Sunday, March 31, 2013

Depositor Haircuts: The New Normal

Stephen Lendman
Activist Post

On March 29, Cyprus Mail said banks opened Thursday. They did so amid calm.

Long lines queued. People waited patiently. A feared stampede didn't materialize. Whether it's the calm before the storm remains to be seen.

Looting Cypriot bank accounts reflects the new normal. It set a precedent. It did so for Europe. More on that below.

Wall Street banks operate the same way. So did MF Global.

Grand theft reflects official policy. Money is made the old-fashioned way. It's stolen. Nothing's done to stop it. Corrupt politicians and regulators permit it. They do so for benefits they derive.

Scamming investors is commonplace. Goldman Sachs derisively calls them "muppets."

MF Global's CEO Jon Corzine formerly headed Goldman Sachs. He looted customer accounts. He did so brazenly. He used client money to speculate. More went for internal purposes. Much went to cover debt obligations and losses. Top firm executives made millions. They did so at customers' expense.

Financial reform accomplished nothing. Grand theft is institutionalized. Europe's no different from America. Anything goes is policy.

Banks deposits were considered safe. No longer. Eurocrats changed things. Euro Group head Jeroen Dijsselbloem explained.

Expect more wealth extracted from depositors. Cyprus established a template. Bank accounts in other troubled economies aren't safe.

"If there is a risk in a bank, our first question should be 'Okay, what are you in the bank going to do about that," he asked? "What can you do to recapitalize yourself?' "

"If the bank can’t do it, then we'll talk to the shareholders and the bondholders. We'll ask them to contribute in recapitalizing the bank, and if necessary the uninsured deposit holders."

"The consequences may be that it’s the end of story, and that is an approach that I think, now that we are out of the heat of the crisis, we should take."

In late February, ECB Executive Board member Benoit Coeure suggested raiding depositor accounts for bail-ins, saying:

"There needs to be an appropriate burden-sharing….because we need to achieve debt sustainability."

At the time, he suggested not doing it across the board. Whether he meant it isn't clear.

He added that he doesn't "pre-judge any instruments because the vocabulary matters, and there are many ways to achieve burden-sharing."

It bears repeating. Grand theft is official policy. Even bank accounts aren't safe.

Market analyst Marc Faber believes "governments one day (will) take away 20 - 30% of (his) wealth." There's no place to hide.

German Finance Minister Wolfgang Schaeuble proposed a 40% haircut on all deposits. So does IMF head Christine Lagarde.

Cypriot Finance Minister Michalis Sarris said large uninsured Laiki Bank depositors could lose up to 80% of their money. Other European depositors race similar risks. So do people elsewhere.

Some may lose everything. It's the new normal. Personal savings are up for grabs. Bank bailouts will be borne on the backs of ordinary people.

Think it can't happen here? Think again. There's no place to hide. Ellen Brown explained. Banks legally own depositor funds, she said.

"Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay."

Banks once repaid depositors on demand. A joint December 10, 2012 FDIC-Bank of England (BOE) paper changed things. Plans to loot customer accounts were made earlier.

The Bank for International Settlements originated them. It's the privately owned central bank for central bankers. Major ones have final say.

Looting depositor accounts is policy. Cyprus isn't a one-off. Guaranteed insured deposits don't matter. They're up for grabs like all others. It'll be done clever ways or outright.

Brown said the FCIC-BOE plan involves converting deposits (IOU promises to pay) into bank equity. They get our money. We get bank stock.

Ready cash on demand is gone. Whether it's ever returned, who knows. Take the money and run looks more than ever like policy. Depositors anywhere may be hung out to dry.

Even gold and silver in safety deposit boxes aren't safe. Not in America. Homeland Security told banks in writing. It may inspect their contents on demand.

Under Patriot Act provisions, it may seize them with no warrant. It can do so anywhere. Banco de Mattress isn't safe.

Investor Jim Rogers said "run for the hills now. I'm doing it." Cyprus is no one-off.

"I want to make sure that I don't get trapped," he said. "Think of all the poor souls that just thought they had a simple bank account."

"Now they find out that they are making a 'contribution' to the stability of Cyprus. The gall of these politicians."

"If you're going to listen to government, you're going to go bankrupt very quickly."

"I, for one, am making sure I don't have too much money in any one specific bank account anywhere in the world, because now there is a precedent,"

"The IMF has said 'sure, loot the bank accounts. The EU has said 'loot the bank accounts, so you can be sure that other countries when problems come, are going to say, 'Well, it's condoned by the EU. It's condoned by the IMF. So let's do it too.' "

The Daily Bell asked "What Is The REAL Euro End Game? It is time to apply the free-market to bank depositors."

Strategy involves shifting responsibility from taxpayers to depositors. Things ahead won't be the same. Eurocrats' policy is wrongheaded. They're deepening crisis conditions, not alleviating them.

They believe achieving "full-on political union" depends on it. Their well-documented comments reflect it.

"….Cyprus shock and subsequent statements are not only deliberate, but have contributed to spreading uncertainty throughout Europe."

"Now people no longer trust their banks, contributing to their destabilization."

"If you have a bank crisis, the last thing you want to do is further destabilize trust and confidence in the system. But Brussels Eurocrats have done just that."

"Don't think it was a mistake. If one accepts that line of thinking, the ramifications are serious and deep from a sociopolitical, political and investment standpoint."

The Economic Collapse Blog said global elites plan to loot bank accounts. Don't be surprised when they steal yours.

"They are already very clearly telling you that they are going to do it." Your money is theirs. It's up for grabs on demand.

People put money in banks for safety. Removing it "jeopardize(s) the entire system." Cyprus is a tip of a giant iceberg. Major global banks are highly leveraged. Many are insolvent.

When their bets pay off, they win. When they don't, we pay. Wealth confiscation is now policy. Commerzbank chief economist Joerg Kraemer urges a "tax rate of 15 percent on (Italian) financial assets."

It's "probably enough to push (government) debt below the critical level of 100 percent of gross domestic product," he said.

New Zealand Finance Minister Bill English proposed across the board depositor "haircut(s)" in case of major bank failures.

Britain's Daily Mail headlined "One of the nastiest and most immoral political acts in modern times," saying:

"People who rob old ladies in the street, or hold up security vans, are branded as thieves."

"Yet when Germany presides over a heist of billions of pounds from private savers' Cyprus bank accounts, to 'save the euro' for the hundredth time, this is claimed as high statesmanship."

"It is nothing of the sort….It has struck fear into the hearts of hundreds of millions of European citizens, because it establishes a dire precedent.

If Eurocrats can loot Cyprus, why not anywhere.

"This is the most brutal display since 2008 of how far the euro-committed nations are willing to go to save the tottering single currency."

"It shows that the zone's crisis will run and run to the grievous disadvantage" of most everyone.

"Surely the euro cannot long survive by such anti-democratic means. It certainly does not deserve to."

Graham Summers says "Europe is out of options and out of money." It's "totally and completely bust."

It's banks are highly leveraged. They can't raise capital "because no one in their right mind wants to invest in them…."

"European nations are bankrupt because AGAIN no one in their right mind wants to buy their bonds UNLESS they believe they can dump their investments on the ECB at a later date. Who is the greater fool there?”

Europe isn't fixed because enough capital isn't there to do it. "Europe and its alleged backstops are out of money. This includes Germany, the ECB, and the mega-bailout funds such as the ESM (European Stability Mechanism)."

The ECB is "chock full of garbage debts." It's insolvent. It can print money, "but once the BIG collateral call hits, (it's) useless because (what's needed) would implode the system."

"What could go wrong?" Virtually anything. "It's only a matter of time before (crisis conditions reach) hyperdrive, and we have an event even worse than 2008."

Zero Hedge says Russia's "next in line to restrict cash transactions. (They're) taking a page from the Europeans' book."

Russia Beyond the Headlines said "Russia to ban cash transactions over $10,000." It plans to "slash the amount of cash in domestic trade."

It may do so by 2015. It's "expected to boost" bank reserves "and put a damper on (its) shadow economy. However, the middle class will most likely end up having to pay the price for the scheme."

According to Zero Hedge, leaders realize that "limits of fiscal and monetary policy have been reached."

They're "now changing rules, limiting freedom, and (instituting) outright confiscation (as) the only way to maintain a status quo."

Doing so reflects predatory capitalism's failure. It's a house of cards. It's heading perhaps for eventual collapse. At risk is whether it takes humanity with it when it does.

Stephen Lendman lives in Chicago and can be reached at His new book is titled How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War. Also visit his blog site at and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

in cyprus, the economic misery is just beginning to sink in

The deal has been struck, and now, Cypriots say, the betrayal is sinking in. Nick Squires reports on how the islanders are goin to need the luck of the gods to avoid plunging off an economic cliff. As she counts another day's paltry takings and frets about how to pay the rent, Dimitra Charilaou knows she is a tiny cog in the machine that drives Cyprus's once thriving economy.
She owns a small hole-in-the-wall electrical supplies shop squeezed between a kebab joint and a dodgy-looking nightclub adorned with photos of blonde East European women in the old town of Nicosia, the island's capital.
But multiply her predicament by 850,000 – the population of this former British colony - and it is clear that the island that claims to be the birthplace of Aphrodite, and which has streets named after Greek heroes like Odysseus, is going to need the luck of the gods to avoid plunging off an economic cliff in the wake of last week's controversial bailout deal.
Picking out a €10 note from her cash till, Mrs Charilaou, 59, told The Sunday Telegraph: "This is what I've earned today. My rent is €500 a month, how am I going to pay it? The retail business is bleeding, everybody is shutting down.
"Today it's Cyprus, tomorrow it will be Italy. It will be a domino effect. We use to live peacefully, we had jobs. Now they have changed our lives."
Last week the sun shone over Nicosia, whose old town is a tangled warren of narrow lanes, Byzantine churches and colonial bungalows with wooden verandas.
But dark economic clouds are looming over Cyprus in the wake of the bail-out struck with Brussels, in which the country's two biggest banks are to be restructured and depositors hit with a "levy" of up to 80 per cent of their savings above €100,000.
In a move that was seen to have crossed the Rubicon regarding the guarantee of savings within the eurozone, customers have had their accounts frozen; exactly when their money will be confiscated in the "haircut", as it is euphemistically known, is expected to be announced this week.
So far there has been none of the violence that has hit neighbouring Greece, where masked protesters hurling stones have frequently clashed with riot police shooting tear gas in cities like Athens and Thessaloniki.
Conventional wisdom has it that Cypriots are more restrained than their Greek cousins – calmer and more "British" in fact, reflecting their 80-year history as one of the strategic lynchpins of the Empire, before they gained independence in 1960.
But there are fears that all that could change and that some Cypriots could suddenly snap when they realise just how grim their future looks, as the financial and banking sector withers, the economy contracts by up to a quarter and unemployment soars to 25 per cent.
"I wouldn't be surprised if someone took a gun and went after whoever is responsible for all this," said Marios Georgiou, a 45-year-old civil servant who stands to lose 40 to 50 per cent of his savings, held in the two banks targeted in the bail-out, Laiki and Bank of Cyprus.
"I ask you, is this fair? Is this legal? It cannot be. People can't believe it. We have been in a struggle with the Turks for 40 years, but it took the EU just one day to come here and take all our money."
Sipping a coffee at a bar between tourist boutiques selling postcards and sunglasses, Kyriacos Loizides, 53, a businessman, said: "Next week there will be huge demonstrations. I think there will be violence and killings. People will take revenge against the people who created this scandal, this tragedy.
"Cyprus will become like Greece, where people throw yoghurt and tomatoes at politicians whenever they see them. We feel that soon everybody will be beggars here."
The stories of financial ruin have been trickling out all week – the elderly man who emigrated to Australia, worked hard for 35 years and now faces losing almost all of the €800,000 nest-egg he deposited in a Cypriot bank on his return; the wholesaler who was unable to pay the €1 million needed for a huge consignment of seafood fish that arrived in the port of Limassol, and which ended up rotting on the dockside.
A drastic reform of the banking system was the condition imposed by the troika of international lenders – the European Bank, the European Commission and the IMF – in exchange for granting Cyprus €10 billion in emergency funding.
The deal, hammered out during marathon talks with Nicos Anastasiades, the newly-elected president of Cyprus, averted the risk of the country going bankrupt and crashing out of the euro.
But Cypriots feel it was a betrayal by their EU partners and reserve particular opprobrium for Germany's Chancellor, Angela Merkel, and its finance minister, Wolfgang Schauble.
Berlin is being widely blamed for wanting to impose its standards of fiscal austerity and probity on Cyprus and of trialling a debt reduction model that could be applied to other struggling countries along the Mediterranean littoral.
One Cypriot newspaper said the troika had "pillaged our economy and desecrated our sovereignty", while another railed against "the EU vultures".
"Mrs Merkel and Dr Schauble decreed that the Cyprus economic model was not acceptable," Jim Leontiades, an analyst, wrote in the Financial Mirror, a Cypriot newspaper. "No other eurozone country has been required to remodel itself and destroy its main industry."
Germany, for its part, was reluctant to spend taxpayers' money on bailing out the large number of Russians who had money in Cyprus's banks, some of it from shady provenance.
But the introduction of the capital controls was unprecedented in the 14-year history of the euro, with analysts saying that it was the sort of thing that usually happened in Africa or Latin America.
"It's criminal, what they have done," said Carmen, 34, a Romanian businesswoman who has lived in Cyprus for two years.
"Never have I heard of a country robbing its citizens' bank accounts like this. There will be trouble for the government over this. If you live by fire, you die by fire."
Facing a drastic contraction of the economy, many Cypriots say their only hope now is the development of huge reserves of natural gas which were found beneath the seabed of the island's exclusive economic zone, two years ago.
In the bars and coffee shops of Nicosia, where locals puff on hookah pipes packed with fragrant tobacco, there is constant talk that the billions of euros to be earned from the gas could be the salvation of Cyprus.
But exploration is still at an early stage and the gas may not come on tap until 2018 or 2019. And exploiting it will only exacerbate Cyprus's already tense relations with Turkey and the northern, Turkish-occupied portion of this divided island.
Cyprus has been split since Turkey invaded the north in 1974, after an attempted coup in the Greek part of the island raised fears in Ankara that the island was about to unify with Greece.
Hopes of a breakthrough in peace talks in 2004 were dashed after Greek Cypriots rejected a peace plan brokered by then-UN Secretary General Kofi Annan.
Turkey is deeply unhappy about the prospect of Cyprus exploiting the gas without its consent, saying that the resources also belong to Turkish Cypriots. It also lays claim to parts of Cyprus's EEZ.
"It is not acceptable that the Greek Cypriot side uses the economic crisis it is facing as an opportunity to create a new fait accompli," the Turkish foreign ministry said in a recent statement.
The only acceptable way to exploit the reserves was with "the clear consent of the Turkish Cypriot side regarding the sharing of these natural resources."
In Nicosia, there are daily reminders of the tensions with the Turks. The UN-administered "Green Line" splits the city in two, making it the last divided capital in the world.
The sound of the muezzin call to prayer can easily be heard in the Greek half of the city, mosques and minarets loom just across the rooftops and a giant Turkish Cypriot flag has been etched in red and white into a nearby mountain side.
Wander through the Greek Cypriot part of the old town in any direction and within 10 minutes your path will be blocked by sand bags, razor wire and barricades made of oil drums filled with concrete.
Bored soldiers with automatic rifles man squat military bunkers. Painted in the blue and white of the Greek flag, they look out onto a scruffy no man's land towards the other side of the Green Line, where the flags of Turkey and the self-declared Turkish Republic of Northern Cyprus flutter in the wind.
In the dead ground in between there are shattered houses and shops, their walls pockmarked with bullet holes, their wooden shutters fading in the sun. Here, time has stood still since 1974.
Some Cypriots see the crippling bail-out deal as a deliberate attempt by the EU to weaken them and drive them to the negotiating table with the Turkish-occupied part of the island, to try to solve the 40-year dispute once and for all.
"There are ulterior motives at work here – other countries want to get their hands on our oil and gas," said Miltos, a 34-year old businessman who was waiting anxiously for the island's banks to open on Thursday after being shut for 10 days to avoid a massive exodus of funds.
"We have a loan we can't repay. We are going deeper and deeper into the hole. So we'll have to sell our only remaining asset – the oil and gas.
"Cyprus is small, the EU can use us as a guinea pig. They can rape our resources and force us to accept any plan for reunification."
Cypriots admit that they are partly to blame for the mess they find themselves in. The country put too much reliance on its burgeoning financial services sector and its banks were heavily exposed to debt in Greece.
Islanders have been living beyond their means for years, said Mr Loizides, the businessman in Nicosia. "But a lot of it was the banks' fault. A bank called me a while back and said they could offer me a €6,000 overdraft and €5,000 on my credit card. I hadn't even asked for it."
As Mrs Charilaou contemplated a tough time for her electronics shop, she learnt that a pharmacy just round the corner is to close this weekend.
"They had been in business for 50 years," she said. "A friend of mine who worked there for 35 years is in tears. We are a laughing people but I'm afraid that we are going to forget how to laugh."

Cypriot banks in politician loan scandal

A list of Cypriot politicians who reportedly had millions in loans to Cypriot banks forgiven is published in Greece via Enet
A list of companies and politicians that had loans written off by banks at the heart of Cyprus’ bailout crisis has been published in Greece.
There is already anger on the island that loans with the Bank of Cyprus, Laiki Bank and Hellenic Bank often running into the hundreds of thousands – and, in one case, millions of euros – have allegedly been wiped out.
The list, reported in Friday’s Ethnos newspaper and which has been handed to the Cypriot parliament’s ethics committee, includes the names of politicians from Cyprus’ biggest parties (excluding the socialist EDEK and the Greens).
Questions are being asked as to why banks at which – in the case of Bank of Cyprus and Laiki – deposits of above €100,000 face a levy of an estimated 40% apparently forgave the loans of politicians and other senior figures in the country’s public adminstration.
According to information acquired by, the list was originally leaked by the Cypriot parliament to a member of the European Parliament, and subsequently to journalists in America, before arriving in Greek hands.
According to Ethnos newspaper, the following loans were written off:
Bank of Cyprus
– A hotel company (with links to the communist AKEL party): Entire €2.81m loan written off
– Labour union: From €554,000 loan, €193,000 forgiven
– Company: From €1.83m loan, €111,000 forgiven
– Well-known conservative Democratic Rally (DISY) MP: From €168,000 loan, €101,000 forgiven
– Company linked to DISY MP: From €61,000 loan, €11,000 forgiven
– Company belonging to the brother of a former minister with the centrist Democratic Party (DIKO): From €1.595m loan, €1.285m written off
– Former DISY MP: From €58,000 euro loan, €26,000 forgiven
– Former DISY MP: From €84,000 euro loan, €16,000 forgiven
– Former mayor of a large town: From €105,000 loan, €17,000 forgiven
– Company linked with the daughter-in-law of a DIKO MP: From €625,000 loan, €330,000 written off
– Company of person related to a member of board of directors of Bank of Cyprus: From €839,000 loan, €237,000 forgiven
– Company apparently linked to a former minister: From €708,000 loan, €399,000 written off
more here

Man tries to sell daughter, 6, for bail money for Girlfriend

A Kingsport man has been arrested for allegedly agreeing to sell his 6-year-old daughter for $1,500 — telling his assumed buyer that he needed the money to bond his girlfriend out of jail.
Shawn Wayne Hughes, 32, of 1028 Fairway Ave., was arrested by Kingsport Police on Wednesday afternoon. He was located in the parking lot of Eastman Credit Union on Wilcox Drive, reportedly thinking that's where he'd exchange his daughter for cash.
He was instead met by Kingsport officers, who had previously listened in on his alleged verbal agreement with a concerned family member. During the phone conversation Hughes also allegedly agreed to sign over custodial rights to the buyer, a 75-year-old woman who accepted his terms under direction of police.
Hughes is charged with illegal payments in connection with placement of a child, a felony, and two counts of possession of drugs. Police say that when he was arrested they located three Clonazepam pills and two unidentified pills in his possession.
According to Kingsport police records, officers were called to a residence in the Bloomingdale area shortly after 1 p.m. Thursday. The resident reported she was the grandmother of Hughes' girlfriend, and had been caring for the couple's two children since Friday.
Kingsport police records say that's when her granddaughter, Jessica April Carey, 27, was located on Clinchfield Street and arrested on a warrant out of Sullivan County. The Sullivan County jail reports the charge was for aggravated child abuse and neglect.
Approximately an hour after Carey's arrest Hughes was arrested for DUI and other charges. A KPD report says he was located driving at nearly midnight with no headlights activated. When stopped he reportedly attempted to turn his headlights on by repeatedly flipping his windshield wiper controls, then performed poorly on field sobriety tests.
According to the elderly woman's statements to police on Wednesday, Hughes had since bonded out of jail. He reportedly came to her home on Monday and asked the woman for $2,000 to bail Carey — but made no attempt to retrieve the children. The woman told police that she refused his request for cash.
The next day, Tuesday, Hughes allegedly returned to her home, this time asking for $300 in bail money. She complied with that request and he left, according to police, then returned three hours later to get one of the children, age 6.
While there he allegedly attempted to guilt the elderly woman into handing over more money, saying the reason her granddaughter was still in jail was because she refused to do so.
As the woman was relaying the events to an officer she reportedly received a call from Hughes. Under the direction of police she activated her phone's speaker.
The officer reports listening in on three separate conversations between Hughes and the elderly woman, with Hughes "repeatedly offering" to sell the 6-year-old child. He also allegedly agreed to sign over legal custody of the girl.
His reported asking price was $1,500.
Under police direction the child's great-grandmother agreed to the offer and Hughes set up a meeting place. He allegedly said he'd be in a pickup truck in the parking lot of Eastman Credit Union, where police responded to take him into custody.
Hughes was arrested and booked into the Kingsport city jail. He was arraigned Thursday morning with his bond set at $16,000, then transferred to the Sullivan County Detention Center.
Kingsport investigators say the Department of Childrens Services was notified of the incident. As of Thursday afternoon Carey also remained jailed in Blountville.

WARNING: A Dangerous Time For Stocks Could Be Starting Now – Every Year So Far, Post-Credit Crisis, We’ve Played The Same Game This Time Of Year – Economic Momentum Slows Down, Fears From Europe Resume And The U.S. Stock Market Takes A Nasty Tumble.

Mark Mobius – Europe Has to Have a Default

Mark Mobius, Executive Chairman at Templeton Emerging Markets Group says the only way to solve the euro zone’s debt crisis is for a default to happen.
Mark Mobius: Default Only Answer for Eurozone
Bailouts have not worked, the executive chairman at Templeton Emerging Markets Group told CNBC. 
“At the end of the day, you just have to have a default. The default will take place with a longer time period, in other words, they will stretch out payments so that at the end of the day, as the economies recover, they are gradually able to pay off these debts,” Mobius said….

Haruhiko Kuroda says Japan’s debts are not sustainable

The Bank of Japan’s new governor, Haruhiko Kuroda, has warned that Japan’s debt levels are unsustainable.
His comments follow calls by Japan’s new government for aggressive stimulus measures to help revive the country’s sluggish economy.
Earlier this year, it approved a 10.3tn yen ($116bn; £72bn) stimulus package.
There have been fears that such moves will further increase Japan’s public debt, which is already the highest among industrialised countries.
Japan’s public debt stands at about 230% of its gross domestic product (GDP).

German Unemployment Unexpectedly Rises Amid Euro Crisis

German unemployment unexpectedly rose in March as renewed tensions in financial markets increased concerns the euro region’s recovery will falter.
The number of people out of work increased a seasonally adjusted 13,000 to 2.94 million, the Nuremberg-based Federal Labor Agency said today. Economists had predicted a decline of 2,000, according to the median of 24 estimates in a Bloomberg News survey. The adjusted jobless rate held at 6.9 percent, slightly above a two-decade low of 6.8 percent.

Italy’s Bersani Fails To Form Government

and so,
Leaving the door open for the possibility of a ‘caretaker’ or technocrat government but most likely – new elections (and given the increased support for Grillo, this could be yet another storm in a teacup for the US markets to shrug off).
While this scenario was an absolutely certain outcome, here are the possible next steps via OpenEurope:
Bersani throws in the towel and hands his mandate back to President Napolitano

Buchheit On Cyprus: “The Situation Is Spiralling Down”, And Why A Second Bailout May Be Needed
Things Are Speeding Up: Portugal Budget Deficit Widened, Will Need A Second Bail Out! BE CAREFUL OF EURO; BE SHORT RATHER THAN LONG, EL-ERIAN SAYS PIMCO

In 2010, 2011, and 2012, the market peaked during one of the four weeks of April… A correction of between 10% and 19% ensued

Every year so far, post-Credit Crisis, we’ve played the same game this time of year – economic momentum slows down, fears from Europe resume and the U.S. stock market takes a nasty tumble.
In 2010, 2011, and 2012, the US stock market peaked during one of the four weeks of April. A correction of between 10% and 19% ensued.
The number one question on everyone’s mind right now (ours included) is whether or not this spring will be yet another Risk Off Extravaganza.
Here’s Jurrien Timmer, co-manager of the Fidelity Global Strategies Fund with his new chart on the topic:
In 2010, it was the end of QE1 and the beginning of the eurozone debt crisis that led to a 17% correction in the S&P 500 from the April high to the July low (based on intraday extremes).

In 2011 it started as…


Europe’s Collapse Of Confidence In One Chart

Those who were transfixed by whether Cypriots would rumble and unleash their anger at the €300/day dispensing ATMs formerly known as bank branches this morning, may have missed what probably was the most important monthly chart coming out of Europe – that showing aggregate money (M3) growth and, far more importantly, loan creation. Those who did pay attention will know that in February M3 grew quite obediently in a Eurozone flush with cash, this time by a respectable €15 billion, or 3.1% y/y, after €37 billion in January (of which, however a whopping €47 billion was M1 so the balance actually declined). Of course, this was the easy part: creating money via various central bank conduits has never been the issue: the concern has always been getting that money into private consumer hands through loan creation.

And it is here that things just keep on getting worse by the day. Because in a continent in which there is no confidence whatsoever:no confidence in the banks, no confidence in the financial system, no confidence in end demand, no confidence in any reported data, no confidence that one’s deposits won’t be confiscated tomorrow, and last but not least no confidence that a sovereign nation won’t just hand over its sovereignty to the Troika tomorrow, nobody is willing to take on additional loans and obligations. This can be seen in the dramatic divergence between European money creation (blue line), and the bank lending to the private sector (brown), which is at or near an all time record year over year low. So much for restoring confidence in Europe.

Euro & Cyprus Crisis – armstrongeconomics
More EU Bad Economic Data: German Unemployment Worse Than Expected! Portugal’s Budget Deficit Widened; 5.15% SPAIN 10YR! Italian GDP Forecast Revised Lower And Political Deadlock Worsening!

Cyprus-Style Bank Account Confiscation Is In The New 2013 Canadian Government Budget!

The politicians of the western world are coming after your bank accounts. In fact, Cyprus-style bank account confiscation is actually in the new Canadian government budget. When I first heard about this I was quite skeptical, so I went and looked it up for myself. And guess what? It is right there in black and white on pages 144 and 145 of “Economic Action Plan 2013″ which the Harper government has already submitted to the House of Commons. This new budget actually proposes “to implement a ‘bail-in’ regime for systemically important banks” in Canada. “Economic Action Plan 2013″ was submitted on March 21st, which means that this “bail-in regime” was likely being planned long before the crisis in Cyprus ever erupted. So exactly what in the world is going on here? In addition, as you will see below, it is being reportedthat the European Parliament will soon be voting on a law which would require that large banks be “bailed in” when they fail. In other words, that new law would make Cyprus-style bank accountconfiscation the law of the land for the entire EU. I can’t even begin to describe how serious all of this is. From now on, when major banks fail they are going to bail them out by grabbing the money that is in your bank accounts. This is going to absolutely shatter faith in the banking system and it is actually going to make it far more likely that we will see major bank failures all over the western world.
What you are about to see absolutely amazed me when I first saw it. The Canadian government is actually proposing that what just happened in Cyprus should be used as a blueprint for future bank failures up in Canada.
The following comes from pages 144 and 145 of “Economic Action Plan 2013″ which you can find right here. Apparently the goal is to find a way to rescue “systemically important banks” without the use of taxpayer funds…

Stock Markets Flashing RED Signal, Things Are Deteriorating At An Alarming Rate!

Final Q4 GDP Misses As Personal Consumption Slides Once More – Full Breakdown
Moments ago, as we prepare to put Q1 2013 to a close with a bout of window dressing that will send the S&P to all time highs, we got the final Q4 2012 GDP revision: a number largely meaningless, although it does put closure to the economy in 2012. And as with all economic numbers in the past year, it was not pretty, coming in at 0.37%, below estimates of a 0.5% print, although modestly better than the second Q4 revision when it was 0.14%. The full breakdown by various components is shown below, with the most notable, Personal Consumption Expenditures, showing a gradual and consistent decline over the past three months as it was revised relentlessly lower, dropping from 1.52% in the first revision, to 1.47% in the second, to 1.28% in the final. Offsetting this was a jump in Fixed Investment which rose to 1.69%, the highest since Q3 2011. Supposedly this implies that capital spending is soaring, when in reality companies continue to curb CapEx plans, instead focusing on short term shareholder gains such as buybacks and dividends, which is to be expected in the absence of any actual end-demand.
BIG MISS: Chicago PMI Falls To 52.4, Production Lowest Since September 2009

What We Are Now Seeing Is Unprecedented In World History

Today Egon von Greyerz warned King World News that the chaos we are seeing right now is unprecedented in world history. Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, also cautioned “The confluence of these cycles will cause unimaginable turmoil in the future.” Below is what Greyerz had to say in this remarkable interview:
Eric King: “Clearly the banks in have reopened in Cyprus, your thoughts in the aftermath of all of this?”
Greyerz: “Eric, they have opened, but the problem is still there. Banks still don’t have enough money. The package which has been put forward by the Troika is not going to last. If they ever, which they might not, lift the exchange controls and restrictions on Cyprus banks, then we will see a run on the banks again….

Bank of Cyprus savers with more than 100,000 euros now face 60 PER CENT losses as officials scramble to prevent collapse

  • Bank insider and government technocrat anonymously reveal latest plan
  • Deposits over 100,000 euros will lose 37.5% of their value
  • Savers then stand to lose a further 22.5% depending on an assessment
  • Cypriot banks refusing to release UK pension payments to expat Britons
  • President of Cyprus says there is 'no intention' of leaving the eurozone

  • etermine the exact figure aimed at restoring the troubled bank back to health.
    A man withdraws money from an ATM of a Bank of Cyprus branch today. A bank insider revealed savers with more than 100,000 euros could be hit for more than 60 per cent of their deposits
    A man withdraws money from an ATM of a Bank of Cyprus branch today. A bank insider revealed savers with more than 100,000 euros could be hit for more than 60 per cent of their deposits
    People waited in line outside the Laiki Bank branch in Nicosia, Cyprus, today as economists feared Slovenia would be the next country in need of a bailout
    Cyprus crisis: Deposits over 100,000 euros will lose 37.5 percent of their value after being converted into bank shares and savers could then lose up to 22.5 per cent more, according to two anonymous insiders
    Cyprus agreed Monday to make depositors contribute to a financial rescue in order to secure 10 billion euros ($12.9 billion) in loans from the eurozone and the IMF.

    On Wednesday night, five shipping containers filled with billions of Euros are reported to have been flown to Cyprus from Frankfurt and delivered to the island’s central bank to ensure money did not run out.
    A helicopter and police cars guarded the armoured cash convoy, thought to have been sent by the European Central Bank, on its way from the airport.
    Strict new rules have been imposed to stop a run on Cyprus banks which yesterday opened for the first time since the island’s economic meltdown started nearly a fortnight ago.
    Banks in Cyprus opened for normal business for the second day, but with strict restrictions on how much money people could withdraw, while the International Monetary Fund said Slovenia's banks 'are under severe distress'
    Banks in Cyprus opened for normal business for a second day but with strict restrictions on how much money people could withdraw while the International Monetary Fund said Slovenia's banks 'are under severe distress'
    Airports are now searching passengers and stopping anyone trying to leave the country with more than 1000 euros (£845) and daily cash machine withdrawals are limited to 300 euros (£250).
    Cyprus was yesterday still reeling from its bailout plans with British expat pensioners struggling to pay for food and bills as banks refuse to release their UK pension payments.

    Former NHS nurse Diane Ameur-Zaimeche, 71, said of her £400-a-month pension: ‘I’ve been told all money being sent to Cyprus is being sat on by the government’s Central Bank.’
    President Nicos Anastasiades said yesterday risk of bankruptcy had been contained and Cyprus had no intention of leaving the euro.
    Analysts are increasingly sceptical Slovenia will be able to raise £2.5billion to keep running in the wake of Cyprus's £8.5billion bailout
    Analysts are increasingly sceptical Slovenia will be able to raise £2.5billion to keep running in the wake of Cyprus's £8.5billion bailout
    Slovenia’s recently elected prime minister Alenka Bratusek insisted her country should not be compared to Cyprus. ‘Our banking system is stable and safe,’ she said.

    But the IMF said: ‘The new government should promptly address bank restructuring, corporate sector debt overhang and governance and involvement of the state in the economy.’
    Economists polled by Reuters said Slovenia and Spain were now the two eurozone nations most likely to need a bailout.

    Earners fight the economic crisis by saving more than ever: Figures reveal the average person puts away £104 every month

  • Average earner is saving eight per cent of their wages every month
  • First time the quarterly survey has shown average savings above £100
  • Figures are surprising given low interest rates and squeeze on living costs
  • Young savers, aged between 25 and 34, putting away 9% of income a month
  • Survey found Londoners are saving the most - £142 every month

  • A survey, released by savings body NS&I, found that the average earner is saving eight per cent of their wages. This is the first time the quarterly survey has shown savings above £100
    Saving nation: A survey, released by savings body NS&I, found that the average earner is saving eight per cent of their wages. This is the first time the quarterly survey has shown savings above £100
    Despite the squeeze on household budgets, determined savers are putting away more than £100 every month.
    The figure marks a highpoint for personal saving, with the average person now saving eight per cent of their income every month.
    The findings, released by Treasury-backed savings body NS&I, are striking given the continued rise in living costs coupled with flat-lining wages.
    After four years of low interest rates, held at 0.5 per cent by the Bank of England, earners are also offered poor returns on their savings.
    But NS&I found that we are setting aside £104 every month, the first time its quarterly survey has produced a figure of more than £100.
    The rise is thought to have been driven by younger savers, many of whom are saving in the hope of buying a home.
    Savers aged between 25 and 34 are putting away just over 9 per cent of their incomes each month - equivalent to £125 - the highest average since 2010.
    Nearly 60 per cent of those surveyed in the age group said that they were saving for their home, whether to pay a mortgage or for home improvements.
    The proportion of Britons who are not saving anything has also fallen from one quarter three months ago to one fifth in the latest study.
    Londoners were found to be saving the most, at an average of almost 10 per cent of their incomes, or £142 each month.
    Two-fifths of Londoners said they are saving to have cash for an emergency, while three in ten are saving for retirement. Both of these figures were the highest propensity recorded across Britain.
    Meanwhile, savers in Wales are putting the least cash aside, saving £87 or just under 8% of their average income.
    Savers aged between 25 and 34 are putting away just over 9 per cent of their incomes each month - equivalent to £125 - the highest average since 2010
    Striving: Savers aged between 25 and 34 are putting away just over 9 per cent of their incomes each month - equivalent to £125 - the highest average since 2010
    Savers in the South West of England are putting away the least as a proportion of their income, at just over 7 per cent, or £90 a month.
    Saving levels in Scotland are at their highest in two years, with Scottish savers putting aside just under 8 per cent of their incomes.
    Just over a quarter of Britain's savers (28 per cent) said they set specific savings goals.
    More than 2,400 people were surveyed across Britain between January and February.

    Cyprus just got worse

    Dr. Eric Edmond
    This morning Sky reported that the levy on balances over 100k€ had now increased to 60% as per my prediction that it would increase from the 40% to 50%. It just shows you should never underestimate the insensitivity of the Eurocrats to the plight of ordinary people.
    Also on cue the human interest story appears in todays DT Money headlined , “Cyprus Grabs Family’s Fortune”. The sold their villa on the island but now cannot bring the 200000€ back to Britain. I warned abou the inverse of this two days ago for would be purchasers. It works both ways as funds are held in Cyprus lawyers accounts with a Cyprus bank will be aggregated in the client escrow account and so subject to the full 60% theft.  
    Also on cue Richard North reports in his blog EU Referendum blog details of the Bezzle are starting to leak out.  Richard headlines his piece Eurocrash: corruption at heart of Cyprus crisis. Cypriot banks ‘forgave’ loans to MPs and firms. That is the EU way, forgive your cronies and rob the rest.
    Richard writes, “ These tell of an unhealthily close relationship between the Cypriot banks and politicians, and with political parties and trades unions. Thus we hear that the Bank of Cyprus and Laiki, between 2007 and 2012 gave loans amounting to millions to these groups, without in any way seeking full repayment.
    The Bank of Cyprus wrote off the €2.8-million loan given to a hotel with ties to the communist-rooted Progressive Party (AKEL) and forgave significant portions of many other loans. ”
    There is a whole lot more to come. It is too late if you are already involved in Cyprus. But if you are thinking about buying in Spain or Portugal my advice is don’t and if you are selling there it may be best to cut your asking price for a quick sale. This one will run and run unlike Mr Wood’s horse!

    The Chess Game of Capital Controls

    The best indicator of a chess player's form is his ability to sense the climax of the game.– Boris Spassky, World Chess Champion, 1969-1972

    Jeff Clark
    Casey Research

    You've likely heard that the German central bank announced it will begin withdrawing part of its massive gold holdings from the United States as well as all its holdings from France. By 2020, Bundesbank says it wants half its gold reserves stored in its own vault in Germany.

    Why would it want to physically move the metal from New York? It's not as if US vaults are not secure, and since Germany already owns the gold, does it really matter where it sits?

    You may recall that Hugo Chávez did the same thing in late 2011, repatriating much of his country's gold reserves from London. However, this isn't a third-world dictatorship; Germany is a major ally of the US. So what's going on?

    Pawn to A3

    On the surface, it may seem innocuous for Germany to move some pallets of gold closer to home. Some observers note that since Russia isn't likely to be invading Germany anytime soon – one of the original reasons Germany had for storing its gold outside the country – the move is only natural and no big deal. But Germany's gold stash represents roughly 10% of the world's gold reserves, and the cost of moving it is not trivial, so we see greater import in the move.

    The Bundesbank said the purpose of the move was to "build trust and confidence domestically, and the ability to exchange gold for foreign currencies at gold-trading centers abroad within a short space of time." It's just satisfying the worries of the commoners, in the mainstream view, as well as giving themselves the ability to complete transactions faster. As evidence that it's nothing more than this, Bundesbank points out that half of Germany's gold will remain in New York and London (the US portion of reserves will only be reduced from 45% to 37%).

    Sounds reasonable. But these economists remind me of the analysts who every year claim the price of gold will fall – they can't see the bigger implications and frequently miss the forest for the trees.


    What your friendly government economist doesn't reveal and the mainstream journalist doesn't report (or doesn't understand) is that in the event of a US bankruptcy, euro implosion, or similar financial catastrophe, access to gold would almost certainly be limited. If Germany were to actually need its gold, regardless of the reason, any request for transfer or sale would be… difficult. There would be, at the very least, delays. At worst such requests could be denied, depending on the circumstances at the time. That's not just bad – it defeats the purpose of owning gold.

    But this still doesn't capture the greater significance of this action. First, it reinforces the growing recognition that gold is money. Physical bullion isn't just a commodity, a day-trading vehicle, or even an investment. It's a store of value, a physical hedge against monetary dislocations. In the ultimate extreme, it's something you can use to pay for goods or services when all other means fail. It is precisely those who don't recognize this historical fact who stand to lose the most in an adverse monetary event. (Hello, government economist.)

    Second, here's the quote that reveals the ultimate, backstop reason for the move: Bundesbank stated it is a "pre-emptive" measure "in case of a currency crisis."

    Germany's central bank thinks a currency crisis is really possible. That's a very sobering fact.
    We agree, of course: history is very clear on this. No fiat currency has lasted forever. Eventually they all fail. Whether the dollar goes to zero or merely becomes a second-class currency in the global arena, the root cause for failure is universal and inevitable: continual and perpetual dilution of the currency.

    Some level of currency crisis is inescapable at this point because absolutely nothing has changed with worldwide debt levels, deficit spending, and currency printing, except that they all continue to increase. While many economists and politicians claim these actions are necessary and are leading us to recovery, it's clear we have yet to experience the fallout from spending more than we have and printing the difference. There will be serious and painful consequences, sooner or later of an inflationary nature, and the average person's standard of living will be greatly reduced.

    And now there are rumblings that the Netherlands and Azerbaijan may move their gold back home. If this trend gathers steam, we could easily see a "gold run" in the same manner history has seen bank runs. Add in high inflation or a major currency event and a very ugly vicious cycle could ignite.


    If other countries follow Germany's path or the mistrust between central bankers grows, the next logical step would be to clamp down on gold exports. It would be the beginning of the kind of stringent capital controls Doug Casey and a few others have warned about for years. Think about it: is it really so far-fetched to think politicians wouldn't somehow restrict the movement of gold if their currencies and/or economies were failing?

    Remember, India keeps tinkering with ideas like this already.

    What this means for you and me is that moving gold outside your country – especially if you're a US citizen – could be banned. Fuel would be added to the fire by blaming gold for the dollar's ongoing weakness. Don't think you need to store gold outside your country? The metal you attempt to buy, sell, or trade within your borders could be severely regulated, taxed, tracked, or even frozen in such a crisis environment. You'd have easier access to foreign-held bullion, depending on the country and the specific events.

    None of this would take place in a vacuum. Transferring dollars internationally would certainly be tightly restricted as well. Moving almost any asset across borders could be declared illegal. Even your movement outside your country could come under increased scrutiny and restriction.

    The hint that all this is about to take place would be when politicians publicly declare they would do no such a thing. You could quite literally have 24 hours to make a move. If your resources were not already in place, even the most nimble of us would have a very hard time making arrangements.

    Once the door is closed, attempting to move restricted assets across international borders would come with serious penalties, almost certainly including jail time. In such a tense atmosphere, you could easily be labeled an enemy of the state just for trying to remove yourself from harm's way.

    The message is clear: storing some gold outside your country of residence is critical at this point, and the window of time for doing so is getting smaller. Don't just hope for the best; do something about it while you still can. The minor effort made now could pay major dividends in the future. Besides, you won't be any worse off for having some precious metals stored elsewhere.

    If you're moved to take action, know that you're not alone. It's critical that you take these first steps now, while you still can.

    The best chess players in the world aren't that way because they can see the next move. They're champions because they can see the next 14 moves.

    You only have to see the next two moves to "win" this game. I suggest making those moves now before your government declares checkmate.

    There's another "great game" when it comes to the precious metals market: the junior mining sector. The truth is, these stocks aren't for every investor – junior miners are more volatile than any other stock on Earth. However, for those who can stomach sudden price swings and are willing to bet against the crowd, right now junior explorers are offering the profit opportunity of a lifetime.

    If you've ever wanted a realistic shot at making a fortune, you owe it to yourself to sign up for the upcoming Downturn Millionaires free online video event. It will feature famous speculators, including Doug Casey, Rick Rule, and Bill Bonner, who will detail how everyday investors can leverage junior miners to fantastic profits… just as they have done time and again over the years. Get the details and sign up now.

    China to spend $16 billion to tackle Beijing pollution crisis

    China will spend 100 billion yuan ($16 billion) over three years to deal with Beijing's pollution, an official newspaper reported on Friday, as the government tries to defuse mounting public anger over environmental degradation.
    Beijing's government has pledged to improve sewage disposal, garbage treatment and air quality, as well as crack down on illegal construction, the China Daily newspaper said, citing a three-year plan released on Thursday.
    Air quality in Beijing, a city of around 20 million people, has mostly stayed above "very unhealthy" and "hazardous" levels since the beginning of this year.
    Pollution was one of the key themes at the recent National Party Congress, where China's new leaders were confirmed. Many Chinese feel the government lacks bite when it comes to enforcing policies designed to protect the environment.
    Beijing's plan includes laying or upgrading 1,290 km (800 miles) of sewage pipeline, building five garbage incineration plants, setting up 47 water recycling plants and upgrading 20 sewage disposal plants, said China Daily.
    Beijing Mayor Wang Anshun called on the government to allow the private sector to participate in these investments.
    The government also plans to curb illegal construction and land use, and will compile a list of illegal buildings for demolition next year, Beijing Deputy Mayor Wang Wei told China Daily.
    Most of China's major cities are plagued by pollution of one sort or another. Earlier this month thousands of dead pigs were found floating in one of Shanghai's main water sources.
    ($1 = 6.2143 Chinese yuan)

    How The British Banking Industry Became An Organised Crime Enterprise

    I know it. You know it. We all know it. It’s the elephant in the room that the subservient cowards in the mainstream media are too afraid to mention; the banking industry is run and controlled by criminals.
    Among the growing mountain of evidence that has been gathered over the decades to prove this accusation, a former Scotland Yard Fraud Squad detective has now spoken out.
    Speaking on BCFM radio, Rowan Boswell-Davies revealed to host Tony Gosling the depth of criminal activity within the banking industry and the lengths that the government will go to, to conceal the evidence.
    Boswell-Davies, who spent 12 years on the force investigating major investment fraud as the City lawlessly regulated itself, received a sinister response when he submitted his evidence of fraud to the Parliamentary Banking Commission.
    Listen to the interview as he sheds light this vast criminal conspiracy.
    Listen to the Second Hour Here  (Second Hour with Rowan Boswell-Davies)
    Or Listen to Both Hours Here (Both Hours)
    Interview with lawyer & former Scotland Yard Fraud Squad detective for 12 years Rowan Boswell-Davies who submitted evidence of widespread organised crime in the City of London under US, EU, Australian and British definitions of Organised Crime to the Parliamentary Banking Commission chaired by Andrew Tyrie. This evidence was initially ’lost’ by the Commission and after Rowan contacted Mr Tyrie they found it again.
    They have suggested the evidence might have to be ‘redacted’, or blanked out, so Rowan has published it in full for the public to view online. Mr Boswell-Davies believes that unless the authorities institute a series of criminal trials and convictions of ‘blue blood’ City bankers, the ‘Princes of the City’, will continue to defraud the nation, loot and bring about an eventual collapse of the national economy and the pound.
    He has identified the ‘Blue Arrow’ trial as the most important city fraud case where the message went out that it was ‘open season’ for city fraudsters, that they would never again be prosecuted. This trial had rattled the ‘self-regulating’ City criminal club and they then knocked back the police and went back to a tame, pre Sir Robert Mark, system of ‘light touch’ regulation by their friends. Rowan explains who should be arrested and put on trial, as well as why and how to do it.

    Why a Dollar & Euro Collapse Is Guaranteed

    This Is What It Feels Like To Have Your Life Savings Confiscated By The Global Elite

    This Is What It Feels Like To Have Your Life Savings Confiscated By The Global Elite - Photo by Hannibal PoenaruWhat would you do if you woke up one day and discovered that the banksters had "legally" stolen about 80 percent of your life savings?  Most people seem to assume that most of the depositors that are getting ripped off in Cyprus are "Russian oligarchs" or "wealthy European tycoons", but the truth is that they are only just part of the story.  As you will see below, there are small businesses and aging retirees that have been absolutely devastated by the wealth confiscation that has taken place in Cyprus.  Many businesses can no longer meet their payrolls or pay their bills because their funds have been frozen, and many retirees have seen retirement plans that they have been working toward for decades absolutely destroyed in a matter of days.  Sometimes it can be hard to identify with events that are happening on the other side of the globe, but I want you to try to put yourself into their shoes for a few minutes.  How would you feel if something like this happened to you?
    For example, just consider the case of one 65-year-old retiree that has had his life savings totally wiped out by the "wealth tax" in Cyprus.  His very sad story was recently featured by the Sydney Morning Herald...
    ''Very bad, very, very bad,'' says 65-year-old John Demetriou, rubbing tears from his lined face with thick fingers. ''I lost all my money.''
    John now lives in the picturesque fishing village of Liopetri on Cyprus' south coast. But for 35 years he lived at Bondi Junction and worked days, nights and weekends in Sydney markets selling jewellery and imitation jewellery.
    He had left Cyprus in the early 1970s at the height of its war with Turkey, taking his wife and young children to safety in Australia. He built a life from nothing and, gradually, a substantial nest egg. He retired to Cyprus in 2007 with about $1 million, his life savings.
    He planned to spend it on his grandchildren - some of whom live in Cyprus - putting them through university and setting them up. There would be medical bills; he has a heart condition. The interest was paying for a comfortable retirement, and trips back to Australia. He also toyed with the idea of buying a boat.
    He wanted to leave any big purchases a few years, to be sure this was where he would spend his retirement. There was no hurry. But now it is all gone.
    ''If I made the decision to stay, I was going to build a house,'' John says. ''Unfortunately I didn't make the decision yet.
    ''I went to sleep Friday as a rich man. I woke up a poor man.''
    You can read the rest of the article right here.
    How would you feel if you suddenly lost almost everything that you have been working for your entire life?
    And many small and mid-size businesses have been ruined by the bank account confiscation that has taken place in Cyprus.
    The following is a bank account statement that was originally posted on a Bitcoin forum that has gone absolutely viral all over the Internet.  One medium size IT business has lost a staggering amount of money because of the "bail-in" that is happening in Cyprus...
    Cyprus Bank Account Confiscation
    The following is what the poster of this screenshot had to say about what this is going to do to his business...
    Over 700k of expropriated money will be used to repay country's debt. Probably we will get back about 20% of this amount in 6-7 years.
    I'm not Russian oligarch, but just European medium size IT business. Thousands of other companies around Cyprus have the same situation.
    The business is definitely ruined, all Cypriot workers to be fired.
    We are moving to small Caribbean country where authorities have more respect to people's assets. Also we are thinking about using Bitcoin to pay wages and for payments between our partners.
    Special thanks to:
    - Jeroen Dijsselbloem
    - Angela Merkel
    - Manuel Barroso
    - the rest of officials of "European Comission"
    With each passing day, things just continue to get worse for those with deposits of over 100,000 euros in Cyprus.  A few hours ago, a Reuters story entitled "Big depositors in Cyprus to lose far more than feared" declared that the initial estimates of the losses by big depositors in Cyprus were much too low.
    And of course the truth is that those that have had their deposits frozen will be very fortunate to ever see any of that money ever again.
    But just a few weeks ago, the Central Bank of Cyprus was swearing that nothing like this could ever possibly happen.  Just check out the following memo from the Central Bank of Cyprus dated "11 February 2013" that was recently posted on Zero Hedge...
    Central Bank of Cyprus Memo
    Sadly, the truth is that the politicians will lie to you all the way up until the very day that they confiscate your money.
    You can believe our "leaders" when they swear that nothing like this will ever happen in the United States, in Canada or in other European nations if you want.
    But I don't believe them.
    In fact, as an outstanding article by Ellen Brown recently detailed, the concept of a "bail-in" for "systemically important financial institutions" has been in the works for a long time...
    Confiscating the customer deposits in Cyprus banks, it seems, was not a one-off, desperate idea of a few Eurozone “troika” officials scrambling to salvage their balance sheets. A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland (discussed earlier here); and that the result will be to deliver clear title to the banks of depositor funds.
    If you do not believe that what just happened in Cyprus could happen in the United States, you need to read the rest of her article.  The following is an extended excerpt from that article...
    Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.”  The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills.
    The 15-page FDIC-BOE document is called “Resolving Globally Active, Systemically Important, Financial Institutions.”  It begins by explaining that the 2008 banking crisis has made it clear that some other way besides taxpayer bailouts is needed to maintain “financial stability.” Evidently anticipating that the next financial collapse will be on a grander scale than either the taxpayers or Congress is willing to underwrite, the authors state:
    An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company [meaning the depositors] into equity [or stock]. In the U.S., the new equity would become capital in one or more newly formed operating entities. In the U.K., the same approach could be used, or the equity could be used to recapitalize the failing financial company itself—thus, the highest layer of surviving bailed-in creditors would become the owners of the resolved firm. In either country, the new equity holders would take on the corresponding risk of being shareholders in a financial institution.
    No exception is indicated for “insured deposits” in the U.S., meaning those under $250,000, the deposits we thought were protected by FDIC insurance. This can hardly be an oversight, since it is the FDIC that is issuing the directive. The FDIC is an insurance company funded by premiums paid by private banks.  The directive is called a “resolution process,” defined elsewhere as a plan that “would be triggered in the event of the failure of an insurer . . . .” The only  mention of “insured deposits” is in connection with existing UK legislation, which the FDIC-BOE directive goes on to say is inadequate, implying that it needs to be modified or overridden.
    You can find the rest of her excellent article right here.  I would encourage everyone to especially pay attention to what she has to say about derivatives.
    Sadly, what is happening in Cyprus right now is just the continuation of a trend.  In recent years, governments all over the world have turned to the confiscation of private wealth in order to solve their financial problems.  The following examples are from a recent article posted on Deviant Investor...
    October 2008 – Argentina’s leftist government, facing a gigantic revenue shortfall, proposes to nationalize all private pensions so as to meet national debt payments and avoid its second default in the decade.
    November 2010 – Headline – Hungary Gives Its Citizens an Ultimatum: Move Your Private Pension Fund Assets to the State or Permanently Lose Your Pension – This is an effective nationalization of all pensions.
    November 2010 – Ireland elects to appropriate ten billion euros from its National Pension Reserve Fund to help fund an eighty-five billion euro rescue package for its besieged banks. Ireland also moves to consider a regulatory move that compels some private Irish pension funds to hold more Irish government debt, thereby providing the state with a captive investor base but hugely raising the risk for savers.
    December 2010 – France agrees to transfer twenty billion euros worth of assets belonging to its Fonds de Reserve pour les Retraites (FRR), the funded portion of its retirement system, to help pay off recurring social benefits costs. No pensioners are consulted.
    April 2012 – Argentina announces that its Economy Ministry has taken an emergency loan from the national pension fund in the amount of $4.3 billion. No pensioners were consulted.
    June 2012 – Treasury Secretary Timothy Geithner unilaterally appropriates $45 billion from US federal pension funds to help tide over US deficits for the remainder of fiscal year 2011.
    January 2013 – Treasury Secretary Geithner again announces that the government has begun borrowing from the federal employees pension fund to keep operating without passing the approaching “fiscal cliff” debt limit. The move effectively creates $156 billion in borrowing authority from federal pension funds.
    March 2013 – Open Bank Resolution finance minister, Bill English, is proposing a Cyprus style solution for potential New Zealand bank failures. The reserve bank is in the final stages of establishing a rescue scheme which will put all bank depositors on the hook for bailing out their banks. Depositors will overnight have their savings shaved by the amount needed to keep distressed banks afloat.
    Can you see the pattern?
    As I wrote about the other day, no bank account, no pension fund, no retirement account and no stock portfolio will be able to be considered 100% safe ever again.
    And once the global derivatives casino melts down, there are going to be a lot of major banks that are going to need to be "bailed in".
    When that day arrives, they are going to try to come after your money.
    So don't leave your entire life savings sitting in a single bank - especially not one of the banks that has a tremendous amount of exposure to derivatives.
    Hopefully we can get more people to wake up and realize what is happening.  We are moving into a time of great financial instability, and what worked in the past is not going to work in the future.
    Be smart and get prepared while you still can.
    Time is running out.