With the media awash in stories telling us how much oil is being
discovered around the world, there is one word which the optimists
quoted in these stories refuse to utter: Depletion.
The simple
fact is that depletion never sleeps. It starts as soon as an oil well
begins production and goes on 24 hours a day, 365 days a year.
Furthermore, it is not exactly news that oil is being discovered all
around the world. The industry has been spending record amounts to find
it.
What’s critical is the difference between the annual additions
to oil production capacity and the annual decline in the rate of
production from existing wells, a decline which is running anywhere from
4 to 9 percent depending on whom you talk to.
Even at the low end
of decline rate estimates, the world must find and put into production
the equivalent of what is currently coming out of the entire North Sea,
one the world’s largest finds, and we must do so EVERY SINGLE YEAR
before worldwide production can rise. So difficult has this task become,
that we’ve only just been able to keep global production on a bumpy plateau since 2005. For now, the oil industry is on a treadmill which requires ever more drilling just to keep production even.
(Many
regular readers will wonder why I continually emphasize the flat
trajectory of world oil production since 2005. It’s so new readers will
be introduced to this central fact about oil supplies—an indisputable
trend which the industry simply refuses to talk about and even tries to
obscure by changing the definition of oil to include things which are not oil. This trend has ominous implications for our society if it continues or, even worse, turns downward.)
To
the untrained observer the quantities of oil recently discovered sound
large. But, when put into the context of how much we consume, they won’t
extend the oil age by much. Norway, which produces oil from the North
Sea, recently announced its largest find since 2000, a field with nearly 1.8 billion barrels. How long would the oil in that field last the world at the current rate of consumption? About 24 days.
The
math looks like this. The world currently consumes about 27.4 billion
barrels a year of crude oil including lease condensate—which is the definition of oil.
So, just divide 1.8 billion by 27.4 billion and multiply the fractional
result by 365 days in a year, and you’ll get the number of days such a
discovery could supply the world if we could pump it out at any rate we
want to (which we can’t).
Well, there are larger discoveries in
Brazil, you may say. If we accept the government’s figures on their face
(and we really ought to be a little skeptical), then the Tupi field has
5 to 8 billion barrels and the Sugarloaf field has 33 billion. (The
truth is no one really knows because there hasn’t been enough drilling.)
Let’s
take the top end of the estimates and call it 41 billion barrels. If we
do the above calculation for just one billion barrels, we find that it
will last about 13 days. And so, a little multiplication tells us that
two of the most massive finds ever (if they actually pan out) will give
us 41 X 13 days of oil or 533 days, which is about a year and a half.
It’s nothing to sneeze at; but it doesn’t exactly change the overall
picture that much.
And, of course, this number holds only if the
world does NOT increase its rate of oil consumption. But economic growth
is dependent on ever increasing supplies of oil, a fuel central to
every economy on the globe. India, China and many other developing
countries have consistently increased oil consumption to fuel their
economic growth. But because worldwide production has been flat since
2005, consumption in places such as the United States has had to fall in order to make room for growing demand from Asia.
This has happened because American and European consumers aren’t willing or aren’t able to pay as much. Oil
analyst Steven Kopits has explained the counterintuitive idea that poor
Asians are willing to pay more for oil and oil products than rich
Westerners because poor Asians get so much more economic
productivity out of the marginal barrel of oil than rich Westerners who
consume many times more barrels of oil per person. The result has been
that developed countries in North America and Europe have seen very
little growth in their economies as Asian economies continue to sprint
ahead.
Of course, the optimists have been telling us (and telling
us and telling us) that so-called tight oil—the kind that comes from
hydraulically fractured wells—will now finally move the needle on
worldwide production. Well, so far, the net result is nada, nothing,
zilch. Production from such wells has risen, but not enough to offset
declines elsewhere.
And, as it turns out, fracked oil wells are
now the poster children for the problem of production decline. Average
annual oil production decline rates for two of the most well-developed
tight oil plays, Bakken in North Dakota and Eagle-Ford in Texas, are 38 percent and 42 percent, respectively.
That means that drillers in those plays must replace 38 to 42 percent
of their current production EACH YEAR before they can increase
production. It’s a ferociously high decline rate, some 10 times the rate
worldwide. And, this is the oil that the optimists tell us is going to
raise global production!
Humans evolved to be optimistic
risktakers. That genetic heritage has served us well up to this point.
But, sometimes that trait makes us incautious and gullible. And, the oil
industry is taking advantage of a natural human inclination to believe
the presumed experts, especially when they offer an optimistic tale that
is designed to make us comfortable with the status quo.
In truth,
unprecedented disruptions and changes in our worldwide energy system
have been underway for more than a decade. We can ignore that fact, but
only at our peril.
Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he writes columns for the Paris-based science news site Scitizen,
and his work has been featured on Energy Bulletin, The Oil Drum,
OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams,
Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.
Monday, March 18, 2013
Another, less known reason why Cyprus collapsed
This “incident” cost the government of Cyprus over 3 BILLION euros
Cyprus has the most expensive electricity in Europe.
The Evangelos Florakis Naval Base explosion was the worst peacetime military accident ever recorded in Cyprus. The incident occurred on 11 July 2011, when 98 containers of explosives that had been stored for 2½ years on the Evangelos Florakis Naval Base near Zygi detonated.
The resulting explosion killed 13 people, 12 of them immediately, including Captain Andreas Ioannides, the Commander of the Navy (Cyprus’s most senior naval officer), and the base commander, Lambros Lambrou. Also killed were four navy personnel and six firefighters, while a further 62 people were injured. The explosion severely damaged hundreds of nearby buildings including all of the buildings in Zygi the island’s largest power station, responsible for supplying over half of Cyprus’ electricity. As a result, much of Cyprus was without power in the immediate aftermath of the incident and rolling blackouts were initiated in order to conserve supplies.
According to a list of the largest artificial non-nuclear explosions, the explosion was the 4th largest accidental explosion and 7th largest overall.
In open storage on the base were 98 containers of explosives that had been seized by the United States Navy in 2009 after it intercepted a Cypriot-flagged, Russian owned vessel, the MV Monchegorsk travelling from Iran to Syria in the Red Sea. According to leaked US cables through WikiLeaks, released in 2011, the US through Hillary Clinton exerted pressure on Cyprus to confiscate the shipment. The ship was escorted to a Cypriot port and the Cyprus Navy was given responsibility for the explosives, which it moved to the Evangelos Florakis a month later. At the time of the incident in 2011, the explosives had apparently been left in the open for over two years. The Cypriot government had declined offers from Germany, the United Kingdom and the United States to remove or dispose of the material, having feared an adverse reaction from Syria. The government had instead requested that the UN effect the removal, but claimed that its request had been rejected.
The Vasilikos Power Station, the largest power facility on Cyprus, which provided approximately half the island’s electricity, was severely damaged, causing widespread power cuts.
Several thousand people upset by the Cypriot government’s failure to dispose of the explosives held a demonstration in the capital Nicosia on 12 July. A group of about fifty broke away from the demonstration and stormed the grounds of the Presidential Palace, demanding the resignation of Dimitris Christofias, President of Cyprus. The breakaway group was almost immediately apprehended by the Cyprus Police, who nonetheless used tear gas ten minutes after the incident had begun in an attempt to disperse the crowds.
Of Cyprus’ US$ 24.66 bn economy, the EU estimates that the cost of explosion to the island could amount to US$ 2.83 bn, with cost of the power plant itself coming to US$ 992m.
This was weeks before the Bank of Cyprus and other business leaders said “deep spending cuts are needed fast.”
https://en.wikipedia.org/wiki/Evangelos_Florakis_Naval_Base_explosion
Many, many russians have deposited black money in Cyprus.
Simply put… they can’t get into Syria as long as this money stream is flowing through Cyprus.
Ruskies have at least 50 billion euros stalled in Cyprus.
And that’s only an estimate.
Cyprus has the most expensive electricity in Europe.
The Evangelos Florakis Naval Base explosion was the worst peacetime military accident ever recorded in Cyprus. The incident occurred on 11 July 2011, when 98 containers of explosives that had been stored for 2½ years on the Evangelos Florakis Naval Base near Zygi detonated.
The resulting explosion killed 13 people, 12 of them immediately, including Captain Andreas Ioannides, the Commander of the Navy (Cyprus’s most senior naval officer), and the base commander, Lambros Lambrou. Also killed were four navy personnel and six firefighters, while a further 62 people were injured. The explosion severely damaged hundreds of nearby buildings including all of the buildings in Zygi the island’s largest power station, responsible for supplying over half of Cyprus’ electricity. As a result, much of Cyprus was without power in the immediate aftermath of the incident and rolling blackouts were initiated in order to conserve supplies.
According to a list of the largest artificial non-nuclear explosions, the explosion was the 4th largest accidental explosion and 7th largest overall.
In open storage on the base were 98 containers of explosives that had been seized by the United States Navy in 2009 after it intercepted a Cypriot-flagged, Russian owned vessel, the MV Monchegorsk travelling from Iran to Syria in the Red Sea. According to leaked US cables through WikiLeaks, released in 2011, the US through Hillary Clinton exerted pressure on Cyprus to confiscate the shipment. The ship was escorted to a Cypriot port and the Cyprus Navy was given responsibility for the explosives, which it moved to the Evangelos Florakis a month later. At the time of the incident in 2011, the explosives had apparently been left in the open for over two years. The Cypriot government had declined offers from Germany, the United Kingdom and the United States to remove or dispose of the material, having feared an adverse reaction from Syria. The government had instead requested that the UN effect the removal, but claimed that its request had been rejected.
The Vasilikos Power Station, the largest power facility on Cyprus, which provided approximately half the island’s electricity, was severely damaged, causing widespread power cuts.
Several thousand people upset by the Cypriot government’s failure to dispose of the explosives held a demonstration in the capital Nicosia on 12 July. A group of about fifty broke away from the demonstration and stormed the grounds of the Presidential Palace, demanding the resignation of Dimitris Christofias, President of Cyprus. The breakaway group was almost immediately apprehended by the Cyprus Police, who nonetheless used tear gas ten minutes after the incident had begun in an attempt to disperse the crowds.
Of Cyprus’ US$ 24.66 bn economy, the EU estimates that the cost of explosion to the island could amount to US$ 2.83 bn, with cost of the power plant itself coming to US$ 992m.
This was weeks before the Bank of Cyprus and other business leaders said “deep spending cuts are needed fast.”
https://en.wikipedia.org/wiki/Evangelos_Florakis_Naval_Base_explosion
Many, many russians have deposited black money in Cyprus.
Simply put… they can’t get into Syria as long as this money stream is flowing through Cyprus.
Ruskies have at least 50 billion euros stalled in Cyprus.
And that’s only an estimate.
S&P Futures Plunge To 1-Week Lows; Gold Jumps To 3-Week Highs
Given FX markets are double-dipping now, it is little surprise that S&P 500 futures open down 16 points from the 1553.5 close on Friday - a one-week low. This is the biggest close-to-open gap down since May 2012. Treasury Futures just opened implying a 1.94% 10Y (-5bps)
and 3.16% 30Y (-5bps). And despite the USD strength, spot gold just
opened also up from $1591.95 to $1607. The arb against JPY carry is
holding stocks for now... only another 8 hours until Europe opens... Over 38,000 contracts have traded in S&P 500 futures in the first 5 minutes
($2.9bn notional) - 30 times the average for a Sunday night... The
initial dump was caught by a VWAP reverter but that is fading now... Japan's NKY looks set to open down around 500 points or so given JPY's strength.
The biggest Close to Open gap in 10 months...
Initial massive volume dump for a Sunday night, VWAP algos revert and now fading again...
Stocks open down to EURJPY, bounce a little on the catch up from carry...
Gold holding above $1605...
Treasuries...
and for now it looks like Japan's Nikkei 225 will open -500 points or so at around 12,000...
Charts: Bloomberg
The biggest Close to Open gap in 10 months...
Initial massive volume dump for a Sunday night, VWAP algos revert and now fading again...
Stocks open down to EURJPY, bounce a little on the catch up from carry...
Gold holding above $1605...
Treasuries...
and for now it looks like Japan's Nikkei 225 will open -500 points or so at around 12,000...
Charts: Bloomberg
FX Market Opens, EUR Hammered, CHF Bid; S&P To Open -30pts
As Citi's Steven Englander suggested earlier, the developments in Cyprus will lead to EUR selling and USD, CHF, GBP, NOK and SEK buying (in that order).
He adds, the issue is whether to believe that the Cyprus levy on
depositors is one-off, but depositors and investors elsewhere could
easily see this as another in a string of ‘one-offs’ and react badly.
The risk-return to depositors in countries with weak banking systems may
not favor taking the risk that Cypriot banking system was so unique
that such a levy would never be considered elsewhere. The levy on
deposits ostensibly covered by deposit insurance may also undermine
confidence in weak banks. The question is whether this becomes a
full-blown crisis or a mini-crisis. For now, as FX markets open, it
appears EURJPY is getting hammered (from 124.47 close to 121.6) implying S&P futures will open down around 30 points. We are sure Abe is watching closely...
Given the element of surprise, it is probably the case that euro zone policymakers will not have concrete measures prepared to convince depositors elsewhere that this will never happen again. So it seems likely in the first instance some resurgence of tail risk will re-appear and that there is a risk that we could see a downward spike in the euro and significant backing up of spreads.
EURUSD has opened and is -140 pips for now...
and CHF is bid...
and all that good jawboning by Carney gone dow the drain... as GBP bid too...
the question is will the Swissie bid on Europe's risk flare recouple the S&P 500 with reality once again... as it did after theItalian election...
and of course everyone's favorite USDJPY...
Leaving us asking 'Is This It?' as a terrible case of deja vu comes over the market once again...
or this?
or perhaps more appropriately this?
Charts: Bloomberg
Given the element of surprise, it is probably the case that euro zone policymakers will not have concrete measures prepared to convince depositors elsewhere that this will never happen again. So it seems likely in the first instance some resurgence of tail risk will re-appear and that there is a risk that we could see a downward spike in the euro and significant backing up of spreads.
EURUSD has opened and is -140 pips for now...
and CHF is bid...
and all that good jawboning by Carney gone dow the drain... as GBP bid too...
the question is will the Swissie bid on Europe's risk flare recouple the S&P 500 with reality once again... as it did after theItalian election...
and of course everyone's favorite USDJPY...
Leaving us asking 'Is This It?' as a terrible case of deja vu comes over the market once again...
or this?
or perhaps more appropriately this?
Charts: Bloomberg
71% of Cypriots Say Parliament Should Reject Bailout
With President Anastasiades concluding his remarks, Cypriot public
opinion, as it has changed over the first critical 24 hours after
yesterday's Eurogroup decision, are recorded in a survey conducted by
the Insight Market Research (IMR) agency at the University of Nicosia. The survey shows that the first reaction of Cypriots can be characterized as anything but positive with 71% believing the the House should reject the deposit haircut imposition and a full 73% believe that President Anastasiadis and the Cypriot delegation "failed to secure a good deal." 72% believe that depositors below EUR100,000 should not be affected at all but 62% believe Cyprus should stay in the Euro. Begging the question, when's the next Cypriot election?
Chart: SigmaLive
Chart: SigmaLive
The EU Robs the Bank In Cyprus - Coming to the USA Too?
By Nick G, International Man
The
people of Cyprus had a very rude awakening to the issue of political
risk on Saturday morning. It should serve as a wake up call for us all.
They discovered that their government and a bunch of EU bureaucrats conspired in secret to rob their savings accounts to pay for the country's bailout.
Specifically, those with savings accounts of over 100,000 euros will have 9.9% of its value seized, and those with less than 100,000 euros will have 6.75% stolen.
While the measure still needs final approval from the parliament in Cyprus, the cat is out of the bag. Regardless of whether it passes, the Cyprus case illustrates that raiding savings deposits, which were once thought of as off limits, is an option that is very much on the table for desperate Western governments.
"As it is a contribution to the financial stability of Cyprus, it seems just to ask for a contribution of all deposit holders," the Dutch finance minister told reporters.
Only they didn't ask. They just took, without permission, with no warning, and amid secret discussions.
In Orwellian-tinged language, EU bureaucrats called it "an upfront one-off stability levy." Instead of using newspeak and euphemisms, how about we just call it what it really is: stealing.
Here are some reactions from justifiably angry Cypriots:
Like most other instances of capital controls and blatant wealth confiscation, these measures came as a surprise, and in a way that would make it difficult for someone to protect themselves after the fact.
Banks are closed in Cyprus during the three-day holiday weekend. ATM machines are reportedly out of cash, and the government has made it nearly impossible to wire money out of the country.
Of course, if you have any exposure to a desperate government, the time to act is before they implement measures like this.
This incident in Cyprus is a natural reaction of a desperate government and is to be expected…and prepared for.
Readers of International Man who are familiar with how to internationalize and insulate themselves from political risk should not be surprised by such an event.
The fact is, capital controls and outright wealth-confiscation can happen in any country that is desperate enough. This most certainly includes the US and most countries in the West. Fortunately it is possible to limit or completely remove your exposure to this risk through internationalization.
It is imperative that you move at least some of your savings into something that is not easy for a desperate government to seize at the drop of a hat. And do so before it is too late.
Physical gold in your possession and immediate reach, as well as some in a safe foreign jurisdiction is one way. Foreign real estate and financial accounts in safe jurisdictions are other options.
I wouldn't take the word of the bureaucrats that this is only a "one-off" event, especially if I had savings in other desperate EU countries like Spain, Italy, Greece, or Portugal.
Sign-up here to join the International Man community for free, and get the IM Communiqué delivered to your inbox. If you do, you will have the most actionable and timely information you need to internationalize your savings, yourself, and your income.
Become internationalized and not fully dependent on any one government. Then you can sleep well at night knowing that you will not wake up to the same surprise as the people of Cyprus did last Saturday.
The
people of Cyprus had a very rude awakening to the issue of political
risk on Saturday morning. It should serve as a wake up call for us all.They discovered that their government and a bunch of EU bureaucrats conspired in secret to rob their savings accounts to pay for the country's bailout.
Specifically, those with savings accounts of over 100,000 euros will have 9.9% of its value seized, and those with less than 100,000 euros will have 6.75% stolen.
While the measure still needs final approval from the parliament in Cyprus, the cat is out of the bag. Regardless of whether it passes, the Cyprus case illustrates that raiding savings deposits, which were once thought of as off limits, is an option that is very much on the table for desperate Western governments.
"As it is a contribution to the financial stability of Cyprus, it seems just to ask for a contribution of all deposit holders," the Dutch finance minister told reporters.
Only they didn't ask. They just took, without permission, with no warning, and amid secret discussions.
In Orwellian-tinged language, EU bureaucrats called it "an upfront one-off stability levy." Instead of using newspeak and euphemisms, how about we just call it what it really is: stealing.
Stealing: taking (the property of another or others) without permission or right, especially secretly or by force.By hook or by crook, desperate governments will grab anything within their reach when they want to. They are not constrained by the laws that apply to the average citizen, or any sort of ethical considerations. They are only limited by “what they can get away with.”
Here are some reactions from justifiably angry Cypriots:
"They call Sicily the island of the mafia. It's not Sicily, it's Cyprus. This is theft, pure and simple" said a pensioner.Digital cash and digital accounting entries on the books of financial institutions are perhaps the easiest form of wealth to confiscate. It can all be done with a few strokes on the keyboard. This is another reason why governments around the world are waging a war against physical cash and forcing us to use digital cash more and more.
"I'm extremely angry. I worked years and years to get it together and now I am losing it on the say-so of the Dutch and the Germans," said a British-Cypriot.
"This is like stealing, I feel rage," said a Nicosia artist. "I earned this money and now it is taken to cover for some mistakes that are not my fault."
Like most other instances of capital controls and blatant wealth confiscation, these measures came as a surprise, and in a way that would make it difficult for someone to protect themselves after the fact.
Banks are closed in Cyprus during the three-day holiday weekend. ATM machines are reportedly out of cash, and the government has made it nearly impossible to wire money out of the country.
Of course, if you have any exposure to a desperate government, the time to act is before they implement measures like this.
This incident in Cyprus is a natural reaction of a desperate government and is to be expected…and prepared for.
Readers of International Man who are familiar with how to internationalize and insulate themselves from political risk should not be surprised by such an event.
The fact is, capital controls and outright wealth-confiscation can happen in any country that is desperate enough. This most certainly includes the US and most countries in the West. Fortunately it is possible to limit or completely remove your exposure to this risk through internationalization.
It is imperative that you move at least some of your savings into something that is not easy for a desperate government to seize at the drop of a hat. And do so before it is too late.
Physical gold in your possession and immediate reach, as well as some in a safe foreign jurisdiction is one way. Foreign real estate and financial accounts in safe jurisdictions are other options.
I wouldn't take the word of the bureaucrats that this is only a "one-off" event, especially if I had savings in other desperate EU countries like Spain, Italy, Greece, or Portugal.
Sign-up here to join the International Man community for free, and get the IM Communiqué delivered to your inbox. If you do, you will have the most actionable and timely information you need to internationalize your savings, yourself, and your income.
Become internationalized and not fully dependent on any one government. Then you can sleep well at night knowing that you will not wake up to the same surprise as the people of Cyprus did last Saturday.
Cyprus bank raid pushes Europe into uncharted waters
Free Savings, Pension & Investment Report for all Expats. Request Now!
A man walks past anti-austerity graffiti in the
Cypriot capital of Nicosia at the weekend. The measures included in a
bailout package for Cyprus have shocked the country's citizens. Photo: AFP
Europe's debt crisis tsar has promised that an unprecedented raid on the bank accounts of Cypriots will not be repeated.
Euro-area finance ministers agreed to a tax on Cypriot bank deposits as officials unveiled a €10billion ($A12.57 billion) rescue plan for the country, the fifth since Europe's debt crisis hit in 2009.
In a move that has caused shock and dismay among its citizens, Cyprus will impose a levy of 6.75 per cent on deposits of less than €100,000 - the ceiling for European Union account insurance - and 9.9per cent above that.
Asked whether a future EU-mandated bank levy can be categorically ruled out, Olli Rehn, who is the European Union Economic and Monetary Commissioner, said that ''it can and there is no concrete case where it should be considered''.
''Market forces understand that the sheer size of the problem of the Cypriot banking sector and its troubles were so huge that we needed to take very substantial measures,'' he said.
''This kind of stability fee is clearly a much better choice from the point of view of financial stability and Cypriot citizens than a full-scale bail-in, which would have led to very chaotic consequences in the Cypriot economy.''
However, analysts said the move would increase pressure on the euro. Holger Schmieding, chief economist at Berenberg Bank, said the risk it could backfire was ''not zero'' and Europe was in ''unchartered territory again''.
The measures will raise €5.8 billion, Dutch Finance Minister Jeroen Dijsselbloem, who leads the group of euro-area ministers, told reporters after 10 hours of emergency talks in Brussels.
The euro region's bailout kitty and, possibly, the International Monetary Fund will look to make up the shortfall. A partial ''bail-in'' of junior bondholders is also possible.
''Further measures concern the increase of the withholding tax on capital income, a restructuring and recapitalisation of banks, an increase of the statutory corporate income tax rate and a bail-in of junior bondholders,'' European finance ministers said in a communique released after the talks.
The European Central Bank will use its existing facilities to make funds available to Cypriot banks as needed to counter potential bank runs. Depositors will receive bank equity as compensation.
Cypriot Finance Minister Michael Sarris said the plan was the ''least onerous'' of the options Cyprus faced to stay afloat.
''It's not a pleasant outcome, especially of course for the people involved,'' said Mr Sarris.
While the tax on deposits will hurt wealthy Russians with money in Cypriot banks, it will also sting ordinary citizens. Some ATMs in the country have run out of cash, Erotokritos Chlorakiotis, general manager of the Cooperative Central Bank, told state-run CYBC.
Funds to pay the levy were frozen in accounts immediately, ECB executive board member Joerg Asmussen said. The levy will be assessed before Cypriot banks reopen on March 19 after a March 18 national holiday. Mr Sarris said electronic transfers would also be limited until then.
''As it is a contribution to the financial stability of Cyprus, it seems just to ask a contribution of all deposit holders,'' Mr Dijsselbloem said, noting the country's financial industry was five times the size of its economy. The plan includes ''unique measures'' that address the ''exceptional nature'' of Cyprus and show ''inflexible commitment to financial stability and the integrity of the euro area''. The IMF will consider contributing money to the rescue, said IMF managing director Christine Lagarde, who travelled to Brussels for the talks. ''We believe that the proposal as outlined by Jeroen is actually sustainable,'' she said.
Agencies
On Sunday, Mr Anastasiades was poised to defend his decision to accept a rescue that includes the euro area's first move to penalise depositors when he addresses parliament before lawmakers vote on the legislation. With his Disy party holding 20 seats in the 56-seat legislature, he needs at least nine more votes to secure approval and avoid the financial collapse of the region's third-smallest economy.
''We faced decisions that had already been taken,'' Mr Anastasiades said.
He said the European Central Bank would stop providing liquidity to one of the country's banks on March 19, leading to its collapse, if his government did not accept the rescue package.
He had been given the choice of ''the catastrophic scenario of disorderly bankruptcy or the scenario of a painful but controlled management of the crisis''.
A man walks past anti-austerity graffiti in the
Cypriot capital of Nicosia at the weekend. The measures included in a
bailout package for Cyprus have shocked the country's citizens. Photo: AFPEuro-area finance ministers agreed to a tax on Cypriot bank deposits as officials unveiled a €10billion ($A12.57 billion) rescue plan for the country, the fifth since Europe's debt crisis hit in 2009.
In a move that has caused shock and dismay among its citizens, Cyprus will impose a levy of 6.75 per cent on deposits of less than €100,000 - the ceiling for European Union account insurance - and 9.9per cent above that.
Asked whether a future EU-mandated bank levy can be categorically ruled out, Olli Rehn, who is the European Union Economic and Monetary Commissioner, said that ''it can and there is no concrete case where it should be considered''.
Advertisement
Mr Rehn said he did not expect an adverse market reaction to
the precedent-setting tax on deposits both above and below the insured
limit of €100,000.''Market forces understand that the sheer size of the problem of the Cypriot banking sector and its troubles were so huge that we needed to take very substantial measures,'' he said.
''This kind of stability fee is clearly a much better choice from the point of view of financial stability and Cypriot citizens than a full-scale bail-in, which would have led to very chaotic consequences in the Cypriot economy.''
However, analysts said the move would increase pressure on the euro. Holger Schmieding, chief economist at Berenberg Bank, said the risk it could backfire was ''not zero'' and Europe was in ''unchartered territory again''.
The measures will raise €5.8 billion, Dutch Finance Minister Jeroen Dijsselbloem, who leads the group of euro-area ministers, told reporters after 10 hours of emergency talks in Brussels.
The euro region's bailout kitty and, possibly, the International Monetary Fund will look to make up the shortfall. A partial ''bail-in'' of junior bondholders is also possible.
''Further measures concern the increase of the withholding tax on capital income, a restructuring and recapitalisation of banks, an increase of the statutory corporate income tax rate and a bail-in of junior bondholders,'' European finance ministers said in a communique released after the talks.
The European Central Bank will use its existing facilities to make funds available to Cypriot banks as needed to counter potential bank runs. Depositors will receive bank equity as compensation.
Cypriot Finance Minister Michael Sarris said the plan was the ''least onerous'' of the options Cyprus faced to stay afloat.
''It's not a pleasant outcome, especially of course for the people involved,'' said Mr Sarris.
While the tax on deposits will hurt wealthy Russians with money in Cypriot banks, it will also sting ordinary citizens. Some ATMs in the country have run out of cash, Erotokritos Chlorakiotis, general manager of the Cooperative Central Bank, told state-run CYBC.
Funds to pay the levy were frozen in accounts immediately, ECB executive board member Joerg Asmussen said. The levy will be assessed before Cypriot banks reopen on March 19 after a March 18 national holiday. Mr Sarris said electronic transfers would also be limited until then.
''As it is a contribution to the financial stability of Cyprus, it seems just to ask a contribution of all deposit holders,'' Mr Dijsselbloem said, noting the country's financial industry was five times the size of its economy. The plan includes ''unique measures'' that address the ''exceptional nature'' of Cyprus and show ''inflexible commitment to financial stability and the integrity of the euro area''. The IMF will consider contributing money to the rescue, said IMF managing director Christine Lagarde, who travelled to Brussels for the talks. ''We believe that the proposal as outlined by Jeroen is actually sustainable,'' she said.
Agencies
Presidential backflip
Cyprus' President Nicos Anastasiades will try to persuade lawmakers to back a plan to impose losses on the island-nation's depositors less than a month after he won an election vowing to prevent that happening.On Sunday, Mr Anastasiades was poised to defend his decision to accept a rescue that includes the euro area's first move to penalise depositors when he addresses parliament before lawmakers vote on the legislation. With his Disy party holding 20 seats in the 56-seat legislature, he needs at least nine more votes to secure approval and avoid the financial collapse of the region's third-smallest economy.
''We faced decisions that had already been taken,'' Mr Anastasiades said.
He said the European Central Bank would stop providing liquidity to one of the country's banks on March 19, leading to its collapse, if his government did not accept the rescue package.
He had been given the choice of ''the catastrophic scenario of disorderly bankruptcy or the scenario of a painful but controlled management of the crisis''.
“Lehman 2.0″ Imminent: Global Financial Chaos starts NEXT WEEK!
And so it begins…. All Cyprus banks this weekend have frozen
electronic transfers while a bailout is brought in. There will be a
“bank holiday” on Monday and then on Tuesday, March 19th, 10% of every
bank depositors savings will be taken and transferred to the central
planners and central banksters.
http://www.telegraph.co.uk/finance/9934565/Cypriot-savers-hit-as-eurozone-agrees-10-billion-bail-out.html
Cyprus bailout: Man threatens bank with bulldozer
zerohedge @zerohedge
JPMorgan Asks “Has Europe Bazookaed Itself In The Foot”, Answers “Yes”
http://www.zerohedge.com/news/2013-03-17/jpmorgan-asks-has-europe-bazookaed-itself-foot-answers-yes
ANALYST: The Cyprus Deal Could Be The ‘Trigger’ We Were Waiting For In Europe
http://www.businessinsider.com/cyprus-deal-could-trigger-eurozone-shockwave-2013-3
Sebastian Valdivieso @S_Valdivieso
“Cyprus has declared a bank holiday on Monday to prevent such a run on the banks and banned electronic transfers.”
Mikaël Kerbourc’h @kerbourchmikael
The Botching of the Cyprus Bailout: Worse Than Lehman Brothers
http://www.forbes.com/sites/eamonnfingleton/2013/03/17/the-botching-of-the-cyprus-bailout-worse-than-lehman-brothers/
Dr Ausberto Torres @aussietorres
BOOM RT @InsideParadeplz: DIJSSELBLOEM DECLINES TO RULE OUT FURTHER DEPOSITOR HAIRCUTS IN OTHER EUROZONE COUNTRIES: GREECE, SPAIN OR ITALY.
Yup, just like this. . .
S&P Futures Plunge To 1-Week Lows; Gold Jumps To 3-Week Highs
Given FX markets are double-dipping now, it is little surprise that S&P 500 futures open down 16 points from the 1553.5 close on Friday – a one-week low. This is the biggest close-to-open gap down since May 2012. Treasury Futures just opened implying a 1.94% 10Y (-5bps) and 3.16% 30Y (-5bps). And despite the USD strength, spot gold just opened also up from $1591.95 to $1607. The arb against JPY carry is holding stocks for now… only another 8 hours until Europe opens… Over 38,000 contracts have traded in S&P 500 futures in the first 5 minutes ($2.9bn notional) – 30 times the average for a Sunday night… The initial dump was caught by a VWAP reverter but that is fading now… Japan’s NKY looks set to open down around 500 points or so given JPY’s strength.
…
http://www.telegraph.co.uk/finance/9934565/Cypriot-savers-hit-as-eurozone-agrees-10-billion-bail-out.html
Cyprus bailout: Man threatens bank with bulldozer
zerohedge @zerohedge
JPMorgan Asks “Has Europe Bazookaed Itself In The Foot”, Answers “Yes”
http://www.zerohedge.com/news/2013-03-17/jpmorgan-asks-has-europe-bazookaed-itself-foot-answers-yes
ANALYST: The Cyprus Deal Could Be The ‘Trigger’ We Were Waiting For In Europe
http://www.businessinsider.com/cyprus-deal-could-trigger-eurozone-shockwave-2013-3
Sebastian Valdivieso @S_Valdivieso
“Cyprus has declared a bank holiday on Monday to prevent such a run on the banks and banned electronic transfers.”
Mikaël Kerbourc’h @kerbourchmikael
The Botching of the Cyprus Bailout: Worse Than Lehman Brothers
http://www.forbes.com/sites/eamonnfingleton/2013/03/17/the-botching-of-the-cyprus-bailout-worse-than-lehman-brothers/
Dr Ausberto Torres @aussietorres
BOOM RT @InsideParadeplz: DIJSSELBLOEM DECLINES TO RULE OUT FURTHER DEPOSITOR HAIRCUTS IN OTHER EUROZONE COUNTRIES: GREECE, SPAIN OR ITALY.
Cyprus Depositor Tax: Genius Plan or the End of the Euro?
Every so often, a moment comes along when you learn something
important about how economies work. Thanks to the Euro area member
states, we’re about to get one of these moments. Next week, we’re going
to find out how people react when their bank deposits are at risk of
being confiscated.
http://www.forbes.com/sites/karlwhelan/2013/03/16/cyprus-depositor-tax-genius-plan-or-the-end-of-the-euro/
Tomorrow, Cyprus could vote to leave the euro. This is political dynamite – Telegraph
http://blogs.telegraph.co.uk/finance/matspersson/100023412/tomorrow-cyprus-could-vote-to-leave-the-euro-this-is-political-dynamite/
Joey @DreamBoy__
Economics Nobel Laureate+ #Cyprus econ advisor Pissarides warns economy would collapse within “2 or 3 days” if deposit tax failed to pass
Ian Gillespie @IanRGillespie
Cyprus delays vote on EU bank acc’t tax. Ironically, voting it down may now increase the risk of a bank run. (1/2)
http://www.cbc.ca/news/world/story/2013/03/17/cyprus-bank-deposits.html
SilverDoctors.com @SilverDoctors
#Cyprus Parliament doesn’t have votes for bailout, President warns of complete #collapse if #bankrescue not passed!
http://www.forbes.com/sites/karlwhelan/2013/03/16/cyprus-depositor-tax-genius-plan-or-the-end-of-the-euro/
Tomorrow, Cyprus could vote to leave the euro. This is political dynamite – Telegraph
http://blogs.telegraph.co.uk/finance/matspersson/100023412/tomorrow-cyprus-could-vote-to-leave-the-euro-this-is-political-dynamite/
Joey @DreamBoy__
Economics Nobel Laureate+ #Cyprus econ advisor Pissarides warns economy would collapse within “2 or 3 days” if deposit tax failed to pass
Ian Gillespie @IanRGillespie
Cyprus delays vote on EU bank acc’t tax. Ironically, voting it down may now increase the risk of a bank run. (1/2)
http://www.cbc.ca/news/world/story/2013/03/17/cyprus-bank-deposits.html
SilverDoctors.com @SilverDoctors
#Cyprus Parliament doesn’t have votes for bailout, President warns of complete #collapse if #bankrescue not passed!
Mark Cicero @1freetruth
REPORT: Germany Told Cyprus They Could Tax Their Depositors, Or Leave The Eurozone http://www.businessinsider.com/report-germany-told-cyprus-they-could-tax-their-depositors-or-leave-the-eurozone-2013-3#ixzz2NijouhAa #Truth #Freedom
REPORT: Germany Told Cyprus They Could Tax Their Depositors, Or Leave The Eurozone http://www.businessinsider.com/report-germany-told-cyprus-they-could-tax-their-depositors-or-leave-the-eurozone-2013-3#ixzz2NijouhAa #Truth #Freedom
zerohedge @zerohedge
Live Streaming Of Cyprus Mega TV
Live Streaming Of Cyprus Mega TV
Business Insider @businessinsider
CITI: Watch These 5 Currencies To See How The Market Is Reacting To Cyprus
What will be the market impact from the Cyprus bailout?
Citi FX guru Steven Englander explains what to watch in the currency space.
The developments in Cyprus will lead to EUR selling and USD, CHF, GBP, NOK and SEK buying (in that order). The issue is whether to believe that the Cyprus levy on depositors is one-off, but depositors and investors elsewhere could easily see this as another in a string of ‘one-offs’ and react badly. The risk-return to depositors in countries with weak banking systems may not favor taking the risk that Cypriot banking system was so unique that such a levy would never be considered elsewhere. The levy on deposits ostensibly covered by deposit insurance may also undermine confidence in weak banks.
The question is whether this becomes a full-blown crisis or a mini-crisis. Given the element of surprise, it is probably the case that euro zone policymakers will not have concrete measures prepared to convince depositors elsewhere that this will never happen again. So it seems likely in the first instance some resurgence of tail risk will re-appear and that there is a risk that we could see a downward spike in the euro and significant backing up of spreads.
Read more: http://www.businessinsider.com/citi-watch-these-5-currencies-to-see-how-the-market-is-reacting-to-cyprus-2013-3#ixzz2Nps5GaLZ
CITI: Watch These 5 Currencies To See How The Market Is Reacting To Cyprus
What will be the market impact from the Cyprus bailout?
Citi FX guru Steven Englander explains what to watch in the currency space.
The developments in Cyprus will lead to EUR selling and USD, CHF, GBP, NOK and SEK buying (in that order). The issue is whether to believe that the Cyprus levy on depositors is one-off, but depositors and investors elsewhere could easily see this as another in a string of ‘one-offs’ and react badly. The risk-return to depositors in countries with weak banking systems may not favor taking the risk that Cypriot banking system was so unique that such a levy would never be considered elsewhere. The levy on deposits ostensibly covered by deposit insurance may also undermine confidence in weak banks.
The question is whether this becomes a full-blown crisis or a mini-crisis. Given the element of surprise, it is probably the case that euro zone policymakers will not have concrete measures prepared to convince depositors elsewhere that this will never happen again. So it seems likely in the first instance some resurgence of tail risk will re-appear and that there is a risk that we could see a downward spike in the euro and significant backing up of spreads.
Read more: http://www.businessinsider.com/citi-watch-these-5-currencies-to-see-how-the-market-is-reacting-to-cyprus-2013-3#ixzz2Nps5GaLZ
S&P Futures Plunge To 1-Week Lows; Gold Jumps To 3-Week Highs
Given FX markets are double-dipping now, it is little surprise that S&P 500 futures open down 16 points from the 1553.5 close on Friday – a one-week low. This is the biggest close-to-open gap down since May 2012. Treasury Futures just opened implying a 1.94% 10Y (-5bps) and 3.16% 30Y (-5bps). And despite the USD strength, spot gold just opened also up from $1591.95 to $1607. The arb against JPY carry is holding stocks for now… only another 8 hours until Europe opens… Over 38,000 contracts have traded in S&P 500 futures in the first 5 minutes ($2.9bn notional) – 30 times the average for a Sunday night… The initial dump was caught by a VWAP reverter but that is fading now… Japan’s NKY looks set to open down around 500 points or so given JPY’s strength.
…
Cyprus Parliament Delays Bailout Vote, Bank Holiday Extended to Tues, President Warns Banks Will Collapse if Not Passed
In his interview with The Doc last week, Jim Willie stated that THE COLLAPSE IS ON OUR DOORSTEP! and made the case that the great financial reset will begin with a small trigger in Europe.
The Cypriot depositor haircut to bailout the Cypriot banking system is beginning to look like it could be just that trigger, as the situation has turned from bad to worse.
With the general public in an uproar, the ratification vote by the Cypriot Parliament on the depositor haircut/ daylight robbery has been delayed until 4pm local time Monday as the vote reportedly had lost sufficient support to pass! Ahead of today’s scheduled vote, the plan was 9 votes short in a 56 seat legislature!
In response, Cypriot President Nicos Anastasiades threatened that if the depositor haircut is not passed, the entire Cypriot banking system will collapse, and former Central Bank President Afxentis Afxentiou claimed that if the bill is not passed, Cyprus opens the road to chaos, and that Cyprus will turn into Libya!
As Bloomberg reports, the Cypriot depositor haircut plan is at least 9 votes short in a 56 seat legislature!
The problem is that even if enough arms can be twisted by 4pm Monday, the European markets open in 16 hours, with no official agreement in place regarding the Cypriot bailout, and the rest of the southern Eurozone’s population likely headed to their local bank to empty their account first thing Monday am.
*Update: The Cyprus Mail reports today that funds will be cut from depositors accounts prior to the reopening of banks on Tuesday, apparently regardless of the approval by the Cypriot Parliament?
The Cypriot depositor haircut to bailout the Cypriot banking system is beginning to look like it could be just that trigger, as the situation has turned from bad to worse.
With the general public in an uproar, the ratification vote by the Cypriot Parliament on the depositor haircut/ daylight robbery has been delayed until 4pm local time Monday as the vote reportedly had lost sufficient support to pass! Ahead of today’s scheduled vote, the plan was 9 votes short in a 56 seat legislature!
In response, Cypriot President Nicos Anastasiades threatened that if the depositor haircut is not passed, the entire Cypriot banking system will collapse, and former Central Bank President Afxentis Afxentiou claimed that if the bill is not passed, Cyprus opens the road to chaos, and that Cyprus will turn into Libya!
As Bloomberg reports, the Cypriot depositor haircut plan is at least 9 votes short in a 56 seat legislature!
With his Disy party holding 20 seats in the 56-seat legislature, he needs at least nine more votes to secure approval and avoid the financial collapse of the region’s third- smallest economy. If he doesn’t get backing for the plan, the banks may stay shut starting March 19, state-run Cyprus Broadcasting Corp. said. Tomorrow is a bank holiday in Cyprus.
“If tomorrow Cyprus’s Parliament rejects the bill, Cyprus opens the road to chaos,” said Afxentis Afxentiou, who was governor of the Central Bank of Cyprus from 1982 until 2002, said on CYBC. If the bill is rejected, “Cyprus will turn into Libya. Even with the pain, we need to follow a normal course, with hope we’ll see better days.”
The problem is that even if enough arms can be twisted by 4pm Monday, the European markets open in 16 hours, with no official agreement in place regarding the Cypriot bailout, and the rest of the southern Eurozone’s population likely headed to their local bank to empty their account first thing Monday am.
*Update: The Cyprus Mail reports today that funds will be cut from depositors accounts prior to the reopening of banks on Tuesday, apparently regardless of the approval by the Cypriot Parliament?
Cyprus government raids private checking and savings accounts as citizens panic
(NaturalNews) The day is coming when the U.S. government will claim it
"owns" a portion of all our bank accounts, and it will electronically
drain our accounts of money in a grand theft scheme designed to pay off
the banksters while decimating private savings.
Don't believe it? That day has already arrived in the European nation of Cyprus, where the government made a secret deal with the IMF to loot private bank accounts of up to 10% of current deposits. Banks went along with the theft, sealing off the funds from account holders. The government now plans to initiate millions of funds transfers as early as Tuesday, draining private accounts of the money the government now claims it owns.
"Restrictions have been imposed to stop people emptying their accounts or moving their money out of the country following the deal with other eurozone finance ministers, under which ordinary citizens' deposits will be directly raided for the first time," reports the Daily Mail.
It continues: "But financial experts said the move -- designed to stop Cyprus crashing out of the euro, potentially destroying the currency -- would send shock waves through the eurozone. If savers in other troubled nations fear their accounts might be next, they could withdraw their money and spark a catastrophic run on the banks."
Not surprisingly, bank customers freaked out across Cyprus and began lining up in front of ATMs to withdraw as much cash as possible, causing fears of bank runs.
This seizing of private funds held in bank accounts is being called a "bailout" by eurozone cleptocrats. This is the model of theft that we are going to see replicated all across the EU as the global debt collapse takes hold. When wealthy bankers and investment houses make bad decisions on derivatives debt, they will be "bailed out" by a combination of governments creating fiat currency and / or looting the bank accounts of private citizens.
See this video for more (story continues below):
The U.S. government is going to loot private bank accounts when the global debt collapse strikes, stealing everybody's money and setting off nationwide riots that will be held in check using armored assault vehicles and automatic weapons fire.
This is what the government sees coming: A global collapse of the 1+ quadrillion dollars in derivatives debt, causing a runaway cascade of wealth destruction and bank failures. No nation on the planet carries more debt than the U.S. government, making it more vulnerable to a debt collapse than any other nation.
Once a global debt collapse spreads to America, the U.S. government will be unable to sell new debt, meaning it will have no choice but to print currency and start looting private bank accounts just to stay afloat. The value of the currency will be rapidly eroded, causing dollars that people have saved in bank accounts to plummet in value by the day. When the government loots private bank accounts, all hell will break loose in the streets, and a national state of Martial Law will be declared to try to stop the violent riots that will be unleashed in every major city.
The U.S. government, like every other government in the world, is like a cancer tumor in that it would rather kill the host than face death itself. There is no limit to the actions the U.S. government will take in an attempt to keep itself afloat, including confiscating private bank accounts, confiscating gold, demanding all gun owners turn in their guns or be arrested, and even confiscating large sectors of the economy such as the technology sector. Don't be surprised if the U.S. government seizes Google, for example, and then begins to censor the search results of all websites critical of the government.
All those in society who produce wealth will be told to hand over their wealth to the government. The billions of rounds of ammunition (and armored assault vehicles ordered by DHS) are to be used by the government to make sure the populace complies. Drones will also be used to kill any who resist by firing missiles at their homes or businesses. This is why Obama continues to claim the right to use drone strikes on U.S. soil to target "enemies" of America (meaning enemies of his regime).
How can you protect yourself from this theft? Trade dollars for REAL things now, while you still can. Here's my list of real assets that are far more valuable than dollars, Euros or any other currency:
• Farm land with good topsoil and multiple water supplies (more valuable than gold!)
• Heirloom seeds
• Physical gold and silver (not held in a bank, obviously)
• Farm equipment such as tractors and farm implements
• Firearms and ammunition
• Home food production systems (aquaponics) - see these websites:
http://theaquaponicsource.com (has an awesome online course)
http://www.backyardaquaponics.com
Don't believe it? That day has already arrived in the European nation of Cyprus, where the government made a secret deal with the IMF to loot private bank accounts of up to 10% of current deposits. Banks went along with the theft, sealing off the funds from account holders. The government now plans to initiate millions of funds transfers as early as Tuesday, draining private accounts of the money the government now claims it owns.
"Restrictions have been imposed to stop people emptying their accounts or moving their money out of the country following the deal with other eurozone finance ministers, under which ordinary citizens' deposits will be directly raided for the first time," reports the Daily Mail.
It continues: "But financial experts said the move -- designed to stop Cyprus crashing out of the euro, potentially destroying the currency -- would send shock waves through the eurozone. If savers in other troubled nations fear their accounts might be next, they could withdraw their money and spark a catastrophic run on the banks."
Outright government theft of after-tax money
Just to be clear: even after you earn money by working your job and paying your taxes, any money you have in a bank account can be seized without notice as the government loots private savings to bail out wealthy bankers.Not surprisingly, bank customers freaked out across Cyprus and began lining up in front of ATMs to withdraw as much cash as possible, causing fears of bank runs.
This seizing of private funds held in bank accounts is being called a "bailout" by eurozone cleptocrats. This is the model of theft that we are going to see replicated all across the EU as the global debt collapse takes hold. When wealthy bankers and investment houses make bad decisions on derivatives debt, they will be "bailed out" by a combination of governments creating fiat currency and / or looting the bank accounts of private citizens.
See this video for more (story continues below):
Now it's clear why DHS needs 1.6 billion bullets and armored assault vehicles
If you've been wondering why DHS thinks it needs 1.6 billion rounds of ammunition, 7,000+ full-auto assault rifles, and 2,700+ armored assault vehicles, all for use on the streets of America, the answer is now clear:The U.S. government is going to loot private bank accounts when the global debt collapse strikes, stealing everybody's money and setting off nationwide riots that will be held in check using armored assault vehicles and automatic weapons fire.
This is what the government sees coming: A global collapse of the 1+ quadrillion dollars in derivatives debt, causing a runaway cascade of wealth destruction and bank failures. No nation on the planet carries more debt than the U.S. government, making it more vulnerable to a debt collapse than any other nation.
Once a global debt collapse spreads to America, the U.S. government will be unable to sell new debt, meaning it will have no choice but to print currency and start looting private bank accounts just to stay afloat. The value of the currency will be rapidly eroded, causing dollars that people have saved in bank accounts to plummet in value by the day. When the government loots private bank accounts, all hell will break loose in the streets, and a national state of Martial Law will be declared to try to stop the violent riots that will be unleashed in every major city.
The U.S. government, like every other government in the world, is like a cancer tumor in that it would rather kill the host than face death itself. There is no limit to the actions the U.S. government will take in an attempt to keep itself afloat, including confiscating private bank accounts, confiscating gold, demanding all gun owners turn in their guns or be arrested, and even confiscating large sectors of the economy such as the technology sector. Don't be surprised if the U.S. government seizes Google, for example, and then begins to censor the search results of all websites critical of the government.
All those in society who produce wealth will be told to hand over their wealth to the government. The billions of rounds of ammunition (and armored assault vehicles ordered by DHS) are to be used by the government to make sure the populace complies. Drones will also be used to kill any who resist by firing missiles at their homes or businesses. This is why Obama continues to claim the right to use drone strikes on U.S. soil to target "enemies" of America (meaning enemies of his regime).
How to protect yourself from government theft
As Cyprus clearly demonstrates, we are now entering the era of runaway government theft of private bank accounts. This is a warning sign of deep desperation, and it's a sign of things to come across the globe. The global debt pyramid is a fictional construct built on a house of cards, and it's going to come crashing down in a violent, desperate implosion that impacts every nation on the planet.How can you protect yourself from this theft? Trade dollars for REAL things now, while you still can. Here's my list of real assets that are far more valuable than dollars, Euros or any other currency:
• Farm land with good topsoil and multiple water supplies (more valuable than gold!)
• Heirloom seeds
• Physical gold and silver (not held in a bank, obviously)
• Farm equipment such as tractors and farm implements
• Firearms and ammunition
• Home food production systems (aquaponics) - see these websites:
http://theaquaponicsource.com (has an awesome online course)
http://www.backyardaquaponics.com
Drunk With Debt - St. Patrick's Day Special
Drinking our way through $17 trillion.
As Seamus eagerly displays, years of overspending have left us drunk with debt. The US gross debt has reached $14 trillion — the size of the US economy. This has only happened once before in American history: World War II.
Produced by Bankrupting America
[Editor's Note: In the 2 years since this video was produced, the national debt has gone from $14 trillion to $16.8 trillion.]
The U.S. Debt Machine rolls on, borrowing $3 million per minute.
'We're Looking At $700 Billion Just To Pay Interest On The Debt!'
Tomorrow, Cyprus could vote to leave the euro. This is political dynamite
There are two ways to look at the hugely controversial bailout agreed for Cyprus in the early hours of Saturday morning, in which the small island nation – accounting for only 0.2 per cent of eurozone GDP but whose troubles will have an impact far beyond its size (including on some 25,000 Brits in Cyprus) – received a €10bn rescue package in return for a series of unusually harsh conditions. In a shock to everyone, including admittedly Open Europe, the deal included a “tax” on depositors: 6.75 per cent for anyone with less than €100,000 in a Cypriot bank account, 9.9 per cent for anyone with more than that.
The first way to look at the deal: lessons have been learned. Unlike in the case of Greece, Cypriot debt will come down to around 100 per cent of its GDP, following this deal. While not great, it’s not the type of maddening cocktail of continued austerity and increasing debt that Greece has been forced to swallow (the country’s debt is at 160 per cent of GDP this year). At least the combination of the deposit tax and privatisations in Cyprus will give the country some breathing space. And the alternative, letting Cyprus sink and leaving the euro, showing the world that the single currency is no longer "irreversible", would have been far worse.
The second way: All bailouts are unfair – the people who screwed up almost never pay – but this is in a league of its own. Seventeen Eurozone finance ministers locked themselves in a room and decided that every Cypriot depositor – whether super-wealthy or dirt-poor – will, out of the blue, see part of their hard-earned money seized. Remember, Cypriot President Nicos Anastasiades explicitly promised in his election campaign, only a few weeks ago, that depositors were safe. The Cypriot electorate now faces losses on deposits as well as years of austerity (under the bailout loan). What’s worse, deposits under €100,000 are supposed to be protected by EU law, not raided by EU leaders. And Cypriot banks have frozen close to €5.8bn, i.e. imposed capital controls which is meant to be illegal under EU single market rules. This is political dynamite.
Regardless of one’s interpretation, in the entrenched eurozone North-South stand-off, this clearly represents a victory for the German government and German taxpayers over their southern counterparts, as it was Berlin that drew a line in the sand. In many ways, Cypriot depositors fell victim to the forthcoming German elections in September.
What happens next? Well, the Cypriot parliament will vote on the deal tomorrow (conveniently, a bank holiday in Cyprus). This will be a nail-biter. The parties which supported Cypriot president Nicos Anastasiades only hold 28 out of 56 MP, so not a majority. Yesterday, Anastasiades issued a stark warning: accept the bailout deal or face “a complete collapse with a possible exit from the euro”. Given the huge stakes, I reckon that MPs will approve the deal, but it could be close – current voting arithmetic suggests 30 in favour and 26 against, but this is incredibly fluid. Even if the parliament does reject the package, there could still be room for further negotiation.
The bailout format is therefore a gamble on several levels. Most importantly, massive questions still linger over the precedent this sets. If Cypriot depositors are forced to pay today, why not Spanish ones tomorrow? People queuing up in massive numbers outside ATM machines is always an incredibly scary sight wherever you are and given the anger in Cyprus, we just don’t know how people will react when banks open again (unclear when, the Cypriot government may declare both Tuesday and Wednesday bank holidays as well). But fears of deposit-led contagion to other parts of the eurozone should definitely not be be overstated. EU leaders have gone out of their way to say that the depositor tax won’t be repeated in other countries. And viewed with a depositor's eyes from Barcelona or Bilbao, Spain may have very little in common with Cyprus.
The eurozone also now has a contagion-fighting instrument in the ECB’s bond-buying programme (the OMT), which can be used should panic spread to Spain and Italy. There’s a problem here of course. If the Cyprus deal represents a more assertive German approach, it will be far more difficult to actually trigger the OMT as that, in turn, depends on whether the debtor country will agree to be put on a bailout programme, with tough conditions (a prerequisite for it to tap the OMT). Cyprus is small enough to boss around, but Italy or Spain?
UK troops hit by Cyprus bailout 'will be compensated'
George Osborne has said that troops and civil servants serving in Cyprus whose savings are threatened by the island's £8.7bn bailout will be compensated.
The Chancellor described the Cypriot bail-out as an "extraordinary"
situation, but he pledged that British armed forces personnel and Government
staff serving on the island will be protected from the bank levy.
"It’s a difficult situation for people who live in Cyprus," Mr
Osborne told the BBC's Andrew Marr Show. "For people serving in our
military and our government out in Cyprus, we are going to compensate anyone
affected by this bank tax - people who are doing their duty for our country
in Cyprus will be protected from this Cypriot bank tax."
He added that Britain was "not part of the bail-out" because David
Cameron "got us out of these euro bail-outs" when he became prime
minister and he added that Cyprus is an example of "what happens if you
don't show the world you can pay your way".
"That’s why in Britain we’ve got to retain the confidence of world
markets," said the Chancellor.
William Hague, the foreign secretary, later echoed the Chancellor's pledge.
Speaking on Sky, he said that the Government was currently working on
details of the compensation.
Thousands of British savers, including armed forces personnel, are to be hit by a eurozone tax on Cypriot banks after the island’s £8.7bn bail-out.
Approximately €2bn (£1.7bn) of British deposits held in Cyprus will be subject to a levy of up to 10pc.
British-born Cypriots and their families, some of the UK’s 3,500 service personnel on the island and holiday home owners with savings locally are likely to be affected. The tax will raise €5.8bn to refinance the country’s ailing banks, in addition to the eurozone funds. The Government is considering reimbursing some of those affected.
In a departure from previous eurozone bail-outs – the Mediterranean country is the fifth to have turned to the eurozone for financial aid – savers are being asked to make sacrifices in a move which critics say sets dangerous precedents.
As well as the levy on savers, the Cypriot government has also agreed to
increase its corporation tax rate by 2.5 percentage points to 12.5pc to
boost revenues.
Further measures include bank restructuring, a “bail-in” of junior bondholders (where some of their debt will be turned into less valuable equity) and the increase of the taxes on capital income.
The deal means that savers will be forced to sacrifice up to 10pc of their deposits.
After a bank holiday in the country on Monday, the levy on bank deposits will come into force on Tuesday. The emergency levy will be 9.9pc for deposits over €100,000, and 6.75pc for lower sums. Depositors will receive bank equity as compensation.
Government sources on Saturday night stressed that funds in the London branches of Bank of Cyprus UK and Laiki Bank would not be affected. The value of those funds is not known, however. Treasury officials said that “deposits in UK subsidiaries and branches [of Cypriot banks] aren’t affected” by the measure.
Thousands of British savers, including armed forces personnel, are to be hit by a eurozone tax on Cypriot banks after the island’s £8.7bn bail-out.
Approximately €2bn (£1.7bn) of British deposits held in Cyprus will be subject to a levy of up to 10pc.
British-born Cypriots and their families, some of the UK’s 3,500 service personnel on the island and holiday home owners with savings locally are likely to be affected. The tax will raise €5.8bn to refinance the country’s ailing banks, in addition to the eurozone funds. The Government is considering reimbursing some of those affected.
In a departure from previous eurozone bail-outs – the Mediterranean country is the fifth to have turned to the eurozone for financial aid – savers are being asked to make sacrifices in a move which critics say sets dangerous precedents.
Further measures include bank restructuring, a “bail-in” of junior bondholders (where some of their debt will be turned into less valuable equity) and the increase of the taxes on capital income.
The deal means that savers will be forced to sacrifice up to 10pc of their deposits.
After a bank holiday in the country on Monday, the levy on bank deposits will come into force on Tuesday. The emergency levy will be 9.9pc for deposits over €100,000, and 6.75pc for lower sums. Depositors will receive bank equity as compensation.
Government sources on Saturday night stressed that funds in the London branches of Bank of Cyprus UK and Laiki Bank would not be affected. The value of those funds is not known, however. Treasury officials said that “deposits in UK subsidiaries and branches [of Cypriot banks] aren’t affected” by the measure.
+30.5B: Federal Spending Up, Not Down, in First 5 Months of FY13
CNS News – by Terence P. Jeffrey(CNSNews.com) – Federal spending was up $30.5 billion in the first five months of fiscal 2013 compared to the first five months of fiscal 2012, according to newly released data from the U.S. Treasury.
The federal fiscal year begins on Oct. 1 and runs through Sept. 30. In the first five months of fiscal 2012 (October through February), according to the Monthly Treasury Statement, total federal spending was approximately $1,473,999,000,000.00. In the first five months of fiscal 2013, total federal spending was $1,504,547,000,000.00.
Thus, federal spending was $30,548,000,000.00 more in the first five months of fiscal 2013 than it was during the first five months of fiscal 2012.
The federal government is also spending at a much faster pace this year than it did before President Barack Obama took office.
In the first five months of fiscal 2008 (the last full fiscal year before Obama took office), the federal government spent $1,230,412,000,000.00. That is $274,315,000,000.00 less than the $1,504,547,000,000.00 that the federal government spent in the first five months of this fiscal year.
So far this fiscal year, the federal government is spending an average of about $300,909,400,000.00 per month. If the government maintained that average pace for all 12 months of the fiscal year, it would spend a total of $3,610,912,800,000.00.
Through all of fiscal 2008, before Obama took office, the federal government spent a total 2,978,440,000,000.00. Adjusted for inflation, that equals $3,211,717,910,000.00 in 2013 dollars. So, were the government to continue on its pace to spend $3,610,912,800,000.00 this year, then real federal spending in fiscal 2013 would be $399,194,890,000.00 more than it was in the last full fiscal year before Obama became president.
Congress would need to cut $399 billion this year to bring inflation-adjusted federal spending back to the level it was before Obama.
According to the CBO, the sequester that has now taken effect will cut only $44 billion from the money that was expected to be spent through the remainder of this fiscal year.
http://cnsnews.com/news/article/305b-federal-spending-not-down-first-5-months-fy13
Cyprus is the canary in the mineshaft, economic collapse ahead
Fiat currencies last for about 40 years; the fiat dollar has so far lasted 41 years. Far too much currency has been loaned into existence, it can never be paid back, we passed the tipping point many years ago.
REPORT: Germany Told Cyprus They Could Tax Their Depositors, Or Leave The Eurozone
The drama out of Cyprus Saturday continues to get more interesting.
The country has been ailing for quite some time, and everybody knew that a bailout was coming.
But the big surprise is that depositors in banks will be subject to an instant one-off tax to raise nearly 6 billion euros.
The background is that because Cyprus has an enormous banking system -— and houses a lot of offshore Russian money — there was not much political appetite to bail it out, even though the amount of cash was minimal.
In fact it seems, Germany was comfortable letting Cyprus go completely.
Faisal Islam — who is the crack economics reporter at U.K. network C4 — tweets that Germany basically gave a quid-pro-quo. Take the deal, or leave the Eurozone.
The country has been ailing for quite some time, and everybody knew that a bailout was coming.
But the big surprise is that depositors in banks will be subject to an instant one-off tax to raise nearly 6 billion euros.
The background is that because Cyprus has an enormous banking system -— and houses a lot of offshore Russian money — there was not much political appetite to bail it out, even though the amount of cash was minimal.
In fact it seems, Germany was comfortable letting Cyprus go completely.
Faisal Islam — who is the crack economics reporter at U.K. network C4 — tweets that Germany basically gave a quid-pro-quo. Take the deal, or leave the Eurozone.
How London’s gold and silver prices are “fixed”
Source: Reuters
London’s gold and silver markets face the possibility of a probe alongside other benchmarks into price setting, putting a century-old practice under the spotlight after the Libor rigging scandal that exposed widespread interest rate manipulation by banks.
The U.S. Commodity Futures Trading Commission has engaged in “a couple” of conversations about whether the daily setting of gold and silver prices in London is open to manipulation, Commissioner Scott O’Malia said on Thursday, although he said the situation is “fairly immature in its development.
The Wall Street Journal, citing unnamed sources, reported on Wednesday that the CFTC was examining various aspects of gold and silver price-setting, including whether it is sufficiently transparent.
“What was stated in that story was more than I think we’re doing,” O’Malia told reporters at the annual Futures Industry Association conference in Florida on Thursday.
“I think we’ve had a couple of conversations. We’re looking at energy, indexes, prices, how they’re set. We’ll look at all of the range of index-setting,” O’Malia said.
The CFTC declined to provide an official comment, while the chairs of the London Gold Fixing Company and London Silver Fixing Company were not available for comment.
Another CFTC Commissioner Bart Chilton, known as an outspoken proponent of regulation to protect investors and consumers, declined to specifically address the report, saying: “Given the clubby manipulation efforts we saw in Libor benchmarks, I assume other benchmarks – many other benchmarks – are legit areas of inquiry.”
The Financial Services Authority (FSA) also declined to comment on whether it was looking into gold and silver price setting, but said on Thursday it is feeding into a wider review of price benchmarks run by the International Organisation of Securities Commissions (IOSCO) – a global umbrella group for markets regulators.
IOSCO is set to publish a report in May with principles on how to compile important benchmarks to avoid rigging.
The setting, or “fix”, of the gold price in London dates back to 1919, originally involving NM Rothschild & Sons, Mocatta & Goldsmid, Samuel Montagu & Co, Pixley & Abell and Sharps & Wilkins. Silver price setting started in 1897.
Currently, gold fixing happens twice a day by teleconference with five banks: Bank of Nova Scotia-ScotiaMocatta (BNS.TO), Barclays Bank Plc (BARC.L), Deutsche Bank AG (DBKGn.DE), HSBC Bank USA, NA and Société Générale (SOGN.PA). The fixings are used to determine prices globally.
Chairmanship of the Gold Fixing rotates annually among the member banks.
At the start of each gold price-fixing, the chairman announces an opening price to the other four members who relay that to their customers, and based on orders received from them, instruct their representatives to declare themselves as buyers or sellers at that price.
The gold price is adjusted up and down until demand and supply is matched at which point the price is declared “Fixed”.
The fixings are used to determine spot prices for the billions of dollars of the two precious metals traded each day.
Buyers and sellers can get insight on price changes and the level of interest during the fixing process. They can cancel, increase or decrease their interest based on that information.
Gold and silver price setting has long been the subject of debate, and the CFTC looked at complaints about the silver market in 2008.
But most believe that the process is transparent.
“The fix is open, consequential, transparent and has stood the test of time. It’s not open to manipulation in the same way as Libor,” said Ross Norman, chief executive of bullion broker Sharps Pixley.
Cyprus Bank Levy Vote Delayed By Parliament Until Monday, As Nation's Bailout Hangs In The Balance
NICOSIA, Cyprus -- Cyprus' president said Sunday that he is trying to
amend a key provision of an unpopular eurozone bailout plan that would
tax deposits in the country's banks to reduce its effect on small
savers.
But in a nationally televised speech, President Nicos Anastasiades also urged lawmakers to approve the tax in a vote Monday, saying it is essential to save the country from bankruptcy.
About 25 lawmakers from the communist-rooted AKEL party, the socialist EDEK and the Greens said they won't vote for the tax in the 56-seat Cypriot parliament amid deep resentment over a move some called disastrous. If Parliament rejects the tax, that would put the entire aid package in jeopardy.
The vote was initially set for Sunday but was postponed until Monday – a national holiday in Cyprus. On Saturday frightened savers rushed to automated teller machines to withdraw as much of their cash as they could. Cypriot officials have expressed fears of a fully-fledged bank run once lenders reopen their doors on Tuesday.
The announcement of the vote postponement set off an immediate scramble among top European financial officials. One lawmaker told The Associated Press that European Central Bank was pressuring Cypriot authorities to hold the vote without delay.
"I completely share the unpleasant sentiment that this difficult and onerous decision has caused," Anastasiades said. "That's why I continue to give battle so that the decisions of the eurozone are amended in the next hours to limit the effect on small depositors."
In exchange for (EURO)10 billion ($13 billion) in rescue money, creditors would impose a one-time tax of 6.75 percent on all bank deposits under (EURO)100,000 ($131,000) and 9.9 percent over that amount.
A senior government official said it wants to reduce the tax on bank deposits under (EURO)100,000, with a corresponding increase in the tax on deposits over that amount. The official spoke on condition of anonymity because of the sensitivity of the talks.
The deposit tax is part of a bailout agreement reached early Saturday after talks by finance ministers from euro countries and representatives of the International Monetary Fund and the European Central Bank.
The
Cypriot bailout follows those for Greece, Portugal, Ireland and the
Spanish banking sector, and it is the first one that dips into people's
savings to finance a bailout. Analysts worry the move could roil
international markets and jeopardize Europe's fragile economies.
Officials in Spain and Italy tried over the weekend to reassure their citizens by saying the situation in Cyprus is unique, and that bank deposits in their countries will remain safe.
In Cyprus, the levy – which also would hit wealthy Russian depositors who have put vast sums into Cyprus's banks in recent years – is expected to raise (EURO)5.8 billion to recapitalize the nation's banks and service the country's debt.
Cypriot banks got into trouble after losing some (EURO)4.5 billion on their Greek government bond holdings after eurozone leaders decided to write down Greece's debt last year.
Anastasiades didn't provide any specifics on what he would do to try to limit the pain on small depositors, but he explained why he decided to consent to the taxes. Anastasiades, who only assumed the Cypriot presidency on March 1st, had vehemently rejected any idea of going after deposits to help pay for a bailout during the campaign and after his election.
"The solution that we have reached is certainly not the one we wanted, but it is the least painful under the circumstances because above all it leaves the management of our economy in our own hands," Anastasiades said Sunday.
He said the tax would only be as much as the interest collected on deposits over two years and stressed that it would only happen once because it would ensure the bailout wouldn't push the country's debt to unsustainable levels.
Anastasiades said savers would be compensated with bank shares. Moreover, all those depositors who opt to keep their money in Cypriot banks for at least two years would receive government bonds with a value equal to their losses. The bonds will be backed up by future revenue generated from the country's newfound offshore gas deposits.
He said pension and provident funds will remain untouched, and there won't be any need for further salary and pension cuts, or an earlier demand by creditors for a financial transaction tax, which would have damaged Cyprus' financial services-driven economy.
Cypriot lawmakers have already approved a raft of cuts to government worker salaries and pensions as well as tax increases under a preliminary bailout deal.
The Cypriot president said if he hadn't accepted the tax on bank deposits, the European Central Bank would have stopped providing emergency funds to the country's top two lenders which would have led to the collapse of the banking system, the bankruptcy of thousands of small businesses, massive job losses, and ultimately the country's exit from the euro.
But in a nationally televised speech, President Nicos Anastasiades also urged lawmakers to approve the tax in a vote Monday, saying it is essential to save the country from bankruptcy.
About 25 lawmakers from the communist-rooted AKEL party, the socialist EDEK and the Greens said they won't vote for the tax in the 56-seat Cypriot parliament amid deep resentment over a move some called disastrous. If Parliament rejects the tax, that would put the entire aid package in jeopardy.
The vote was initially set for Sunday but was postponed until Monday – a national holiday in Cyprus. On Saturday frightened savers rushed to automated teller machines to withdraw as much of their cash as they could. Cypriot officials have expressed fears of a fully-fledged bank run once lenders reopen their doors on Tuesday.
The announcement of the vote postponement set off an immediate scramble among top European financial officials. One lawmaker told The Associated Press that European Central Bank was pressuring Cypriot authorities to hold the vote without delay.
"I completely share the unpleasant sentiment that this difficult and onerous decision has caused," Anastasiades said. "That's why I continue to give battle so that the decisions of the eurozone are amended in the next hours to limit the effect on small depositors."
In exchange for (EURO)10 billion ($13 billion) in rescue money, creditors would impose a one-time tax of 6.75 percent on all bank deposits under (EURO)100,000 ($131,000) and 9.9 percent over that amount.
A senior government official said it wants to reduce the tax on bank deposits under (EURO)100,000, with a corresponding increase in the tax on deposits over that amount. The official spoke on condition of anonymity because of the sensitivity of the talks.
The deposit tax is part of a bailout agreement reached early Saturday after talks by finance ministers from euro countries and representatives of the International Monetary Fund and the European Central Bank.
Officials in Spain and Italy tried over the weekend to reassure their citizens by saying the situation in Cyprus is unique, and that bank deposits in their countries will remain safe.
In Cyprus, the levy – which also would hit wealthy Russian depositors who have put vast sums into Cyprus's banks in recent years – is expected to raise (EURO)5.8 billion to recapitalize the nation's banks and service the country's debt.
Cypriot banks got into trouble after losing some (EURO)4.5 billion on their Greek government bond holdings after eurozone leaders decided to write down Greece's debt last year.
Anastasiades didn't provide any specifics on what he would do to try to limit the pain on small depositors, but he explained why he decided to consent to the taxes. Anastasiades, who only assumed the Cypriot presidency on March 1st, had vehemently rejected any idea of going after deposits to help pay for a bailout during the campaign and after his election.
"The solution that we have reached is certainly not the one we wanted, but it is the least painful under the circumstances because above all it leaves the management of our economy in our own hands," Anastasiades said Sunday.
He said the tax would only be as much as the interest collected on deposits over two years and stressed that it would only happen once because it would ensure the bailout wouldn't push the country's debt to unsustainable levels.
Anastasiades said savers would be compensated with bank shares. Moreover, all those depositors who opt to keep their money in Cypriot banks for at least two years would receive government bonds with a value equal to their losses. The bonds will be backed up by future revenue generated from the country's newfound offshore gas deposits.
He said pension and provident funds will remain untouched, and there won't be any need for further salary and pension cuts, or an earlier demand by creditors for a financial transaction tax, which would have damaged Cyprus' financial services-driven economy.
Cypriot lawmakers have already approved a raft of cuts to government worker salaries and pensions as well as tax increases under a preliminary bailout deal.
The Cypriot president said if he hadn't accepted the tax on bank deposits, the European Central Bank would have stopped providing emergency funds to the country's top two lenders which would have led to the collapse of the banking system, the bankruptcy of thousands of small businesses, massive job losses, and ultimately the country's exit from the euro.
Television: The Image of Sin (Full Version)
What are the implications of a device that was created for the sole
purpose of entertainment, but is now used to target us with a constant
stream of ads, political brainwashing, and conformist messages? Many
arbitrarily use this device thinking there is not a vast physiological
and psychological effect. This documentary exposes how children and
adults are manipulated by TV programming.
Electricity As Currency? 10 Reasons It Could Work
 |
| Energy-backed currency concept Source |
Remember the good old days when gasoline only cost $1.50/gallon way back in the ancient times of 2000? Why does it cost more than double that today ($3.71)? A gallon of gas is still a gallon of gas, so it seems obvious that the dollar has lost value.
This rapid devaluation of the U.S. dollar makes it an unstable medium of exchange and certainly not a good store of value -- two aspects considered to be the main functions of money. This has led many to examine the flaws of the current monetary system and search for possible alternatives.
Some have suggested that returning to the Gold Standard (pegging the dollar to gold) will help control the fraudulent expansion of the money supply and protect the value of the currency. Others say eliminating the interest attached to each dollar created will get rid of scarcity and provide abundance. Each of these ideas has merit since they correct some of what's broken, yet they both also have flaws which make them difficult to fully support.
One interesting alternative that has been proposed is using an energy-backed currency. The idea is not new. Thomas Edison envisioned an "energy dollar" after seeing the value of electricity, and Henry Ford also conceptualized backing a currency by a "unit of energy" instead of gold. Motivated by the failed monetary system during the Great Depression, Ford even planned to support the idea with his own electric dams. Of course the central bankers scolded Ford's idea because it threatened their schemes.
In more recent times the idea of using electricity as a currency has gained some traction. An online ebook Energy Backed Money was published in 2009 supporting the concept of backing the dollar with electricity. Kilowatt Cards were introduced as gift cards for electric power meant to be a transferable means of currency. And former NASA scientist, Michael Rivero, proposed the Lectro, a universal electricity based currency whose supply is controlled by production and use of electric power.
Currently, Federal Reserve Notes (dollars) are not backed by anything valuable and their value is determined primarily by how much supply is in circulation. The supply of money under our current system is lent into existence as fast or as slow as the bankers or the government determines, leaving a lot of room for manipulation.
The only way to solve the inefficiencies of the current system is to use a currency that has real value, whose supply is tied to an accurate economic indicator, and doesn't need interest attached just for the sake of creating it. Electricity has measurable value in our society and since everything in our modern world runs on power, it may be the most accurate gauge of economic activity we have.
An electricity-backed currency would not be nearly as complicated as our fractional reserve system. It could work something like this: electric producers could issue certificates (money) as kilowatts are produced and they would be removed from circulation once the electric bill is paid (redeeming their receipts), thus always maintaining a consistent and stable supply.
Here are 10 reasons for an electricity based currency:
1. It Has Real Value: Electricity has recognizable value for every person on Earth, as opposed to gold or silver which are just pretty metals with some minor industrial uses.
2. Easily Measurable Units: A kilowatt-hour (kWh) is an absolute unit that can be measured easily and is impossible to counterfeit. The average cost of electricity in the United States has remained relatively stable (mainly due to regulations) over the last few years at around $0.13 per kilowatt hour. But we must stop thinking in terms of measuring things in dollars for this concept to become clear. This currency would represent a kWh, not a dollar amount.
3. Universal Flexibility: An electric-backed currency can work just as well as a local competing currency or as a global medium of exchange. Since a kWh of power has the same value all over the world, a kWh certificate issued in Hawaii could theoretically be redeemed anywhere.
4. Supply Can't Be Manipulated: The electric money supply would naturally be tied to population growth and economic productivity because electricity is an indicator of those measures. Money (kWh notes) would be created when new electricity is produced and eliminated from the economy when electric bills are paid, maintaining a stable balance.
5. Cannot Be Monopolized: Central banking monopolies are at the heart of many economic problems around the world where entire nations are held hostage by these singular entities. Even though electricity has a universal global value, it would be impossible to monopolize the production of kilowatts.
6. Decentralized: Literally, anyone can produce electricity if they choose to do so. Although larger organizations may be necessary to handle the issuance or certification of kWh notes, independent energy producers would compete to produce electricity as efficiently as possible.
7. Spurs Innovation: The incentive to create electricity would spur incredible innovation in technology. Rivero, of the Lectro, suggests perhaps more valuable certificates could be issued for electricity derived from clean technology to incentivize its expansion. And if by some chance a source of "free energy" is discovered - fantastic - it could still be measured and used to control the supply of money.
8. Spurs Conservation: When electric power literally equals money, everyone will immediately become more conscious of their energy use. This alone would have a tremendous benefit on the environment.
9. Transportable: Pure gold and silver (commodity money) are not practical physical currencies because large quantities are not easily carried in our pockets. kWh notes would be a paper form of "receipt" or "representative" money where the note can be redeemed for something real and measurable. Fully-backed receipt money is historically viewed as the only form of honest paper money.
10. Creates wealth instead of poverty during the transition from human labor to machine labor. As we move towards more automation, we become more reliant on electricity and less on human labor. Rivero postulates "At present, human labor precedes all capital, payable in a monetary system that pays primarily for human labor. In switching to a monetary system that pays for machine based power production, we evolve towards a society where machines become the primary creators of capital, and all humans shift towards the demand side of the economy. Instead of creating poverty, the push towards automation creates more wealth."
Does a currency backed by kWh's of electricity seem viable enough to be used as a possible alternative to our broken monetary system? Tell us what you think in the comments.
Sources:
http://www.activistpost.com/2011/08/electricity-as-universal-basis-for-new.html
http://kilowattcards.com/template/index.cfm
http://www.fredericklembeck.com/id31.html
http://www.energybackedmoney.com/chapter5.html
http://whatreallyhappened.com/WRHARTICLES/LECTRO/lectro.php
Cyprus Lining Up At ATM To Withdraw Cash Before Stunning Tax On Deposit
Over the last few years political and financial leaders in Europe and the United States have implemented policies, regulations and bailouts costing global taxpayers trillions of dollars with the promise that these measures would lead to economic growth and recovery.
What happened in Europe today is yet further proof that nothing they’ve done has fixed the underlying fundamental issues surrounding the events that led to the crash of 2008.
For those who don’t believe the government is prepared to take extreme measures that may include the seizing of retirement accounts, cash savings or even gold, look no further than Cyprus, the latest recipient of bank bailouts.
As of right now, citizens of Cyprus are scrambling to withdraw funds from their bank accounts after the EU, with agreement from the Cypriot government, announced they will decimate funds held in personal bank accounts to the tune of up to 10% of existing deposits.
You read that right.
The European Union has made the determination that the people of Cyprus are now responsible for the hundreds of billions of dollars in bad bets made by their government and bank financiers, and they are moving to confiscate money directly from the bank accounts of every citizen in the country.
Restrictions have been imposed to stop people emptying their accounts or moving their money out the country after the Cypriot government announced that up to ten per cent of deposits will be seized and used to bailout the island’s crisis-hit banking system.
The deal with other eurozone finance ministers is the first time that ordinary citizens’ deposits have been directly raided in this way.
…
One furious expat said: ‘This is plain theft. I’d love to hear someone explain to me why it isn’t.’
…
Under the deal, all bank deposits over €100,000 will be hit with a levy of 9.9 per cent. Those with smaller savings will pay 6.75 per cent.
…
The move sparked panic and violent protests yesterday as crowds desperately tried to withdraw their money at cash machines.
…
‘Why would you risk putting your money in Greek, Spanish or Portuguese banks after this?’
British expats were stunned by the news, with many left high and dry by the restrictions on accounts.
Cash machines had been working, but many ran out of notes because of the panic withdrawals.
…
But financial experts said the raid – designed to stop Cyprus crashing out of the euro, potentially destroying the currency – would send shock waves through the eurozone.
If savers in other troubled nations fear their accounts might be next, they could withdraw their money and spark a catastrophic run on the banks.
Source: Daily Mail
They’re calling it a “tax.”
As Market Ticker’s Karl Denninger notes, “Like hell that’s a tax. That’s direct confiscation of the funds of people who did nothing wrong!”
It should now be obvious. There is no recovery. There never was.
No matter where you live, your government is likely preparing measures to deal with the coming financial and economic collapse. This means they are going to be coming for anything of value that they can get their hands on.
If you have the majority of your net worth allocated in bank accounts, money market funds, retirement plans, stock markets or the host of other ‘safe’ assets recommended by your financial adviser, then you are playing Russian roulette.
And in this version there’s a bullet in every chamber.
When they come, they will take everything they can.
Panicked Europeans Rush ATMs as Leaders Seize Funds Directly From Bank Account Holders
Over the last few years political and financial leaders in
Europe and the United States have implemented policies, regulations and
bailouts costing global taxpayers trillions of dollars with the promise
that these measures would lead to economic growth and recovery.
What happened in Europe today is yet further proof that nothing they’ve done has fixed the underlying fundamental issues surrounding the events that led to the crash of 2008.
For those who don’t believe the government is prepared to take extreme measures that may include the seizing of retirement accounts, cash savings or even gold, look no further than Cyprus, the latest recipient of bank bailouts.
As of right now, citizens of Cyprus are scrambling to withdraw funds from their bank accounts after the EU, with agreement from the Cypriot government, announced they will decimate funds held in personal bank accounts to the tune of up to 10% of existing deposits.
You read that right.
The European Union has made the determination that the people of Cyprus are now responsible for the hundreds of billions of dollars in bad bets made by their government and bank financiers, and they are moving to confiscate money directly from the bank accounts of every citizen in the country.
As Market Ticker’s Karl Denninger notes, “Like hell that’s a tax. That’s direct confiscation of the funds of people who did nothing wrong!”
It should now be obvious. There is no recovery. There never was.
No matter where you live, your government is likely preparing measures to deal with the coming financial and economic collapse. This means they are going to be coming for anything of value that they can get their hands on.
If you have the majority of your net worth allocated in bank accounts, money market funds, retirement plans, stock markets or the host of other ‘safe’ assets recommended by your financial adviser, then you are playing Russian roulette.
And in this version there’s a bullet in every chamber.
When they come, they will take everything they can.
What happened in Europe today is yet further proof that nothing they’ve done has fixed the underlying fundamental issues surrounding the events that led to the crash of 2008.
For those who don’t believe the government is prepared to take extreme measures that may include the seizing of retirement accounts, cash savings or even gold, look no further than Cyprus, the latest recipient of bank bailouts.
As of right now, citizens of Cyprus are scrambling to withdraw funds from their bank accounts after the EU, with agreement from the Cypriot government, announced they will decimate funds held in personal bank accounts to the tune of up to 10% of existing deposits.
You read that right.
The European Union has made the determination that the people of Cyprus are now responsible for the hundreds of billions of dollars in bad bets made by their government and bank financiers, and they are moving to confiscate money directly from the bank accounts of every citizen in the country.
Restrictions have been imposed to stop people emptying their accounts or moving their money out the country after the Cypriot government announced that up to ten per cent of deposits will be seized and used to bailout the island’s crisis-hit banking system.They’re calling it a “tax.”
The deal with other eurozone finance ministers is the first time that ordinary citizens’ deposits have been directly raided in this way.
…
One furious expat said: ‘This is plain theft. I’d love to hear someone explain to me why it isn’t.’
…
Under the deal, all bank deposits over €100,000 will be hit with a levy of 9.9 per cent. Those with smaller savings will pay 6.75 per cent.
…
The move sparked panic and violent protests yesterday as crowds desperately tried to withdraw their money at cash machines.
…
‘Why would you risk putting your money in Greek, Spanish or Portuguese banks after this?’
British expats were stunned by the news, with many left high and dry by the restrictions on accounts.
Cash machines had been working, but many ran out of notes because of the panic withdrawals.
…
But financial experts said the raid – designed to stop Cyprus crashing out of the euro, potentially destroying the currency – would send shock waves through the eurozone.
If savers in other troubled nations fear their accounts might be next, they could withdraw their money and spark a catastrophic run on the banks.
Source: Daily Mail
As Market Ticker’s Karl Denninger notes, “Like hell that’s a tax. That’s direct confiscation of the funds of people who did nothing wrong!”
It should now be obvious. There is no recovery. There never was.
No matter where you live, your government is likely preparing measures to deal with the coming financial and economic collapse. This means they are going to be coming for anything of value that they can get their hands on.
If you have the majority of your net worth allocated in bank accounts, money market funds, retirement plans, stock markets or the host of other ‘safe’ assets recommended by your financial adviser, then you are playing Russian roulette.
And in this version there’s a bullet in every chamber.
When they come, they will take everything they can.
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