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RBS Crashes Christmas as Panic Button Hit, Savers Dump Savings for Spending and Property Investing

Personal_Finance / Banksters Dec 03, 2013 - 09:57 AM GMT

By: Nadeem_Walayat

Personal_Finance

Tax payer bailed-out and 82% owned RBS remains one of Britains largest weapons of mass financial destruction that along with its subsidiaries such as Nat West literally crashed Christmas for millions of its customers as debit cards were declined and ATM's went offline on cyber monday freezing customers out of their accounts on the busiest shopping day of the year that continues today.


Perhaps someone hit the financial armageddon panic button that is in place so as to prevent a run on the banks Ireland, Greece, Spain, Portugal, Italy and Cyprus style i.e. in the event of loss of confidence in the financial system to instantaneously shutdown all banking systems to result in an extended bank holiday as I wrote over a year ago -

22 Jun 2012 - Did RBS Hit the Greece Election Eurogeddon Bank Holiday Panic Button by Mistake?

All year (and beyond) I have been warning that in the face of financial armageddon emanating out of the euro-zone that the Bank of England would effectively shut-down the banking system rather than face a trillion pound electronic run on the banks, thereby announcing an extended bank holiday that could run into several weeks if not a whole month. Such a Panic Button hitting Bank Holiday would resemble what has transpired with Nat West and RBS all week in that it would freeze customer bank accounts until the Treasury and Bank of England had re capitalised the bankrupting banks after the contagion impact had been fully evaluated. In this respect to counter the fallout on the economy, I had speculated that the Bank of England had already printed actual bank notes by the container load and distributed them across the Banking system that the closed banks would oversee the dispersion of in line with the withdrawal limits already in place that typically restrict withdrawals to no more than £300's per day.

As the above illustrates this is not the first time that RBS has effectively ceased to operate as bank by locking customers out of funds deposited with the banks, as such RBS 'bank holiday's have taken place at least half a dozen times during the past two years and for some customers has become a near monthly occurrence.

The latest RBS banking catastrophe follows hard on the heels of mainstream media reports that have actually been bubbling in the Blogosphere for more than 4 years that RBS and other banks allegedly deliberately bankrupted many companies by putting them into default on loans so as to effectively steal their assets such as properties for a pittance at auction fire sales.

Despite all of this and more such as PPI and LIBOR, RBS will soon still be paying out healthy Christmas bonuses totaling more than £500m to its senior staff despite reporting a LOSS of £5.2 billion, and I am sure RBS senior staff will take the current systems crash as another opportunity to reward themselves more bonuses for bringing day to day banking systems back online just as I wrote a month ago that the RBS plan for an internal bad bank was so as to engineer artificial profits on the basis of which huge bonuses would be paid out.

01 Nov 2013 - RBS Fake Internal Bad Bank For Engineering Artificial Profits Bonuses on Asset Writedown's and Privatisation

Again RBS's senior staff should have spent the past 5 years of artificial QE money printing profits writing down the bad assets but instead been paying themselves billions in bonuses!

I fear that the internal RBS bad bank will further the fraud on tax payers as assets transferred to the bad bank could be heavily marked down in value which could then be sold at a profit and thus result in further massive bonuses for RBS staff, whilst obviously a heavy loss has been sustained on the GOOD bank! Which means that the Bad bank could out perform the Good bank, in terms of profits! Yes, given RBS and the big banks track record this is likely how the next fraud on tax payers will play out during 2014.

The bottom line is that the tax payers through direct bailouts and the money printing inflation stealth tax consequences continue to pump artificial profits into banks such as RBS. However with the formation of an internal bad bank (some 5years late!) as the bad assets evaporate (get sold off) then the Bank of England will likely reduce its funding of bank profits and thus RBS's revenues will shrink, which means that RBS will also continue to shrink in size long after it has been privatised, so it does not look like a good long-term investment proposition.

Was RBS Hacked?

There is another equally plausible reason for the mess at RBS and that is one of under invested systems asked to perform duties they were never designed to do such as internet / smart app banking that opens the bank up to cyber criminals to hack there way into tens of thousands of accounts, the only response to which would be for RBS to pull the plug on the whole system before thousands of accounts were drained of funds.

However, for obvious reasons such as tens of thousands of customers would lose confidence in RBS being a safe place to deposit funds, RBS WILL go out of its way NOT to admit to such large scale cyber crime and instead go for the marginally better public relations option of being incompetent.

There are a few reports in the mainstream broadcast news that suggests that this may be the case because some customers having gained access to their accounts are reporting that credit balances have vanished into thin air.

Crushed UK Savers Forced to Spend and Invest

Meanwhile the mainstream media is reporting that UK savers have withdrawn a record £23 billion from savings accounts over the past year that the media largely attribute to an improving economy that is encouraging spending.

However, the truth is far removed from that which the media assumes are the reasons as the answer lies in the exponential inflation mega-trend which is the primary consequence of money printing debt monetization programmes that the government is engaged in, in an attempt to buy votes through high deficit spending, an inflation trend that asset prices are leveraged to and oscillate around which currently has UK inflation compounding at the rate of 2.2% per year which resolves in the following exponential trend.

A closer look at how much Inflation you have experienced that you are probably not aware of:

The above graph shows that over 5 years your (to May 2012) money on the official CPI measure has been eroded by Inflation to the tune of 17.2%!, This IS the reason why your real experience of day to day living expenses does not match government / BBC propaganda. However it is even worse because as I keep mentioning the rate of Inflation is EXPONENTIAL. What this means is that if you stuffed money under your mattress 20 years ago, today it would have been inflated away by 52.5% CPI and on the more recognised measure RPI of 74%, to be worth approaching half its original value.

The debt / money printing induced inflation mega-trend is forcing you to either spend or put money into a bankrupt banks for a pittance in interest that is TAXED, so that it is near impossible to consistently get a return that is greater than even the official rate of inflation let alone the real rate of inflation that is currently about 4%, as governments continuous tinkering with the methodology to reduce the official inflate rates as you experience when you go to do you weekly shops that usually stands about 1-2% above official CPI.

As I pointed out near 4 years ago in the Inflation Mega-trend ebook (FREE DOWNLOAD), Governments only have one answer which is to PRINT MONEY! No matter what names it goes by, be it called QE, or government bonds, it is all money printing that results in Inflation.

Again, the consequences of the exponential inflation mega-trend stealth theft of savers wealth is worsened by the 20%-40% additional theft by means of double taxation on savings interest i.e. Inflation steals the value of your savings by currently about 3% then the government taxes you by 20% to 40% on the sub inflation interest rate that you will be in receipt of which means that savers are guaranteed to lose near 2% of the value of savings per year which the following graph illustrates that over the past 5 years for the top 20% interest paying of instant access accounts, on the CPI + tax measure over 8% has been stolen and on the real Inflation measure over 16% has been stolen.

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 approx 2% per annum even in the best instant access savings account.

However, those that have been reading my articles for some time will already have had over a years head start in the unfolding UK housing bull market that I forecast to be soon trundling along at an inflation rate of more than 10% per annum, a bull trend that I expect to be sustained for the WHOLE of the remainder of this decade!

UK house prices as measured by the Halifax (NSA - October ) are now rising at an annualised rate of 8% per annum as opposed to falling at a rate of over 2% per annum when I flagged an imminent UK housing multi-year bull market over a year ago.

08 Sep 2012 - UK Home Extension Planning Rules Relaxed to Boost Economy, Trigger Housing Bull Market

I am continuing to see positive signs towards a multi-year bull market, so I am giving you another head start on an emerging probable multi-year bull market in UK housing.

The UK housing bull market continues to gather steam as it represents one of the primary reasons why savers are ditching deposit accounts for exposure to the unfolding housing bull market that offers one of the few low risk avenues to protect wealth from the inflation stealth theft of wealth as asset prices such as house prices are leveraged to the inflation mega-trend because unlike all forms of money i.e. cash, credit and debt they cannot be printed.

19 Aug 2013 - UK House Prices Bull Market Soaring Momentum

The bottom line is that the UK bull market is only just getting underway and will likely last the remainder of this decade, yes there will be overbought states when prices run away to more than 20% per annum followed by corrections that see virtually zero or even negative growth for a month or two, but the over-riding trend will be that of a strong bull market, that in terms of momentum will average at least 10% per annum.

Ensure you remain subscribed to my always free newsletter for ongoing in-depth analysis, detailed trend forecasts, and strategies attempting to protect from and capitalise on the exponential Inflation mega-trend.

Source and Comments: http://www.marketoracle.co.uk/Article43384.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.

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