The War on Cash is now going into hyper-drive.
In the last 24 months, Canada, Cyprus, New Zealand, the US, the UK,
and now Germany have all implemented legislation that would allow them
to first FREEZE and then SEIZE bank assets during the next crisis.
These moves will be sold as â€œfor the publicâ€™s good,â€ when they
happen. But the reality is that itâ€™s all about stopping people from
moving their capital into actual physical cash.
The whole template for this was set out in Cyprus in 2013. The quick timeline for what happened in Cyprus is as follows:
it has reached an agreement with the EU the bailout process once Cyprus
banks are examined by EU officials (ballpark estimate of capital needed
is â‚¬17.5 billion).
candidate Nicos Anastasiades wins Cypriot election defeating his
opponent, an anti-austerity Communist.
terms of its bail-in: a 6.75% confiscation of accounts under â‚¬100,000
and 9.9% for accounts larger than â‚¬100,000â€¦ a bank holiday is announced.
upon. Those depositors with over â‚¬100,000 either lose 40% of their money
(Bank of Cyprus) or lose 60% (Laiki).
The most important thing I want you to focus on is how lies and
propaganda were spread for months leading up to the collapse. Then in
the space of a single weekend, the whole mess came unhinged and accounts
One weekend. The process was not gradual. It was sudden and it was
total: once it began in earnest, the banks were closed and you couldnâ€™t
get your money out (more on this in a moment).
There were no warnings that this was coming because everyone at the
top of the financial food chain are highly incentivized to keep quiet
about this. Central Banks, Bank CEOs, politiciansâ€¦ all of these people
are focused primarily on maintaining CONFIDENCE in the system, NOT on
fixing the systemâ€™s problems. Indeed, they cannot even openly discuss
the systemâ€™s problems because it would quickly reveal that they are a
primary cause of them.
For that reason, you will never and I repeat NEVER see a Central
banker, Bank CEO, or politician admit openly what is happening in the
financial system. Even middle managers and lower level employees wonâ€™t
talk about it because A) they donâ€™t know the truth concerning their
institutions or B) they could be fired for warning others.
Please take a few minutes to digest what Iâ€™m telling you here. You will not
be warned of the risks to your wealth by anyone in a position of power
in the political financial hierarchy (with the exception of folks like
Ron Paul who are usually marginalized by the media).
With that in mind, now is a good time to prepare for systemic
risk. I cannot forecast precisely when things will get as ugly as they
did in Cyprus for the financial system as a whole (no one can).
However, the clear signals are clear that the Feds are preparing for
something big. The Treasury Department has ordered survival kits for the
Big Banksâ€™ employeesâ€¦ and the NY Fed is expanding its satellite office
in Chicago in case something major happens that forces the market to