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For Greeks The Nightmare Is Just Beginning: Here Come The Depositor Haircuts
With capital controls already imposed on Greece, some have wondered if this is as bad as it gets. Unfortunately, as the Cyprus "template" has already shown us, for Greece the nightmare on Eurozone street is just beginning.
As a reminder, over the past few months there have been recurring rumors that as part of its strong-arming tactics the ECB may eventually move to raise the haircuts the Bank of Greece is required to apply to assets pledged by Greek banks as collateral for ELA. The idea is to ensure the haircuts are representative of both the deteriorating condition of Greece's banking sector and the decreased likelihood that Athens will reach a deal with its creditors.
Flashback to April when, on the heels of a decree by the Greek government that mandated the sweep of “excess” cash balances from local governments to the Bank of Greece’s coffers, Bloomberg reported that the ECB was considering three options for haircuts on ELA collateral posted by Greek banks. “Haircuts could be returned to the level of late last year, before the ECB eased its Greek collateral requirements; set at 75 percent; or set at 90 percent,” Bloomberg wrote, adding that “the latter two options could be applied if Greece is in an ‘orderly default’ under a formal ECB program or a ‘disorderly default.’”
While it’s too early to say just how “orderly” Greece’s default will ultimately be, default they just did if only to the IMF (for now), in the process ending their eligibility under the bailout program and ending any obligation by the European Central Bank to maintain its ELA or its current haircut on Greek collateral, meaning the ECB will once again reconsider their treatment of assets pledged for ELA and as FT reported earlier today, Mario Draghi may look to tighten the screws as early as tomorrow:
When the Eurozone’s central bankers meet in Frankfurt on Wednesday, they could make a decision which some officials fear could push one or more of Greece’s largest banks over the edge.
The European Central Bank’s governing council is poised to impose tougher haircuts on the collateral Greek lenders place in exchange for the emergency loans. If the haircuts are tough enough, it could leave banks struggling to access vital funding.
The ECB on Sunday imposed an €89bn ceiling for so-called emergency liquidity assistance, effectively putting the Greek banking system into hibernation. If, to reflect the increased risk of default, the ECB now applied bigger discounts to the Greek government bonds and government-backed assets which lenders use as collateral, that could leave banks struggling to roll over those emergency overnight loans.
Some on its policy-making governing council feel that Athens’ exit from a programme — notwithstanding its 11th-hour request for an extension and third bailout — leaves the ECB with little choice but to take actions that would, in effect, cut the Bank of Greece’s emergency support to Greek lenders.
Some eurozone officials fear that the position at Greece’s biggest lenders is so tight the ECB could be in danger of pushing some weaker banks over the edge if tougher haircuts are imposed.
Recall that in mid-June, Greek banks were said to have had as much as €32 billion in ELA eligible collateral that served as a buffer going forward. Since then, the ELA cap has been lifted by around €5 billion, meaning that a generous estimate (and we say "generous" because according to JPM, Greek banks ran out of ELA collateral weeks ago) puts the buffer at a little more than €25 billion.
As the haircut rises, that buffer disappears and once the discount applied to the collateral reaches a certain level, an implied depositor haircut materializes. Why? Because by simple balance sheet rules, assets must match liabilities (leaving a token €0.01 for shareholder equity) and once the haircuts eat through the collateral buffer, the implied value of Greece's pledged assets (currently at around €125 billion) will quickly fall below the value of Greek banks' unsecured liabilities which sit at around (but really under) €120 billion as of the date capital controls were imposed in Greece over the weekend. These liabilities are better known as "deposits."
At that point, a depositor haircut is required.
Although the collateral haircuts aren't public, the face value of pledged collateral is (it can be found on the BoG's balance sheet) as is the ELA cap, meaning it's possible to estimate the current haircut and, starting with the assumption that a generous €25 billion buffer remained as of the ECB's Sunday freeze of the ELA ceiling at €89 billion, project the implied depositor bail-in for different collateral haircut assumptions.
Here is the summary sensitivity analysis indicating what a specific ELA haircut translates to in terms of deposit haircut.
Another way of showing this dynamic is presenting the ELA haircut on the X-axis and the corresponding deposit haircut on the Y-axis once the critical "haircut" threshold of 60% in ELA haircuts is crossed.
As can be seen raising the haircut to 75% implies a €33 billion (or 37%) depositor bail-in or "haircut", while raising the haircut to 90% implies a €67 billion (or 55%) hit.
Note that the latter scenario looks quite familiar to what happened in Cyprus, and indeed that's not at all surprising because if, as Dijsselbloem himself said, Cyrpus is a "template", then the next step after capital controls is a depositor bail-in.
And while we wish we could have some good news for the Greek population, this outcome may have been preordained by none other than Goldman whose Hugh Pill, who on June 28 suggested the following:
The core constituency of the current Greek government -- pensioners and public employees -- has enjoyed the first claim on remaining government cash reserves. Only when those cash reserves are exhausted will that constituency face the direct implications of the liquidity squeeze the political impasse between Greece and its creditors has created. And only then will the alignment of domestic political interests within Greece change to allow a way forward.
And as Goldman's former employee and current head of the ECB is about to have his way, the pensioners and public employees will be the first to suffer - first with capital controls and then with ever increasing haircuts on their deposits.
In other words, in order for the Troika to finally achieve its goal of either forcing Tsipras to relent or inflicting enough pain on Syriza's "core constituency of pensioners and public sector employees" to compel them to drive the PM from office, after capital controls come the depositor haircuts, first small, then ever greater until Greece collectively Cries Uncle and begs Europe to take it back while presenting Merkel with Tsipras and Varoufakis' heads on a proverbial (and metaphorical, we hope) silver platter.
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The IMF will be sending ISIS to Greece.
Now this is what I've been waiting for...who is losing their ass? This is going to be fun!
The bank will reopen with Ruble and Yuan. There will be no haircut.
A little off the top?!?!? My brain is showing!!!!
"Must make example of greece so other world slaves dont get any ideas."
IMF BIS FED
I expect alot of pain..
RIPS
Wow, the "push people into a corner" plan...That one has a spotty track record
Yup. Sometimes they curl up into a ball and quiver and others they come out fighting 10x harder than you thought possible.
I pray the NWO has met its Hot Gates.
Greece is wearing a toupee.
Bald is beautiful, bitchez.
Varoufakis bald already...game theory. heh.
"just a little off the top"....
...isn't that what they promised Marie Antoinette?
there was plenty of time to get out of the way of this........
The biggest advantage that Tsipras and Varoufakis have is the Institutions are thinking inside a very small box using standard "Banker-think". If they start demanding Depositor bail-ins, my bet is that T&V will nationalise the Banks and wipe out the Shareholders and Bond Holders but protect the Depositors. They will then permanently default on all external Debt and start again with a new "Public" Bank to provide genuine socially value-added Banking services with Capital from China and Russia. Implicit in this would be leaving the Eurozone but on balance that's a good thing if Greece is to have any future as a free sovereign State. They would have a few difficult years and would not be able to go to the Bond markets for a while but I'm sure that Russia and China would help them through the tough years if only for their own strategic reasons. And, of course, with no debt-servicing costs, a Balanced Budget would be much easier to achieve, although genuine reforms must be made: payment of taxes for instance. I would suggest a low standard rate of Income tax and then Sales/VAT taxes to collect the bulk because they are more difficult to evade.
So, next move is yours "Institutions"........
GOOD TEMPLATE
Let's get real. The Greeks will be using the Euro for a long long time. They have no say. It's all up to the powers-that-be. Word to your mother.
Yoo'r right!
, if they think like yoo.
Perhaps they should make a trip to the Bank of North Dakota.
https://dogmaandgeopolitics.wordpress.com/2012/09/28/oil-wars-the-clinto...
There was plenty of time to prepare for this, but there was no way to get out of it.
Read and heed what the L/man says here while you still have time. You don't have to go full blown commando with armored cars, bug out bags stashed everywhere, or enough armarments to start a minor war. Get a few gold and silver peices, some dehydrated food, pito beans, rice, water, medicale supplies, and some clean stored warter. Do easy and cheap things NOW, cause just like the Greeks or any storm survivors who weren't prepared you will sure as hell wish you had.
As the song goes, you can checkout, but you can never leave...
A "haircut" or a "bail-in", what soft euphamisms for THEFT.
Q. What does anyone owe anyone when money is created out of thin air and banks/corporations/insurers are: bailed out, don't have to pay their debts, and are given free money from the Public Treasuries at 0.25% to lend out at 4.5%-29%?
A. Abofuckinglutely NOTHING!
Completely agree. They have made money worthless by shedding light on its contrivance.
The Greeks should just say that the europeans' claims on collateral are invalid.
" If you don't hold it, you don't own it, " will be a hard lesson for many of them. You can bet the wealthy Greeks pulled their money and gold out of banks there long ago.
Remember reading about all those Greeks renting safe deposite boxes in the Netherlands ~ 2 years ago and or storing their gold in vaults somewhere in Scandanavia? Those were the wise Greeks.
Wisest Greek I ever met said....why would I do that, she has a pussy?
LO-spitting-L
The Grreks need some fiat collateral to back their fiat money. Run off 1000's of copies of deeds to a small island with the acreage increased by a factors of 10-30. That should help.
Some would say wise some would say that they were the ones that were stealing all the european and greek money for decades and passed the bills to the rest.
Taxation is theft.
It is indistinguashable from robbery or extortion.
Fractional reserve banking is straight out fraud.
Fiat money can only work when backed by the threat of violence.
Criminals are now in charge.
Hedge accordingly
But we were told that we had voluntarily assumed this responsibility, even though none of us seem to remember doing it. It must have been while under hypnosis! They keep telling us it's a democracy but I don't recall voting for any of this shit, and everything I did vote for that passed was struck down by SCOTUS as unconstitutional. That, after Barny Frank told us that the constitution didn't matter as long as government was only trying to help. The "right" to gay marriage may not be in the constitution, so our wise judges decided it would be a good idea anyway. That's showing us what they think of us. Just shut the fuck up and do what we are told. THEY KNOW BETTER.
As Mike Tyson said "Everyone's got a plan till you get punched in the mouth." The people might revolt not against the Tsipras but against the ECB. You have Russia in there for sure and then there's China. Haven't seen those scenerios posted too much. I sure hope they have a plan X cuz this ain't lookin too good for anyone.
Russia may be considering not what Greece will cost them, but what Europe will lose from a Grexit.
Do it for Nudelman.
What sucks about this whole thing is that the depositor in a bank (Yes, I fully understand the accounting, discounted present values, etc. and relationship between the banks, their holdings of governments and bond values, believe me.) wind up being on the hook for shennanigans at the national level.
That's the truly criminal thing about these charades.
Had those monsters in Brussels have never been set loose, this would not have happened. The Greeks would simply be living as they always had with an ever depreciating national currency
Go for the non-EU alignment, folks. You're being personally bled dry by your "friends and allies" for the bankers.
YOU CANNOT GET BLOOD FROM A TURNIP.
GREECE HAS ZERO COLLATERAL SO THERE CANNOT BE A HAIRCUT.
YOURE TAKING IT UP THE ASS DRAGHI!
GREECE HAS ZERO COLLATERAL SO THERE CANNOT BE A HAIRCUT.
If they have publicly owned land - parks, port facilities, schools, hospitals - there is plenty left to be collateralised.
Yes but they must come with warships, bombers and tanks once again to get them.
dup
Did you see the Greek pensioner on the TV complaining he hasn’t eaten in two days because he lost his ATM card.
Yep.
Prior planning prevents piss poor performance....and hunger.
Good God I can't even get my head around that. Why would you ever make yourself a ward of the system?
"Why would you ever make yourself a ward of the system?"
The Europeans have been raised with a belief in cradle to grave government protection. They know nothing else.
We are not far behind, and Dear Leader Obama is making great strides forward.
dear leader and his handlers are gonna start some shit...
Bush and his GOP pals certainly helped by passing Medicare Part D, which is the major cause of the skyrocketing costs of prescription drugs. Everyone will need the drugs as they grow older.
The Old Man: You mean to say that those people know ahead of time when they're gonna die?
Logan 5: That's right.
The Old Man: Oh, that's silly. What's the reason for that?
Logan 5: That's the way things are. The way things have always been.
The Old Man: Yeah, it takes all the fun out of dying.
YEAH MAN CUZ OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA OBAMA
Propaganda. There's always propaganda.
Well the TV could have shown more pensioners that the last 5 years hadn't something to eat or afford their medication due to very low pensions and high prices.
knucks, although I totally agree with you, I see it in the context of the Bigger JPG, and assert the following hypothesis:
1. Greece is a Testbed/Template of things to come in other Western countries and their bankrupt Governments and criminal CBs: The name of the Game is "Systemic Asset Transfer and Asset Stripping"
2. Either Greece will fight them and things will get very ugly or even 'bloody', just to teach would-be copy-casts (Portugal, Spain, Italy, UK, France) a graphic lesson and submit like neo-Serfs to their neo-Feudal globalist Masters/Overlords.
3. Or Greece caves, does not pass GO, does not collect $200B, and goes straight to Serfdom Jail. As intended.
The ONLY way Greece can win, IMHO, is if they DEFAULT by actually REPUDIATING the ODIOUS DEBT, pull an Iceland, screw the Banks, and jail Bankers (and save the People). Make the Bond Holders eat the losses, then nationalize the Banks. For a while.
They then need to prevent Maidan II that would be headed their way, and jail or hang its perps. After that they need to join the AIIB -- either as an Associate Member of some sort, if possible, or as a Client.
They will also need to pivot EAST and make deals with their new BFFs: Turkey, Russia, China.
Agreed, Kirk 100%
Most interestingly, so many people reject the option as "un-doable" (If that word works. It's not the one I'm thinking of, but I can't think of a better one right now) when in fact much of the reproachment, approachment, alternatives and options seem to have been already instituted. The cards have been dealt and I'm strongly of the opinion that the EU & Cie. are myopically focused upon repayments, which to them are the big near term risk... the EU banking system is clogged with bad paper, etc. Juxtaposed, I believe the Greeks view the repayments as but (consistent with Games Theory a la Nash and Tyler's wonderful exposition of the Dollar Auction) a mere lever for the greater win of remaining a ward of the EU's benefits while repudiating on their debt and reissuing the Drachma (or other).
Which all implies to a very large part, the very same pivot which you suggest .... but a matter of degree.
They then need to prevent Maidan II that would be headed their way, and jail or hang its perps.
---------
To this end, the Greeks should immediately close all of the US Embassy in Greece. Otherwise, we will again see the snipers on the streets of next capital city.
"The ONLY way Greece can win, IMHO, is if they DEFAULT by actually REPUDIATING the ODIOUS DEBT, pull an Iceland"
There is a big difference between Iceland and Greece.
Greece has been building up their national debt for quite some time on their own. Iceland is a case of private irresponsibility at private expense while Greece is more of a case of public irresponsibility at public expense.
Iceland's crisis was triggered by the failure of "private" banks; they had no national debt problem. They're also on a free-floating currency, which was collapsed to boost the country's export power (at the cost of significantly reduced buying power at home -- aka, it's like lowering everyone's salaries and flipping a lot of people upside down on their mortgages). Iceland refused to insure the losses of their banks, but did take huge loans (and implement austerity) to help restructure them during the bankruptcy proceedings; the banks are now worth enough to sell off assets to pay for their debts (although the UK and Netherlands still are suing over the delay).
"For Greeks The Nightmare Is Just Beginning: Here Come The Depositor Haircuts"Oh really? I've been reading here, on this site, for months now that the "Nightmare" would be over once Greece intoned 'nyet', "oxi".
It's always interesting to see just exactly who has the courage of someone else's convictions isn't it?
How many commenters on this site have any personal stake in what is happening in Athens lately?
How many of you have family in Greece? How many of you even live in Europe?
Fair point. What do you suggest be the Greek response to a Troika plan that for at least the next 30 years imposes austerity on Greece, and open the door to total asset stripping of the Greek state in order to pay back creditors. The Hedge Funds are praying the Greeks stay the course, and soon all Greek assets will come on the sales floor for cheap.
Greece was allowed in to the EU in a totally illegal act. You know as well as I do that Greece did not qualify for Eu membership, nor did she really qualify for the raf tof loans written to them after membership. Bad loans and illegal membership. The EU participated in breaking their own rules.
Now there is NO solution, none. The Troika plan is a chance for banks and hedge funds to stip mine the people, lands and assets of the entire nation. You know that as well as I.
If indeed you back the Troika plans and think Greece should stay in the EU, what do you see happening? Why should Greece stay in a union the laws were broken to get Greece into.
Your point is fair, now I think my point is fair and desrves an answer.
Jack, another great post.
Indeed.
...and that beautiful pros. needs a show on RT.
many great points Jack
Kinda like a mortgage broker giving a $500,000.00 mortgae to a landscaper. ( no disrespect intended for landscapers).
All the participants knew damn well it would go up in flames. And when it did, they stood there and said " wa, me? Wa happened? I dunno he couldn't pay. Sshhiiit "
Those hockey stick looking graphs we all looked at u years ago. The ones that projected our path. Looks like we are in the handle part, all over the world. We are waiting for it. I think it's here. We just don't feel it yet.
I'm bummed because my "stocks" ( not stawks) are down, because of lean times. Lovely.
1. List me the countries of the world where people are living better after joining the EU?
2. Give me at least one such country where people are living better after joining the EU?
3. Tell me what the Greeks are wrong when they call Europe as a "prison of nations"?
Belgium :-)
Specifically Brussels, Belgium. Not ALL of Belgium!
i have family in Cyprus.
They didn't listen to my warnings ,and got a big haircut.
You can't fix stupid, and you can't fix really stupid, which is what anyone who is still a depositor in a Greek
bank is.Seems we only delayed natural selection, not defeated it.
Time the gene pool got an acid shock, somebody took a piss in it.
It may not be 'stupid' you are dealing with, it is normalcy bias and denial.
The former can be educated out of them, the latter I have found no solution to other than 'shock' therapy (a systemic shock to the psyche like the current situation)
"Contrary to general belief, it has been my experience that the more intelligent the subject, the easier it is to induce hypnosis" Ralph Slater, Stage Hypnotist, played Carnegie Hall
I have family in England.
I am giving them the same warning - don't keep significant amounts of money in banks.
Do they listen? Hell no, they don't listen, they think I'm looney.
Just wait until you're proved right, you then become the family leper.
You cannot win, just look after yourself first. then maybe you can help later..
Their delusion is very similar to drug addiction.The same pleasure centers.
English banks will be fine.
I can hear "Jerusalem" in the background.
war is peace
The Scottish ones, however, may not. Many of the banks in England are owned by Scottish banks.
How about RBS (Royal Bank of Scotland), including Natwest Bank?
How about HBOS (Halifax, Bank Of Scotland)?
The Scots are not too good at this banking game.
Then we have HSBC (Hong-Kong Shanghai Banking Corporation).
Santander (Spanish).
It is all downhill from here.
im in Canada, same here. they all (except ONE) dont believe it. but yet, put no effort into proving me wrong or right. not much else i can do. ive got my preparations done and await the banksters derivatives/bond nightmare to launch the global depression. peoples normalcy bias is a very powerful force. thats why the illuminati can parade their plans without fear.. even WITH access to the Internet.
Always remember the ZH readership is NOT reflective of society at all. No point spouting off what you have learned or discussed to Johnny Dumb Ass. It would be as if somebody was trying to tell you about the love triangle that is unfolding on some daytime or nightime soap...or teevee in general.
I try never to 'spout off'
A better approach, I think, is to ask a difficult question
'Where does money come from ?' (just an example) usually causes confusion.
Hopefully you can be helpful at that point.
I know I've got through to one or two, at least.
I have a cousin in Athens. I wish she'd move back here sometimes, but in reality, that might be jumping out of the frying pan into the fire.
If you have the means, try to buy Grecian hotspot, vacant properties on the cheap later in the crisis.
All my father's family is in Italy.
Belive me, they're feeling shivers down their spine.
Italy = Dead man walking
ZH had a story that France could be the next body to fall
French have a rep. For buying bad bonds since the days of John Law.
Good thing they hava alot of nuns.
"No," was never the end. It was and could be the beginning of a "go Icelandic" pivot.
My sister-in-law and mother-in-law are in Athens now trying to settle an estate of my father-in-law. Don't know the answer but no one should be scavenging in dumpsters for food. Lagarde pays no taxes on $450,000 income and no taxes on an $85,000 allowance but is keen on screwing the poor in Greece? Honestly, to hell with her.
Meanwhile the communist Alexis Tsipras earns 85,479 euros and puts him in 13th place among European leaders.
Oh really? I've been reading here, on this site, for months now that the "Nightmare" would be over once Greece intoned 'nyet', "oxi".
No it is not the end, but it would finally be the beginning of the end instead of this endless grinding into dust what remains of the economy in Greece with no end in sight. Once you hit bottom you can actually start to grow again and I hope that this process begins soon for Greece - it wont happen so long as they remain under "troika" rule.
It's always interesting to see just exactly who has the courage of someone else's convictions isn't it?
Yes it is. I want the same thing here in the USA. Let the banks burn so hot that they consume themselves so thoroughly not even ashes are left.
How many commenters on this site have any personal stake in what is happening in Athens lately?
How many of you have family in Greece? How many of you even live in Europe?
I have zero personal interest in Greece other than a desire to see their people get out from under the yoke of the banking system and this neverending crushing of their economy.
There is a part of me that says that I would like to see the BIS and every single Central Bank burn and all of the people who were employed by the central banks and those that lived parasitically off the labor of people enslaved by the banks would have to find real and productive occupations or else starve.
Does Mario Draghi have a marketable skill? How about Chelsea Clinton and her Goldman Hubby?
It would cause chaos in the world, but not necessarily for the resource rich countries. They would be out from under the oppression of the banks ... and the world would have a reshuffle the deck and restart.
The other part of me wishes that one day the bankers and the parasites wake up and are magically transformed into good people who care about the world and are not simply interested in the power their monopoly on debt money creation gives them and how much it allows them to enslave others.
Well I am living in Greece, I have a family with 2 babies and my best shorterm interest is to vote yes so my children won't starve now.
BUT I am going to vote a BIG FAT NO hoping when my children grow up won't be slaves.
Those who profits from debt instruments will suffer the most, namely the ECB. When Greece gets banks reopened, watch Spain, Portugal, Italy jump for the door. The new domino theory.
here comes the bail ins
Make that haircut high and tight.
https://www.youtube.com/watch?v=MwMPZR3sS2o
Didn't China open a new Bank recently?
dup
Not quite! The IMF will indicate to the CIA cartel their desire to engage ISIS in an event. Which the Cocain Cartel will be happy to arrange.
I am sure Putin and Tsipras had that conversation Jose.
Greece might be pissed enough to take em'.
They just need to take the money and pay nothing to anyone - keep taking their money and bs'ing that they will bundle payments in the future and see how many suckers line up to give them more money.
For their sake, I hope that Greece will have the courage of King Leonidas, and the innovative cunning and craftiness of Odysseus. They will need both, to deal with this demi-god monster from Brussels.
The IMF has no access to Greeks gold right? Exactly where is Greek gold sitting right now?
As best I could research, half is in Athens and half in England or France.
However, that was months ago. And it is surely all pledged as collateral.
Greece is sitting on $ 6.5b USTreasuries they could dump.
.
ISIS - International Shorters In Stocks.
stick save-you heard it here first. SORRY CHARLIE!
The cretins (isis) are already in the balkans, ready and waiting for the sign of their controler. They even have two states there - or simulations at least - Bosnia and Kosovo
I think the article has the numbers wrong.
Current collateral 113B (with 0% haircut)
ELA 89B
Free Funds 24B
If hairtcut goes to 60%, then 45B shortfall or 37.7% bail-in (45/120 of total deposits).
If 75% then 50% bail-in.
If 90% then 92% bail-in.
All this of course ignores deposit insurance under 100K. If this is honoured, then good luck getting much money from bail-ins.
Buzz or guillotine?
Greece just needs it's own Jimmy Pappas
or Jimmy the Greek.
This is exactly why they want to get rid of cash. So you literally have no control of your own money and they can haircut at will.
No Bank Presidents? NO PROBLEM!
All transactions in Europe will now be conducted in dollars.
Good luck "closing the borders."
BINGO! +100 No cash means an instant haircut at the will of Governments. Sanctions on individuals would be total and instant. Takings would be instant and without recourse. Cashless society is an Orwellian super state hell hole!
Cashless (aka digital national fiats) is literally the trap you describe, but digital crypto currency (aka Bitcoin) is not. Why? Because it acts as a bearer unit of currency - not one that is held 'for you' in a bank - unless you are silly enough to leave in a broker account, or a web wallet where you do not have the private keys.
So, many people are confused into thinking that all digital currencies are the same. Just not true.
You can screw up with Bitcoin easily ... but you can lose Gold too ... both are bearer assets.
There is another problem with National currency 'cash' - the government of the day can just decide to repudiate the notes in circulation, and replace them with some new design.... or even declare them invalid and leave a grace period for you to deposit them into a bank. Oops - even local cash can be corrupted quickly.
Only PM's and crypto currency are beyond that set of manipulation by governments. PM's have an advantage in not requiring a funtioning network, but have the disadvange of being detectable and vulnerable to theft when you are on the move. Crypto's have the opposite. Disadvantage = needs a functioning network, advantage = can be invisible during transit.
Both are tools for wealth preservation under differing situations ... use the right tool for the situaion you face. And keep a little local cash, for dealing with the majority of other people who have never learnt any of this and still believe in their Euro/USD/GBP/JPY or whatever.
and....it's gone.
People of Planet Earth:
The moment that your national government decides to eliminate Cash, in favor or cyber/electronic Currency, is the moment they have "crossed the Rubicon", and you are at WAR with them also (since they are at War with you already).
This is a battle you must win -- at all cost and no matter the method, extent or duration. Leave no cave, hole or rock for the Money Changers to hide in. Take them out of the gene pool, lest their diabolical genes of Usury propagates and resurfaces at a later date."
In the 22nd Century, all currency is backed by PRECIOUS ASSETS: Precious Materials and Precious Energy. Because these are Space and Time invariant. All else is Casino Games. Period.
Kirk out.
Thanks, Cap'n
quick buy JGB and treasuries their safe... its not like their debts as bad as greece (230% vs 187%) oh wait..
but the BOJ / FED can pay it back few...buy buy buy..
Just accidentally broke a plate..
...the contagion is here already!
Where's that Russian cavalry?
wait...
"The Russians saddle their horses slowly, but ride fast" Otto von Bismarck
Why should the Russians lift a finger. Tsipras voted for sanctions renewal
The world will not prosper until the bankers' heads are served on a platter, and
I don't mean a metaphorical platter.
ISIS may be of some value yet.
The moment of truth. Should the IMF or other European banksters make such a move Greeice should simply nationalize all banks and then cancel the outstanding debt. Anything else, like Cyprus, is theft. This is the citizens money, not the banksters.
Right. And what did we do when England tried to tax the hell out of us? Did we just sit around moaning? Screw the ECB.
It also had a lot to do with debt.
Well what the fuck do you expect when the former leadership is a bunch of fucking criminals that they refuse to prosecute?
Why go after a bankster when fucking depositors is easier?
And, who the fuck was stupid enough to leave a large amount in a Greek bank?
Are you talking about Greece or America?
Greece now, the US later.
You want an example of American committment to justice, just look at how many banksters were prosecuted when the S&L shit hit the fan vs 2008 til now.
Any bank. Run on the damn banks, run for your lives.
ZH is a full day behind
read this
http://www.tovima.gr/en/
"arrears" is for NOMENCLATURE purposes only.
"To save on the EMBARRASSMENT that you have no DOLLARS PERIOD."
This thing could spread really far....REALLY fast.
Oligarch News
What's that? Consequences? Oh yes – they're in the pipeline.
Mostly unintended, of course.
One civil war,coming up.
Served hot.
With freshly baked Nuland cookies.
Greeks don't know what a fucking cookie is. Noodleman will be bringing baklava to go with her death and destruction
I shave my own head every week! Sorry if I offended anyone yesteerday as I was cross eyed drunk out of my mind.
SH
Issue the arrest warrant for Blankfein.
Obligatory repost. Authorities got the wrong guys.
http://s12.postimg.org/6r0j5kk99/niceday.jpg
Might be a silly question but whatever. Why can't the Greek gov't print and start their own currency that's interest free and fill the banks with that? People withdraw the money and buy what they need. Does it really have to be more complicated than that?
Because that money will devalue instantly, so the effect is the same or worse than a haircut on the euro dominated deposits.
I find it funny, the Greeks refused a 5% cut in pensions and there refusal will mean that the will be lucky to have 5% left of the pensions when this chit is over.
Not as quickly as the Stock Exchange in Athens will head straight to "de minimus."
This is why MARKETS MATTER.
YOU CAN AT LEAST GET A PRICE!
This thing REEKS of Weimar...but we shall see...
This is true, but the the IMF and the bankers will take everything if they stay in.
They've already been cut 25-50% . 5% here 5% there for the next 40 years equals what ? May as well get this out of the way now and start fresh with your autonomy
Freedom or death
You sound like Bill Still, but lets walk with your suggestion a few steps.
So, the Greeks dump the Euro and print their own monopoly money....
WHO is going to want it? Will the Arabs take the new monopoly money for a tanker of oil?
Will the Germans take the new monolopy money for new BMWs? What could the Arabs and the Germans possibley do with this new monopoly money? What could they buy and from whom?
See where that goes? There is nothing stopping the Greeks from doing what you suggest except the fear of starvation.
The Germans could pull that off....but not the Greeks.
Squid
Bullshit about the Arabs, same goes about the Germans.
Iran provided Greece with crude oil on credit with the full knowledge that they would never be paid back until Greece voted in favour of sanctions against Iran to go along with the flow with what the EU decided (well, US actually but that's a different story). Iran will be more than willing to do the same and so will the Russians.
Why?
Because the Greeks can be squeezed out of the euro by the ECB but they can not be thrown out of the EU. Not unless 28 referendums are held and the existing treaties are revised. Which means Greece has VETO power in EU decisions and that is worth a lot to both Iran and Russia.
As far as foreign imports go, they can buy what they critically need using foreign exchange from money coming in from tourism and and agri-exports for which payment for both with still be demanded in euros. Yes, there will be a period of a very painful great adjustment, but it is exactly this adjustment that brings growth back in about three years when DOMESTIC production (no, not Mercedes Benzes but small industry - you know, the small industry they had before the euro destroyed) begins to supply a lot of the needs of the country. And this is good, unless if course you think the asset striping of their country and a never ending massive depression are better options.
And in the meantime what do you think will happen to that atrocity called the EU? The people of Europe are watching, and if you think this totalitarian attitude of the Belin/Brussels axis or the use of the ECB as a political henchman is going unnoticed, you are sadly mistaken. There will be consequences, none that bode well for the 4th Reich and their satellites.
Fuck the Germans.
All that presumes that the EU lot will follow the rule of law ... yeah, right .....
The international drama is almost over..the game is winding down..and you say..what game do you mean?...why "kick the can"...
This is legitimate news and all. I have some questions about a couple other financial news.
Puerto Rico - About to go belly up. Seems to be a larger exposure for USofA?
National Debt - Why is the Debt Clock frozen now for over 15 weeks?
This makes me want to burst into tears! If not Hitlery, will Biden save us? /sarc
https://www.youtube.com/watch?v=jXE1Ik3oSMc
Debt clock is stuck, because the cheap chinese battery died.
I figured it was because they ran out of zeros
I think it just got tired and said, "Fuck this! I'm goin home."
"Spartans!!!!"
god damnmit stand on your own - Drachma.....