It’s a little known fact about the Spanish crisis is that when the Spanish Government merges troubled banks, it typically swaps out depositors’ savings for shares in the new bank.
So… when the newly formed bank goes bust, “poof” your savings are GONE. Not gone as in some Spanish version of the FDIC will eventually get you your money, but gone as in gone forever.
Over the weekend, we received confirmation that Spain is not the only country pulling such schemes: Cyprus along with Germany and the IMF has confiscated savings accounts to help fund a bailout of the country.
Confiscated… as in stolen. To fund a bailout that Cyprus citizens have no interest in funding. In exchange, they, like the Spanish, will receive shares in the garbage banks that were bailed out.
Why does this matter? Cyprus is a tiny country of only 1.1 million people right?
This matters because it indicates what we’ve been saying since June 2012, the entire European “fix” was one enormous lie. NOTHING was fixed in Europe at all. ON top of this, your SAVINGS in Europe can be seized at any time if things get bad.
Reread that last sentence… people in Europe just woke up and found that the IMF without their consent, can SEIZE their savings during a bailout.
What do you think will be the end result of this?
BANK RUNS and systemic failure.
The deep dark secret of the entire European Mess is that the minute a real legitimate bank run begins, it’s game over. Spain got a taste of this last year when a bank-run brought the country to its knees in less than six months.
Now that Cyprus has revealed that deposits are not safe in Europe, you better buckle up because the bank-runs are coming. And when they do, the European Crisis will hit overdrive. Once deposits flee, banks have to sell assets to meet the capital flight. When banks have to sell assets to meet deposit flight, they need capital.
And European banks don’t have any extra capital. They’re leveraged at 26 to 1 and would need to raise over €1 trillion AT LEAST.
If you are not prepared for this… prepared for potential systemic collapse brought about by Europe…YOU NEED TO ACT NOW.
We have released a number of Special Reports outlining precisely how to prepare for all of this.
The single most important one is called “The C Word: the Dark Secret the Fed Wants Hidden” and it explains in stark detail how Europe can bring about systemic collapse… WHY the Fed is terrified about Europe and is secretly pumping HUNDREDS OF BILLIONS of Dollars into the European banking system (QE 3 and QE 4 were European bank bailouts).