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The Template for the End Game: Lies and Fraud Followed by Bail-Ins
The Cyprus bank bail-in committed of early 2013 may seem like small deal to most US investors.
After all, most Americans probably couldn’t even find Cyprus on a globe. And with the mainstream media spreading the narrative that the Cyprus bail-in was a one-time event that was meant to support the bank while punishing tax-dodging crooks, 99% of folks won’t think twice about the situation.
However, the reality of what happened in Cyprus is a far different matter. And the reason that this reality has not been featured as headline news is because doing so would reveal the following:
1) European politicians are both corrupt and incompetent.
2) Those meant to assess the risk of any financial institutions don’t know what they’re talking about.
3) The average citizen will be screwed while politically connected insiders will be given the means to circumvent the law.
Let’s assess these issues one by one.
First off, the Cyprus bank “bail-in” was not some sudden event. The country first asked for a bail-out in JUNE 2012. Here’s the timeline.
· June 25, 2012: Cyprus formally requests a bailout from the EU.
· November 24, 2012: Cyprus announces it has reached an agreement with the EU the bailout process once Cyprus banks are examined by EU officials (ballpark estimate of capital needed is €17.5 billion).
During the period of late June 2012 until November 2012, Cyprus’s problems were allegedly being assessed and nothing more. Throughout this period, NO ONE in a position of significant political or financial power suggested to Cypriots or anyone else who had money in the Cyprus banks that their money would be STOLEN.
Instead, numerous bureaucrats came out to assure the public that this situation was under control and that the risks to the Cyprus banks would be carefully assessed.
Then, in the span of a single week, a bank holiday was declared, bank accounts were frozen, and deposits were stolen.
Here’s the specific sequence of events:
· March 16 2013: Cyprus announces the terms of its bail-in: a 6.75% confiscation of accounts under €100,000 and 9.9% for accounts larger than €100,000… a bank holiday is announced.
· March 17 2013: emergency session of Parliament to vote on bailout/bail-in is postponed.
· March 18 2013: Bank holiday extended until March 21 2013.
· March 19 2013: Cyprus parliament rejects bail-in bill.
· March 20 2013: Bank holiday extended until March 26 2013.
· March 24 2013: Cash limits of €100 in withdrawals begin for largest banks in Cyprus.
· March 25 2013: Bail-in deal agreed upon. Those depositors with over €100,000 either lose 40% of their money (Bank of Cyprus) or lose 60% (Laiki).
The most critical item to note about this timeline is that while the general public was assured that all was well, politically connected insiders were warned to get their money OUT OF THE BANKS
One hundred and thirty-two companies reportedly had inside knowledge of Cyprus’ impending levy tax as they withdrew deposits worth US$916 million in the run-up to the bailout deal.
The companies withdrew their savings in the two week period (between March 1 to March 15) leading up to the rescue deal that enforced heavy losses on wealthy depositors in Cypriot banks, according to Greek newspaper Proto Thema.
Shortly after this the EU ministers and the IMF hammered out a 10-billion-euro (US$13 billion) bailout agreement with Cyprus, which included a one-time tax on deposits held in Cypriot banks.
In the meantime all banks in Cyprus temporarily froze the amounts required to pay the tax on their clients’ deposits and stopped all transactions while the government negotiated the details of the agreement.
The companies on the list withdrew their deposits in euro, USD, GBP and Russian rubles and later transferred to banks outside of Cyprus. The total amount withdrawn comes to US$916 million.
http://rt.com/news/cyprus-companies-withdraw-money-218/
So, nearly $1 billion worth of insider money escaped the Cyprus confiscation scheme. NONE of it was retiree savings. Ordinary individuals got screwed while politically connected insiders were able to get out scot-free.
Now what’s truly amazing is that the Cyprus bank that collapsed was actually AWARDED BEST BANK for Private Banking by EUROMONEY Magazine. What was hailed as the BEST bank for private banking ended up being totally insolvent with 47% of deposits above €100,000 being converted into bank equity.
Bank of Cyprus has been named as the Best Bank for Private Banking in Cyprus, by the internationally acclaimed magazine EUROMONEY
Bank of Cyprus Private Banking ranked first among Cypriot, Greek and other international financial institutions operating in Cyprus in the Private Banking sector. This accolade classifies the Bank among the leading financial institutions offering Private Banking services and is yet another important international distinction for the Bank of Cyprus Group…
This recognition by EUROMONEY is ever more important in today’s macroeconomic environment as it reaffirms the Bank’s ability to safely and successfully respond to its clients’ financial needs and emphasizes its clients’ loyalty and trust.
http://www.bankofcyprus.com.cy/en-GB/Cyprus/News-Archive/Best-Bank-for-Private-Banking/
Now, the political and financial elite in Cyprus and the EU will argue that bank deposits were not STOLEN because they were converted into equity in the bank at a rate of €1 per share. But being forced to change cold hard cash for equity in an insolvent bank is hardly cause for excitement.
Indeed, the market, now well aware that the Bank of Cyprus is insolvent, has been dumping shares. So those depositors whose deposits were converted into equity are watching their savings evaporate as shares dive.
Moreover, it’s not as though they were given the means to get their other deposits out of the bank:
Last year, thousands of customers with money in Bank of Cyprus, including many British and Russians, became unwilling shareholders in the lender when their deposits were turned into equity as part of a controversial €10bn emergency rescue.
Depositors saw 47.5 per cent of their money above a €100,000 threshold turned into equity.
More than a third of their cash was then locked into six, nine and 12-month accounts. Shares in Bank of Cyprus have been suspended on the Athens and Nicosia stock exchanges since early 2013 and only one of the fixed term cash accounts has released all of the money due to customers.
Éxito’s Ben Rosenberger and Michele Del Bo, who have previously arranged the sale of Lehman Brothers and Icelandic bank distressed debt, said that sellers had so far been mostly international clients who wanted to extract their money from the island by selling their deposits and shares to distressed debt funds.
http://www.ft.com/intl/cms/s/0/89351ec8-f223-11e3-9015-00144feabdc0.html#axzz38Iy371O0
So when the bank wants to raise capital, which would dilute the equity holdings for former depositors. What were savings are now not only subject to the whims of the market, but can be actively diluted by capital raises.
Again, we refer to the list we began this article with:
1) European politicians are both corrupt and incompetent.
2) Those meant to assess the risk of any financial institutions don’t know what they’re talking about.
3) The average citizen will be screwed while politically connected insiders will be given the means to circumvent the law.
Cyprus matters because while countries may differ in specific cultural components, the monetary system in place is by and large the same around the world. And what happened in Cyprus should be seen as a template for what can happen elsewhere.
Indeed, this is now playing out in Greece today.
Greece’s current leadership was elected back in January. Since that time the country has been in an ongoing negotiation concerning its debt issues. Everyone knew Greece was broke, but again the process was dragged out.
Then in the span of a single weekend, a bank holiday was declared… and now suggestions of a 30% haircut on deposits are being floated. And once again, it’s ordinary citizens who are being screwed.
This process will be spreading throughout the globe going forward. Indeed, the FDIC has proposed precisely the same “bail-in” program if a “systematically important financial institution” were to go belly-up in the US.
If you've yet to take action to prepare for this, we offer a FREE investment report called the Financial Crisis "Round Two" Survival Guide that outlines simple, easy to follow strategies you can use to not only protect your portfolio from it, but actually produce profits.
We made 1,000 copies available for FREE the general public.
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To pick up yours, swing by….
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Best Regards
Phoenix Capital Research
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Bail-in's will only result in an increase of banker suicides. If we're lucky maybe a few will use the nail gun technic. Wasn't that eight nails to the head? I'll buy the nails!!
Dear nwesletter promoter - If you start telling me something what I do not now already, I may swing by your newsletter...
10 top places to hide cash around the house.
https://youtu.be/2kEQAve3aJA
The Greek "Haircut" coming to a bank near you. Be aware, Prepare.
G20 govts all agreed to the same FSB/Squidian bail-in template way back in 2010 -
http://barnabyisright.com/2013/04/01/g20-governments-all-agreed-to-cyprus-style-theft-of-bank-deposits-in-2010/
http://barnabyisright.com/2013/07/14/timeline-for-bail-in-of-g20-banking-system/
The guys in Phoenix Capital are just wrong on the timing.
Idiots scream they haven't been correct yet!
Well, yeah, they're not psychic, but their saying the system will crash is correct. The naysayers are as dumb as telling someone who predicts U will die with the comeback, "Yeah, well I'm not dead now!"
They are trying to steal everything too fast. The key is to take all the property in a country slowly, so that everyone thinks it's a bunch of deadbeats who don't want to pay their mortgages. Like in 2008. At this rate, their scheme will fall apart before they can get everything, and people will feel morally justified staying on their own property because all of their neighbors are too.
Silly, silly wannabe aristos. Too incompetant to run a good scam, too stupid to know when to quit.
Everything will be fine when they are deposed and their system of slavery lies in ruins.
The truth is property is a liability and banks do not want to own it , they want people paying interest on mortgages. The reason greece is collapsing is because the fiat ponzi is unwininding at the edges.
Ron Paul on a Stansberry Research video says the truth about the U.S. economy is “terrifying” and predicts that the next huge disaster for America will be worse even than 2008, Black Monday and the Great Depression. Worse yet, it’s inevitable.
And Jesse on Jesse’s Café Americain this weekend regarding Greece and Goldman, asks: “Can the world afford the American Elite’s addiction to abusive banking practices” any longer?:
“I would like to see Europe and Asia begin to take stronger measures to prohibit these banking cartels with long records of banking violations and market rigging from doing business in their regions and with any of their official financial instruments.
“The US apparently does not have the political will to reform its banking system.
“How much damage will they stand by and permit these sorts to visit on their people, who always seem to be picking up the pieces, through austerity and privatizations of their national assets. Will these new trade agreements even allow them to exercise their national sovereignty to protect their people from fraudulent financial practices and price gouging in the future?”
To document Goldman's (the NY Fed's) abusive practices, Jesse then links to…
Wall Street On Parade
Goldman Sachs Doesn’t Have Clean Hands in Greece Crisis
By Pam Martens and Russ Martens
June 30, 2015
Are Goldman Sachs executives Lloyd Blankfein, Gary Cohn and Addy Loudiadis losing any sleep over elderly pensioners waiting outside shuttered banks in Greece, desperately trying to obtain their pension checks to pay their rent and buy food? Are these Goldman honchos feeling a small pang of conscience over the humiliation by creditors of this once proud country?
Perhaps Blankfein, who famously espoused that he’s “doing God’s work” might shed a tear or two for the small child clinging to her elderly Grandmother’s hand as she searches in Athens for an ATM that will give her $66 from her bank account – the maximum allowed per day under the newly imposed capital controls.
According to investigative reports that appeared in Der Spiegel, the New York Times, BBC, and Bloomberg News from 2010 through 2012, Blankfein, now Goldman Sachs CEO, Cohn, now President and COO, and Loudiadis, a Managing Director, all played a role in structuring complex derivative deals with Greece which accomplished two things: they allowed Greece to hide the true extent of its debt and they ended up almost doubling the amount of debt Greece owed under the dubious derivative deals.
A February 2012 BBC documentary on the Goldman Sachs deal provides a layman’s view of the dirty underbelly of the deal, calling it “a toxic import” from America that is “hastening” the downfall of Greece...
For the unschooled to the ways of Wall Street, one might jump to the conclusion that Greece and its finance officials were knowing participants in the deal. That would be a reasonable assumption were it not for counties and cities and school districts across America that were similarly fleeced and hoodwinked by investment banks on Wall Street.
In March 2010, the Service Employees International Union (SEIU) released a study showing that from 2006 through early 2008, Wall Street banks are estimated to have collected as much as $28 billion in termination fees from state and local governments who were desperate to exit abusive derivative deals. That amount does not include the ongoing outsized interest payments that were, and still are being paid in some cases. Experts believe that billions of these abusive derivative deals may still remain unacknowledged by embarrassed municipalities….
Read the entire article here.
http://jessescrossroadscafe.blogspot.com/
http://ronpaulupdate.com/?cid=MKT033949&eid=MKT065671&gclid=CKzi9bPiwsYCFcRlfgodX3kK4A
Great article, great research,timely warning, Phoenix Capital. Thanks.
"“The US apparently does not have the political will to reform its banking system."
the political will left when the bribes came in
This process will be spreading throughout the globe going forward. Indeed, the FDIC has proposed precisely the same “bail-in” program if a “systematically important financial institution” were to go belly-up in the US."
Granted, that's precisely the point.
When government and banks collude to "save the system", they are capable of anything, INCLUDING, rendering what cash you may have in hand...worthless.
Holding cash, like limited "assets" (gold or silver, for example) is stupid, and for similar reasons. When they're gone in an aftermath of a major collapse, they're gone. And believe me, in a post-crash world, they'd go quickly.
Listen to the few folks who remain from the Great Depression; if you have useful skills and equipment to do or produce something, you might make it. You don't, rotsa ruck. You'll live at the benevolence of something else.
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Bail ins are perfectly deserved by the morons who lend the banksters and governments money on an unsecured basis. Next time the bank wants to borrow money from you, demand collateral. The bank won't give you a mortgage without collateral (ie: the pledge of the property if there's a default). Why would anyone lend the bank money without the bank offering up collateral?
Unsecured lending is the true evil. The public are a bunch of freakin' morons if they lend on such a basis.
That is relatively easy to do. In this day of age you need banks/checks/debit cards to fascilitate transactions. It is very dangerous carrying large amount so cash around on your person (the police could confiscate it as drug cash) among other obvious reasons.
Just obtain a CREDIT CARD from the bank you have funds in. if they bail in your cash, do the same to their card. After you have maxed out on it.
Finance only works if done internally.
Sometimes indeed you DO destroy the town to save it.
Folks grow accustomed to things "as they are"...but that is not always how things will be.
"Cyprus" still has quite the foreboding future given where the island currently resides.
They would appear to need more than "financial confidence" at this point....
WTF???