Why Are Bank Holidays Always Announced on Sunday?
On Sunday, June 29, the Associated Press ran the following headline: “Greek Banks will not open Monday.”
After a lengthy cabinet session, it was decided that Greek banks would remain closed for 6 working days, along with restrictions on cash withdrawals. In addition, financial sector officials confirmed the Athens Stock Exchange would not open the following week.
ATM withdrawals were capped at 60 euros ($66) per day. Web bill-paying banking was allowed, but moving money out of the country was prohibited. A side notice reported that Greeks could not remove cash from safety deposit boxes.
A Goldseek.com column at the time commented presciently that “the convenience of ease of access to a local safe deposit box can be offset by the fact that governments and banks can lay claim to their contents at the stroke of a pen. It would be unwise to view Greece as an exceptional case.”
Greeks who paid attention were aware months beforehand that a “bank holiday” could be in the cards. But for most people (ourselves included?), there is an inertia in the human condition. It tends to express itself as “deer in the headlights,” a feeling of being overwhelmed, or just plain denial.
According to the Financial Times, “Greek deposits are guaranteed up to €100,000, in line with EU banking directives…” But with few deposits over €100,000 left in the banks after six months of capital flight, an analyst quipped, “it makes sense for the banks to consider imposing a haircut on small depositors as part of a recapitalization… It could even be flagged as a one-off tax.”
One bank spoke of withholding (stealing) at least 30% on deposits above 8,000 euros ($8,800). This is known as a bank “bail-in,” and it’s a scheme that our own FDIC now has at the ready to rob depositors if needed in the next crisis.
Bank Holidays – Think it can’t happen here? Think again.
The Cyprus accountholder “haircut” two years ago paved the way for what’s taking place now in Greece… and for what could take place HERE in the near future. Cyprus was regarded by many observers as a “test case” to see how the public would react – a first attempt for such a procedure in a public setting.
“As in August 1997, 1998, 2007 and 2008, we could be in the early stage of a very serious situation”
-Former U.S. Treasury Secretary Larry Summers, tweeting on
August 24, 2015, in response to the latest market tumult.
Right into the weekend, politicians and bankers said everything was under control. However, bank employees and others “in the know” were getting their funds out. Then, on Sunday, the powers that be revealed their true intentions – closing for a “bank holiday” and taking “bail in” money from account holders whose balance exceeded a certain amount.
The stated rationale was that most of the money to keep the banks solvent was taken from illegally sourced Russian accounts.
But the recently revealed truth is that much of the penalty theft fell upon British, French, Germans, and Cypriots – many of whom had been building retirement accounts for decades.
Public shock about what happened in Cyprus blew over fairly quickly. Meanwhile, others – the U.S. (2010), Canada (2013), and the EU (2014) – either had already passed similar banking “bail-in” language or proceeded to add it soon thereafter.
Right now, YOUR bank almost certainly limits what you can withdraw per day. It establishes conditions wherein it can refuse to let you have your own money “without good reason.” It even allows for a “bail in” in the event the bank could not otherwise remain solvent.
Bank Holidays Welcome, involuntary shareholders!
You have now become an involuntary “shareholder” in your bank – potentially obligated to help fund their mismanagement through crippling loss of your capital. That a European analyst would dare say in public that “it makes sense for the banks to consider imposing a haircut on small depositors as part of a recapitalization…” should be a shock to your financial core.
In 2013, one of Mexico’s wealthiest industrialists, Hugo Salinas Price (born in Pennsylvania), wrote an open letter to the Greek government suggesting issuance of a one-tenth ounce silver unit. It would circulate alongside the country’s primary currency – be it the euro or a re-issued fiat Drachma. The un-denominated silver coin, which he proposed naming the “Owl,” would have a guaranteed never-to-be- reduced valuation, set daily by the central bank.
Several years ago, Price proposed that Mexico introduce a one-ounce silver coin, the “Libertad.” As with the Owl, it would circulate as a parallel currency to the Peso, priced initially at about 15% over spot. Even though every Mexican state representative voted Si, the central bank refused to mint and issue it!
Bank Holidays – The best line ever from The Magnificent Seven…
Perhaps you’ve seen a 1960 western – now available in stunning Blu-ray format – titled The Magnificent Seven. Starring Yul Brunner, Eli Wallach, Charles Bronson, and Steve McQueen, it chronicles a group of hired gringo gunslingers employed in a Mexican village. They work for little pay in order to rid the town of a band of outlaws who periodically swoop down from the hills, robbing the unfortunates of most of their food and meager finances.
In an immortal line that so poignantly speaks to the coming events for many Americans, the bandit chief, Calvera (Wallach), responds to the Seven’s leader, Chris (Yul Brunner) when he expresses concern about the peasants’ plight:
“If God had not meant them to be shorn, he would not have made them sheep!”
This, folks, may be your fate, lest you take steps soon to acquire sound money in the form of precious metals. That portion of your wealth represents survival insurance – and yes, even potential profit.
Gold and silver are free of counterparty risk and provide protection from the ravages of incompetent, untrustworthy financial houses, cynical politicians, and government agencies at all levels. Like the bandit leader in the movie, all they want from you and yours is “Just a little bit more.”
As the global and domestic situation continues to unravel, will you be an eagle – or a sheep?