Best of the Week
Most Popular
1. Five Charts That Show We Are on the Brink of an Unthinkable Financial Crisis- John_Mauldin
2.Bitcoin Parabolic Mania - Zeal_LLC
3.Bitcoin Doesn’t Exist – 2 - Raul_I_Meijer
4.Best Time / Month of Year to BUY a USED Car is DECEMBER, UK Analysis - Nadeem_Walayat
5.Labour Sheffield City Council Election Panic Could Prompt Suspension of Tree Felling's Private Security - N_Walayat
6.War on Gold Intensifies: It Betrays the Elitists’ Panic and Augurs Their Coming Defeat Part2 - Stewart_Dougherty
7.How High Will Gold Go? - Harry_Dent
8.Bitcoin Doesn’t Exist – Forks and Mad Max - Raul_I_Meijer
9.UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall - GoldCore
10.New EU Rules For Cross-Border Cash, Gold Bullion Movements - GoldCore
Last 7 days
Silver As Strategic Metal: Why Its Price Will Soar - 21st Jan 18
Stocks, Gold and Interest Rates Three Amigos Ride On - 21st Jan 18
Why Sometimes, "Beating the S&P 500" Isn't Good Enough - 21st Jan 18
Bunnies and Geckos of Sheffield Street Tree Fellings Protests Explained - 21st Jan 18
Jim Rickards: Next Financial Panic Will Be the Biggest of All, with Only One Place to Turn… - 20th Jan 18
Macro Trend Changes for Gold in 2018 and Beyond - Empire Club of Canada - 20th Jan 18
Top 5 Trader Information Sources for Timely, Successful Investing - 20th Jan 18
Bond Market Bear Creating Gold Bull Market - 19th Jan 18
Gold Stocks GDX $25 Breakout on Earnings - 19th Jan 18
SPX is Higher But No Breakout - 19th Jan 18
Game Changer for Bitcoin - 19th Jan 18
Upside Risk for Gold in 2018 - 19th Jan 18
Money Minute - A 60-second snapshot of the UK Economy - 19th Jan 18
Discovery Sport Real MPG Fuel Economy Vs Land Rover 53.3 MPG Sales Pitch - 19th Jan 18
For Americans Buying Gold and Silver: Still a Big U.S. Pricing Advantage - 19th Jan 18
5 Maps And Charts That Predict Geopolitical Trends In 2018 - 19th Jan 18
North Korean Quagmire: Part 2. Bombing, Nuclear Threats, and Resolution - 19th Jan 18
Complete Guide On Forex Trading Market - 19th Jan 18
Bitcoin Crash Sees Flight To Physical Gold Coins and Bars - 18th Jan 18
The Interest Rates Are What Matter In This Market - 18th Jan 18
Crude Oil Sweat, Blood and Tears - 18th Jan 18
Land Rover Discovery Sport - Week 3 HSE Black Test Review - 18th Jan 18
The North Korea Quagmire: Part 1, A Contest of Colonialism and Communism - 18th Jan 18
Understand Currency Trade and Make Plenty of Money - 18th Jan 18
Bitcoin Price Crash Below $10,000. What's Next? We have answers… - 18th Jan 18
How to Trade Gold During Second Half of January, Daily Cycle Prediction - 18th Jan 18
More U.S. States Are Knocking Down Gold & Silver Barriers - 18th Jan 18
5 Economic Predictions for 2018 - 18th Jan 18
Land Rover Discovery Sport - What You Need to Know Before Buying - Owning Week 2 - 17th Jan 18
Bitcoin and Stock Prices, Both Symptoms of Speculative Extremes! - 17th Jan 18
So That’s What Stock Market Volatility Looks Like - 17th Jan 18
Tips On Choosing the Right Forex Dealer - 17th Jan 18
Crude Oil is Starting 2018 Strong but there's Undeniable Risk to the Downside - 16th Jan 18
SPX, NDX, INDU and RUT Stock Indices all at Resistance Levels - 16th Jan 18
Silver Prices To Surge – JP Morgan Has Acquired A “Massive Quantity of Physical Silver” - 16th Jan 18
Carillion Bankruptcy and the PFI Sector Spiraling Costs Crisis, Amey, G4S, Balfour Beatty, Serco.... - 16th Jan 18
Artificial Intelligence - Extermination of Humanity - 16th Jan 18
Carillion Goes Bust, as Government Refuses to Bailout PFI Contractors Debt and Pensions Liabilities - 15th Jan 18
What Really Happens in Iran?  - 15th Jan 18
Stock Market Near an Intermediate Top? - 15th Jan 18
The Key Economic Indicator You Should Watch in 2018 - 15th Jan 18
London Property Market Crash Looms As Prices Drop To 2 1/2 Year Low - 15th Jan 18
Some Fascinating Stock Market Fibonacci Relationships... - 15th Jan 18
How to Know If This Stock Market Rally Will Continue for Two More Months? - 14th Jan 18
Everything SMIGGLE from Pencil Cases to Water Bottles, Pens and Springs! - 14th Jan 18
Land Rover Discovery Sport Very Bad MPG Fuel Economy! Real Owner's Review - 14th Jan 18
Gold Miners’ Status Updated - 13th Jan 18
Gold And Silver – Review of Annual, Qrtly, Monthly, Weekly Charts. Reality v Sentiment - 13th Jan 18
Gold GLD ETF Update.. Bear Market Reversal Watch - 13th Jan 18
Stock Market Leadership In 2018 To Come From Oil & Gas - 13th Jan 18
Stock Market Primed for a Reversal - 13th Jan 18
Live Trading Webinar: Discover 3 High-Confidence Trade Set-Ups - 13th Jan 18
Optimum Entry Point for Gold and Silver Stocks - 12th Jan 18
Stock Selloffs Great for Gold - 12th Jan 18
These 3 Facts Show Gold Is Set to Surge in 2018 - 12th Jan 18
How China is Locking Up Critical Resources in the US’s Own Backyard - 12th Jan 18
Stock futures are struggling. May reverse Today - 12th Jan 18
Three Surprising Places You See Cryptocurrency - 12th Jan 18
Semi Seconductor Stocks Canary Still Chirping, But He’s Gonna Croak in 2018 - 12th Jan 18
Land Rover Discovery Sport Panoramic Sunroof Questions Answered - 12th Jan 18
Information About Trading With Alpari And Its Advantages - 12th Jan 18

Market Oracle FREE Newsletter

6 Critical Money Making Rules

Are Your Bank Savings Safe From Bail-Ins?

Personal_Finance / Credit Crisis 2014 Feb 13, 2014 - 03:20 PM GMT

By: Raul_I_Meijer

Personal_Finance

I know you thought you’d seen some crazy stuff, but it’s going to get better, promise!

On the one hand you have Greek politicians claiming their economy is doing so well, they’ll present the troika with a big feel good surprise. On the other, Greek unemployment reached a new high at 28%, with youth unemployment now at 61.4%. That’s almost 2/3 of young people. What is to become of them?


On the one hand Italy sold debt today at record low rates, on the other its bickering and infighting government is teetering on the edge. Wonder who’s been buying the debt. Could one of the super Mario’s be involved?

On the one hand folks claim that the emerging market problems will have little effect on US financial markets, on the other US companies are starting to feel serious pain from those same problems. Not only do sales in developing markets fall, they’ve also invested a lot of money in them, anticipating huge growth potential. Oops.

On the one hand the UK government boasts a strong recovery and claims that is due to their brilliant economic policies, on the other BOE Governor Carney says he can’t lift interest rates because the recovery is “neither balanced nor sustainable”.

On the one hand the Yellen Fed stays a tepid taper course despite all the US recovery stories, without daring to even ponder interest rate rises, on the other Chinese official powers have gotten so spooked by the size and leverage of the shadow bank system they get real about tightening and interest rates, in the face of a sharp fall in auto sales growth, and an ominous default of a shadow bank investment product backed by a loan to a flat broke coal company.

On the one hand the OECD has been pushing rosy forecasts about anything anyone wanted to hear, on the other they are now forced to admit those forecasts were, essentially, made up out of thin air. Still, what looks like a great way to disqualify oneself :“Challenges were compounded by the unusually high speed and depth of cross-country interconnections between real and financial developments, the increased variability of economic growth compared with the pre-crisis period, the lack of timely data on many important financial factors, and the limited understanding of macro-financial linkages … “, will instead undoubtedly only be used to keep on churning out the nonsense. That’s both its MO and the reason it’s so royally funded, after all.

But the grand crazy stuff prize for the day goes to the Reuters article that details a leaked European Commission report in which Brussels considers confiscating (not their word of choice) 500 million Europeans’ personal savings and use them “to fund long-term investments to boost the economy and help plug the gap left by banks since the financial crisis.”.

“The economic and financial crisis has impaired the ability of the financial sector to channel funds to the real economy, in particular long-term investment ..”. That’s right, after all the bail-outs and nationalizations and stimuli, there’s still so much – bad – bank debt hidden in shady ledgers, there’s nothing left to lend out.

But wait, there is a source of wealth left. People have savings in bank accounts, and those are all registered digitally, so we know exactly what everyone has. We’ll take that, give them some sort of guarantee they will think is valid, and hand it to the banks. Who can then lend it out to the same people whose savings these are in the first place, and charge interest for the privilege. That’ll boost the economy!

Now, of course, if you’re like me, you first wonder what the root of the word “savings” is again, and then you’re also thinking, hold on, we’re talking about the same savings deposits the banks have used as collateral for their highly leveraged wagers, that they then lost. Right?

So those savings are already in the banks, but the banks’ “ability to channel funds to the real economy” is still “impaired”. But how can it be that Brussels, when it confiscates the savings, magically solves this impairment? What sleight of hand is this?

Well, they are talking about creating a secondary market for trading corporate bonds in the EU. But that doesn’t guarantee any trades will actually take place. The reason those bonds don’t sell is that not enough people want to buy them.

No, the real Brussels magic consists of reviving securitization markets. The banks will securitize loans and other “products”, which means they’ll slice and dice and tranche them, and sell them on to greater fools. Like you. Only this time, they’ll do so with the – implicit – backing of your savings. And let’s be fair: if you allow them to do this with your savings, you’re a prime candidate for them to sell their “securities” to (in finance, nothing means what it used to, “savings” are not safe and “securities” are anything but secure).

And no, you’re not mistaken: that is indeed the very model that broke the global financial system’s back in the first place.

There is no doubt in my mind that these ideas will be spun in ways that focus on triggering people’s feel good factors to such a degree the vast majority will actually leave their savings in the bank.

If I were you, I would think twice about going that route.

This article addresses just one of the many issues discussed in Nicole Foss’ new video presentation, Facing the Future, co-presented with Laurence Boomert and available from the Automatic Earth Store. Get your copy now, be much better prepared for 2014, and support The Automatic Earth in the process!

By Raul Ilargi Meijer
Website: http://theautomaticearth.com (provides unique analysis of economics, finance, politics and social dynamics in the context of Complexity Theory)

© 2014 Copyright Raul I Meijer - 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.
Raul Ilargi Meijer Archive

© 2005-2018 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