Yesterday we wrote about the Cyprus bank “bail-in” noting that while ordinary citizens were screwed, connected insiders had ample time to get their money out of the banks before they were frozen.
Today, we note the following:
Russian oligarchs who are close to Vladimir Putin have a week to get their cash out of Britain before sanctions are imposed, it has emerged.
European Union officials started on Tuesday to prepare the list of businessmen and Moscow officials who will be targeted by the sanctions.
Philip Hammond, the Foreign Secretary, has made clear the Britain’s desperation to take action at those close to Mr Putin’s regime, saying "the cronies of Mr Putin and his clique in the Kremlin are the people who have to bear the pressure".
However, British sources disclosed that it will not be until the end of the month that all EU countries will have prepared their lists of individuals to be hit with the sanctions.
The length of time before any action against these so-called Putin cronies will fuel concerns that they can withdraw their money before sanctions are imposed.
We don’t ever recall hearing of an instance in which ordinary citizens or taxpayers were given a heads up to get their money out of harm’s way. Usually when they bear the pressure it’s measures in Dollars… not the number of days’ warning they are given to save their capital.
Indeed, there are usually no warnings that trouble is coming because everyone at the top of the financial food chain are highly incentivized to keep quiet about problems.
Central Banks, Bank CEOs, politicians… all of these people are focused primarily on maintaining CONFIDENCE in the system, NOT on fixing the system’s problems. Indeed, they cannot even openly discuss the system’s problems because it would quickly reveal that they are a primary cause of them.
Remember back in 2007 and 2008? Time and again then-Fed Chairman Ben Bernanke stated that the sub-prime crisis was “contained” and that there would be little spillover into the economy.
Bernanke was not alone. Just about every CEO from every major bank spent much of 2008 claiming that all was well, that there was no real need to raise capital, and that their exposure to toxic mortgage backed securities was minimal.
Most of their banks had to be either merged with other entities or went bankrupt.
For that reason, you will never and I repeat NEVER see a Central banker, Bank CEO, or politician admit openly what is happening in the financial system.
Even middle managers and lower level employees won’t talk about it because A) they don’t know the truth concerning their institutions or B) they could be fired for warning others.
As former banker Jean-Claude Juncker put it, "When it becomes serious, you have to lie."
So why does these people lie?
Central bankers lie because they draw all of their power based on the fact that they are beyond oversight or regulation. The minute they lose this power, it becomes obvious that Central Banks and Central Bankers are one of the primary causes of the financial system’s problems.
Ordinary bankers lie because if they were honest, their banks would collapse, they would lose their salaries/ bonuses, and they would very likely face legal actions.
This is why no one in a position of financial power will ever publicly state, “such and such bank is in trouble… it would be wise to move your money.”
Instead, what you’ll be told is, “we need to confiscate some of your savings to prop this bank up… if you don’t agree to this, the bank will collapse and you’ll have nothing.”
This is of course, assuming you are even told this. As the folks in Cyprus found out, often times they’re not even told what’s going to happen, they simply wake up to find themselves locked out of their account.
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Phoenix Capital Research