 14
When Will Central Bank Morons Ever Learn? asks Albert Edwards at Societe General - 28th Oct 14
Functional Economics - Getting Your House in Order - 28th Oct 14
Humanity Accelerating to What Exactly? - 27th Oct 14
A Scary Story for Emerging Markets - 27th Oct 14
Could Tesco Go Bust? How to Save Tesco from Debt Bankruptcy Risk - 27th Oct 14
Europe Redefines Bank Stress Tests - 27th Oct 14
Stock Market Intermediate Correction Underway - 27th Oct 14
Why Do Banks Want Our Deposits? Hint: It’s Not to Make Loans - 26th Oct 14
Obamacare Is Not a Revolution, It Is Mere Evolution - 26th Oct 14
Do Tumbling Buybacks Signal Another Stock Market Crash? - 26th Oct 14
Has the FTSE Stock Market Index Put in a Major Top? - 26th Oct 14
Christmas In October – Desperate Measures - 26th Oct 14
Stock Market Primary IV Continues - 26th Oct 14
Gold And Silver Price - Respect The Trend But Prepare For A Reversal - 25th Oct 14
Ebola Has Nothing To Do With The Stock Market - 25th Oct 14
The Gallery of Crowd Behavior: Goodbye Stock Market All Time Highs - 25th Oct 14
Japanese Style Deflation Coming? Where? Fed Falling Behind the Curve? Which Way? - 25th Oct 14
Gold Price Rebounds but Gold Miners Struggle - 25th Oct 14
Stock Market Buy the Dip or Sell the Rally - 25th Oct 14
Get Ready for “Stupid Cheap” Stock Prices - 25th Oct 14
The Trend Every Nation on Earth Is Pouring Money Into - 25th Oct 14 - Keith Fitz-Gerald
Bitcoin Price Decline Stopped, Possibly Temporarily - 25th Oct 14
Bullish Silver Stealth Buying - 24th Oct 14
Blood in the Streets to Create the Gold Stocks Investor Opportunity of the Decade - 24th Oct 14
Swiss ‘Yes’ and ‘No’ Gold Initiative Campaigns Compete at Launches in Bern - 24th Oct 14
War And The Law Of Unintended Consequences - 24th Oct 14
Tesco Meltdown Debt Default Risk Could Trigger a Financial Crisis in Early 2015 - 24th Oct 14
Saudi Move to Cut Oil Prices Is Now Russia's Biggest Economic Threat - 24th Oct 14
US Stock Market Top Is Now In Sight - 24th Oct 14
New Profit Points in the Shifting Balance of Power, Welcome to Saudi America - 24th Oct 14
QE Failure & Folly Of Paper Mache, Treasury Bond Integrated Lifeline Patches - 24th Oct 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stocks Epic Bear Market

Bank Depositor “Haircuts”: Grand “Financial Theft” is the Money Market’s “New Normal”

Politics / Credit Crisis 2013 Mar 30, 2013 - 06:41 PM GMT

By: Stephen_Lendman

Politics

On March 29, Cyprus Mail said banks opened Thursday. They did so amid calm.

Long lines queued. People waited patiently. A feared stampede didn’t materialize. Whether it’s the calm before the storm remains to be seen.

Looting Cypriot bank accounts reflects the new normal. It set a precedent. It did so for Europe. More on that below.


Wall Street banks operate the same way. So did MF Global.

Grand theft reflects official policy. Money is made the old-fashioned way. It’s stolen. Nothing’s done to stop it. Corrupt politicians and regulators permit it. They do so for benefits they derive.

Scamming investors is commonplace. Goldman Sachs derisively calls them “muppets.”

MF Global’s CEO Jon Corzine formerly headed Goldman Sachs. He looted customer accounts. He did so brazenly.

He used client money to speculate. More went for internal purposes. Much went to cover debt obligations and losses. Top firm executives made millions. They did so at customers’ expense.

Financial reform accomplished nothing. Grand theft is institutionalized. Europe’s no different from America. Anything goes is policy.

Banks deposits were considered safe. No longer. Eurocrats changed things. Euro Group head Jeroen Dijsselbloem explained.

Expect more wealth extracted from depositors. Cyprus established a template. Bank accounts in other troubled economies aren’t safe.

“If there is a risk in a bank, our first question should be ‘Okay, what are you in the bank going to do about that,” he asked? “What can you do to recapitalize yourself?’ ”

“If the bank can’t do it, then we’ll talk to the shareholders and the bondholders. We’ll ask them to contribute in recapitalizing the bank, and if necessary the uninsured deposit holders.”

“The consequences may be that it’s the end of story, and that is an approach that I think, now that we are out of the heat of the crisis, we should take.”

In late February, ECB Executive Board member Benoit Coeure suggested raiding depositor accounts for bail-ins, saying:

“There needs to be an appropriate burden-sharing….because we need to achieve debt sustainability.”

At the time, he suggested not doing it across the board. Whether he meant it isn’t clear.

He added that he doesn’t “pre-judge any instruments because the vocabulary matters, and there are many ways to achieve burden-sharing.”

It bears repeating. Grand theft is official policy. Even bank accounts aren’t safe.

Market analyst Marc Faber believes “governments one day (will) take away 20 – 30% of (his) wealth.” There’s no place to hide.

German Finance Minister Wolfgang Schaeuble proposed a 40% haircut on all deposits. So does IMF head Christine Lagarde.

Cypriot Finance Minister Michalis Sarris said large uninsured Laiki Bank depositors could lose up to 80% of their money. Other European depositors race similar risks. So do people elsewhere.

Some may lose everything. It’s the new normal. Personal savings are up for grabs. Bank bailouts will be borne on the backs of ordinary people.

Think it can’t happen here? Think again. There’s no place to hide. Ellen Brown explained. Banks legally own depositor funds, she said.

“Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay.”

Banks once repaid depositors on demand. A joint December 10, 2012 FDIC-Bank of England (BOE) paper changed things. Plans to loot customer accounts were made earlier.

The Bank for International Settlements originated them. It’s the privately owned central bank for central bankers. Major ones have final say.

Looting depositor accounts is policy. Cyprus isn’t a one-off. Guaranteed insured deposits don’t matter. They’re up for grabs like all others. It’ll be done clever ways or outright.

Brown said the FCIC-BOE plan involves converting deposits (IOU promises to pay) into bank equity. They get our money. We get bank stock.

Ready cash on demand is gone. Whether it’s ever returned, who knows. Take the money and run looks more than ever like policy. Depositors anywhere may be hung out to dry.

Even gold and silver in safety deposit boxes aren’t safe. Not in America. Homeland Security told banks in writing. It may inspect their contents on demand.

Under Patriot Act provisions, it may seize them with no warrant. It can do so anywhere. Banco de Mattress isn’t safe.

Investor Jim Rogers said “run for the hills now. I’m doing it.” Cyprus is no one-off.

“I want to make sure that I don’t get trapped,” he said. “Think of all the poor souls that just thought they had a simple bank account.”

“Now they find out that they are making a ‘contribution’ to the stability of Cyprus. The gall of these politicians.”

“If you’re going to listen to government, you’re going to go bankrupt very quickly.”

“I, for one, am making sure I don’t have too much money in any one specific bank account anywhere in the world, because now there is a precedent,”

“The IMF has said ‘sure, loot the bank accounts. The EU has said ‘loot the bank accounts, so you can be sure that other countries when problems come, are going to say, ‘Well, it’s condoned by the EU. It’s condoned by the IMF. So let’s do it too.’ ”

The Daily Bell asked “What Is The REAL Euro End Game? It is time to apply the free-market to bank depositors.”

Strategy involves shifting responsibility from taxpayers to depositors. Things ahead won’t be the same. Eurocrats’ policy is wrongheaded. They’re deepening crisis conditions, not alleviating them.

They believe achieving “full-on political union” depends on it. Their well-documented comments reflect it.

“….Cyprus shock and subsequent statements are not only deliberate, but have contributed to spreading uncertainty throughout Europe.”

“Now people no longer trust their banks, contributing to their destabilization.”

“If you have a bank crisis, the last thing you want to do is further destabilize trust and confidence in the system. But Brussels Eurocrats have done just that.”

“Don’t think it was a mistake. If one accepts that line of thinking, the ramifications are serious and deep from a sociopolitical, political and investment standpoint.”

The Economic Collapse blog said global elites plan to loot bank accounts. Don’t be surprised when they steal yours.

“They are already very clearly telling you that they are going to do it.” Your money is theirs. It’s up for grabs on demand.

People put money in banks for safety. Removing it “jeopardize(s) the entire system.” Cyprus is a tip of a giant iceberg. Major global banks are highly leveraged. Many are insolvent.

When their bets pay off, they win. When they don’t, we pay. Wealth confiscation is now policy. Commerzbank chief economist Joerg Kraemer urges a “tax rate of 15 percent on (Italian) financial assets.”

It’s “probably enough to push (government) debt below the critical level of 100 percent of gross domestic product,” he said.

New Zealand Finance Minister Bill English proposed across the board depositor “haircut(s)” in case of major bank failures.

Britain’s Daily Mail headlined “One of the nastiest and most immoral political acts in modern times,” saying:

“People who rob old ladies in the street, or hold up security vans, are branded as thieves.”

“Yet when Germany presides over a heist of billions of pounds from private savers’ Cyprus bank accounts, to ‘save the euro’ for the hundredth time, this is claimed as high statesmanship.”

“It is nothing of the sort….It has struck fear into the hearts of hundreds of millions of European citizens, because it establishes a dire precedent.

If Eurocrats can loot Cyprus, why not anywhere.

“This is the most brutal display since 2008 of how far the euro-committed nations are willing to go to save the tottering single currency.”

“It shows that the zone’s crisis will run and run to the grievous disadvantage” of most everyone.

“Surely the euro cannot long survive by such anti-democratic means. It certainly does not deserve to.”

Graham Summers says “Europe is out of options and out of money.” It’s “totally and completely bust.”

It’s banks are highly leveraged. They can’t raise capital “because no one in their right mind wants to invest in them….”

“European nations are bankrupt because AGAIN no one in their right mind wants to buy their bonds UNLESS they believe they can dump their investments on the ECB at a later date. Who is the greater fool there?”

Europe isn’t fixed because enough capital isn’t there to do it. “Europe and its alleged backstops are out of money. This includes Germany, the ECB, and the mega-bailout funds such as the ESM (European Stability Mechanism).”

The ECB is “chock full of garbage debts.” It’s insolvent. It can print money, “but once the BIG collateral call hits, (it’s) useless because (what’s needed) would implode the system.”

“What could go wrong?” Virtually anything. “It’s only a matter of time before (crisis conditions reach) hyperdrive, and we have an event even worse than 2008.”

Zero Hedge says Russia’s “next in line to restrict cash transactions. (They’re) taking a page from the Europeans’ book.”

Russia Beyond the Headlines said “Russia to ban cash transactions over $10,000.” It plans to “slash the amount of cash in domestic trade.”

It may do so by 2015. It’s “expected to boost” bank reserves “and put a damper on (its) shadow economy. However, the middle class will most likely end up having to pay the price for the scheme.”

According to Zero Hedge, leaders realize that “limits of fiscal and monetary policy have been reached.”

They’re “now changing rules, limiting freedom, and (instituting) outright confiscation (as) the only way to maintain a status quo.”

Doing so reflects predatory capitalism’s failure. It’s a house of cards. It’s heading perhaps for eventual collapse. At risk is whether it takes humanity with it when it does.

Stephen Lendman lives in Chicago. He can be reached at lendmanstephen@sbcglobal.net.

His new book is titled “Banker Occupation: Waging Financial War on Humanity.”

http://www.claritypress.com/LendmanII.html

By Stephen Lendman
http://sjlendman.blogspot.com

His new book is titled "How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War"

 

http://www.claritypress.com/Lendman.html

Stephen Lendman is a Research Associate of the Centre for Research on Globalization. He lives in Chicago and can be reached in Chicago at lendmanstephen@sbcglobal.net.

Also visit his blog site at sjlendman.blogspot.com and listen to The Global Research News Hour on RepublicBroadcasting.org Monday through Friday at 10AM US Central time for cutting-edge discussions with distinguished guests on world and national topics. All programs are archived for easy listening. © 2012 Copyright Stephen Lendman - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014