High Noon in Nicosia: Banker Vs Depositor
March 19, 2013
'The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks.' -Lord Acton
By Anthony Migchels
(Henry Makow.com) and Real Currencies
It is not clear yet how things will go in Cyprus. The depositor bank bail-out was rejected by Parliament Tuesday. Ironically deposits may be in more danger if banks fail. It remains to be seen if the EU will bail out Cyprus' banks to the tune of 10 billion euros.
Some think that the main target was Russian holdings in Cyprus, which is an off shore hub for all sorts of shady fortunes, including those of the Oligarchs. Putin denounced the package as 'unjust, unprofessional and dangerous'. However, the stakes involved here are way too high: grabbing a few Russian billions is not the agenda behind destroying depositor confidence worldwide. But apparently Putin's constituency is hurting, because a little later he actually offered to participate in the Cypriot bailout. Almost half of the $90 billion in Cyprus banks is Russian money, await6ing reinvestment in Russia. 40,000 Russians live on the island.
Apparently, the 'rescue' was forced upon Nicosia by the threat of being kicked out of the euro. It's amazing that this 'threat' still holds sway, after five years of this nightmare and with the clear example of Iceland. Cyprus, as a small nation, seems to be similarly positioned. Undoubtedly, behind closed doors, the threats were more strenuous.
Cyprus is probably just a test case, to monitor global reactions. The country is irrelevant, with only 0,2% of Euroland's GDP.
The euro may not fail, because if it does, they will never be able to sell World Currency. If they can't even make it work in Europe, how is it going to work on a global scale? That's the reason why all member states are kept on board at whatever cost, either to Brussels, Frankfurt, the national economies or even, it seems, the banking system itself.
The key driver behind the Euro crisis is the Money Power agenda of consolidating power in Brussels. The issue is fiscal union. Over the last few decades a lot of political power has been centralized in Brussels. About half of European legislation already emanates from there, instead of national capitals. But real political power is with those running the budget and that's what Brussels is after here. The Euro crisis' main goal, from the Money Power's point of view, is to sucker people into handing over the power over their budgets. How this is achieved is of lesser import, there are several ways.
One of them is the infamous European Stability Mechanism (ESM), an utterly tyrannical outfit, financed by the Nations and run, without any democratic oversight, by a commission of finance ministers. The ESM's goal is to bail out any bank even before it becomes a problem. The ESM is backed by a law forcing the nations to cough up any sum the ESM demands within seven days.
The other is ECB money printing. The big difference between the Fed and the ECB is, that the Fed is backed by only one Government and the interests of the Fed and Washington are highly aligned. The Fed will always provide Washington with whatever liquidity needs. The US cannot go bust, because the Fed will always print whatever is needed. Nowadays, with nobody buying US Treasuries, the Fed simply provides the Government with all the money it needs at close to 0%. This is not possible in Europe, because if the Spanish need money, all other Governments, most notably the Germans, are on the hook for it.
This is the reason why the US has not found itself in the kind of debt trap that destroyed Spain, Italy, Greece, Portugal and Ireland. Had these nations still been able to print their own money, they would not have had these problems either.
Structural ECB money printing would make a mockery of 'fiscal independence' and would create an almost unstoppable driver for further fiscal integration, as all the nations would in effect be guaranteeing each other and the weaker nations would have to comply with the stronger nations' demands.
This was the real 'break through' behind ECB boss Draghi's 'we'll do whatever it takes' back in July 2012: what he was really saying was that the ECB, for the first time, would interfere in the sovereign debt market in a major way: printing to keep borrowing costs down for the PIIGS nations.
However, although the Germans backed this statement, gnashing teeth and all, they are unwilling to go all the way. They are not going to allow a real debasement of the euro. Certainly not if they are on the hook for it.
German support for the euro is still fairly strong. The country has benefited immensely from the crisis. Structural imbalances have provided Germany with great exporting opportunities throughout the zone. The nation has seen a massive capital influx from money leaving the South due to lack of confidence. This capital has generated a bit of a boom while the rest of the world burns. But while Germans love the upside of European Colonization through the euro, they hate the downside: backing Southern debt. Merkel is dealing with plummeting confidence and recently an anti Euro party was launched.
People like Merkel and Schauble (the German finance minister who also coordinated the Cyprus deal) are total NWO insiders, but while most lower politicians are kept in check, this veneer is wearing thin. Nationalism, a lethal enemy to Globalism, is rearing its almost forgotten head and the utter disgust with the bankers and local elites are becoming hard to avoid.
So we see two basic conflicts: one being the hard choice for the bankers of either being shorn themselves or to rape the depositors they need in the long run. The second being the German refusal to pay the price for the great benefits the euro has brought them.
Of course, the tensions in Europe's South will continue to escalate also. Only a few days ago the Spanish police took to the streets to apologize to the people that they were fighting them, instead of arresting the Bankers. In the Netherlands, another key member, people are refusing austerity to destroy their economy like it did in the PIGS nations.
The euro may not fail. If it does, it would be a devastating blow to the agenda of World Currency. Rest assured that the Cypriots were threatened with sulfur and brimstone.
The original German demand seems to have been taking 40% of deposits, to avoid further (German) tax payer or ECB involvement. Obviously this is not sustainable: just this Cyprus thing is going to have major consequences. Already we hear of taking 15% of Italian savings but this is not doable. It would mean war. The Italians just did away with Goldman Sachs alumni, Trilateralist and German backed strong man 'Super' Mario Monti . They went for Beppe Grillo and it's not hard to imagine what he would make of such a move. We would see quick new elections in Italy and the end of the current order.
Throughout the South, local elites face extinction. In the US, it is clear the Government is preparing for civil war, depleting national ammunition production, buying thousands of tanks for the DHS and the recent confirmation of manned and ready internment camps throughout the United States.
Of course, many rational solutions are available to the credit crisis. But all of these imply the end of banker hegemony and that is, after all, what it is all about.
It Is impossible to fathom it all in real time. Their smoke and mirrors will always fool us and only with hindsight can it be really understood. But the question of today is: is the Money Power still in control and preparing for a final showdown, or is all this a sign of weakness? We MAY know the answer to this question sooner than most might have imagined.
Anthony Migchels is an Interest-Free Currency activist and founder of the Gelre, the first Regional Currency in the Netherlands. You can read all of his articles on his blog Real Currencies
Unexpurgated version of this article.
Cyprus Solution Spreads TO NZ
Spain Considering Deposit Tax?
Take your Money out of the Bank NOW! (includes video)
Financial Warfare 2012: Boycott All Banks
Germany, the Money Power's Golem in Europe
The Battle for Europe: will the people or the Euro survive?
High Treason: The European Stability Mechanism
The Wolfson Prize, I win!
Debt Repudiation or an Interest Strike?
Mutual Credit, the Astonishingly Simple Truth about Money Creation
The Swiss WIR, or: How to Defeat the Money Power