Cyprus – Banking Theft / Bail In

My article #3 on this Blog, America?s National Debt, What It Means for Investors, provides a background and context to understand the significant financial events in Cyprus. It also discusses the Cyprus banks actual financial constraints placed on its depositors. In effect, the Cyprus government and its banks folded to the demands of the bankers in Brussels, Germany and the Fed, in order to get their “bailout money”, to save their banks, which created the problem in the first place. Ordinary depositors had their savings stolen – 37.5 % over 100K Euros put into insolvent banks. The bankers now call this theft a “Bail In”.   The importance of this is embedded in a word called, “Trust”. Most institutions in western society are completely built about the idea of  “trust” in the system. We have built this trust into our banking system. We don’t think twice about it. For the last 35 years this trust has been shaky. Now it is clearly being challenged by bankers’ actions. In this country, we now know what has happened with our banks because it has been revealed in the papers. Specifically:
o The banks broke many banking laws with no one going to jail.
o They approved mortgages for dead people and illegally for others.
o They bundled these fake mortgages calling them prime investments and sold them to investors about the world.
o  Concurrently, knowing that these bundled mortgages were trash, they shorted them in the open market and made additional monies. Again, no one went to jail. This is clearly collusive criminal behavior – White Collar Crime.
o Now the FED is buying this “trash” and putting them on their books with money created out of nothing.

Thus, on two continents discerning depositors have found that they can no longer trust the banks. When this attitude becomes generally accepted and pervasive, there will be runs on banks. Within 10 months after that, if one uses Germany of 1922 as an example, then the economy will shut down. However, this will take time. This is especially true if governments in Europe and the United States fight it. They will do so if for no other reason than to keep themselves in political office and banking power. Consequently, no one knows how long this will take. Nonetheless, this seems to be the inevitable trend. Runs on banks will be the signal.

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