European Union

Mounds of cold, hard, indisputable evidence not found ANYWHERE else! Damn, you thought Cyprus was newsworthy? Ireland already Troika'd & they're bigger than Cyprus. Depositor recap of banks looks inevitable if this research is right!

Debt-serfdom and the dominance of Financial Power are two sides of the same coin. Let's be clear about three things: 1. Too Big to Fail financialization is the metastasizing cancer that has crippled democracy and capitalism; 2. Financialization feeds on expanding debt and cannot survive without it; and 3. Debt is serfdom. Debt is the mechanism of the Financial Powers' dominance and the chains of our serfdom. Eliminate debt and you eliminate the foundation of banks' power and the financial bondage of serfdom. Though it would dearly love to, the State cannot force anyone to take on debt except as taxpayers. We do not have to remain debt-serfs, nor accept our servitude as unavoidable or fated. Debt = serfdom. There is another way to live, frugally, with only short-term debts that are paid off in a few short years. We either accept the consumerist-narcissist debt-serf programming or reject it. We are neither victims nor bystanders. The choice is ours.

It begins here: Introduction of cold, hard evidence of bank shenanigans (with complete documentation) that A) should be prosecuted & B) cause enough concern to make you worry about your bank's integrity. 

When governments begin doing things that are extreme and outside of the normal patterns of behavior then it is not a stretch to say that they are in trouble. They are responding this way because they are in a critical and perhaps life threatening situation. They do not tell the truth about sovereign finances and cover up everything at the ECB but they must be looking at the real numbers and experiencing some sort of epileptic fit. I would say that you can now speculate in Europe. I would say that you can bet in a manner no different than a casino. Actually no; I would say it is worse. You can put your money down and then the dealer can say, "New Rules, Game Change; all the money on the table is required for the House and it is now mine." If you had suspicions before; they have been confirmed. Anything, everything can and might be done and then justified by the unwillingness of the nations in Europe to pay for any more of a troubled country's difficulties. Whatever boundaries that existed have been breached. There is no Law, no fences and no limits. First Greece and now Cyprus and Pandora has raised the lid on her Box.

Another non-Russian, non-oligarch, non-billionaire, non-tax evader speaks up...

Far from being a unique situation, the fragile exposure of unsecured depositors across the Euro zone is the norm; and their fragility was further increased in the last twelve months thanks to policies created by the same authorities who now refuse to honor their promise of a banking union, and instead impose capital controls, which have effectively destroyed any credibility on the safety of capital in the Euro zone. However, even if one accepts my view, the unintended outcome begs the following question: Why was there cheap money available for subordinated debt holders to cash out, but there is none now to protect the savings of depositors?

It's funny how things are done in Europe. Nothing is as it seems. Then everything is orchestrated to try to get you to believe what they want you to believe. The Cyprus fiasco is one good example. The Dutch FinMin broke ranks and spoke the truth; there is now a template in Europe for financial bail-outs which include losses for bond holders and depositors. The ECB had almost all of its members deny that there was any template. Then Spain denied, Portugal was on the tape so many times yesterday denying that you thought it was the newest Cadillac commercial and then virtually every other country in Europe had somebody in the Press with their own denials. "One-off" was the word of the day and the giant European propaganda machine worked well into the night. The problem is the way these things work. The reporters, from any news agency, are handed out stuff from the government. They have to publish it. There is no choice. But why are the Russians not quite so upset as they were at the beginning of the crisis. The answer to this question is Uniastrum bank...

Moments ago Cyprus banks reopened, under heavy guard, without signs of a stampede. However, since as was made clear yesterday, all bank branches will serve merely as glorified ATMs, allowing for a maximum €300 cash withdrawal and practically no outbound cash transactions allowed, there has been no stampede, and no lines as the bulk of services provided legally are merely what one can find at an automated teller machine. The question is whether the five shipping container full of ECB cash delivered last night into the country will be enough to cover the cash-strapped public's demands, and for how long.

Is it possible for burned Cyprus depositors to file a suit against the Troika or the US Navy? Why not?

With the 'temporary' capital controls being imposed in Cyprus, Credit Suisse explains why a Cypriot euro not equal to a euro from any other member country. Furthermore, the clear fabrication of a 'seven-day' period for these controls (when monthly and quarterly limits on spending are also included) is questioned as they ask how such capital controls could eventually be lifted with no obvious cure of the underlying problem, i.e., the risk of a bank run. Since every guarantee is only worth as much as its guarantor, we would expect that in absence of a European wide deposit guarantee (which for political reasons and the aforementioned template look very unlikely) these capital controls are likely to stay for longer than originally planned. Unless this vicious circle is broken, this attempt to save the euro could ironically even become the template of how a member state could leave the currency union.

Back in December 2011, Europe swooned and bond yields soared when it was shocked, shocked, to learn that Spain had been lying about its budget deficit all year, a number which was subsequently hiked several more times. Then in 2012, to keep up with the pretense that things are better, Spain once again did what it does best: fudged numbers, this time desperate to make it appear that its actual government deficit was better than expected because one had to 'obviously' exclude all those items that are not part of the government spending... like payments for its broke provinces, or indirect funding for its broke banks. Now it turns out that in addition to fudging the definition of "budget", Spain was, surprise surprise, lying once again. From Bloomberg: "The Spanish government said its 2012 budget deficit will be bigger than first estimated after the European Union requested changes in how tax claims are computed. The budget shortfall excluding aid to the banking sector was 6.98 percent of gross domestic product last year, more than the 6.74 percent predicted on Feb. 28, Deputy Budget Minister Marta Fernandez Curras told reporters in Madrid today. That compares with 8.96 percent in 2011."

If we shed our fixation with the Fed and look at global supply and demand, we get a clearer understanding of the tailwinds driving the U.S. dollar higher. I know this is as welcome in many circles as a flashbang tossed on the table in a swank dinner party, but the U.S. dollar is going a lot higher over the next few years. In a very real sense, every currency is a claim not on the issuing central bank's balance sheet but on the entire economy of the issuing nation. All this leads to two powerful tailwinds to the value of the dollar. One is simply supply and demand: as the global economy slides into recession, trade volumes decline, and the U.S. deficit shrinks. (It's already $250 billion less than was "exported" in 2006.) That will leave fewer dollars available on the global market. The second tailwind is the demand for dollars from those exiting the euro and yen. The abandonment of the euro is already visible in these charts.

A brief note on what to look for in the capital controls Cyprus will soon announce. The purpose is not to pass judgment on the merits of capital controls, but to discuss the implication.

There are some good features of the Cyprus deal and, of course, some bad aspects. However, its repercussions for the Eurozone as a whole are exceptionally ugly and will, we submit, mark a turning point for Europe; a point at which Europe took a nasty turn toward a set of mutually disagreeable outcomes.

An increase in safe haven demand, particularly in periphery European nations such Spain and Italy will likely support gold. Citizens in these countries are alarmed by how depositors in Cyprus were treated and the more aware and prudent ones are taking the requisite action in order to protect their families and businesses from the growing possibility of capital controls.

Whether to sell Italy's national gold reserves is an interesting question. A perhaps as interesting question and more important question in the light of the Troika expropriation of bank deposits is will Italians begin to diversify some of their savings in Italian banks into gold bullion?