Here's Where The Next Bank Deposit "Bail-In" Will Strike...

Tyler Durden's picture

Submitted by Nick Giambruno via InternationalMan.com,

One shot from a pistol pierced the night right before Antonio Bedin collapsed, dead.

Antonio, a 67 year-old retired Italian, had just committed suicide. He was plagued by health problems and by the loss of his savings.

Last year, four small Italian banks became insolvent and immediately needed capital. They turned to a bail-in.

Antonio was one of thousands of small savers who were wiped out. Antonio lost everything. Then he shot himself.

He wasn’t alone.

There was another pensioner who hung himself at his home near Rome after he lost more than $100,000.

Their stories became national news sensations. It generated intense anger at the bail-ins.

A bail-in is when a bank recapitalizes itself by tapping its creditors, including depositors.

Most people think of the money they deposit into the bank as a personal asset they own.

But that’s not true.

Once a deposit is made at the bank, it’s no longer your property. It’s the bank’s. What you own is a promise from the bank to repay. It’s an unsecured liability. That’s a very different thing from owning physical cash stuffed under your mattress. Money deposited into the bank technically makes you a creditor of the bank. You’re liable to get burned from a bail-in should the bank get into trouble.

People in Cyprus had to find this out the hard way in early 2013. People awoke on an otherwise normal Saturday morning to the shock that the money in their bank accounts had been taken by a bail-in to recapitalize the banks.

Not surprisingly, many Italians aren’t just waiting around to get “Cyprused.”

I recently spent weeks on the ground in Italy investigating the ongoing banking crisis. I spoke with a prominent lawyer who told me that most Italians are now distrustful of the banks. They’re keeping a substantial portion of their savings in cash under their mattresses. They’re also buying lots of gold.

I’ve been to Italy numerous times over the years. But this time, I saw something new. There were signs everywhere advertising gold bullion, like the one below.

 

I think it indicates a strong demand for gold and a strong distrust of the banks. It seems to me like a slow motion bank run is already happening. This is the last thing Italy’s banking system needs. It’s further bleeding the capital in the banking system.

I only see the situation getting worse…

Italians are rightly afraid of bail-ins. That fear is leading them to withdraw their savings as cash and also to buy gold. This further drains the banks’ capital, making it more likely they’ll need to do a bail-in to remain solvent, which fuels even more withdrawals. It’s like a self-fulfilling prophecy.

This means that the chances are good that a large number of unsuspecting Italian savers are going to get wiped out.

The thought of potentially many more old, struggling pensioners committing suicide because they got wiped out from bail-ins has enormous emotional power in Italy. It’s like political nitroglycerin.

It would have a catalyzing political effect.

Bottom line, if Italians get Cyprused before the referendum later this year it’s a virtual certainty it will fail.

That’s the unenviable conundrum the current, pro-EU Italian government is facing. They can stall and save the banks through a bail-in, or they can let the whole house of cards come down. Either option is political suicide.

It’s hard to imagine that the frustrated Italian populace won’t vote to give the establishment the finger in the referendum, and humiliate the pro-EU government.

Prime Minister Matteo Renzi has promised to resign if that happens.

If he does, the anti-euro, populist Five Star Movement will almost certainly come to power. They’ve promised to promptly hold another referendum. This one would be on whether Italy should leave the euro and go back to its old currency, the lira.

If Italy—the third-largest member of the eurozone—leaves, it will have the psychological effect of someone yelling “Fire!” in a crowded theater. Other countries will quickly head for the exit, and return to their national currencies.

Economic ties and integration are what hold the EU together. Think of the currency as the economic glue. Without the euro, economic ties will weaken, and the whole project could unravel.

It would be a deathblow to the EU, the world’s largest economy… And it would explode into a global stock market crash like the world has never seen.

The Financial Times recently put it this way:

An Italian exit from the single currency would trigger the total collapse of the eurozone within a very short period. It would probably lead to the most violent economic shock in history, dwarfing the Lehman Brothers bankruptcy in 2008 and the 1929 Wall Street crash.

That’s how important the upcoming referendum in Italy is. It would be the first domino to fall in the collapse of the EU.

Not surprisingly, the unsavory George Soros is keenly aware of what’s going on. He recently said, in reference to the Brexit and events in Italy, “Now the catastrophic scenario that many feared has materialized, making the disintegration of the EU practically irreversible.”

Soros Fund Management has been picking up gold assets and placing bets that stocks will crash.

He’s positioning to make big profits from the coming crisis. And I think we should, too.

That’s exactly why I recently spent weeks on the ground in Italy.

There are potentially severe consequences in the currency and stock markets.

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38BWD22's picture

 

 

In 2012 we were in Italy on vacation.  I remember seeing all these signs advertising "Compro Oro" (pawn shops advertising to buy people's gold) in various cities: Rome, Caserta, Lecce, Bari, Taranto...  I wrote a couple of blog pieces about it with pictures.

Now Italians want to buy gold?  Things must be even worse there than in 2012.

*   *   *

Might we see similar signs here in America if our economy falls down again...?

 

Cliff Claven Cheers's picture

I could be wrong but I think Soros might be carried out on a strecher, the days of bond vigilantes is dead int he new Central Bank bail out era.  Never under estimate a good printing press run to keep the zombies alive a few more years.

darteaus's picture

The reason Soros is so prominent is 1) He's a raging egotist, and 2) He's being set up as the fall guy, i.e. there are many more guys like him who don't mind him being the face.

mkkby's picture

Bullshit article.  There was NO Italian bail in.   The guy who committed suicide was a stock investor.  It was his own fault for putting all his eggs in one rotten basket.  When a business goes under, the stock and bond investors deserve their fate.  They WILLINGLY CHOSE the risk.

Italy has a 100k euro deposit insurance limit.  If they ever resort to bail ins, all you have to do is keep your account under 100k and you will be fine.

Why can't international man (i.e Simon fucking black) ever tell the truth?  Is this shit company a Clinton property?

sessinpo's picture

Yea, I think you are correct. Some got a bail out, not in bail in.

However, I find it curious that anyone would actually rely and believe in depositor insurance.

Simply put, you can't trust any of these institutions including the bank, the insurer or the government.

philo24's picture

I'm Italian and i agree with mkkby, in the article there are few mistakes:

 

It wasn't about bank deposit, but about bank's high risky bond

Italiy has 100k euro deposit limit insurance

 

These banks sold their bonds to old people without any financial knowledge, in some cases the banks fakes their clients signature and their financial knowledge declarations. So was actually a FRAUD.

 

Yes in 2012 there were a lot of "Compro Oro" (Buy Gold) shops. 

The reasons were 2:

1) The price of gold was skyrocketing

2) Italy was (And still is) in recession/stagnation, a lot of poor people who needed cash sold the gold stuff that they've got at home.

A lot of those shop now are closed.

 

 

The advertising about Gold in the picture, or anothore one i've listened on the italian major Business Radio that was about "Buy True Gold Roman Coins" as an Investment.

 

The reason is simple:

We (italians) don't fucking kwnow where to invest our money. 

 

The "classic" investing Markets for the italian are at 0% yeld

- Real estate price are declining, and renting the last years became dangerous

- Bond Italian Market is almost 0% yeld

- Bank deposit are at 0% yeld (or less)

So 0%reward/ high risk

The perception of gold for avarage italian investor is as riskless commodity

Flankspeed60's picture

........all you have to do is keep your account under 100k and you will be fine.

Seriously? If one or two banks go down, maybe. But in a general meltdown scenario, NO backup system anywhere can cover even 1% of the potential depositor liabilities. In the US, FDIC is a fraudulent charade.

Nobodys Home's picture

Soros is a rothschild minion....not sure why you were downvoted...except he's not a fall guy....the rest I agree with.

CCanuck's picture

+ 1 DoChen,
Have you noticed the same signs in other cities you have travelled to since 2008?
I have seen them in every city in U.S and Canada I've been in.

I have a banner right now on this page advertising buy/sell gold from a local shop, in Edmonton, population around 1,000,000

jonjon831983's picture

If you see gold banners now it might be due to you searching for gold on Google.

Ads are based on your search history.

CCanuck's picture

I know that my ad search reflects what I see,
However i see physical signs all over the city, every mall has buy/sell gold shops and kiosks.

I am just looking for others experience based on international cities.
As I don't trust most reported stats, the word on the street can be used to confirm reports.

Keep stacking!
Ccanuck

buzzkillb's picture

We were in Naples about 3 years ago and everything handed to us as tourists said we would be robbed while walking around. I have never seen anything like that, and we have been to some sketchy countries.

zvzzt's picture

In (most of) Europe, gold is less of a dirty word than in the US. 

ProsperD9's picture

You are 10000% correct....I easily buy gold here and the bank doesn't flinch an eye. No signing papers, no showing ID, just hand over the cash...LOL

ProsperD9's picture

The economy has already fallen....again! They are good at trying to cover it up; however, those in the know see the signs everywhere and act accordingly. 

Nobodys Home's picture

Do.....I live in NH....in a small town there are 3 metals buyers...One of these days I'm going to ask if they sell........I checked out a pawn shop a while ago.....they had a 10oz sunshine bar for....$200!!!! It was worth about $160 back then...assholes

doctor10's picture

more currencies makes so much sense. It basically is spreading the risk

The world's oligarchs have an adolescent pre-occupation with centralized control-so very 19-30th centurys

The 21st century is waiting for the market to wipe out legacy 19th-20th century institutions so it can get started

New_Meat's picture

we get to see both pawn shop buying and shills selling the precious on TeeVee every night.

- Ned

{Nice rollers u got there, fella'}

myne's picture

How does one get euro denominated debt? I figure borrowing at the right time and using the loan to pay the loan should leave a decent chunk left when you can buy 100eu notes for the cents to pay it back. 

Lost in translation's picture

Senior citizens suiciding themselves on account of bankster theft is an outrage and a tragedy. It's the bankers who should die, not the pensioner.

Cliff Claven Cheers's picture

in a just world my friend that would be true.

Nobodys Home's picture

Yah bahstad...weah ah u frum? Now get youa shit togetha an have sum balls you mutha fucka. Cliff Claven my ass!

just kidding..

holgerdanske's picture

"Senior citizens suiciding themselves on account of bankster theft is an outrage and a tragedy. It's the bankers who should die, not the pensioner"

Just give it some time!

hendrik1730's picture

If I were in such pensioners' position, I would not take MY life but a banksters one. Or as much as possible before they stop me. And then they can put me in jail and take care of me for the rest of my days. When only 10 ( ten ) pensioners would do this, bail-ins would very quickly stop. ( and be follewed by hyperinflation, plan B )

sinbad2's picture

But you can't get at them, you could kill a teller, but he is as much a victim as you.

The boss arrives on the roof, in a chopper, Blankfiend has probably never seen the entrance of GoldinSacks.

zvzzt's picture

To be (somewhat fair), most bankers just exploit / "excessively use" the framework spread out for them by the politicians. If I got a government guarantee to get my money back when entering a casino, I'm not going to be playing morally correct for too long either. 

Long rope for three parties: politicians, bankers and their lobbyists. 

RaceToTheBottom's picture

I am good with short rope, as long as it holds.  Squirming while asphyxiating is fine with me.

 

Nobodys Home's picture

I asked the manager of the bank i hatefully need to use if she had any knowledge of the shit going down with Deutchbank...None!

She told me she doesn't listen to the news.

I asked her if she knew what happened in Cyprus....nope

Greece...nope

They know me at this bank. They ask me if my mattress is full yet

They ask me that because they used to ask me about my pillows.

My advice......find a local bank or whatever....and don't leave your cash in it...especially over long weekends!

Wallyroo's picture

I am also a regretful bank minion. When my paycheck hits I am no longer a creditor. I always leave less than 10.00 in my account. It's my money, not theirs.

Nobodys Home's picture

I read that and almost wanted to spurn my good woman and become a homosexual.

Nobodys Home's picture
Nah...I'm 58 ....not looking to die...don't really care if I do. I'm old school. You can't have your pudding If you don't eat your meat!
VWAndy's picture

 Some great store of wealth they had. Overnight a 0  poof!

quasi_verbatim's picture

They got you every which way.

Stuff your cash under the mattress -- they change the currency overnight, ban the old cash.

Stackers will be SWATted and shot.

We have a new plastic £5 note with a picture of Winston on it. Big fucking deal. It'll just about buy you a Starbucks.

When Winnie was Prime Minister you could live well on £5 for a month.

RayKu's picture

I'm not convinced most people get that. Currency can be wiped out overnight, PM stacking is all well and good, but how is a person going to convert it when they need it to buy food or other essentials? What do they do when government agencies outlaw it? Maybe they should be stacking cans of food first.

Nobodys Home's picture

Buy food...canned food lasts about forever! Screw the dates on the can. If it's not looking strange it's edible. Unless it smells bad when you open it...and even then it might be ok. Have you heard what Germany said? 10 days of food and water?

10 days? Most people can't go 3 days in the US...even if they have a baby. I've been planning for 10 people for 2 years, buying sales and bulk and ammo.

I have found amazing deals...been doing it for a while...I pay 1/2......I;m also a fucking asshole that will kill you as soon as you open your mouth

Ignorance is bliss's picture

Look into "gold money"

I don't recommend putting all your savings into a gold money account, but think it's a good way to retain liquidity and to diversify. It allows you to redeem your gold in pounds, dollars, Euros, and another currency which I don't recall as you need it.

Bemused Observer's picture

People stack because they realize that although having the 'stuff' (canned goods, water, etc) is desireable, they also understand that STORING enough of it to get you through even a few months is problematic. It also means you are now tied to the physical place...
The stacker can grab his stash and move it much more easily. As for trading? Well, I suppose THAT could be problematic as well, but the history tells me this is unlikely, as every time a fiat currency died, PM's quickly filled the void, regardless of what the various powers wanted and demanded of people. Their wishes simply did not matter once their fiat died.

And all of those nations and empires? They are now gone, swept into history's dustbin, along with their worthless currencies. I'll bet they never saw it coming, either. Just like today.

Nobodys Home's picture

Apparently you and Rayku.....don't have a concept of using the black/grey market.....

JailBanksters's picture

Who says Bail-ins don't work.

The Bank lives on ... well, until the next Bail-in

 

Nobodys Home's picture

You paid for the last one. Ready to do it again?

JailBanksters's picture

As one leaves the Criminal Banking System another one joins.

Sooner or Later every new born is forced into the Criminal Banking System or you can't get paid.

 

Nobodys Home's picture

Warn your idiotic relatives...unless you hate them...which in many cases is understandable.

But why did the SEC make rulings that changed just about EVERYTHING? I actually sent an oppositional email telling them to fuck themselves during the comment (time)?

We are now ...what are we?

Not savers. Not Depositors.

Oh....My memory is coming back...It's on the tip of my tongue (like Huma on Killary)

GoldIsMoney's picture

"Antonio was one of thousands of small savers who were wiped out. Antonio lost everything. Then he shot himself."

 

It's time to get that right. If you open an account with any  bank the money you put there is a credit to the bank. 

 

So if they do not know that, they're toast. Since ages do I criitize that. But what do I hear - oh the pooe savers. F.... they yre not poor they are creditors and credits to get lost. That's the simple fact. So instead of crying about the poor savers I suggest working to get that theft proseuted. Now here's the easy deal.

Let ther be saving accound and this are exactly that. Account for savings, they won't get lend they won't get a credit for the bank. If any ideot wants some interest, then he can get it but don't wine if the bank defaults on that debt.

lolmao500's picture

Shot himself. Should have used that bullet to shoot one of the fucker who did this instead. If the thieves start getting shot maybe they'll stop

Nobodys Home's picture

I think the same way....but everybody else thinks I'm a nut! I'd identify as a walnut.

Ignorance is bliss's picture

Let's see how they feel once their savings are stolen. I bet they are the first to lock and load then.

Nobodys Home's picture

Yup...Except they used to be depositors...now they're creditors....when the bank loses everybody loses now......fuckers!

lolmao500's picture

Maybe that's just my folks but I've talked about this to a lot of people around me and a lot of them said : they do this crap, we're gonna go kill the fuckers.

I wonder why people in Cyprus didn't hire assassins to go get some payback... or just do it themselves.