The Financial Jigsaw – Issue No.2

My unpublished (100,000 word) book “The Financial Jigsaw”, is being serialised here weekly in 100 issues by Peter J Underwood, author

I hinted in Issue 1 last week that it is the remoteness of ‘BIG’ government that disconnects the people from their unelected, elite bureaucrats as is so clearly witnessed in the European Union among many other examples. In UK we are working to change this in preparation for the coming post-collapse world: http://harrogateagenda.org.uk/

But enough of politics, back to the dispersed jigsaw pieces that I am trying so hard to put together to make that complete picture of our global financial system.

I sat at my computer one morning, as I have done for over twenty years, trawling the internet for the latest financial reports and market gossip. This is my hobby, keeping up to date, ever since the internet was launched in 1991. I traded shares on the stock market in the 1990s and was pleased to find that I could actually make more profits than losses until the 21st century dawned, markets went south rapidly and I jumped ship.

My early experience was an illusion because the markets had been steadily rising for several years and what I thought was my own consummate skill turned out to be nothing more than the enthusiasm of the markets in general; I had merely ridden the wave.

On that fateful morning on 1 April 2013 my world rocked as I read of the financial trauma in Cyprus and the sheer arrogance of the European Union daring to steal the people’s hard-earned savings straight out of their bank accounts without a by-your-leave.  In fact, a bank robbery had taken place and there were no cops in sight.

The first lesson is to know that when you put your money into a bank it no longer, legally, belongs to you. In fact, you have legally ‘loaned’ the bank your money, without knowing it; they actually have a claim on it, at a minute’s notice, before you are able to take any action whatever, exactly as happened in Cyprus. But this is but one of the many jigsaw pieces that we will need to look at before understanding exactly what the financial world’s jigsaw picture really looks like.

On a sunny Monday morning, 1 April 2013, this Cypriot businessman looked at his online bank account and found that the bank had blocked €720,898.01 of his total balance of €849,682.08, leaving only € 128,784.67 in his bank account, and it wasn’t an April Fool’s joke.

The owner said:

“Most of the circulating assets on our business Current Account are blocked. Over 700k of expropriated money will be used to repay the country’s debt. Probably we will get back about 20% of this amount in 6–7 years. I’m not a Russian oligarch but just a European medium-size IT business. Thousands of other companies around Cyprus have the same situation. The business is definitely ruined, all Cypriot workers to be fired. We are moving to a small Caribbean country where authorities have more respect for people’s assets. Also we are thinking about using Bitcoin* to pay wages and for payments between our partners.”

*Bitcoin is a new internet-based currency which avoids the banking systems.

What happened in Cyprus is not, as is claimed, a ‘one-off’ event. The bankers, the financial elite and their mainstream media have been trying to convince the world that Cyprus was a unique situation, a special event and that our money is safe in the banks, but this is untrue. UK, USA, EU, Canada, New Zealand and many other countries have already legislated similar measures by which individual savings and current accounts would be used to support the banks during times of crisis. It’s called euphemistically a ‘bail-in’, but really it is nothing short of legalised theft, plain and simple.

Most of the world’s banks have made terrible mistakes, rendering them technically bankrupt. These banks should simply be allowed to fail. However, instead of failing, the governments and their regulators want to keep the banks in business using your money.

The most important reason is that governments are frightened that the effects of a failing ‘Too-Big-To-Fail’ bank would ricochet around the world, like a contagious virus, bringing the global financial system to a halt. No trading would be able to take place and it would take only days before vital supplies run out, causing chaos and anarchy throughout our fragile societies, the consequences of which we narrowly escaped in 2008.

Governments are therefore doing their best, together with their financial elites, to avoid this crisis at all costs, because even the mega-rich people and global corporations, who exert control over governments, would lose their wealth at short notice. This well-worn adage explains it perfectly: ‘Turkeys don’t vote for Christmas’!

It should also be noted that even governments don’t have the money to actually insure bank deposits, as their ‘guarantees’ claim. Most governments are broke and politicians realise that people are now resentful of public funds being used in bank bailouts, so instead they’re targeting individual and business savers – just as happened in Cyprus. Although the media, politicians and the International Monetary Fund (IMF) claim Cyprus is a special case, this is merely ‘noise’ and the next crisis is already baked into the cake.

People’s wealth worldwide is counted in trillions of dollars, USD 250 trillion in 2015, but most deposit insurance institutions have only a few billion USD in reserves to meet claims. Obviously, if a large bank were to go bankrupt there wouldn’t be enough money to cover insured deposits, as was the case in 2008 when governments were forced to use taxpayers’ money to bail out the banks and save them from bankruptcy.

Perhaps their thinking is: ‘if you can’t steal a little from everyone, you might as well try to steal a lot from a few’. It’s more likely that governments around the world and especially those in Europe and America have reached the limit of taxpayers’ patience and worry about social breakdown; Italy’s recent populist election is pointing the way for Europe.

 To be continued next Saturday

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Author: Austrian Peter

Peter J. Underwood is a retired international accountant and qualified humanistic counsellor living in Bruton, UK, with his wife, Yvonne. He pursued a career as an entrepreneur and business consultant, having founded several successful businesses in the UK and South Africa His latest Substack blog describes the African concept of Ubuntu - a system of localised community support using a gift economy model. View all posts by Austrian Peter