When the Defaults Come, So Will the Wealth Grab

Phoenix Capital Research's picture


The biggest problem with the epic Central Bank rig of the last five years is that propping up a bankrupt financial system by printing money only works for so long.


The reason for this is that no one, whether it be a country, company, or person, can defy mathematics.


A loan can be extended, it can be restructured, or it can be finagled in countless financial ways. But at the end of the day, if your creditors lost faith in your ability to repay it… it’s GAME OVER.


History has shown many times that countries try to inflate their debts away until the inevitable restructuring occurs. As Argentina is now showing us, when the “D” word becomes palpable, markets move quickly.


Anyone who is truly concerned about their wealth in the coming years needs to assess what has happened in Europe: higher taxes on top earnings and bail-ins (meaning your bank deposits are raided to fund bank bailouts).


Indeed, the IMF recently proposed a “global wealth tax” to “restore debt suatainability.”


Here’s the critical quote:


Recurrent taxes on net wealth (assets less liabilities) have been declining in Europe over the last 15 years (repealers include Austria, Denmark, Finland, Germany, the Netherlands, and Sweden). But this may be changing: Iceland and Spain reintroduced the tax during the crisis, and it is now actively discussed elsewhere. (There has been interest, too, in the possibility of a one-off wealth tax to restore debt sustainability, taken up in Box 6.)


The revenue potential is subject to considerable uncertainty (related, for instance, to the valuation of real estate) but is in principle sizable. Based on Luxembourg Wealth Study data, a 1 percent tax on the net wealth of the top 10 percent of households could, in principle, raise about 1 percent of GDP per year…




The sharp deterioration of the public finances in many countries has revived interest in a “capital levy”—a one-off tax on private wealth—as an exceptional measure to restore debt sustainability.1 The appeal is that such a tax, if it is implemented before avoidance is possible and there is a belief that it will never be repeated, does not distort behavior (and may be seen by some as fair)






Anyone who has assets worth over $200,000 should note that the Governments of the world WILL be coming for your money to prop up the insolvent banks. And they’re going to be taking MORE instead of less.


Indeed, in the case of Cyprus, the proposed wealth tax of 7% of all deposits over €100,000 quickly rose to an incredible 47%!  Those individuals whose deposits were seized received equity in the banks themselves.


This scheme has been used in Spain multiple times… though the press has yet to note that when the banks FAIL, that equity is worth ZERO.


Cyprus has since released some of these funds though they are subject to capital controls (READ: YOU CANNOT GET YOUR MONEY OUT OF THE COUNTRY).




1)   Cyprus staged a bail-in, froze accounts, and took 47% of wealth over the first €100,000.

2)   EU Finance ministers announced this policy will be a “template” for bailouts going forward.

3)   The IMF hints that a global wealth tax might be a good thing.


Connect the dots...


This concludes this article. If you’re looking for the means of protecting your portfolio from the coming collapse, you can pick up a FREE investment report titled Protect Your Portfolio at http://phoenixcapitalmarketing.com/special-reports.html.


This report outlines a number of strategies you can implement to prepare yourself and your loved ones from the coming market carnage.


Best Regards


Phoenix Capital Research




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The Most Interesting Frog in the World's picture

If you define "wealth" by living high on the hog while government gets the bill and hoping future generations are cool with paying your fucking bills when you are gone, I am all for taxing that "wealth".

Sick and tired of listening to the communist baby boomer generation whine that before they die it might be a requirement to pay for the shit their government handed out.

Fuck you! Pay your bills deadbeats!

All Risk No Reward's picture

But, you can't "pay your bills" WHEN MONEY ITSELF IS DEBT, BY DEFINITION!

The whole stinkin' system is a prima facie fraud.


Debt Money Tyranny Exposed in graphic format...


Quit being divided so easily by the Money Power that is evicerating everyone else's liberties worldwide.

conspicio's picture

All in all, some good thoughts by the authors. Until I see the offer for "the means of protecting your portfolio from the coming collapse." The collapse is already here, kids. You're in it. This is what it looks like, smells like, tastes like. There is no "coming collapse" as if there is a moment of truth that defines the event. It's a slow complex system grinding the gears as you read this. But if it makes you feel better to explain that to yourself every morning, then be sure to let us know when you see this "coming collapse" and tell us all about it.

messymerry's picture

We're in the incipient stage of the collapse.  in fact, it is theoretically possible to reverse this collapse scenario.  HAHAHAHAHAHA!!!  Not gonna happen.  

We should be looking for a knee in the collapse curve where events accelerate rapidly and the decline becomes much steeper.  Nobody knows where the bottom is...  

My current forecast is that we will "see the knee" while His Majesty and Lord of all the lands, Barack Hussein Obama is still in office.  


nickt1y's picture

Would that be a knee to the groin?

messymerry's picture

Orrr, a knee to the nose.  Knees and elbows are potent close in weapons.  If you're physically able, I suggest martial arts training.  it is an asset that no one can take away from you...

disabledvet's picture

This is why I am very suspicious that 2008 was a set up and done intentionally. "When the note goes belly up the asset is DEVALUED." So not only to those that have liquidity...but those that create liquidity...can simply buy up those assets "for a song."

Having said that this sell off collapse...as massive as it was...has also been massively "brief." You were either long in 2009...or you simply took the bit and stayed in. Otherwise you've pretty much missed the bulk of this move higher "even as a Wall Streeter."

So now we're "in the ether" and the economy is saying "we've been in a recession for some time now."

You can have too much production. Prices...especially of debt...can fall....maybe even sell off! Detroit did go bankrupt in the middle of this "roaring recovery"!

the grateful unemployed's picture

it's hard to see how confiscating savings in order to leverage more debt is ever going to work, but that seems to be the plan

Lumpenproletarier's picture

This comment threading format has GOT TO GO!

Ban KKiller's picture

Central banks are the enemies of the people and the whip of the fascist oligarchs.

Deer Hunter's picture

"Again the devil took HIM to a very high mountain and showed HIM all the kingdoms of the world and their splendor. All this I will give you if you will bow down and worship me."

This shows ownership of the wealth of the world, do not be deceived.

Why I like real estate, my labor is not all tied up in a bank account or some 401k. I will never be able to retire, but that's mans idea, not of God.

Burticus's picture

About the only way to protect one's wealth from confiscation when the Paper Ponzi inevitably collapses is to convert excess financial assets into physical gold & silver bullion, stored outside the insolvent zombie banking system and out of reach of thieving gubbermint tentacles.

Of course, even this strategy exposes one to the risk of losing his silver in a tragic sailing/boating accident, which seems to happen all the time to a large number of people.

All Risk No Reward's picture

#1 gain control over the necessities of life.

#2 and #3 are the same as #1.

#4, don't forget #1

If you have monetary wealth left over, then consider gold and silver.

Folks are so close...  don't screw it up.

Marco's picture

Ehh, I don't have over 100K in the bank ...

All Risk No Reward's picture

You believe in a bankrupt Money Power controlled government's promise to pay out on FDIC?

I see you've bought the bridge they are selling.


Ben Ghazi's picture

Thanks to Obamacare, NOBODY has $100,000 in the bank anymore!

doctor10's picture

All this tells you is how worthless banks really  are-especially when they have to force cash equity at the point of a gun.

Look to see barter as an increasing mechanism of even international trade.


Obamanism's picture

How about creating a 1% wealth tax on all Trust funds over $100million or creating a bail-in on trust funds held in banks etc say start at 7% at work up to 47%.

Or provide everyone with wealth over $10,000 to able to put in a untouchable tax free Trust fund.

nickt1y's picture

Who would get the proceeds? The kleptocratic government? The IMF? A bad idea all around.

stacking12321's picture

Or, how about no taxes, end the fed, stop meddling in peoples' affairs, and leave us to live our lives in peace?

AdvancingTime's picture

Modern Monetary Theory often referred to as MMT to its many believers removes much of the risk ahead and guarantees that we will always be able to muddle forward. MMT also known as neochartalism is a economic theory that details the procedures and consequences of using government-issued tokens and our current units of fiat money.  Newly acquired tools like derivatives and currency swaps  allow us to print and  manipulate away problems.

While reading an article about the growth of debt in China's non-financial sector I was forced to reflect on how debt is effected by the interest rates. In Europe the ECB had to step in to halt the economic collapse of Spain, Italy and several other countries that were on the brink. What you pay in interest on debt does matter except in the manipulated land of MMT. Have we been lulled into complacency by the extraordinary actions taken by central banks and governments over the last six years? This is a key question we must face. More on this subject in the article below.



All Risk No Reward's picture

The fraud of debt based money is that society doesn't have the quantity of money required to pay back their private debtors...  because the monetary wealth of the lenders is equivalent to the inextinguishable debt of the borrowers!

Debt based money is an artificial zero sum game constrain imposed on a sucker society of galactic chumps...  engineered to systematically asset strip us of monetary wealth, physical wealth and liberty wealth.




Anyone that can't/won't adress the fraud that is Debt Money Tyranny head on is full of crapola.

Debt Money Tyranny

are we there yet's picture

We need to polygraph politicians as to corruption. Also, polygraph lobbyists. Public corruption should confiscate all personal assets then hard labor for life with public oversight.

New_Meat's picture

won't work very well--sociopaths think what they are doing is the right thing. - Ned

pitz's picture

Hey dumbass.  When banks are 'bailed-in', their debt is converted to equity.  The equity holders, if they have any brains, immediately dump bank management, and find management that actually operates the bank prudently.  The 'bail-in' also makes the bank very competitive by reducing its debt load and its cost of capital relative to its competitors (after all, a bank with minimal equity will tend to have a very high cost of capital).  "bail-ins" are nothing to be afraid of, and bank equity after a bail-in is not worth zero. 


therevolutionwas's picture

It is the fiat money that will be worth zero.

FredFlintstone's picture

Who owns the banks? Do you think they are going down? They have been getting legislation passed around the globe that changes the seniority of the creditors from the depositor to bond holders. When TPTB decide to do the Grand Cyprus it will most likely be far reaching so that there is no where to run or hide. They will just take a huge portion of the wealth and thank us all very much for saving the world. The bastards that should have taken the haircut will be largely unscathed.


therevolutionwas's picture

Only those with "real" assets will be unscathed.  Those with fiat money promises will lose.

stacking12321's picture

Nowhere to hide?
I have Troy ounces at the bottom of a lake that say otherwise

spinone's picture

Banks debt are deposits.  Their bad paper wasn't debt, it was reserves.

FredFlintstone's picture

You must not have much wealth. I think most of what you have said has been proven to be wrong.

Pickleton's picture

You must not have much wealth.


...or brains.

potato's picture

I just had this thought this evening about the coming collapse and the end-of-days mongering on ZH. 

We already have a template of what the future looks like. And it's not as cataclysmic as described.


What do you guys think?

Professorlocknload's picture

The results aren't in yet on Japan. It is still a work in devolution.

August's picture

The Japanese are a civilised people, and have a high level of civic trust. 

The USA, not so much.

eishund's picture

They just conveniently leave out parts of their history while teaching their kids.

novictim's picture


" if your creditors lost faith in your ability to repay it… it’s GAME OVER."--->Wrong.  

If you have a run on your banks and you are in control of your currency then you can print money to cover your debt.  That has been the saving grace of many a country from 1920's Weimar Germany to Hungary.  


"John Maynard Keynes described the situation in The Economic Consequences of the Peace: "The inflationism of the currency systems of Europe has proceeded to extraordinary lengths. The various belligerent Governments, unable, or too timid or too short-sighted to secure from loans or taxes the resources they required, have printed notes for the balance." "


So we come again to a point few of you are brave enough to acknowedge.  When we run the natural cycle of capitalism to its logical conclusions we end up with vast poverty and a few wealthy elites.  Along the way, great things do happen and we celebrate capitalism for these things.  But in the end we find disaster again and again and again.   And at the end of the day, the cycle must be reset and the means are simple.  We see them naturally follow again and again, too.  We choose of have chosen for us:

INFLATION, TAXATION, or CONFISCATION.  Or we let the shit really hit the fan and we have REVOLUTION followed by INFLATION, TAXATION, and/or CONFISCATION.  

If I was an anthropologist (or even zoologist) then I would say this cycle is normative for advanced human societies. 

dirtscratcher's picture


" if your creditors lost faith in your ability to repay it… it’s GAME OVER."--->Wrong.  

If you have a run on your banks and you are in control of your currency then you can print money to cover your debt.  That has been the saving grace of many a country from 1920's Weimar Germany to Hungary.  -----novictim


The article is refering to loss of faith in the Central bank, not 'private banks' (so-called). Confidence is lost in a central bank by money printing, making printing the cause not the cure. A run on banks indicates a lack of control as well as a lack of confidence. A run on banks is a rejection of money printing. When that happens, it's GAME OVER.

shovelhead's picture

" When we run the natural cycle of capitalism to its logical conclusions we end up with vast poverty and a few wealthy elites."

No, you are wrong.

What is happening is an unnatural distortion of capitalism by banksters with access to free money aided by the Fed banksters. Printing money and fractional reserve credit is counterfeiting. Just because something is "legal" doesn't mean it's not criminal theft. It means bad law is in effect.

Capitalism is honest trade with the surplus saved or invested in future production gains.

Don't conflate crime with capitalism. They are two different things.

This is what people are not brave (or educated) enough to acknowledge.

TrulyStupid's picture

Don't conflate capitalism with monopoly capitalism..  our present system. . In the current case the government, banks and large corporations have conspired to artificially raise prices and misallocate capital.

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."

-Adam Smith

stacking12321's picture

Absolutely correct, shovelhead
It is central planning/fascism (the opposite of capitalism) that creates vast poverty and a wealthy few.
Capitalism only creates wealth and increased opportunities.
Capitalism doesn't take from anyone.
It gives to those who choose to participate voluntarily.

SokPOTUS's picture

Weimar Germany?  Yep, that turned out well.

Marco's picture

It protected their banking system and kept their industrial system going for a long time ... much longer than it would have been able to do in a deflationary situation IMO.

The problem in the end was that their external debt was in gold, they had no choice but to keep devaluing (to keep wages down and to be able to use surplus to pay off external debt) but in the end it just wasn't enough. If foreign countries had been just a bit less greedy there would have been no WW2 and they could have kept the Germans as defacto slave labourers.


There is no way to protect assets if the whole financial system goes down and chaos ensues. Once the food supply chain is disrupted and the banks close their doors it's
lights out for the cities everywhere. Without continued existence of all the food supply chains populations will begin to panic and contagion will spread until it is exhausted. Bringing society back on-line will be impossible
in light of the numbers that will rampage destroying everything their wake. The 'civilized world' will become uncivil at that point and modern society cannot reach that point without initiating all out revolution.

Buck Johnson's picture

Your correct, what will most likely happen is that the US will devolve into a thousand kings/presidents.  Meaning that we will have a strongman at every 30 miles or more. 

August's picture

Castles, too, but they won't be as scenic as in Europe.

Long concrete and rebar, baby.

dark_matter's picture

This is what Orlov calls the "Age of Big Men" in the 5 stages of collapse:

"As stage 3 collapse runs its course, the power vacuum left by the now defunct federal, state and local government is filled by a variety of new power structures. Remnants of former law enforcement and military, urban gangs, ethnic mafias, religious cults and wealthy property owners all attempt to build their little empires on the ruins of the big one, fighting each other over territory and access to resources. This is the age of Big Men: charismatic leaders, rabble-rousers, ruthless Macchiavelian princes and war lords. In the luckier places, they find it to their common advantage to pool their resources and amalgamate into some sort of legitimate local government, while in the rest their jostling for power leads to a spiral of conflict and open war."