Is Portugal Next In Line For Wealth Confiscation?

Tyler Durden's picture

Submitted by Nick Giambruno via Doug Casey's International Man blog,

The pattern should be seared in your memory by now. If you fail to recognize it, you could be struck with a huge financial blow.

It’s a pattern that has played out over and over throughout history: a government gets into financial trouble, then denies there’s a problem, which is followed by a surprise wealth grab.

That’s exactly what happened when bank deposits in Spain and Cyprus were raided. We’ve also seen retirement savings confiscated in some form in Poland, Portugal, and Hungary. Capital controls have been imposed in Cyprus and Iceland.

Of course these aren’t the only examples of blatant government thievery. These examples are just within Europe and just within recent years. They can and will happen anywhere.

These events highlight the need to use international diversification to mitigate your political risk—the risk that comes from governments.

I think they also give us some clues as to what country is next on the chopping block.

A Roadmap to Confiscation

It starts out with government officials telling you everything is all right—when clearly everything is not all right.

Like when the president of Cyprus promised that bank deposits would be safe. A promise that we all know turned out to be worthless. Another example of why you’re almost always better off believing the opposite of whatever the government says, especially in a crisis.

Deceptions like this don’t happen by accident. The politicians and media deliberately lull the people into complacency so that they can optimize their forthcoming theft.

The next thing that happens needs to come as a surprise, otherwise it loses its effectiveness. It starts with a bank holiday or capital controls. It’s usually optimal—from the government’s view—to impose these measures on weekends or during a holiday to catch people off guard. They need the element of surprise or else people would take protective measures, like moving their money abroad and safely out of reach.

Once the banks are closed and capital is trapped, the government is free to confiscate as much wealth as it can get away with. It doesn’t matter what they call it or how they do it, the bottom line is they are making an unscrupulous grab. Capital controls are usually kept in place after the grab to prevent the remaining money from fleeing further slaughter.

So don’t forget the pattern:

  1. Country gets into serious financial trouble;
  2. Official government denials;
  3. Surprise bank holiday/capital controls; and
  4. Confiscation.

I think Portugal is a ripe candidate for being the next country to fall into this pattern.

Portugal Is Blinking Red

In late July 2014, Banco Espírito Santo (BES)—Portugal’s second-largest bank—went bust amid allegations of accounting problems and fraud.

BES is no ordinary bank. The Espírito Santo family, which owned the bank and a large empire of companies in Portugal and abroad, has been described as Portugal’s Rockefellers.

BES was quickly bailed out by the Portuguese government, the EU, and the IMF.

When I read about the incident in the mainstream financial media, most outlets refused to use the word “bailout.” Instead, it seemed that someone handed down the order to describe the event as a “rescue.” Such a concerted effort to coordinate talking points seems to me to be an Orwellian attempt to make this incident seem less objectionable, and perhaps to help conceal the real nature of Europe’s continued economic problems.

The fact that such a huge fraud at such a significant bank for so long escaped the notice of regulators—which supposedly had kept a close watch on Portugal due to a prior crisis in 2011—has reinforced fears that the banks and banking systems of the PIIGS countries (Portugal, Italy, Ireland, Greece, and Spain) are not as good as they seem.

So looking at our roadmap to confiscation, Portugal is clearly at the first stage in the pattern—serious financial trouble.

We also have government officials telling us everything is OK when it is probably too early to declare victory. Mario Draghi, the head of the ECB, recently stated that the collapse of BES “affected neither the banking sector in Portugal, nor Portugal at large, nor other markets.” It’s reminiscent of how, prior to the crisis in Cyprus, government officials were assuring everyone that there was nothing to worry about. Portugal also seems to be at stage two of our confiscation roadmap.

So in short we have another serious financial mess in Portugal. It occurred right under the noses of the regulators who were supposedly keeping a close watch on the country from a prior bailout and crisis in 2011. We have the media sugarcoating the incident, and government officials telling us everything is fine.

To me, it smells like a wealth confiscation in Portugal is just around the corner.

Get Out Before They Close the Window

If you have any money in a Portuguese bank, I think it’s clear that now is the time to head for the exits while you still can.

When it comes to protecting yourself from confiscations, capital controls, bank holidays, and other desperate measures of an out-of-control government, it’s absolutely essential to take action before it’s too late.

Unless you’re part of the political elite, you won’t know exactly when the window of opportunity will slam shut. In Cyprus, that moment came on an ordinary Saturday morning—to surprise as many people as possible before they could take defensive action.

While the window is still open for those in the US to protect themselves, the warning signs are clearly there. And the writing is on the wall.

It’s only logical to find ways to protect yourself. Moving some of your savings outside of the immediate reach of your home government and into a competently run jurisdiction with relatively sound banks makes sense no matter what happens.

Fortunately you can do this from the comfort of your own living room, by opening offshore bank and brokerage accounts remotely.

Naturally, things can change quickly. New options emerge, while others disappear. This is why it’s so important to have the most up-to-date and accurate information possible. That’s where International Man comes in. Be sure to get the free IM Communiqué to keep up with the latest on the best international diversification strategies.

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Newsboy's picture

Thanks, transferring to London NOW!

whotookmyalias's picture

Anyone with money in the bank or other financial institution is next in line.  Once this succeeded with no hangings, it will continue. Welcome to the new world order.

LawsofPhysics's picture

please, it's been a "mark to fantasy" world for quite a while now.  People do not know what real assets are or what real collateral is.  You expect them to understand counterparty risk?  LMFAO!

knukles's picture

Waaaaait?  There's still wealth in Portugal? 
aw shucks, just gotta rinse and turn the condom inside out from now on

Oldwood's picture

It can't happen here..this is AMERICA!

Living The Dream's picture

It can't happen here..this is AMERIKA!

(There, fixed it!)

inhibi's picture

It can't happen here..this is AMURIKA!

(There, fixed it!)

Kirk2NCC1701's picture

The AA (Anglo-American) global hegemony must be maintained.  As must the GRC of the USD.

Else all Prime Beneficiaries of QE are affected:  the Rich, and the Chosen.  It's a small club, and you, Portugal and Greece ain't in it.  There "Can only be One" country along the Mediterranean that has everything shoved up its ass, and those two ain't it.

Cognitive Dissonance's picture

"But...but...but they would never do that over here. Congress would never allow it for the simple reason Congressmen and women want to be re-elected." - The drowning cries of the average middle class American in deep denial.

Harbanger's picture

If it did happen here it would be Ok because,

You didn't build That!  send your donations early.

Elisabeth Warren 2016

Oldwood's picture

Exactly! We are constantly reminded that none of this is really ours anyway. Our property "rights" are as fungible as all of the rest of our newly acquired ones (here for as long as the money lasts). I used to think of our government as a silent partner skimming the profits but it seems more like a bad marriage (I have had both), in that there is what is considered ours and then there is hers. When the shit hits the fan, she immediately takes "hers" and then proceed to take at least half of mine, plus any small bodily appendages that may still remain unclaimed.

JenkinsLane's picture

Sell Mortimer, sell!

whotookmyalias's picture

Turn those machines back on.

RattNRoll's picture

Those men tried to have sex with me! Sorry lol

detached.amusement's picture

why was I picturing sir smoke a lot going "he had sex with my MOMMA!"

LawsofPhysics's picture

Are they armed?  No?  Well then, yes, I believe they could be subjected to this "plan".

Winston Churchill's picture

You know its coming here LoP. Guns or no guns.

2 billion hollow points agree with me.

LawsofPhysics's picture

So does the link below.  Apparently, the U.S government does not want people to have access to non-lethal protection either.

 

https://beta.congress.gov/bill/113th-congress/house-bill/5344/text

 

Harbanger's picture

Correction, apparently Democrats. Like it makes a difference.

detached.amusement's picture

dont worry, the whips will tally it all out ahead of time so that those who wish to keep up appearances can smugly say they voted against it

Oldwood's picture

Only till the republicans can figure how to make hay with it and still blame it on the libs. We are genuinely fucked as long as we rely on republicans to actually represent anything resembling conservative values. There will never be a meaningful libertarian government because they would be voting to eliminate their own jobs.

Harbanger's picture

Well I'm sure people were wondering why George Washington didn't want to be King and stay in Office for life. 

Oldwood's picture

In the beginning, all creatures were free, but eventually they were gathered and "harvested". Our founders were free men who obviously believed in a pretty basic concept of freedom, but there were those and increasingly more since who saw great advantage in minimizing that freedom. But of course they can never tell us that so they simply tax our freedoms away, like social security, "investing" our freedoms to be used for our own security. AS usual, we have been manipulated into ceding our rights and freedoms for magic beans that will grow, carrying us to the heavens, only to find evil giants there hoping to grind our bones to make their bread.

Itchy and Scratchy's picture

'They didn't build that!' - The Kenyan

Oldwood's picture

Its really pretty easy to tell when you have officially been enslaved, when your labor is actually building their assets and wealth rather than your own.

Itchy and Scratchy's picture

Think : Progressive Tax Rates!

Winston Churchill's picture

Easier for some of us to do than others.Not sure its safe overseas either.

Most here on ZH can't though. Your only real defence is to semi get out of the matrix,

by having nothing in your name they can come after.They will before this is over.

They were only letting you play with their money after all.Now they want it back.

All of it.

Thinkabout it.

Dr. Engali's picture

Sorry for the repost, but we were for Assad before we were against Assad and now it looks like we are for Assad again:

 

 

US and UK should back Assad to defeat ISIS - senior UK MP

 

http://rt.com/uk/182108-uk-assad-alliance-isis/

LawsofPhysics's picture

Doc,  take a look at the "ISIS fighters".  What are the genetic odds of a person in this region having a red beard?

Dr. Engali's picture

That was my first thought when I saw that picture. A ginger in the Middle East?..... Yeah right

Harbanger's picture

Sorry but that's just being ignorant Doc.  Take a minute to google blonde and red haired Arabs in images.  Yes, even blue eyes.

Winston Churchill's picture

Lots of stray genes floating around there .

From the greeks, traders, crusaders, you name it. But that one looks Irish with that skin,

and beard.

Harbanger's picture

"Red-hair is still honoured amongst Moslems as the Prophet Mohammed himself was reported to have red hair." [von Schwerin (1960)

smacker's picture

Philip Hammond (new UK Foreign Secetary) has ruled it out within the last hour or two.

Oldwood's picture

Regardless of ideology we must accept we have no allies, other than those we can force or bribe to temporarily "behave" in a complementary or allied fashion. Alliances could change three times a day and still be "normal" at this point. When you have fucked everyone in the room, friends are likely anyone who is not trying to kill you at any one moment. This IS the definition of CHAOS. No rules, no allies, no way of knowing who is friend or foe so assumptions are that everyone is a potential enemy.....and just because I think everyone is out to get me DOES NOT mean I'm paranoid, damnit.

tjeffersonsghost's picture

Why did they feel the need to blur one of the guys image out?

Creepy Lurker's picture

Doc, I looked at the article and then at the comments and you know what ran through my mind?

"We have always been at war with Eastasia..."

Joe Tierney's picture

If they try that confiscation game here in the U.S. they're really going to have to use those 2 billion hollow-point rounds.

 

I think they know that already. Man, this is really going to get ugly.

 

I wish I could escape to a small tropical island somewhere.

dearth vader's picture

If you're that desperate I've an island to sell to you, a bridge is optional.

Yen Cross's picture

    You know a country is bankrupt when their bond yields have fallen so much over a years time and they still can't service their debt. I wonder how much U.S. treasury buying through Belgium is being done by European banks who in turn use the treasuries as collateral to borrow against to buy European bonds.

  Todays closings. 
    Italy 2.58% -2bp
    Spain 2.38% -2bp
    Portugal 3.24% +2bp
    Germany 0.983% -1bp

Dubaibanker's picture

Since 2006, the Debt to GDP ratio of Portugal has only doubled, from 62.6% to 129% today.

This is also happening at a time when their GDP has been shrinking:

2006: 192bn

2009, peak: 252bn

2014: 220bn

This is happening when their population has started declining and has dropped by 80,000 people in the past 2 years.

At the same time, Moody's has upgraded the ratings to BB level when Espirito Santo bank issues had just begun late last month. Talk about perfect timing to look like an ass! Surreal takes a new meaning with these chaps.

We all know how much we need to trust the ratings. If we pay enough fees to any rating agencies, they will do whatever you tell them, because all agencies are controlled by the same people. 

Moody's upgrades Portugal's debt rating

 

Let the bank runs begin in Portugal!

 

orangegeek's picture

smart money has probably

 

the only ones to take from are the ones without much cash

 

socialists love using OPM (other people's money) until there's nothing left, then they get moody

Farmer Joe in Brooklyn's picture

That's a tad elitist....

Whether people have $50,000 or $5,000,000 in the bank, if it's a lot to THEM, then they would be wise to protect those assets any way they can.

Itchy and Scratchy's picture

Socialism is a senational idea .... until the other dude runs out of cheese!

Bangin7GramRocks's picture

Enough with the socialism shit. This will happen in every country in the world. Even the fucking exceptional U S of A. Roll your capitalism flag up, slide it in your ass and run one out. It will make you feel better, but it won't change the fact that all of the worlds financial systems are bullshit and fake.

Itchy and Scratchy's picture

WORLD Socialism is sensational ....until the other comrade runs out of feta!

Bangin7GramRocks's picture

Have we all so conveniently forgotten TARP? If I told you all 10 years ago that the bankers will blow up the financial system, then demand $700 billion or they would destroy it completely. They also demand complete immunity from prosecution, larger bonuses and unlimited free money from the FED. You would swear that the country would revolt and there would be blood in the streets. Didn't happen then, and it won't happen next time when they say sacrifice 30% of your money or you will lose it all. We will all take it once again and watch the cocksuckers buy yachts, $300 million homes and private islands with our money.