• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Europe Considers Wholesale Savings Confiscation, Enforced Redistribution

Tyler Durden's picture




 

At first we thought Reuters had been punk'd in its article titled "EU executive sees personal savings used to plug long-term financing gap" which disclosed the latest leaked proposal by the European Commission, but after several hours without a retraction, we realized that the story is sadly true. Sadly, because everything that we warned about in "There May Be Only Painful Ways Out Of The Crisis" back in September of 2011, and everything that the depositors and citizens of Cyprus had to live through, seems on the verge of going continental. In a nutshell, and in Reuters' own words, "the savings of the European Union's 500 million citizens could be used to fund long-term investments to boost the economy and help plug the gap left by banks since the financial crisis, an EU document says." What is left unsaid is that the "usage" will be on a purely involuntary basis, at the discretion of the "union", and can thus best be described as confiscation.

The source of this stunner is a document seen be Reuters, which describes how the EU is looking for ways to "wean" the 28-country bloc from its heavy reliance on bank financing and find other means of funding small companies, infrastructure projects and other investment. So as Europe finally admits that the ECB has failed to unclog its broken monetary pipelines for the past five years - something we highlight every month (most recently in No Waking From Draghi's Monetary Nightmare: Eurozone Credit Creation Tumbles To New All Time Low), the commissions report finally admits that "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."

The solution? "The Commission will ask the bloc's insurance watchdog in the second half of this year for advice on a possible draft law "to mobilize more personal pension savings for long-term financing", the document said."

Mobilize, once again, is a more palatable word than, say, confiscate.

And yet this is precisely what Europe is contemplating:

Banks have complained they are hindered from lending to the economy by post-crisis rules forcing them to hold much larger safety cushions of capital and liquidity.

 

The document said the "appropriateness" of the EU capital and liquidity rules for long-term financing will be reviewed over the next two years, a process likely to be scrutinized in the United States and elsewhere to head off any risk of EU banks gaining an unfair advantage.

But wait: there's more!

Inspired by the recently introduced "no risk, guaranteed return" collectivized savings instrument in the US better known as MyRA, Europe will also complete a study by the end of this year on the feasibility of introducing an EU savings account, open to individuals whose funds could be pooled and invested in small companies.

Because when corporations refuse to invest money in Capex, who will invest? Why you, dear Europeans. Whether you like it or not.

But wait, there is still more!

Additionally, Europe is seeking to restore the primary reason why Europe's banks are as insolvent as they are: securitizations, which the persuasive salesmen and sexy saleswomen of Goldman et al sold to idiot European bankers, who in turn invested the money or widows and orphans only to see all of it disappear.

It is also seeking to revive the securitization market, which pools loans like mortgages into bonds that banks can sell to raise funding for themselves or companies. The market was tarnished by the financial crisis when bonds linked to U.S. home loans began defaulting in 2007, sparking the broader global markets meltdown over the ensuing two years.

 

The document says the Commission will "take into account possible future increases in the liquidity of a number of securitization products" when it comes to finalizing a new rule on what assets banks can place in their new liquidity buffers. This signals a possible loosening of the definition of eligible assets from the bloc's banking watchdog.

Because there is nothing quite like securitizing feta cheese-backed securities and selling it to a whole new batch of widows and orphans.

And topping it all off is a proposal to address a global change in accounting principles that will make sure that an accurate representation of any bank's balance sheet becomes a distant memory:

More controversially, the Commission will consider whether the use of fair value or pricing assets at the going rate in a new globally agreed accounting rule "is appropriate, in particular regarding long-term investing business models".

To summarize: forced savings "mobilization", the introduction of a collective and involuntary CapEx funding "savings" account, the return and expansion of securitization, and finally, tying it all together, is a change to accounting rules that will make the entire inevitable catastrophe smells like roses until it all comes crashing down.

So, aside from all this, Europe is "fixed."

The only remaining question is: why leak this now? Perhaps it's simply because the reallocation of "cash on the savings account sidelines" in the aftermath of the Cyprus deposit confiscation, into risk assets was not foreceful enough? What better way to give it a much needed boost than to leak that everyone's cash savings are suddenly fair game in Europe's next great wealth redistribution strategy.

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Wed, 02/12/2014 - 23:57 | 4431097 LMAOLORI
LMAOLORI's picture

 

 

It looks like it will be unless they are smart enough to pull it all out ASAP

Thu, 02/13/2014 - 00:07 | 4431129 Georgia_Boy
Georgia_Boy's picture

What name is on this paper bill? The government's, and the Federal Reserve. Well sooner or later, what came from them, belongs to them, and they will take from you what belongs to them eventually. It's just a matter of creating a crisis big enough. I've made that mistake, I've got savings in that system that take decades to accumulate, and if they let me keep it then great. But I'm not counting on it. I'm not playing by their rules anymore. It's time to build the backup system.

Thu, 02/13/2014 - 00:22 | 4431161 Mactheknife
Mactheknife's picture

"Socialism is a philosophy of failure.  The creed of ignorance and the gospel of envy.  Its inherent virtue is the equal sharing of misery."      Winston Churchill

Thu, 02/13/2014 - 20:55 | 4434569 GoinFawr
GoinFawr's picture

Aiiigh! My Sovereign Wealth Fund only has 818 billion in it! Q. So if it's being stolen, just who does own Norway's oil, anyway?

FYI: Strictly speaking, skimming the deposits of the proles and handing it over to a handful of banksters isn't technically 'socialism' the last time I checked.

Thu, 02/13/2014 - 01:36 | 4431319 MontgomeryScott
MontgomeryScott's picture

DONE.

Let me get this correctly, please.

"the savings of the European Union's 500 million citizens could be used to fund long-term investments to boost the economy and help plug the gap left by banks since the financial crisis, an EU document says."

The E.U. as a WHOLE had some bankster-cocks gang-rape and penetrate them and stretch them open. In order to staunch the bleeding from their orifices after they got done, they (the population of the E.U.) are told that they ( the E.U. population) WILL have to stuff some absorbent materials ('TAMPONS', or 'LONG-TERM INVESTMENT VEHICLES) in their assholes, mouths, and vaginas so that the BLEEDING and WOUNDS will not METASTASIZE and cause DEATH from being BLED OUT.

Did I miss something, here?

MOLON LABE!

SIC SEMPER TYRANNIS!

CRY HAVOC!, AND LET SLIP THE DOGS OF WAR!

http://www.youtube.com/watch?v=LmrbiX9__wM

FUCK YOU, ROTHSCHEILD!

Thu, 02/13/2014 - 10:42 | 4432032 gonetogalt
gonetogalt's picture

Where is Francis Sawyer when you need him?

Thu, 02/13/2014 - 23:53 | 4435248 jomama
jomama's picture

apparently he was banned...?

Thu, 02/13/2014 - 19:54 | 4434402 Buck Johnson
Buck Johnson's picture

This is going to get ugly real soon.

Wed, 02/12/2014 - 22:33 | 4430836 JohnnyBriefcase
JohnnyBriefcase's picture

Nobody saw this coming.

Wed, 02/12/2014 - 22:38 | 4430861 akak
akak's picture

But our leaders assured us that this could NEVER happen!

Wed, 02/12/2014 - 22:53 | 4430918 krispkritter
krispkritter's picture

Dear Leader, you suck Banker Balls.  Sincerely, Serfs  PS. Can I get a loan for some pitchforks?

Thu, 02/13/2014 - 00:05 | 4431118 Crawdaddy
Crawdaddy's picture

pps. and another case of nails for our nail guns

Thu, 02/13/2014 - 01:50 | 4431338 MontgomeryScott
MontgomeryScott's picture

You Chinese posters always have issues with pronunciation!

It's 'RAIL' guns, you silly Chinese peasant!

http://www.youtube.com/watch?v=Fnm-etchLOk

Not too bad, huh, CLAWdaddy?

I like the audio effects that sound like something out of Star Wars...

Bringing un-population with ever-greater efficiency, the warfighters of the Mercinary Bankster Army are always endeavouring to boost the bottom line, as they attack savings AND life...

You thought that having an 'MBA' degree had something to do with civilian endeavours, didn't you?

Thu, 02/13/2014 - 02:32 | 4431403 Crawdaddy
Crawdaddy's picture

so solly. I will now use general atomic rail gun for elimination of capitalist squirrels attacking village rice paddy.

Wed, 02/12/2014 - 22:42 | 4430878 johngaltfla
johngaltfla's picture

Bullshit.

Ayn Rand and many others with more than 2 functioning brain cells saw this coming. It is the fusion of crony state capitalism merging with the welfare state.

Meet Mr. Atlas as he is about to Shrug

Thu, 02/13/2014 - 02:17 | 4431362 MontgomeryScott
MontgomeryScott's picture

Perhaps all the 'downarrows' are due to the fact that 'John Galt' is a fictional character, and Ayn Rand was a woman (and a devout socialista) who didn't understand macroecenomics and the REAL human issues surrounding it. I don't know, however, after seeing this 'Ayn Rand' person, if I could honestly classify her as a 'woman'. I mean, Moochelle, with a Butch cut, and white skin, would STILL be a fugly chimp, you know.

Perhaps you get off sexually on a female who looks and talks like a socialist male. To each their own, I suppose.

NO, I didn't 'red-thing' your post (just so you understand this fact).

If you had had 2 functioning brain cells, you would have re-thought the post that you are now being responded to; in a clear and concise fashion; instead of responding as you have with a deleted expletive: An emotional and crude tool that you are attempting to post as 'information' regarding the feces of a Bovine (and the connotations of sight, smell, and touch that it brings) shall not in any way hereby give you cause to deflect from the issues at hand, 'fla'.

'FLA'...

SAY!

Now that you're down here, why don't you let a financial manager from the old country (the Bronx) manage your retirement account? Our staff of energetic and enthusiastic young interns are trained to bear only ONE thing in mind: The security and trust of our investors is the most important aspect of any of our clients. Your 'peace of mind' is their most high calling as they manage funds from all over the global sphere, and your trust must be earned (as they well know). That trip to Barbados on a shoe-string fixed income is but a phone call away. WHY wait? CALL NOW! Our operators are standing by! (Florida customers: Call 1-800-EF-YOU-SEE KAY, WHY OWE YOU!)

 

 

Thu, 02/13/2014 - 09:56 | 4431606 GetZeeGold
GetZeeGold's picture

 

 

many others with more than 2 functioning brain cells saw this coming.

 

Word up there dawg.

Wed, 02/12/2014 - 22:53 | 4430929 HardAssets
HardAssets's picture

I know youre doing a sarc - - - but people such as Bob Chapman warned of this several years ago

Wed, 02/12/2014 - 23:03 | 4430959 johngaltfla
johngaltfla's picture

Did Bob warn about this before or after "allegedly" fleecing old ladies in Florida before he fled to Honduras?

Wed, 02/12/2014 - 23:34 | 4431039 mvsjcl
mvsjcl's picture

John, which Bob Chapman are you refering to?

Thu, 02/13/2014 - 02:41 | 4431407 MontgomeryScott
MontgomeryScott's picture

Ron Paul warned us. He's not dead (YET).

Smedley Darlington Butler warned us, as well (he's dead, now).

Alex Jones is bullhorning us (and the UKIP politician has taken up his tactics).

Bob Chapman and I had a disagreement regarding the legal and lawful tactics that he stated on-air several years ago, after he attacked a friend of mine for pointing out that calling for hanging the treasounous bastards and bitches by the lampposts was NOT authorized by either the Magna Carta OR the Constitution (lack of trial by peers). He got really pissed off at me (on-air). It seems that he was a staunch supporter of 'trial by jury', but couldn't make a credible argument as to why he was in favor of pre-emptive strikes (MURDER in the FIRST DEGREE) of the scum-sucking leeches that now are killing us.

It is a shame that we never had the opportunity to complete this progression of the logical discussion.

He's dead, now.

Perhaps, you might give us a better example than this Bob Chapman' guy?

Wed, 02/12/2014 - 22:44 | 4430875 booboo
booboo's picture

Skimming the proceeds of impaired assets held in funds made up of future promises to pay....what could possible go wrong? This is giving necrophilia a bad name, I mean fucking a corpse is bad enough, butt fucking one is a bit over the top even for Jeffery Dahmer

Wed, 02/12/2014 - 23:41 | 4431064 G.O.O.D
G.O.O.D's picture

Idiot! NOTHING works we are running out of easy everything as in "resource depletion". Get it? Everything is crashing as we slowly go to hell.

Thu, 02/13/2014 - 00:31 | 4431183 disabledvet
disabledvet's picture

well...this does seem to be an admission that there is no such thing as private banking in Europe right now.

I've still got a few dollars lying around. Ummm...how about we start with...te Principality of Manaco?

Thu, 02/13/2014 - 04:26 | 4431500 AngelEyes00
AngelEyes00's picture

Confiscation is a form of fascism, so it's easy to see how desperation leads to fascism.  Hitler's party went from being considered a bunch of clowns to the ruling party due to desperation.  We are entering unchartered territory folks.  Time to going back to stuffing mattresses.

Thu, 02/13/2014 - 04:44 | 4431511 Wile-E-Coyote
Wile-E-Coyote's picture

Well if they want Europe to burn go ahead, the French will start rolling out the guillotines, the Italians will go nuts only like the Italians can. The Irish will just bend over like they have always done; the Brits will gloat from the side-lines while their own government contemplates the same measures in the future. The Spanish will start blowing each other up; the Basques don't need much encouragement. The Swiss will close their borders and hunker down, their normal default position when Europe goes tits up. The Germans will start rearming; the Poles will say fucking hell here we go again.

Putin will actually piss himself laughing; Obama will need to be reminded where Europe actually is, only to mutter something about a golf appointment…………………………… You get the drift!

 

Thu, 02/13/2014 - 08:46 | 4431723 ParkAveFlasher
ParkAveFlasher's picture

The French will strike for two months straight, which actually will improve their productivity. 

Thu, 02/13/2014 - 06:23 | 4431579 Jannn
Jannn's picture

January Chinese Gold Demand All-Time Record, 247 Tons

 

http://www.ingoldwetrust.ch/january-chinese-gold-demand-all-time-record-...

Thu, 02/13/2014 - 11:52 | 4432320 chubbar
chubbar's picture

That means the end is near for the monetary system. Their gold deliveries are on a parabolic arc and have outstripped world wide mining supply just on their own demand. We are a few months at most away from something breaking OR a false flag that allows for gold to spike without the sheeple catching on. Either way, major changes in the near future.

Thu, 02/13/2014 - 08:03 | 4431655 Oracle 911
Oracle 911's picture

More likely fascism at work.

#deadly serious

Thu, 02/13/2014 - 09:59 | 4431877 CoolClo
CoolClo's picture

"Socialism works"

Works great for the few in power....

Thu, 02/13/2014 - 10:36 | 4432012 rwe2late
rwe2late's picture

But aren't the private, profit-seeking capitalist banks already investing

everybody's savings to help the economy?

 

Thu, 02/13/2014 - 10:55 | 4432075 mr1963
mr1963's picture

At the end of the day, the government is going to protect themselves first. From the president on down all the way to the lowest government worker and military, they will protect their financial security first. If it requires riots, snipers, beatings by union thugs, they will not give up till every last drop of blood is squeezed from the private sector worker.  I am not certain when this shift occured, but it has and it cannot be reversed.

Fri, 02/14/2014 - 00:04 | 4435227 Boy
Boy's picture

 

 

 

 

Fri, 02/14/2014 - 00:08 | 4435230 Boy
Boy's picture

 

 

Fri, 02/14/2014 - 00:12 | 4435232 Boy
Boy's picture

 

 

Fri, 02/14/2014 - 00:14 | 4435233 Boy
Boy's picture

 

GOLD BITCHEZ  !!

Fri, 02/14/2014 - 08:10 | 4435912 GetZeeGold
GetZeeGold's picture

 

 

I was rooting for you......come on man......you can do this.

Wed, 02/12/2014 - 22:33 | 4430838 Jason T
Jason T's picture

what has been done will be done again, nothing new under the sun.

 

course they will confiscate!  

Wed, 02/12/2014 - 22:52 | 4430924 john39
john39's picture

inflation is confiscation, so this is nothing new.  they just need more now.

Wed, 02/12/2014 - 23:04 | 4430954 HardAssets
HardAssets's picture

Maybe its not so much that they need more . . . . as they want everyone broke, dependent, easily controlled and new serfs in a new world order ?

'Needing more' to 'stabilize the financial system' may just be an excuse for impoverishing most of the people of the west, and in particular those in the united States.

 

Wed, 02/12/2014 - 23:21 | 4431001 Wahooo
Wahooo's picture

Yes, please hold still for the implant.

Wed, 02/12/2014 - 22:33 | 4430842 Ignatius
Ignatius's picture

Whatever it takes.  Man, we gotta save these banks.

Wed, 02/12/2014 - 23:21 | 4431004 Wahooo
Wahooo's picture

I get it now. I was wondering what would keep us from burning every bank and government institution to the ground. They will be holding our money.

Wed, 02/12/2014 - 23:52 | 4431084 cro_maat
cro_maat's picture

If they hold all my money...

1. I am a loser
2. I have nothing left to lose
3. Time to make torches, pitchforks, guillotines, etc. from recycled materials

Thu, 02/13/2014 - 01:02 | 4431251 RaceToTheBottom
RaceToTheBottom's picture

Historically, the resetting of debt only occurs with the threatening of rebellion

Wed, 02/12/2014 - 23:54 | 4431091 chemystical
chemystical's picture

quite frankly I'd call that more than an even trade.  either they re-set or we do it for them.  there really is no in between as the can nears the end of the road.

Wed, 02/12/2014 - 22:33 | 4430846 dirtyfiles
dirtyfiles's picture

all for one one for all ..or someting like that

Wed, 02/12/2014 - 22:47 | 4430895 logicalman
logicalman's picture

All for .001%

FIFY

Wed, 02/12/2014 - 22:34 | 4430848 seek
seek's picture

Companies would invest in capex if they thought they'd be getting a single dollar (excuse me, euro) more in profits. The fact that they're not investing speaks volumes. It also means the confiscated money is therefore being thrown into a black hole.

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