EU Turns up the Heat on Greece: Stands Ready to Lock Out Greeks From Their Cash
from The Wealth Watchman
Pressure Ratchets Up
The headlines now coming out of Greece each day are nothing short of heartbreaking. With the brinksmanship between Greek leadership, the Troika, and German financial ministers now reaching a fever pitch, the people of Greece are stuck in purgatory, wondering when and where a sustainable, financial future will begin for them.
The poverty that has struck most levels of society there have now grown so severe, that nearly a quarter million people Greeks have applied for humanitarian aid. To make matters worse, the longer their populace goes without any sort of deal, the worse the joblessness gets.
If things weren’t bad enough though, there’s another huge problem: cash in the Greek banking system is scarce, as bank deposit outflows in Greece have been so drastic in 2015, that it threatens the solvency of their entire financial system. If you’re thinking, “ya know, this disaster scenario seems vaguely familiar”, then you’re right.
If you’ll remember just 2 years ago, depositors in the island nation of Cyprus found themselves also unable to trust either their banking system or EU promises, and had the nerve to withdraw their own money from Cypriot banks. The outflow for a nation that small, was gargantuan. Here’s a chart of what it looked like:
Of course, we all know how that ended: rather than let a mere million people cause a chain reaction of bank-runs across Europe, the order was given to Cyprus to freeze the deposits of their citizens, and “bail-in” some failed banks, using much of depositors’ funds.
This was the sight that greeted hundreds of thousands of Cypriots at their local bank:
It was a “dagger in the back”, the ultimate betrayal, and the ultimate capital control.
ATM’s were on lock-down.
The depositors’ cash was seized.
The banks’ doors were closed.
And safety deposit boxes? Forget about it.
Citizens, rich and poor, woke up to the terrifying reality that everything they’d saved in their bank, was on the chopping block. Panic was in the air. Lines formed around every bank across the country….with the most fortunate folks only able to access a few hundred Euros a day.
Shortly after that trainwreck played out, and everyone’s lives were ruined…Europe’s minister of finance, Jeroen Dijisselbloem thought that the theft of billions of euros went so “swimmingly”, that he called that bail-in a “template for Europe”.
The banksters in the West seemed to agree with Dijesselbloem too! For soon they’d blanketed the entire Western world, from the US to Canada, from the EU to the UK, from Japan to New Zealand….with legislation that made bank bail-ins a workable proposition.
Greece’s Cypriot Moment?
Let me ask you something: do you think the financial elites drafted all that bail-in legislation in 2013 just for the fun of it? Or do you suppose they did so, because they knew they would be using it?
I say this, because things are getting really, really tenuous in Greece, as they did in Cyprus.
Just take a look at Greece’s deposit outflows in early 2015…
In two short months, Greek deposits took a flying bungee jump to the tune of over 12 billion Euros! In 2 short months, deposits fell back to the same levels they’d been in 2005!
It didn’t stop there though! As Bloomberg reported, by the end of March….Greece had experienced 6 straight months of deposit outflows, totaling a whopping 28 billion Euros!
There’s no two ways about it: without bending the normal rules, and without the program called the Emergency Liquidity Assistance(ELA), Greek banks would’ve been vaporized long ago.
The reason why things have now grown this dire though, is that due to the huge amounts of cash that Greek depositors are withdrawing, the ELA fund(which is plugging the gap) has basically hit its ceiling, and will need to be expanded drastically in the weeks and months ahead, if disaster is to be averted for even a short time longer.
Which brings us to current events! Recently, the Wall Street Journal was quick to point out that German finance minister Wolfgang Schauble responded very differently when asked about the possibility of a Greek default today, as compared to 2012:
“Asked whether he would repeat an assurance he gave in late 2012 that Greece wouldn’t default, Wolfgang Schäuble told The Wall Street Journal and French daily Les Echos that “I would have to think very hard before repeating this in the current situation.”
“The sovereign, democratic decision of the Greek people has left us in a very different situation,” he said, referring to the January election that delivered a radical-left government bent on reversing five years of creditor-mandated austerity and painful economic overhauls.”
Please understand what is going on here: German and EU bankers need Greece to continue to toe the line, and follow the script that Brussels gives them. They know that if Greece gets any bright ideas about sovereignty(especially of the budgetary or monetary varieties), then the entire EU monetary experiment faces a sequence of much larger dominoes falling.
Next, in a move which was likely approved by Schauble and company, the secret details were leaked about how and when a prospective Greek default would go down, should circumstances not change. The date given for that scenario? June 5th. That date has now been verified as the time in which “the good times” for the Hellenes would expire(plus a 30 day grace period, to follow).
The real “coup de grace” though was when Moody’s uttered this statement within the last 48 hours:
“The outlook for the Greek banking system is negative, primarily reflecting the acute deterioration in Greek banks’ funding and liquidity, says Moody’s Investors Service in a new report published recently. These pressures are unlikely to ease over the next 12-18 months and there is a high likelihood of an imposition of capital controls and a deposit freeze.”
Boom! Unreal, right?
Two things need to be said about this:
1) While EU themselves did not utter this statement….they most certainly greenlit it beforehand, as a statement this serious would never see the light of day without their approval first. As I’ve written about before: the Credit Rating Agency industry in the West is a total scam. Those institutions, like Moody’s or Standard & Poor’s, are TOTAL enablers of the banks, and are all in the hip-pocket of Wall Street, DC, and London. At this late stage of the game in Bretton Woods II, they are expected to act merely as the foot soldiers of the large banks. If you doubt me, read my piece on what happened to Egan Jones or Standard & Poor’s, after they had the nerve to downgrade the US’s AAA credit rating!
2) Is that statement a bluff on the part of the Troika? I were a Greek citizen and bank depositor…I sure wouldn’t literally bet my assets on it. It is more than likely a means to really turn up the pressure cooker on Greek officials, by scaring Greek citizens, and thusly convincing Syriza to bow their heads and accept whatever “gracious” surrender terms that European banking institutions have prepared for them.
Whatever the intent, it got results, as even now the meetings and negotiations are ongoing with the highest European heads of state, including Angela Merkel, Francois Hollande, and others, and though nothing has been hammered out.
Greek citizens need to take all of this very seriously. Bank bail-ins(like SWIFT deletions) are the “nuclear option” in monetary matters, and the EU has already shown the “imperium” that it is a weapon they won’t hesitate to use, should their backs be against the wall.
When push came to shove, both Brussels and Berlin were all too happy to sacrifice Cypriot depositors on the EU altar:
They were all too happy to undermine democratic institutions and treat depositors as merely unbacked creditors…
They were thrilled with themselves over how “smoothly” it all went down…
It was actually all a source of great pride for central planners within the halls of power in Europa.
Do not think for one blessed second, that the same technocrats wouldn’t do likewise with Greece.
They would, but only as a last resort, should Syriza continue to insist upon an antidote of a more sustainable payment plan for its current dose of austerity-filled bailout.
Bail-ins are now the prized, planet-detroying lazer beam of the banksters’ “Death Star”, which makes all the provinces jump to attention. They are now using pure fear to keep the masses in line. It should now be all too clear to everyone, from:
Multiple banks now banning cash…
To threats of deposit freezes….
To the dogmatic embrace of austerity….
To the zero(or even SUB-ZERO) interest rates being “paid” you as your due….
That banks, on the whole, have become the enemies of the people, and have left us all precious little reason to ever, ever keep cash in their institutions. Period!
Greeks should fight back! Those who haven’t done so, should remove that cash as soon as possible from their accounts.
They voted with their ballot box for Syriza, and now they should follow up by voting with their pocket books, by turning the weapon of bank accounts back against the controllers!
They should also turn up the pressure on Syriza to stand fast, and assert the interest of the Greek people.
Every day the Greeks choose to go to bed, while keeping any cash in their bank, is another opportunity wasted to really and truly stick it to the controllers.
Greece: there is still time to remove your assets from danger!
There is still time to stick it to those who are subverting the democratic voice of your nation.
There is still time to strike a blow for your people, while safeguarding something for your tomorrow.
It is now time to make the most powerful vote you could possibly make.
Wanna be a real revolutionary? Then take that already-dire deposit-outflow cruve exponential, and buy some silver with it. Don’t sweat leaving your masters behind. You’ll soon come to realize…
That a mattress is far better friend than your banker ever was….