Next, people are asking why I’m not saying much about Cyprus and all of that.
Um, because I already did. Back in November of 2012. I made a 2.5 hour economics presentation that “called” and explained exactly what has and is happening in Cyprus, Europe, and eventually here. And, big props to Karl Denninger and Warren Pollock who were all over these ideas before I was. Warren, in particular, was warning of bank holidays and “bail-ins” two years ago.
Part 3 beginning at the 6:00 mark is where I discuss the sweeping confiscations of bank deposits.
I explain repos and CDS in the context of MF Global, but you can just substitute “Cyprus” for MF Global and it is the exact same thing. Cyprus was basically forced by the Troika (European Commission, European Central Bank, International Monetary Fund) to lever up on Greek junk bonds. The Troika, through various “regulatory” arms were “fake auditing” the Cypriot banks (just as MF Global was being “fake audited” by the Commodity Futures Trading Commission and the Chicago Mercantile exchange) and were valuing the worthless Greek bonds as having essentially full, “par” value. Then, when the Troika wanted to collapse the Cypriot banking industry and begin the process of seizing customer deposits, they did an about face and declared that the Greek paper that the Cypriot banks were holding – at the urging of and enabled by the Troika all along, remember – was worthless. Acknowledging this reality and marking the Cypriot banks’ balance sheets to REALITY is what instantly collapsed the Cypriot banks. So, just making sure you understand, the Troika forced and enabled the Cypriot banks to load up on junk, and then when the Troika olgarchs, led by Obama Chicago crony Christine Legarde, wanted Cyprus dead and the accounts swept, they just dropped the sword of damocles. And, of course, we now know that the Russians and the Continental “elites” were given weeks of warning, and slithered out of the Cypriot banks, mostly via London. It’s basically the mom-and-pop accounts that lost their funds in Cyprus – again, just like MF Global.
Guys, exactly the same condition exists in the U.S. banking system. If the U.S. banks were suddenly forced to mark their mortgages and credit cards to REALITY, and not full par, peak-of-the-bubble values, the entire U.S. banking system would instantly implode. And that doesn’t even take into consideration the hundreds of TRILLIONS of dollars in derivatives on European junk bonds that all of the U.S. banks are holding, too. I lay all of that out in lurid, lurid detail.