Greece Faces Bank Confiscations… As We Warned

Greek pain is far from over – and depositors should have seen it coming.

Just the other day we wrote about the way wealthy Greeks were lining up for passports and worrying openly that cash-rich accounts could be frozen or even seized.  And now Reuters tells us it could be happening just the way it happened in Cyprus with a bank bail-in.

Really no excuse for anyone to be surprised this time.

Where were these Greeks for the past two or three years? Didn’t they read the papers? Didn’t they watch the news? Didn’t they see how the Cyprus government acquiesced to outside pressure and depositors – mostly Russian ones – and had money seized?

Were Greeks lulled into passivity because of “deposit insurance.”  This was the main thing we heard from Greeks when someone would bring up the possibility of a bank bail-in… to paraphrase, they said, “We’ll be okay, the Greek Prime Minister said all bank deposits are safe… plus the Greek government guarantees all bank deposits up to 20,000 euros 100%.”

Aside from the fact that nothing is truly official until it is denied by government, how’s counting on government “depositor insurance” working out for them?  Americans counting on the massively insolvent FDIC can expect something similar.

The FDIC is one of those agencies that seems to work fine until it is actually needed. It went into a massive crisis in 2008-2009 and reports  show that regulators were scrambling to generate funds by any means necessary.

Reuters even reported that the fund was contemplating borrowing directly from  Treasury Department.

With a rise in the number of troubled banks, the FDIC’s Deposit Insurance Fund used to repay insured deposits at failed banks has been drained. In a bid to replenish the $45.2 billion fund … the FDIC will consider a plan in October to raise the premium rates banks pay into the fund, a move that will further squeeze the industry.

The 2008-2009 crisis was a horribly bad one but the next one will be even worse. Who is to say that the political consensus to bail out a massively indebted banking system will be there this time round – in the US or the West generally. Politics and finance are getting more unpredictable as the Greeks are finding out.

When you keep your money in a bank you are truly providing “a hostage to fortune,” putting your assets in the hands of others who have little reason to care for you or your family.

There’s no excuse for relaxing in the face of a 21st century financial crisis. It’s a new era, as Greeks –monied or not – are about to find out.

At the end of the last decade,  as we can see above, Reuters was reporting on FDIC insolvency. Five years later, Greek insolvency is not generating suggestions of a Treasury bailout.

Nope. Times have changed. Instead Reuters is reporting about a “bail-in,” which simply means that depositors suddenly discover they are actually liable for bank debts.

For Western – and especially US – citizens, this is ironic as governments made great efforts in the 20th century to convince savers that their funds were safe in their bank accounts because of deposit insurance.

But governments don’t seem to be so keen on reassurance these days and big institutions increasingly get the benefit of the doubt.

Some key points to keep in mind.

• Cash controls may not be lifted any time soon; we’re talking months not weeks. And at just $460 a week, the controls are effectively paralyzing an already damaged economy.
• There is no certainty that bank-restructuring charges will be picked up by the EU. Instead Greeks may end up paying for their bankrupt institutions, whether that’s fair or not.
• In fact, the German government is reportedly in the process of concluding that depositors with more than 100,000 euros must shoulder some of the losses.
• The numbers are significant: something like 20 billion euros at risk in various banks and that tempting pot of money makes it likely that losses are covered by Greek depositors.

It is unfortunate that much of this money is held by Greek companies, for confiscating these funds will have a direct impact on the solvency and resilience of the Greek economy.

It is understandable that Greek companies used Greek banks because small companies need liquidity and banks provide it (although they should be running, not walking, to now accept bitcoin). But there is no excuse for the current panic that wealthy Greeks are reportedly exhibiting.

First Cyprus. Now Greece. First Russian “hot” money and now Greek savings. There’s no excuse this time. The people who are going to be hurt aren’t gangsters. They’re just average Greeks, maybe a little more well-to-do than most.  And the people who will profit are the banksters.

These Greeks made the stupid mistake of believing that 21st century is like the 20th and that their government worked for them and not outside forces.  Not that governments EVER really work for the people but it is blatantly obvious now as financial and monetary systems collapse.

They’re about to pay for their naivete with hard-won funds that Brussels is about to siphon off.

These Greeks believed in their regulatory democracy and the assurances of their largest institutions – and they were likely wrong. What about you?

Do YOU believe in the assurances of your government and “highly placed officials?”

Do you believe the US is in a recovery? Do you believe the government can continue to fund its borrowing? Are you positive the thousand trillion dollar derivatives market won’t crash under the severe pressure of a critical market event?

Here at The Dollar Vigilante (TDV) we don’t believe that the modern technocratic state has your welfare at heart. In programs such as “Get Your Gold Out of Dodge” and consultancies that advise you on second passports and even homes abroad, we’ve created resources you need to consider – seriously.

We’ve also created a new website at SurviveShemitah.com that focuses specifically on upcoming financial risks – including the unraveling of the economy and stock markets this fall– and what you need to do to protect yourself and your loved ones.

Please take the time to watch the video at SurviveShemitah.com if at all possible. It may be the most valuable half hour you’ll spend this summer. (Over 250,000 have taken the time to look and listen in only the past few days since it went up.) If you’re not a subscriber to our newsletter, please act on the “Shemitah Survival” low price we’ve created as an introductory offer.

Time is short and unlike the Greeks, if you’re reading this article you likely understand the immediacy and intensity of these crises. No, they’re not going away.

It CAN happen here and almost certainly it WILL. Protect yourself.

Originally Appeared At The Dollar Vigilante