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https://www.youtube.com/watch?v=mQUhJTxK5mA
Peter Kopa, February 2018
The latest stress test of European banks, carried out by the European Banking Authority (EBA), although it has had an apparently encouraging result, has not convinced the investment world. On the website www.Euro-Stoxx Banks, European bank shares have lost no less than 30% of their market value in 2016. We are therefore faced with a problem, caused by the financing of the States by the banks through the continuous issue of State debt securities, which the banks buy without the obligation to increase their capital.
This situation of unfair privilege is allowed by the State to ensure its maintenance through bank loans. At the Basel International Clearing Bank – the global bank of banks – it demands and insists that this situation cannot continue, because loans to the State also have their risk and therefore such loans always have to be accompanied by a capital increase by the lending bank. According to the Fitch Agency, the EU Commission promised last year to submit proposals to solve this problem. The European Central Bank has also declared that the interlinking between the state and the banks must be ended.
In other words, this issue is a time bomb that could explode at any time, triggering a tsunami that could wipe out many private assets located in these banks, subjecting companies and individuals to partial confiscation of their assets. It is a hot potato that no state wants to touch, because they would rather patch up and patch up more than go to the root of the problem and solve it as their responsibility to their citizens demands. This would require a budget austerity plan, an end to corruption and the activation of the economy.
In June 2016, Fitch published a report stating that at the end of the first half of this year, EU banks had a total of 2.3 trillion euros in loans to the state on their books, of which 1.5 trillion euros had been given by banks resident in their territory. And most of these risks are not supported by increasing bank capital requirements and represent up to 20% of total banking assets.
In Europe, it seems that the average tax collection of 48% is not enough for the state, but on top of that it needs more and more money to pay for its exaggerated bureaucratic apparatus, its mistakes, its waste and, worst of all, to fill the gaps that corruption continually produces.
Profiles of a potential disaster
Below is a hard to read report from the International Monetary Fund that can be seen on Google:
IMF reports [edit] 2013 – Confiscation of private savings to reduce debt in rich countries [edit]
In a working document of 2013,15 the authors Carmen M. Reinhart and Kenneth S. Rogoff propose the need for the cancellation of public debts -sovereign debt- through the expropriation of a part of the private savings of individuals and families with the aim of reducing the public debt of developed countries -basically the countries of Europe, Japan and the United States. The IMF had already indicated in October 2013 the possibility of establishing a corralito and the consequent confiscation of private savings of up to 10% of family assets in order to reduce public debt to the 2007 level, before the 2008 financial crisis and the subsequent recession triggered by it.
2013 – Confiscation of private savings to reduce debt in rich countries
In March 2013, the Dutch representative to the European Central Bank, Klaas Knot, declared: ‘The expropriation of private banking assets will in the future be a constituent part of the European policy for solving current problems’. He said that the European Central Bank (ECB) wants banks to put their balance sheets in order. This was also confirmed by another Dutch representative at the ECB, Jereon Dijsselbloem: that the restructuring of the European banks will follow the example of the expropriations of the banks in Cyprus, in the sense that by law in an extreme case all or part of the savings of citizens or their companies can be expropriated.
I assume that you have read the previous paragraph twice. What is happening? Is it possible for the EU to approve the confiscation of part of the money of individuals and corporations without prior consultation with their countries and citizens? And just as in Cyprus, these measures can be applied without prior warning, in any EU country. The serious thing is that companies, in such a case, would have no way out, because they need operational liquidity in their bank. And if this were to disappear or be substantially reduced, this would be a very hard blow that could lead to their bankruptcy. The truth is that the account holder is nothing more than a lender to his bank, so the big question now is whether or not to keep the money in the companies’ safe, paying everything in cash. But this is strictly forbidden throughout Europe, starting from very low minimums. Can you not see in this the bad game that the state or the EU is playing towards its citizens?
We are as perfectly cornered as lambs destined for the slaughterhouse. In view of all this, is it not logical that many, distrustful of the state itself, have long since sought a safer place for their money? And to top it all off, the leading OECD countries have allied themselves to increasingly ban the use of cash, thus seeking absolute control and surveillance of all economic movement, always under the pretext of fighting crime and terrorism. By June 2015, the Greek crisis has caused the Greeks to withdraw more than 6 billion euros from their bank accounts, because they fear – among other things – sudden confiscation, in the style of Cyprus. On 29 June, the Greek government kept the banks and stock exchanges closed, with huge media coverage worldwide.
In view of this regrettable development, which, by prohibiting the movement of cash by the state or the EU, as mentioned above, restricts the freedom of the individual and infringes on his or her right not to be spied upon by the state, the big question is whether there is a safe place in the world other than the mattress itself. The answer could lie in buying property or other objects that offer equal protection, both against future inflation and against the expropriation of money in banks. The increasing investment in farmland, forests or other natural resources that are constantly rising in price is very indicative in this regard. In the Czech Republic and Slovakia these prices are still very low in comparison with the rest of Europe and are therefore rising much more than urban property.
In the USA, in 2014, the state debt represents 110% of its GDP and in the European Union countries, the average reaches 85%. And this with a total tax burden of 39.5% in the USA and 46.8% in Germany, not to mention the other EU countries, which are moving around an average of 48%.
