by Anthony Migchels
(left: one of those Cypriots holding the bag)
In a stunning, but inevitable development, savers are getting a haircut in Cyprus. Raping depositors, however necessary if they insist on keeping the banks open, will only further erode confidence in the system. Did the Money Power miscalculate? Are they upping the ante in preparation for their endgame? Or was their hand forced by mounting German opposition?
‘The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.’
By Anthony Migchels for Henry Makow and Real Currencies
It is not clear yet how things will go in Cyprus. The Finance Minister has resigned and the governing party is abstaining from the Parliamentary vote. The depositor bail-out seems doomed. After shrugging off the crisis Monday, world markets have adopted a more negative tone today.
The EU will bail out Cyprus to the tune of 10 billion euros if they comply.
The spin-machine came up with a story that the main target was Russian holdings in Cyprus, which is an off shore hub for all sorts of shady fortunes, including those of the Oligarchs. Putin denounced the package as ‘unjust, unprofessional and dangerous’. However, the stakes involved here are way too high: grabbing a few Russian billions is not the agenda behind destroying depositor confidence worldwide. But apparently Putin’s constituency is hurting, because a little later he actually offered to participate in the Cypriot bailout. Almost half of the $90 billion in Cyprus banks is Russian money, await6ing reinvestment in Russia. 40,000 Russians live on the island.
Apparently, the ‘rescue’ was forced upon Nicosia by the threat of being kicked out of the euro. It’s amazing that this ‘threat’ still holds sway, after five years of this nightmare and with the clear example of Iceland. Cyprus, as a small nation, seems to be similarly positioned. Undoubtedly, behind closed doors, the threats were more strenuous.
Cyprus is probably just a test case, to monitor global reactions. The country is irrelevant, with only 0,2% of Euroland’s GDP.
The euro may not fail, because if it does, they will never be able to sell World Currency. If they can’t even make it work in Europe, how is it going to work on a global scale? That’s the reason why all member states are kept on board at whatever cost, either to Brussels, Frankfurt, the national economies or even, it seems, the banking system itself.
It’s not unfair
The story of today is about those poor savers that did absolutely nothing wrong, are indeed the backbone of the economy, and are now being mauled so badly. But this celebration of victimhood is not to the point. What is really absurd, is forcing the taxpayer to guarantee the holdings of savers. Meaning the poor guarantee those that actually do have money. The taxpayer guarantees of deposits always were a clear sign of banking supremacy. Banks have been going bust routinely for centuries and nobody would have kept a dime with them, without the depositor guarantees. It’s just another example of how they privatize profit and socialize loss.
The truth is that the banking system could not exist without savers and the banking system is the scourge of the world. So savers are not only insanely irresponsible with their own money, they’re backstabbing all the rest of us too with keeping their money in banks. True, very few will agree with this line, but it seems the inescapable conclusion of a clear cut analysis of our long term predicament as interest-slaves.
So what’s the story?
What are the forces driving this seemingly suicidal step?
During the negotiations about the ‘rescue’, the issue of the Bond holders was of prime importance. Prime Minister Juncker of the small Bankster nation of Luxemburg warned against a Bond holder haircut and indeed they seem to have been spared. Although viper bank Barclays warned that even touching deposits was a clear threat to Bond holder confidence. The Bond market is everything in finance and we’ll know the end is there if they quit the market. They paid in Greece, but it seems they managed to scare the Germans and the IMF away from their assets this time.
This is in fact a crucial trade off: lest we forget, the Bond holders are mainly the international banking cartel itself. So either it pays for the debt crisis they created themselves with direct haircuts, or by raping the depositors, whose confidence they need in the long run. And of course: making the banks pay just creates a new round of busts for the ‘too big to fails’, ‘forcing’ the taxpayer into a new round of bailouts.
The key driver behind the Euro crisis is the Money Power agenda of consolidating power in Brussels. The issue is fiscal union. Over the last few decades a lot of political power has been centralized in Brussels. About half of European legislation is already from there, instead of national capitals. But real political power is with those running the budget and that’s what Brussels is after here. The Euro crisis’ main goal, from the Money Power’s point of view, is to sucker people into handing over the power over their budgets to Brussels. How this is achieved is of lesser import, there are several ways.
One of them is the infamous European Stability Mechanism (ESM), an utterly tyrannical outfit, financed by the Nations and run, without any democratic oversight, by a commission of finance ministers. The ESM’s goal is to bail out any bank even before it becomes a problem. The ESM is backed by a law forcing the nations to cough up any sum the ESM demands within seven days.
The other is ECB money printing. The big difference between the Fed and the ECB is, that the Fed is backed by only one Government and the interests of the Fed and Washington are highly aligned. The Fed will always provide Washington with whatever liquidity needs. The US cannot go bust, because the Fed will always print whatever is needed. Nowadays, with nobody buying US Treasuries, the Fed simply provides the Government with all the money it needs at close to 0%. This is not possible in Europe, because if the Spanish need money, all other Governments, most notably the Germans, are on the hook for it.
This is the reason why the US has not found itself in the kind of debt trap that destroyed Spain, Italy, Greece, Portugal and Ireland. Had these nations still been able to print their own money, they would not have had these problems either.
Structural ECB money printing would make a mockery of ‘fiscal independence’ and would create an almost unstoppable driver for further fiscal integration, as all the nations would in effect be guaranteeing each other and the weaker nations would have to comply with the stronger nations’ demands.
This was the real ‘break through’ behind ECB boss Draghi’s ‘we’ll do whatever it takes’ back in July 2012: what he was really saying was that the ECB, for the first time, would interfere in the sovereign debt market in a major way: printing to keep borrowing costs down for the PIIGS nations. However, although the Germans backed this statement, gnashing teeth and all, they are far from willing to go all the way. They are not going to allow a real debasement of the euro. Most certainly not if they are on the hook for it.
German support for the euro is still fairly strong. The country has benefited immensely from the crisis. Structural imbalances have provided Germany with great exporting opportunities throughout the zone. The nation has seen a massive capital influx from money leaving the South due to lack of confidence. This capital has generated a bit of a boom while the rest of the world burns. But while Germans love the upside of European Colonization through the euro, they hate the downside: backing Southern debt. Merkel is dealing with plummeting confidence and recently an anti Euro party was launched.
People like Merkel and Schauble (the German finance minister who also coordinated the Cyprus deal) are total NWO insiders, but most lower politicians are kept in check with ‘political correctness’ and with the mounting pressures of the crunch, this shallow veneer is becoming ever more fragile. Nationalism, a lethal enemy to Globalism, is rearing its almost forgotten head and the utter disgust with the bankers and local elites are becoming hard to avoid.
So we see two basic conflicts: one being the hard choice for the bankers of either being shorn themselves or to rape the depositors they need in the long run and on the other hand the German refusal to pay the price for the great benefits the euro has brought them.
Of course, the tensions in Europe’s South continue to escalate also. Only a few days ago the Spanish police took to the streets to apologize to the people that they were fighting them, instead of arresting the Bankers. In the Netherlands, another key member, people are refusing austerity to destroy their economy like it did in the PIIGS nations.
The euro may not fail. If it does, it would be a devastating blow to the agenda of World Currency. Rest assured that the Cypriots were threatened with sulfur and brimstone.
The original German demand seems to have been taking 40% of deposits, to avoid further (German) tax payer or ECB involvement. Obviously this is not sustainable: just this Cyprus thing is going to have major consequences. Already we hear of taking 15% of Italian savings but this is not doable. It would mean war. The Italians just did away with Goldman Sachs alumni, Trilateralist and German backed strong man ‘Super’ Mario Monti . They went for Beppe Grillo and it’s not hard to imagine what he would make of such a move. We would see quick new elections in Italy and the end of the current order.
Throughout the South local elites face extinction. In the US it is clear the Government is preparing for civil war, depleting national ammunition production, buying thousands of tanks for the DHS and the recent confirmation of manned and ready internment camps throughout the United States.
Of course, many rational real solutions are available to the credit crisis. But all of these imply the end of banker hegemony and that is, after all, what it is all about.
It remains impossible to fathom it all in real time. Their smoke and mirrors will always fool us and only with hindsight can it all be really understood. But the question of today is: is the Money Power still in control and preparing for a final showdown, or is all this a sign of weakness? It seems fair to say we will know the answer to this question perhaps sooner than most might have imagined.