Roosting Chickens

Sunday, July 5, 2015. The Day of Reckoning for Greece and the EU. The day their chickens come home to roost.

There’s been a lot of talk about it, back and forth over which way the chips will fall. In the end, it’s not going to make a hill of beans worth of difference, I’m afraid. We'll find out what's been decided in a matter of a few hours, and then the drama will really begin.

If the Greeks vote ‘yes’ to stay with the EU and reject their government’s demand for a ‘no’ vote, it’s going to be a hard row to hoe. By voting yes, they will be declaring that they are willing to accept more austerity. That will grant the EU a win and allow the ECB and other members of the Eurozone to dictate terms to the Greek citizens. The Greek people will become, in real terms, serfs or slaves (take your pick) to the rest of the EU.

If they vote ‘no’, it is a rejection of the EU and they will then have to try and find their own way through the stinking quaking bog they’ve created.

No matter how it goes, the Greek people are screwed, and the credibility of Greece as a ‘going concern’ is non-existent.

Do you remember Cyprus and the ‘bail-ins’ of depositor’s bank accounts? Greece is preparing to do the same thing, now. This is part of an article from the Financial Times that was posted yesterday, July 4th:

“The plans, which call for a “haircut” of at least 30 per cent on deposits above €8,000, sketch out an increasingly likely scenario for at least one bank, the sources said.

“A Greek bail-in could resemble the rescue plan agreed by Cyprus in 2013, when customers’ funds were seized to shore up the banks, with a haircut imposed on uninsured deposits over €100,000.”

http://www.ft.com/cms/s/0/9963b74c-219c-11e5-aa5a-398b2169cf79.html#axzz3exL7UfAg
 

Because the banks have been closed for the past week, and because depositors in those banks have been restricted to limited withdrawals, the liquidity of the banks is known. There haven’t been the daily fluctuations that are typical, so they’ve had time to audit what they have, in-house, and decide how much to take – to steal from the accounts of the bank’s depositors.

In Cyprus, the bail-in affected depositors with more than €100,000. In Greece, it’s a ‘measly’ €8,000. The plan, based on the article quoted from the Financial Times, above, is that if you have €8,000 or more in your account, the Greek government will take, through the banking system, at least 30% of your worth.

This is money that the people of Greece earned and saved. It is not the bank’s money, nor is it the government’s. It was deposited in trust to a ‘trust’ institution – a bank. Now that trust isn’t worth a Tinker’s dam.

After the Cyprus bail-in idea was first floated, the G20 nations started talking about it as a broad-approach to preserve the international banking system if needed. They instituted it, made it international banking law, at last year’s G20 summit in Brisbane, Australia.

It doesn’t affect just little countries, or Eurozone countries. It affects everyone – all of the people in the world, including Americans – the U.S. Constitution and private property ‘rights’ be damned.

There is a ‘white’ paper written by an attorney from the Federal Reserve Bank of New York. It’s available in PDF form on the internet. It’s called ‘Why Bail-In? And How!’ It’s dry as dust but what’s telling is it talks about ‘creditors’ but not ‘depositors’. It goes on for twenty-two pages, justifying and explaining, talking about how the ‘megabanks’ must be protected at all costs – including the cost of you and me and the other ‘folks’ who work and put our money in their banks.

We don’t count. Our deposits are the foundation of the banks – if we and the companies for whom we all work didn’t trust our money to them, they would suffer, badly. We provide the liquidity they need to keep going, but our importance to them is the equivalent of a pimple on a gnat’s butt.

If you’re an American depositor and if you can’t believe such a communist tool has been put in place, check the fine print on your bank website. It’s boring as hell (that’s what they’re counting on) but in that fine print is a clause that says that they can, if the need is perceived, seize your money. It’s called a ‘bail-in’.

Take a look at this from the Huffington Post in January, 2015:

“Russell Napier, writing in ZeroHedge, called it "the day money died." In any case, it may have been the day deposits died as money. Unlike coins and paper bills, which cannot be written down or given a "haircut," says Napier, deposits are now "just part of commercial banks' capital structure." That means they can be "bailed in" or confiscated to save the megabanks from derivative bets gone wrong.”

http://www.huffingtonpost.com/ellen-brown/new-g20-bailin-rules-now-_b_6244394.html
 

If you want to know who Russell Napier is, what his creds are, check this:

http://www.eri-c.com/russellnapier

Or this:

http://www.valuewalk.com/2015/04/russell-napier-inflation-deflation-and-mean-reversion-slides/
 

Or check out this – my go-to for financial and monetary information:

http://www.zerohedge.com/
 

This is a site where a lot of really smart, financially savvy people write articles.

So, let’s get back to the EU and Greece and the mess there and how it could and probably will affect the rest of us.

What’s already happened in Cyprus, what is going to happen in Greece, could well happen here, in the US or in the UK or any other of the G20 members.

In all cases, the countries have issued bonds. Those bonds are worthless because there are too many of them to ever be paid back. At this stage, they have all the value of the ‘money’ in your Monopoly set on the back shelf of your cabinet or closet or wherever you happen to keep yours.

When the day of reckoning comes for the next country, and the next and the next, the banks will do what they’ve already done in Cyprus and what they’re about to do in Greece. They will steal their depositor's money in order to shore up a failing institution.

It's like stealing a kidney from you to save their kid's life. Doesn't matter if you agree, it's theirs and, by God, they're going to take it! Eventually, it will happen in your hometown, too.

At that point your money, the money that you work for, earn and try to save, is not yours if it’s in a bank someplace. If ‘they’ (those guys in the basement from Gary Larson) decide they need it more than you do, they can and they will take it. And there is not one single blessed thing you can do about it.

This is one reason why there is discussion to do away with money, as we know it, completely. A true cashless society would tie us even more closely to the banks, making us more dependent than we already are, and put us even more in their power.

Denmark will be the test case, the canary in the coalmine.

http://www.economywatch.com/news/Denmark-Announces-Plans-to-Start-Doing-Away-With-Cash-Transactions.05-07-15.html
 

“While the plan to move to a cashless economy may raise concerns about consumer access to necessary goods and services, it does appear as though this movement will gain momentum over the next several years. Sweden and several other Nordic countries have already signaled the intention to move to a cashless system, as well, even if doing so requires pushing consumers into this new way of doing things whether they like it or not.”

Think about that. You may be forced into a cashless system – whether you like it or not. Whatever happened to the idea of individual choice or freedom? Gone apparently, at least in the Nordic countries and, eventually, once it takes root and spreads, elsewhere, too.

Yeah, there are benefits. But!

Let’s say you get robbed. Your wallet or purse is stolen. Your identity is gone – along with your means to pay for anything. How will you get home if you’re traveling? What if, worst case scenario, you’re in Greece. You have no wallet, no ID, no passport, no credit cards, no nothing. What are you going to do?

Let’s say – as is happening in Greece right now – the bank closes down. Electronic transactions are stopped. How will you pay for food? How will you pay for transportation or anything else?

Beyond that, every single transaction you make – whether it’s buying a can of beans at the local grocery story or paying for your kid’s dentist bill or buying pot from the local pharmacy – every single transaction you make is tracked. Big Brother knows precisely what you did, where you did it, and what you bought. Do you really want to give up that privacy?

Let’s take it farther. You’ve just been to the doctor. Obamacare just paid for your physical. You’re overweight, you have high blood pressure, you’ve just been prescribed medication. You decide, ‘what the hell, one last time and then I’ll start my diet.’ You drive to McDonald’s, with every intention of it being your last time through the drive-through. You order, you get to the window and… You’re rejected.

‘Why?’

‘I don’t know, but I can’t accept your payment. It’s been blocked.’

Two hours later you hear a ‘ding’ from your computer. It’s a formal official notice that you have been diagnosed as having health problems that you can no longer eat certain foods or at certain places. How would you like that?

It’s not impossible. It isn’t beyond imagination – obviously, since I just imagined it, and I am pretty darned sure there are lots of smart people out there who would just love to have that much control over our lives.

So there is a danger in getting rid of cash – but that’s what the banks would like to do. It’s cheaper for government – no more printing and distribution. They get absolute control over every single last transaction you make – up to the point of denying a transaction if they don’t think it’s a smart one, or healthy or whatever other criteria they set.

Oh! And your safety deposit box, the contents of it? Those are theirs, too. Not yours, theirs and again, once the doors are locked there is damn-all you can do.

Look at Greece. People who might want or need stuff out of ‘their’ safety deposit box in the past week couldn’t get to it. The banks were closed - locked up tight with no admittance allowed.

There's an old saying: possession is nine points of the law (or nine-tenths, depending on who you listen to). It's true. If they have it in their possession, behind locked doors and gates, what are you going to do? Take them to court? Good luck with that.

It sounds crazy – like some whack-job talking but honest to God, keeping your valuables at home, under your mattress, is safer than keeping it in a bank. At least then, if you get robbed, it’s by an honest robber instead of a criminal robber.

One is honest in his stealing. He makes no bones about why he’s there, in your house, taking your stuff. The other promises your money is safe with them while holding one hand behind their back, their fingers crossed while they pat you on the head.

Buy a safe or two or three (good quality – the ones you get at Costco or the local home improvement store are a joke if someone has a circular saw), keep your money at home, where you know where it is and what it’s doing. After all, you’re not getting interest worth having if it’s in the bank. And, once the black market springs up, the one that accepts cash for that McDonald’s Big Mac that you wanted, you’ll be set and ready to go and participate.

Good luck!

Philippa

Follow me at Twitter: https://twitter.com/PhilippaStories

Greece, Rehypothecation and Slavery

Rehypothecation – do you know what that is? It’s a really great big word that means stealing. Slavery is a hot button word that is alive and well in societies around the world.

The stealing part is what’s happening in Greece right now. It’s what happened in Cyprus two years ago. Puerto Rico is on the verge of bankruptcy, unable to meet its obligations on $70bn of debt. Spain has a weak economy and might be next. Will they follow the examples set by members of the European Union?

As an individual, when you put your money – the dough you earned by working and earning a living – into a bank or mutual fund or other ‘paper’ investment, that money is no longer yours. It is theirs. The place into which you put it takes it. It does not go into a little box with your name on it. It gets pooled with everyone else’s, and then it gets loaned out. On one dollar deposited, they can borrow ten.

Now, if that person or entity to which the loan is made defaults, if they don’t pay their debt, there’s usually an asset of some type. A home loan is made against the physical structure. If the borrower defaults, the bank takes the house. It can resell that house and collect at least some of the money it loaned against it.

In the case of a loan to a nation – like Cyprus or Greece – there is no single physical asset that stands as collateral. Because of that, the loans made to countries with weak economies are bad investments.

Because the European Union, European Central Bank (ECB) and International Monetary Fund (IMF) made loans to economies that were teetering on the edge of default and bankruptcy, the lenders – the other members of the European Union – are in a fix right now. There is nothing they can sell to get back their money – your money, since you’re the one who put the money into the bank in the first place.

Greece, with 26% unemployment and 30% of its citizens retired has more people unemployed or retired than working. More of their working citizens work for the government than for private business. Their debt to GDP ratio is astronomical – they are spending far more than they are earning. It’s like you, earning minimum wage and spending like George Soros.

As a result of its profligate spending (17.5% of GDP) on social benefits – pensions and such - it is in no position to repay the billions of Euros loaned to them in the past few years.

This leaves the ECB, IMF and the Greek government with limited choices.

They can do a public bail-in, like Cyprus did in 2013-2014. That was a very popular move. Take the money from depositors – steal it – so you can shore up a failing institution. Now, out of the kindness of their good little hearts, the bankers didn’t steal the money of the mom and pop depositors. They focused on the big kids – depositors with more than 100,000 Euros – with ample warning beforehand so those big depositors had time to shift the bulk of their wealth off-shore.

Right now, this week, Greece is quietly doing this – without the forewarning Cyprus offered. After all, the wealthy investors from Russia and other European countries probably didn’t make the same mistake twice. Instead of depositing in ‘iffy’ places like the Med, they’ve probably already shifted their deposits to more stable places – like Switzerland, the Bahamas and the Cayman Islands.

In the meantime, hurting those mom and pop depositors the most, banks in Greece are closed this week. The Greek stock market is closed, at least through Tuesday. Depositors who have their savings in the bank, if they wait long enough through the queue and if the reserve isn’t drained by the time they get to the front of the line, may (with the government’s permission), withdraw a whopping 60 EU per day - the equivalent of $66. No checks will be honored. In other words, the money that people have in their bank accounts is no longer theirs. It belongs to the bank and to the ECB and IMF.

Why is it like this? It’s simple. It is because the socialist model doesn’t work. They, the noblesse oblige governments, have run out of other people’s money.

They ran out of their own, from their own citizens, several years ago. Then they turned to the primary members of the EU and held out their hand, ‘help us, please’. The EU obliged by handing over billions of their citizen’s money to failing economies.

Socialism has never worked. Not once. It’s a wonderful ideal – if you’re lazy and don’t want to work hard to earn your keep. Take what others make – the ‘from each according to their ability’ theft of another’s labor.

Socialism is, in its most fundamental definition, slavery.

Stop and study that Marxist ideal: From each according to his ability, to each according to his need.

In other words, simple words, take from those who are able and give it to someone else.

When you have a society that hands out more than it takes in – the second half of the Marx ideal of ‘from each according to their ability, to each according to their need’ – you have a failing system. It is not sustainable.

At a ratio of 2:1 non-workers to workers, it becomes a slave state. Look at Greece.

The one worker is toiling to support two people. Never mind that the worker wants to enjoy the fruits of their labor, too. They do not willingly get up in the morning and go to work so they can be slaves who support the non-workers. At that point, they are slaves; nothing more, nothing less because their effort is given away to support someone else. They are not a free individual, using the gifts given to them by Fate or God or whatever. They Are A Slave.

That’s where Greece is now. The workers are working harder and harder to pay the taxes and the fees and the levies that provide the pension funds to the non-workers.

It didn’t work in the Soviet Union – the Soviet Socialist Republic that died in the 1980’s – a mere 70 years after starting. It isn’t working in Greece now. The only question remaining is how long it will take to collapse and who will be next.