the IMF Now Recommending Capital Controls…?
by Simon Black: Why
Is the US Government Planning for 'Mass Fatalities'?
It takes all
of three seconds on the ground in Spain to realize that this country
is hurting. Big time.
I was just
here three months ago, eight or nine months before that. Each time
it seems worse more strikes, more homeless, more unemployed,
more unrest, more storefront vacancies. Its amazing what the
combination of debt, deceit, and a bona fide banking collapse can
do to a nation.
In a most intellectually
disingenuous statement, European leaders recently announced that
Spain is A-OK and would not require a bailout. I suppose its
true to a degree. Spain doesnt really need a bailout. More
like an exorcism. Or at least last rites.
After all the
debt, austerity, government collapse, riots, etc., theres
a new crisis du jour here: the banking system. Individuals, businesses,
and institutions are all predicting a breakup of the eurozone, and
nobody wants to have cash in this country on the day they introduce
a new currency (and then immediately proceed to devalue it.)
depositors are moving money out of the country en masse, often to
the tiny principality of Andorra next door a highly capitalized,
low tax banking jurisdiction. This leaves the already thinly-capitalized
Spanish banks in an even weaker position.
As you probably
know, the way the banking system works in most of the world is a
complete fraud. Most banks only hold a tiny percentage of their
customers deposits in cash. The rest is invested
(gambled) or loaned to a bankrupt government.
This is a high-risk
model that only works well when people have tremendous confidence
in the system. The moment there are more than a handful of depositors
wanting their money back, the bank has a big problem.
This is happening
nationwide in Spain, so the entire banking system has a problem.
Nearly every bank here is technically insolvent
and yet they
have droves of customers trying to withdraw funds that arent
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© 2012 Sovereign Man
Best of Simon Black