Enforced Wealth Redistribution On The Horizon?
February 17, 2014 | Tom Olago
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Is history repeating itself? Europe seems to be on course to walk the very same path that Cyprus walked in early 2013. In an article submitted by Tyler Durden for zero.hedge.com, Reuters cites an EU document: "the savings of the European Union's 500 million citizens could be used to fund long-term investments to boost the economy and help plug the gap left by banks since the financial crisis”...
Tyler states " What is left unsaid is that the "usage" will be on a purely involuntary basis, at the discretion of the "union", and can thus best be described as confiscation.”
The Cyprus crisis initially seemed like a targeted one-off treatment plan for one country’s economic troubles. Now it seems more likely that Cyprus was just a guinea pig test case study on how to implement wealth confiscation and redistribution across Europe and beyond.
The EU document accessed by Reuters describes how the EU is looking for ways to "wean" the 28-country bloc from its heavy reliance on bank financing and find other means of funding small companies, infrastructure projects and other investment. The commission’s report finally admits that "the economic and financial crisis has impaired the ability of the financial sector to channel funds to the real economy, in particular long-term investment."
Tyler summarizes key elements of the EU report as follows: -
1. To “Mobilize” more personal pension savings for long-term financing:
The Commission will ask the bloc's insurance watchdog in the second half of this year for advice on a possible draft law "to mobilize (read: confiscate) more personal pension savings for long-term financing", the document said."Evidently the commission has chosen to write its report in such as way as to use politically correct and socially palatable terms.
2. To introduce a collective and involuntary CapEx funding "savings" account:
Introducing an EU savings account, open to individuals whose funds could be pooled and invested in small companies. This would enable the E.U to finance capital expenditure shortfalls that cannot be raised through willing corporations. Europe will complete a feasibility study by the end of this year towards this end, borrowing from successful aspects of similar initiatives such as MyRA, which is a “no risk, guaranteed return" collectivized savings instrument in the U.S.
3. To return to and expand the securitization market model:
The EU is also seeking to restore and revive the securitization market, which pools loans like mortgages into bonds that banks can sell to raise funding for themselves or companies. By so doing, Europe is seeking to restore the primary reason why Europe's banks are as insolvent as they are: securitizations.
The market was tarnished by the financial crisis when bonds linked to U.S. home loans began defaulting in 2007, sparking the broader global markets meltdown over the ensuing two years.
The Reuters report quotes the document as saying that the Commission will "take into account possible future increases in the liquidity of a number of securitization products" when it comes to finalizing a new rule on what assets banks can place in their new liquidity buffers. This signals a possible loosening of the definition of eligible assets from the bloc's banking watchdog.
4. Changes in accounting rules to accommodate the EU proposals:
More controversially, the Commission will consider whether the use of fair value or pricing assets at the going rate in a new globally agreed accounting rule "is appropriate, in particular regarding long-term investing business models".
Tyler states that this EU proposal to address a global change in accounting principles is designed to ensure that an accurate representation of any bank's balance sheet becomes a distant memory. This will make the entire inevitable catastrophe smells like roses until it all comes crashing down.
The only remaining question is: why leak this now? Tyler concludes: “Perhaps it's simply because the reallocation of "cash on the savings account sidelines" in the aftermath of the Cyprus deposit confiscation, into risk assets was not forceful enough? What better way to give it a much needed boost than to leak that everyone's cash savings are suddenly fair game in Europe's next great wealth redistribution strategy”.
However, it is also highly alarming that the lessons from the Cyprus case study may be forgotten by the EU citizens now in the crosshairs of this savings-seizure process. Predictably, in Cyprus it was being conveniently reported as a mere “haircut”: a much more psychologically acceptable term, yet hardly a fitting description to describe proposals to deduct as much as 47.5% of private deposits. Rather than a “haircut”, that sounded more like having your body sawn in half, and being expected to survive it.
Tyler refers us back to his predictive analysis of 18th March, 2013 in an article published in americanthinker.com where he labels this a “coercive, mandatory wealth tax”. An extract from that article quotes Tim Duy: “…The bigger question is what does this mean for the European financial system as a whole? …Perhaps expectations of a broader bank run are premature…But I suspect this is still a game-changing event, sure to make the financial system more unstable by aggravating the negative feedback loop that surrounds financial crises. What else could be the case when you remove a basic safeguard against panic in the banking system?”
Yes indeed…just one more way to provoke an economic global collapse via a global run on the banks. Or perhaps, to redistribute wealth to government via confiscation. That way, you get to pay for the “privilege” of fixing a mess that you had no part in creating. Worse still, with no say as to how those funds will be used…and that may well include the financing of the same economic debt crisis “solutions” that have been recently proven to fail.
Whatever the end game, the price will be borne by innocent, helpless citizens. As usual.
Read more at http://www.prophecynewswatch.com/2014/February17/172.html#lDIMJpv68cGL8Fd6.99
February 17, 2014 | Tom Olago
Share this article
Is history repeating itself? Europe seems to be on course to walk the very same path that Cyprus walked in early 2013. In an article submitted by Tyler Durden for zero.hedge.com, Reuters cites an EU document: "the savings of the European Union's 500 million citizens could be used to fund long-term investments to boost the economy and help plug the gap left by banks since the financial crisis”...
Tyler states " What is left unsaid is that the "usage" will be on a purely involuntary basis, at the discretion of the "union", and can thus best be described as confiscation.”
The Cyprus crisis initially seemed like a targeted one-off treatment plan for one country’s economic troubles. Now it seems more likely that Cyprus was just a guinea pig test case study on how to implement wealth confiscation and redistribution across Europe and beyond.
The EU document accessed by Reuters describes how the EU is looking for ways to "wean" the 28-country bloc from its heavy reliance on bank financing and find other means of funding small companies, infrastructure projects and other investment. The commission’s report finally admits that "the economic and financial crisis has impaired the ability of the financial sector to channel funds to the real economy, in particular long-term investment."
Tyler summarizes key elements of the EU report as follows: -
1. To “Mobilize” more personal pension savings for long-term financing:
The Commission will ask the bloc's insurance watchdog in the second half of this year for advice on a possible draft law "to mobilize (read: confiscate) more personal pension savings for long-term financing", the document said."Evidently the commission has chosen to write its report in such as way as to use politically correct and socially palatable terms.
2. To introduce a collective and involuntary CapEx funding "savings" account:
Introducing an EU savings account, open to individuals whose funds could be pooled and invested in small companies. This would enable the E.U to finance capital expenditure shortfalls that cannot be raised through willing corporations. Europe will complete a feasibility study by the end of this year towards this end, borrowing from successful aspects of similar initiatives such as MyRA, which is a “no risk, guaranteed return" collectivized savings instrument in the U.S.
3. To return to and expand the securitization market model:
The EU is also seeking to restore and revive the securitization market, which pools loans like mortgages into bonds that banks can sell to raise funding for themselves or companies. By so doing, Europe is seeking to restore the primary reason why Europe's banks are as insolvent as they are: securitizations.
The market was tarnished by the financial crisis when bonds linked to U.S. home loans began defaulting in 2007, sparking the broader global markets meltdown over the ensuing two years.
The Reuters report quotes the document as saying that the Commission will "take into account possible future increases in the liquidity of a number of securitization products" when it comes to finalizing a new rule on what assets banks can place in their new liquidity buffers. This signals a possible loosening of the definition of eligible assets from the bloc's banking watchdog.
4. Changes in accounting rules to accommodate the EU proposals:
More controversially, the Commission will consider whether the use of fair value or pricing assets at the going rate in a new globally agreed accounting rule "is appropriate, in particular regarding long-term investing business models".
Tyler states that this EU proposal to address a global change in accounting principles is designed to ensure that an accurate representation of any bank's balance sheet becomes a distant memory. This will make the entire inevitable catastrophe smells like roses until it all comes crashing down.
The only remaining question is: why leak this now? Tyler concludes: “Perhaps it's simply because the reallocation of "cash on the savings account sidelines" in the aftermath of the Cyprus deposit confiscation, into risk assets was not forceful enough? What better way to give it a much needed boost than to leak that everyone's cash savings are suddenly fair game in Europe's next great wealth redistribution strategy”.
However, it is also highly alarming that the lessons from the Cyprus case study may be forgotten by the EU citizens now in the crosshairs of this savings-seizure process. Predictably, in Cyprus it was being conveniently reported as a mere “haircut”: a much more psychologically acceptable term, yet hardly a fitting description to describe proposals to deduct as much as 47.5% of private deposits. Rather than a “haircut”, that sounded more like having your body sawn in half, and being expected to survive it.
Tyler refers us back to his predictive analysis of 18th March, 2013 in an article published in americanthinker.com where he labels this a “coercive, mandatory wealth tax”. An extract from that article quotes Tim Duy: “…The bigger question is what does this mean for the European financial system as a whole? …Perhaps expectations of a broader bank run are premature…But I suspect this is still a game-changing event, sure to make the financial system more unstable by aggravating the negative feedback loop that surrounds financial crises. What else could be the case when you remove a basic safeguard against panic in the banking system?”
Yes indeed…just one more way to provoke an economic global collapse via a global run on the banks. Or perhaps, to redistribute wealth to government via confiscation. That way, you get to pay for the “privilege” of fixing a mess that you had no part in creating. Worse still, with no say as to how those funds will be used…and that may well include the financing of the same economic debt crisis “solutions” that have been recently proven to fail.
Whatever the end game, the price will be borne by innocent, helpless citizens. As usual.
Read more at http://www.prophecynewswatch.com/2014/February17/172.html#lDIMJpv68cGL8Fd6.99
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