Saturday, July 4, 2015

So Who Needs a Haircut? Apparently the Greeks.

From the Financial Times:

"Greek banks are preparing contingency plans for a possible “bail-in” of depositors amid fears the country is heading for financial collapse, bankers and businesspeople with knowledge of the measures said on Friday.
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.
It would be implemented as part of a recapitalisation of Greek banks that would be agreed with the country’s creditors — the European Commission, International Monetary Fund and European Central Bank.
“It [the haircut] would take place in the context of an overall restructuring of the bank sector once Greece is back in a bailout programme,” said one person following the issue. “This is not something that is going to happen immediately.”"

It happened in Cyprus and now they are talking about it in Greece. When your economy teeters on the edge of bankruptcy and the nation can no longer pay its creditors, the bankers simply help themselves to your bank deposits. This is legal in almost every country of the world now in case you were wondering - yes, even here in the good old US of A. In Cyprus, they only hit deposits of 100,000 EUR or more. For Greece, they are talking about taking it down to 8,000 EUR.

I think the Greeks need to consider taking the route that Iceland chose. Simply default. Reboot the economy, prosecute the criminal banker and political class and go back to a metal based currency. And what ever else...they need to get out of the EU. This is where their troubles started.

So do you think this cannot happen here? Do not get overly optimistic about our financial future. The debt of the US government is deep and heavy. Should the right dominoes fall on a given day, both the bond and stock markets could collapse. Cash would be King for a bit, followed by wholesale dollar printing, followed by staggering inflation. The bankers will endeavor to recover their largess by giving you a haircut long before that last bit happens. There will be nothing you can do about it. They will simply help themselves to what is yours because they view your deposits as unsecured loans to them. Actually, I believe they think it's their money that they let us use.

Anyway, as this nightmare scenario proceeds, a barter economy is inevitable unless the people will be willing to take control, by force if necessary, of the reigns of government and finance. There are states in the current US union that are making preparation for this possibility. Texas come to mind. I believe that North Dakota is also prepared economic dooms day.

Some will say that their money is invested at brokerage houses or investment firms and is therefore safe. Let me tell you, when the feces hit the oscillating wind device, those with power will take what they want to save their sorry hides no matter where it is stashed. I look for them to pass the Mattress Seizure Act to be sure to get everything. There will be no place that is economically safe.

Gold and silver will not save you in the long term either. In the great and terrible day, I think we will be swapping bottled water and cans of Campbell's cream of tomato soup. People need to eat. You can't eat gold. Just my thought. It would be nice if I was wrong.

So what should you take from all this? Greece and Cyprus are rehearsals for the real deal. The bankers and politicians want to see what works and what does not work. They failed in Iceland.

We need to tell them now, that if it happens here, a giant Iceland will be their fate. They need to back off or they will have more trouble then they ever bargained for.

Jade Helm 15 is practice for the government handling of such a crisis. It is taking place in late summer and early fall in many states of the southwest. Some say it's merely a military drill. 9/11 happened during a military drill. Oklahoma City happened during a military drill. The subway bombings in London happened during a military drill. It could well be that there is a plan in place to artificially collapse the economy during this period to avoid a natural catastrophic melt down. Jade Helm 15 may be the way they intend to take control of an unruly populace. If this is the plan, look for it by September 23.

Here is to hoping none of that happens and that the Greek thing is localized and does not spread. That would be preferable to other scenarios. But just in case...lay in some bottled water and Campbell's tomato soup. I kind of like the chicken noodle too.             

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