Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20
U.S. Long Bond: Let's Review the "Upward Point of Exhaustion" - 27th Jun 20
Gold, Copper and Silver are Must-own Metals - 27th Jun 20
Why People Have Always Held Gold - 27th Jun 20
Crude Oil Price Meets Key Resistance - 27th Jun 20
INTEL x86 Chip Giant Stock Targets Artificial Intelligence and Quantum Computing for 2020's Growth - 25th Jun 20
Gold’s Long-term Turning Point is Here - 25th Jun 20
Hainan’s ASEAN Future and Dark Clouds Over Hong Kong - 25th Jun 20
Silver Price Trend Analysis - 24th Jun 20
A Stealth Stocks Double Dip or Bear Market Has Started - 24th Jun 20
Trillion-dollar US infrastructure plan will draw in plenty of metal - 24th Jun 20
WARNING: The U.S. Banking System ISN’T as Strong as Advertised - 24th Jun 20
All That Glitters When the World Jitters is Probably Gold - 24th Jun 20
Making Sense of Crude Oil Price Narrow Trading Range - 23rd Jun 20
Elon Musk Mocks Nikola Motors as “Dumb.” Is He Right? - 23rd Jun 20
MICROSOFT Transforming from PC Software to Cloud Services AI, Deep Learning Giant - 23rd Jun 20
Stock Market Decline Resumes - 22nd Jun 20
Excellent Silver Seasonal Buying Opportunity Lies Directly Ahead - 22nd Jun 20
Where is the US Dollar trend headed ? - 22nd Jun 20
Most Shoppers have Stopped Following Supermarket Arrows, is Coughing the New Racism? - 22nd Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Bank of England Celebrates 50 Months of Stealth Inflation Theft From Savers and Tax payers

Interest-Rates / UK Interest Rates May 09, 2013 - 05:49 PM GMT

By: Nadeem_Walayat

Interest-Rates

The Bank of England today kept interest on hold at 0.5% for the 50th month, as Britain's central bank continues to support its bankster brethren in the crime syndicate that calls itself Britain's banks who continue to literally get away with crimes without any real consequences as evidenced by the over 6 year old LIBOR scandal that the mainstream press and financial regulator only awoke to mid last year. As far as I am ware no one has gone to prison for this mega-fraud, instead the CEO's of Britians major banks have been retired on mega-pension handouts whilst all of the fines are at the end of the day being picked up by British tax payers.


For instance the hundreds in million in fines for the likes of RBS are only the tip of the iceberg for this near wholly tax payer owned bank will soon be hit for claims for tens of billions in damages that Britians tax payers WILL foot the bill for, because the consequences would be bankruptcy which is something that we have repeatedly witnessed that the Government nor the Bank of England will ever entertain.

Therefore in the name of continuing to save Britain's criminal banks the Bank of England continues to funnel tax payer cash into their coffers, not only to meet the existing scandals such as PPI mis-selling but the long string of ever escalating bank rescues that will follow such as LIBOR as tax payers continue to be literally bled dry as the Bank of England's brethren bank billions in bonuses on the basis of fictitious profits.

Britians' Savers and Workers Continue to Pay the Price

Britians' savers and workers continue to pay the price for over 5 years of artificially low interest rates as the Bank of England continues to print money to monetize government debt and drive down all interest rates in the economy the consequences for which is for persistently sub-inflation rates of interest that ensures that depositor cash over the coming decade will be stolen in MOST part as I warned several years ago and as iterated in the January 2010 Inflation Mega-trend Ebook (Free download), whilst the Bank of England continues to attempt to keep the general population sedated with the economic propaganda mantra of the always imminent risk of deflation something that was NEVER probable but just an excuse for the stealth theft of wealth by means of high real inflation which exists even on the governments own highly suspect official CPI measure of inflation that tends to under-report real inflation by approx 1.5% per annum.

Instead Britians' savers and workers continue to be impacted by the consequences of the EXPOENTIAL inflation mega-trend as illustrated by the below graph that clearly demonstrates the deflation of the great recession of 2008-2009 that vested interest academic economists that populate the mainstream press continue to regurgitate amounts to nothing more than an inconsequential blip.

The impact on savers of the inflation stealth theft is worsened by the 20%-40% additional theft by means of double taxation on savings interest i.e. Inflation erodes the value of your savings by currently about 4% then the government taxes you by 20% to 40% on the sub inflation interest rate you will be in receipt of which means that savers are guaranteed to lose near 2% of the value of savings per year that amounts to an estimated theft of 14% over the past 5 years.

To protect oneself from the global inflation war against savings, savers need to increase risk i.e. if you invest in the stock market then you need to appreciate the fact that it will be far higher risk then leaving it in the bank even if you WILL lose at least 2% per annum in the bank.

Cyprus Shows that Ultimately Your Bank Deposits Will be Stolen

You think a Cyprus style theft cannot happen here ?

Think again, because when the chips are down and the Government has its back against the wall then it WILL happen and it would be far worse than that which took place in Cyprus for the fact that Britain is NOT in the Euro-zone, therefore our currency would plunge WHILST savings are frozen, whilst the government formulates a hair-cut xx%.

The net result would be that ALL Savers would lose, no one would be left standing as inflation would ensure that even if savers escaped the hair-cut they would only get back a fraction of the value of their money after the hair-cut which is why for several years I have been advocating an exodus out of bank deposits and into inflation proof assets such as stocks and since early 2012 property as illustrated by the January 2010 Inflation Mega-trend Ebook (FREE DOWNLOAD).

Cyprus is not the guinea pig for something new for ALL central banks including the Bank of England have plans for theft of depositor funds to recapitalize banks in the event of a re-run of 2008 or Cyprus 2013, or the soon to follow Greece, Portugal, Spain, Italy and Ireland.

The evidence for this 'bail-in' can be found in the Bank of England's own documents as the following except illustrates from a document dated 10th of December 2012 - http://www.bankofengland.co.uk/publications/Documents/news/2012/nr156.pdf

Resolving Globally Active, Systemically Important, Financial Institutions Federal Deposit Insurance Corporation and the Bank of England

Executive summary

The financial crisis that began in 2007 has driven home the importance of an orderly resolution process for globally active, systemically important, financial institutions (G-SIFIs). Given that challenge, the authorities in the United States (U.S.) and the United Kingdom (U.K.) have been working together to develop resolution strategies that could be applied to their largest financial institutions. These strategies have been designed to enable large and complex cross-border firms to be resolved without threatening financial stability and without putting public funds at risk. This work has taken place in connection with the implementation of the G20 Financial Stability Board’s Key Attributes of Effective Resolution Regimes for Financial Institutions. The joint planning has been productive and effective. It has enhanced the resolution planning process in both jurisdictions, tackled key issues in relation to crossborder coordination, and identified potential challenges that will be addressed through further work.

This paper focuses on the application of “top-down” resolution strategies that involve a single Such a strategy would involve the bail-in (write-down or conversion) of creditors resolution authority applying its powers to the top of a financial group, that is, at the parent company level. The paper discusses how such a top-down strategy could be implemented for a U.S. or a U.K. financial group in a cross-border context.

In the U.S., the strategy has been developed in the context of the powers provided by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Such a strategy would apply a single receivership at the top-tier holding company, assign losses to shareholders and unsecured creditors of the holding company, and transfer sound operating subsidiaries to a new solvent entity or entities.

In the U.K., the strategy has been developed on the basis of the powers provided by the U.K. Banking Act 2009 and in anticipation of the further powers that will be provided by the European Union Recovery and Resolution Directive and the domestic reforms that implement the recommendations of the U.K. Independent Commission on Banking. at the top of the group in order to restore the whole group to solvency.

Both the U.S. and U.K. approaches ensure continuity of all critical services performed by the operating firm(s), thereby reducing risks to financial stability. Both approaches ensure activities of the firm in the foreign jurisdictions in which it operates are unaffected, thereby minimizing risks to cross-border implementation. The unsecured debt holders can expect that their claims would be written down to reflect any losses that shareholders cannot cover, with some converted partly into equity in order to provide sufficient capital to return the sound businesses of the G-SIFI to private sector operation. Sound subsidiaries (domestic and foreign) would be kept open and operating, thereby limiting contagion effects and crossborder complications. In both countries, whether during execution of the resolution or thereafter, restructuring measures may be taken, especially in the parts of the business causing the distress, including shrinking those businesses, breaking them into smaller entities, and/or liquidating or closing certain operations. Both approaches would be accompanied by the replacement of culpable senior management.

The above text clearly implies that a bail-in of all creditors will be involved in the case of bankruptcy to recapitalize the bankrupt banks.

I won't post the whole document but again refer to an excerpt that makes it clear that only insured depositors will be protected i.e. holdings of less than £85,000 per banking licence.

U.K. regime 17 In the U.K., the Banking Act provides the Bank of England with tools for resolving failing deposit-taking banks and building societies.5 Powers similar to those of the FDIC are available, including powers to transfer all or part of a failed bank’s business to a private sector purchaser or to a bridge bank until a private purchaser can be found. The Banking Act also provides the U.K. authorities with a bespoke bank insolvency procedure that fully protects insured depositors while liquidating a failed bank’s assets. These powers have proved valuable; for example, during the crisis they allowed the authorities to transfer the retail and wholesale deposits, branches, and a significant proportion of the residential mortgage portfolio of a failed building society to another building society.

This further reinforces the fact that savers have to take some risk with their capital be it in the stock market or the housing market or commodities because as things stand you are guaranteed to lose at least 1/3rd of the real value of your bank deposits during this decade, with the ever prevalent risk that in a worse case scenario the Government WOULD Cyprus style outright steal ALL of your money in the bank.

FOCUSED MESSAGE

If you want to take one message away from ALL that I have written over the years then take note of this - The Exponential Inflation Mega-trend Can ONLY TREND in ONE Direction which is to ACCELERATE - You need to consider this in how you view risk vs reward with respect to your wealth. In the long-run your wealth can only survive if it is indexed to Inflation which means being invested in assets that cannot be easily printed such as the housing market or are leveraged to inflation such as consistently increasing dividend stocks.

Meanwhile Britain's politicians are dancing around the issue of In or Out of Europe when the REAL FUNDEMNENTAL ISSUE IS RAMPANT OUT OF CONTROL DEBT AND MONEY PRINTING AND ITS ACCELERATING INFLATION CONSQUENCES!

To get my next in-depth analysis in your email in box, ensure you are subscribed to my ALWAYS FREE newsletter.

Source and Comments: http://www.marketoracle.co.uk/Article40371.html

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2013 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of four ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series.that can be downloaded for Free.

The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 600 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

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 trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 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

6 Critical Money Making Rules