• 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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Thu, 02/13/2014 - 00:40 | 4431209 disabledvet
disabledvet's picture

they called it "the Greek Vortex" actually.

Wed, 02/12/2014 - 22:34 | 4430851 akak
akak's picture

Forward, European Union of Soviet Socialist Republics!

Wed, 02/12/2014 - 22:38 | 4430860 nmewn
nmewn's picture

They're doing it for the children!

Wed, 02/12/2014 - 23:38 | 4431048 TheFourthStooge-ing
TheFourthStooge-ing's picture

It's always for the cheeeeeldren.

Thu, 02/13/2014 - 07:32 | 4431631 GetZeeGold
GetZeeGold's picture

 

 

They love the children so much.....they're robbing them blind.

Thu, 02/13/2014 - 01:10 | 4431265 Chuck Walla
Chuck Walla's picture

FORWARD KONZENTRATIONSLAGER!

The NWO is licking their chops they are so close to the end game.

Wed, 02/12/2014 - 22:35 | 4430855 geminiRX
geminiRX's picture

You have to be insane to keep money in European banks after all these repeated warnings.

Wed, 02/12/2014 - 22:38 | 4430865 akak
akak's picture

You have to be insane to put an iota of trust in central banksters and political 'leaders', yet most still do.

As I have often said, humanity, taken as a whole, is fundamentally insane.

Wed, 02/12/2014 - 22:48 | 4430903 logicalman
logicalman's picture

Humanity, as a whole, is fundamentally brain dead.

Wed, 02/12/2014 - 22:58 | 4430937 Soul Glow
Soul Glow's picture

I blame doctors, because they are the first people we see.

Bright lights, mother is yelling, or doped up, maybe there was a c-section - an over used practice.  Then after a brief meeting with the parents the baby is whisked away to an incubator like an egg.  Then the mother is forced back home with no rest, the father is expected to work soon after instead of holding his baby whenever the baby needs him.

It's just fucked this world we are living in, yet it is inspirational.  We have so much to overcome and we really aren't anymore spiritually behind than before.  Maybe humanity makes the great leap, maybe we don't, but it sure is interesting.

Wed, 02/12/2014 - 23:58 | 4431103 cro_maat
cro_maat's picture

What if you knew that the whole of physical existence was just a 3D hologram and that your only reason for living was to work with Will and Imagination in order to overcome the maya (illusion) allowing you to escape to another dimension with god like powers?

Would you live your life differently?

Thu, 02/13/2014 - 03:56 | 4431479 merizobeach
merizobeach's picture

If it was a 3D hologram, we would all be static and not moving.  At the very least, we are 4D.

Thu, 02/13/2014 - 13:20 | 4432735 Raging Debate
Raging Debate's picture

Merizobeach this would be a stimulating conversation to have together. Here is my email jrines@ragingdebate.com . Anybody else like Tall Tom or others that want to email and talk about this subject please feel free to do so. It's a lot of fun and scientifically, I wager a few of you have conducted some experiments. Access needs to be codified into software and that might be possible in the NEAR future, enough said ;)

I wish ZH had a method for user to communicate with one another from each thread.

Thu, 02/13/2014 - 13:22 | 4432736 Raging Debate
Raging Debate's picture

Merizobeach this would be a stimulating conversation to have together. Here is my email jrines@ragingdebate.com . Anybody else like Tall Tom or others that want to email and talk about this subject please feel free to do so. It's a lot of fun and scientifically, I wager a few of you have conducted some experiments. Access needs to be codified into software and that might be possible in the NEAR future, enough said ;)

I wish ZH had a method for user to communicate with one another from each thread.

Fri, 02/14/2014 - 04:15 | 4435688 ebear
ebear's picture

"At the very least, we are 4D."

Yeah, but it still hurts!

Thu, 02/13/2014 - 08:47 | 4431727 ParkAveFlasher
ParkAveFlasher's picture

Forward, Rocinante!

Wed, 02/12/2014 - 23:36 | 4431041 edotabin
edotabin's picture

I think we are poorly or improperly evolved.  Maybe we are devolving? Something ain't right and that's why I love Idiocracy so much!

Thu, 02/13/2014 - 00:07 | 4431123 cro_maat
cro_maat's picture

There is a reason that Darwin's evolution is taught in the schools and taken as the only gospel. If the true teachings of all the esoteric schools became widely available then the masses would know that Nature evolves and devolves as well. We are seeing the end game of a giant compost pile that most are gladly marching into. If you want to evolve you have to resist every trick of the black lodge aka TPTB. This take lots of Will and unfortunately the hypnotized are busy watching the Olympics.

Thu, 02/13/2014 - 01:01 | 4431202 Creepy Lurker
Creepy Lurker's picture

You're not the first I've heard refer to TPTB by that name. The other writer was of the opinion that they believe they are doing the Great Work and don't understand their own evil. I don't think I buy that.

Thu, 02/13/2014 - 18:37 | 4434116 NemoDeNovo
NemoDeNovo's picture

You could be quite wrong in that assumption, ask yourself where that reaction comes from is it emotionally based, and based upon logic and reason???  Do we really think our mere 80+ year existence in this realm is in anyway meaning ful in a multi billion [arguably trillion] year old universe??  We are barely here long enough to pass gas.  But then again each of us has to find our own path in our own time, and 95%+ are not supposed to find it each evolution.  Would this place serve its purpose if there was no chaos??

Thu, 02/13/2014 - 18:32 | 4434105 NemoDeNovo
NemoDeNovo's picture

Most are not reayd to understand the principles you have described on several posts here.  Remember my friend it is a violation of the Law of Free Will to intrude on others right to remain Ignorant.  Less then 5% [and I'm being generous here] are ready to 'level up' and beat the game in this incarnation, they have not learned their lesson yet, but do not feel sorrow for them as this was choice made before they entered the game here.  How many could actually accept what this place is, why they are here and who they truly are, they veil is thick right now, and growing thicker by the day...........

Thu, 02/13/2014 - 21:04 | 4434632 Creepy Lurker
Creepy Lurker's picture

You make good and valid points. Absolutely chaos has its function. Without chaos one would never know order, without darkness one would never know light.

" We are barely here long enough to pass gas." So very true, lol. It's my main complaint, 80 years is a ripoff! It's not even enough time to learn anything. I know I will be back again. I cannot give up my attachments to this world, and I'm not done learning from it. Still, I'm glad of the progress I've made so far, even if it only means I've become aware of my vast ignorance.

Fri, 02/14/2014 - 04:41 | 4435704 ebear
ebear's picture

You guys need some epic theme music to go with that:

http://www.youtube.com/watch?v=Hs4g_jC48Wc

C'mon everybody!  Sing along!

http://www.metrolyrics.com/lets-just-see-lyrics-engineers.html

Thu, 02/13/2014 - 10:29 | 4431994 Mesquite
Mesquite's picture

All the chemicals are working...

Wed, 02/12/2014 - 22:52 | 4430921 A Lunatic
A Lunatic's picture

 

 

'You made me master of the world where you exist

The soul I took from you was not even missed'

   'Lord of this World' by Black Sabbath.

Wed, 02/12/2014 - 22:38 | 4430862 buckwheat5000
buckwheat5000's picture

germany should abandon EU tomorrow

Wed, 02/12/2014 - 22:44 | 4430887 Ignatius
Ignatius's picture

Germany is the EU.

Wed, 02/12/2014 - 22:50 | 4430911 Overfed
Overfed's picture

Germany is the single pillar holding up the entire house of cards called the "EU" (sounds like ewww). Remove that pillar, and....kaboom!

Wed, 02/12/2014 - 23:46 | 4431070 Portuguese Revo...
Portuguese Revolutionary's picture

Germany is the shepherd that fleeces the sheep...

Portugal, Greece, Spain and Ireland are in debt because they were FORCED to buy shit they didin't need. But that shit was "made in Deustchland"...

In Portugal's case it was: submarines (!!), electric trains (siemens), hospital equipment (siemens again) and many other items (all overpriced, obviously)...

Wed, 02/12/2014 - 22:41 | 4430868 balolalo
balolalo's picture

I read zerohedge for deep shit like this, calling a spade a mother fucking spade.   There goes one half of the first world.    How did it happen?.......  robbed at gun point.  

Thu, 02/13/2014 - 00:46 | 4431214 disabledvet
disabledvet's picture

"the power to print is the power to destroy."

this European "Bank" is in the wrong City...they should have located it in Venice actually.

Thu, 02/13/2014 - 02:24 | 4431383 Lore
Lore's picture

Redundant comment removed.

Wed, 02/12/2014 - 22:39 | 4430869 Yenbot
Yenbot's picture

Its amazing how you can rob the WHOLE WORLD at gunpoint for 600 years, and STILL be poor as dirt...

Wed, 02/12/2014 - 22:39 | 4430871 stant
stant's picture

modern day holocaust, your money goes to the furnace. and then you just die

Wed, 02/12/2014 - 22:40 | 4430873 Spungo
Spungo's picture

Don't worry, much of Europe is disarmed so people can't shoot politicians supporting this.

Wed, 02/12/2014 - 22:47 | 4430886 balolalo
balolalo's picture

That's ok.   The cities are tight and small.   Ever wonder how the USA solved that problem over here?.... notice those nice wide streets in DC... it wasn't no accident.  

Wed, 02/12/2014 - 22:50 | 4430902 dexter_morgan
dexter_morgan's picture

yep, which is why it's imperative to disarm Dumbfuckistan (formerly known as USA) so great plans like this can jump the pond. 

Thu, 02/13/2014 - 00:23 | 4431162 InjectTheVenom
InjectTheVenom's picture

NO NO NO NO NO !!!     dontcha remember...IT'S ALL FOR THE CHILDREN  !!!

Wed, 02/12/2014 - 22:42 | 4430879 zen0
zen0's picture

so if you got pHysical, it can be confiscated, or if you hide it, they will make the situation untenable to use it. If you have fiat, they will confiscate and invest it for you in what they want. What you done got. bitchez? Nada. Lets hear all you smart guys present a solution. Bitcoin?

Wed, 02/12/2014 - 22:47 | 4430890 seek
seek's picture

High value tangible goods.

And AU. These fuckers won't be in charge forever.

Wed, 02/12/2014 - 23:52 | 4431088 Droel
Droel's picture

This is how they will take your gold. Doesn't matter how much lead you stacked. Quite possibly the scariest article I have read to date.
http://rt.com/usa/real-life-iron-man-armor-746/

Thu, 02/13/2014 - 00:43 | 4431213 Tinky
Tinky's picture

How many times do I have to repeat this? The U.S. government will not be confiscating gold. If and when it becomes desparate enough to make a grab, it will do so through taxation, and for many reasons that should be obvious.

Thu, 02/13/2014 - 00:49 | 4431222 disabledvet
disabledvet's picture

if you're the worlds larger energy producer by far...you don' even need to worry about taxation actually.

"our winter your problem."

Thu, 02/13/2014 - 00:53 | 4431233 Meat Hammer
Meat Hammer's picture

Dude, that shit is for use against the parasitic FSA. When their votes are no longer needed they will be disposable when the SHTF. 

Have a bug out plan and when this fiat experiment goes tits-up, bug out.

Thu, 02/13/2014 - 02:14 | 4431376 balolalo
balolalo's picture

I always hear people say don't make big purchases, times are tough.   F that.  I am buying as much high quality products as possible, while I still can - before our paper hits the ground like zimbabwe.   

Wed, 02/12/2014 - 22:58 | 4430940 FilthyPhil37
FilthyPhil37's picture

It's a lot easier to confiscate dematerialised securities, such as USD, any paper denominated in USD and bitcoin. At least with physical they have to come and take it in person. 

Thu, 02/13/2014 - 00:16 | 4431151 JimS
JimS's picture

Ah, Bitcoin. It's OK, till they seize you and your "thumb-drive", waterboard you till you cough up the code. Or, they may just kill you, and fry your thumb-drive. That, more or less, finishes your Bitcoin.

Thu, 02/13/2014 - 00:58 | 4431243 disabledvet
disabledvet's picture

interesting that it was a denial of service attack.

that's normally a Government action...not "hackers."

Thu, 02/13/2014 - 03:48 | 4431472 JustUsChickensHere
JustUsChickensHere's picture

Ever heard of multiple wallets? ... and if you have time, see this tutorial on 'sloppy wallets' - things you leave to distract and identify attackers. http://www.youtube.com/watch?v=I1uefzJJ6nM

If you are being waterboarded, resist for a bit and then give up the keys to a minor wallet with a credible percentage of your wallets ... ignore further torture.... if they keep going, they intend to kill you anyway.

Do NOT follow this link or you will be banned from the site!