A. 11 Things That Can Happen When You Allow Your Country To Become Enslaved To The Bankers
August 9th, 2012, The Economic Collapse
Pasted from: <http://theeconomiccollapseblog.com/archives/11-things-that-can-happen-when-you-allow-your-country-to-become-enslaved-to-the-bankers>
Why are Greece, Spain, Italy, Portugal and so many other countries experiencing depression-like conditions right now? It is because they have too much debt. Why do they have too much debt? It is because they allowed themselves to become enslaved to the bankers. Borrowing money from the bankers can allow a nation to have a higher standard of living in the short-term, but it always results in a lower standard of living in the long-term. Why is that? It is because you always have to pay back more money than you borrowed. And when you get to the point of having a debt to GDP ratio in excess of 100%, you are basically drowning in debt. Huge amounts of money that could be going to providing essential services and stimulating your economy are now going to service your horrific debt. Today, citizens in Greece, Spain, Portugal and Italy are experiencing a standard of living far below what they should be because the bankers have trapped them in endless debt spirals. Sadly, the vast majority of the people living in those countries have absolutely no idea what is at the root cause of their problems.
The truth is that no sovereign nation on earth ever has to borrow a single penny from anyone.
In theory, there is nothing stopping a government from printing up debt-free money and spending it into circulation.
But that is not the way our world works. Instead, our national governments borrow money that has been zapped into existence out of thin air by central banks. Now what kind of sense does that make?
Why don’t our governments just create the money themselves?
If the government of Greece had been directly issuing debt-free Greek currency all these years, they would have a national debt of zero and they would not be in the middle of a deep depression today.
So why isn’t anyone proposing that they go to such a system?
Instead, everyone is trying to figure out a way that the Greeks can muddle through this depression and keep paying on their unsustainable debts.
It is such a tragedy what has happened to Greece. The city of Boston has a larger economy than the entire nation of Greece at this point.
But this is what happens when you allow the bankers to trap your country in debt. The central banking systems of the world are designed to be endless debt spirals that systematically transfer wealth from the people through the governments and into the hands of the ultra-wealthy.
Just look at what is happening in the United States. The U.S. national debt is now more than 5000 times larger than it was when the Federal Reserve was first created.
Greece, Spain, Italy, Portugal and the rest of the nations of the western world did not get into all this debt by accident.
This happened by design.
And we can see what happens when the system starts to unravel by looking at what is happening in Greece and in Spain right now.
The following are 11 things that can happen when you allow your country to become enslaved to the bankers….
#1 At some point nations that are drowning in debt must implement “austerity measures” in an attempt to stay solvent. This causes economic slowdown and unemployment skyrockets. We are seeing this happen in Greece, Spain and a whole bunch of other nations right now. Over the past four years, the Greek economy has contracted by close to 25 percent. Just this week it was announced that the unemployment rate in Greece has risen to 23.1 percent. A year ago it was just 16.8 percent In Spain, the unemployment rate is even higher. It has hit 24.6 percent, and some analysts expect it to eventually reach 30 percent. This would have never happened if these nations had not gotten into so much debt.
#2 Economic progress can actually go backwards in a debt-based system. In Greece, a very large number of citizens have actually been giving up their cars and have gone back to riding bikes…. The high cost of road tax, fuel and repairs is forcing Greeks to ditch their cars in huge numbers. According to the government’s statistics office, the number of cars on Greek roads declined by more than 40 percent in each of the last two years. Meanwhile, more than 200,000 bikes were sold in 2011, up about a quarter from the previous year.
#3 Your banking system will inevitably melt down at some point. Every debt bubble eventually bursts, and authorities all over Europe are desperately trying to keep the European banking system from completely imploding. But despite their efforts, people are pulling money out of banks in southern Europe at a staggering pace. Just check out the slow motion bank run that is unfolding in Spain…. Capital outflows from Spain more than quadrupled in May to €41.3 billion ($50.7 billion) compared with May 2011, according to figures released on Tuesday by the Spanish central bank. In the first five months of 2012, a total of €163 billion left the country, the figures indicate. During the same period a year earlier, Spain recorded a net inflow of €14.6 billion.
#4 In all countries with a debt-based system, eventually your taxes will be raised to ridiculous levels. When the income tax was introduced in the United States back in 1913, the vast majority of Americans were in the 1 percent tax bracket. Throughout the years there have been countless promises that taxes would be limited, but those promises always end up getting broken. Even when they give us “tax cuts” with one hand, they usually end up raising taxes ten different ways with the other hand. In the United States today, we are literally taxed in dozens and dozens of different ways. Our politicians love to come up with new and inventive ways to tax us without us really even feeling it. In the end, they are going to take as much away from us as they can possibly get away with. Just look at what is happening in France. The newly elected socialist president of France says that his party plans to raise the top tax rate in France to 75 percent. But even though our politicians tax us to death, they still manage to run up gigantic mountains of debt on top of that.
#5 Your currency slowly but steadily becomes worthless. Most people don’t realize that inflation is a tax. Every dollar you currently have in the bank is constantly losing value. That is because in a debt-based system like we have, the total amount of money and the total amount of debt is supposed to keep perpetually expanding. Since the Federal Reserve was created, the U.S. dollar has declined in value by well over 95 percent. This did not happen by accident. Every other major currency around the globe has been steadily declining in value as well.
#6 When things get bad enough, there will be rioting in the streets. A few weeks ago, a total of more than a million public employees took to the streets in more than 80 different Spanish cities. You can view footage of some of the violent clashes with police that took place right here.
#7 When a debt-based economy crashes, money becomes very tight and shortages tend to happen. Just look at what is happening in Greece. Medicine shortages have become a tremendous problem. The following is from a recent Bloomberg article…. Mina Mavrou, who runs a pharmacy in a middle-class Athens suburb, spends hours each day pleading with drugmakers, wholesalers and colleagues to hunt down medicines for clients. Life-saving drugs such as Sanofi (SAN)’s blood-thinner Clexane and GlaxoSmithKline Plc (GSK)’s asthma inhaler Flixotide often appear as lines of crimson data on pharmacists’ computer screens, meaning the products aren’t in stock or that pharmacists can’t order as many units as they need. “When we see red, we want to cry,” Mavrou said. “The situation is worsening day by day.” The 12,000 pharmacies that dot almost every street corner in Greek cities are the damaged capillaries of a complex system for getting treatment to patients. The Panhellenic Association of Pharmacists reports shortages of almost half the country’s 500 most-used medicines.
#8 Your population will eventually become so desperate that they will start banding together to loot food and supplies from stores. When people have no work and they cannot feed their families they often find themselves doing things that they never imagined that they would do. Just check out what is happening in Spain right now…. Unemployed fieldworkers and other members of the union went to two supermarkets, one in Ecija (Sevilla) and one in Arcos de la Frontera (Cadiz) and loaded up trolleys with basic necessities. They said that the people were being expropriated and they planned to “expropriate the expropriators”. The foodstuffs, including milk, sugar, chickpeas, pasta and rice, have been given to charities to distribute, who say they are unable to cope with all the requests for help they receive. Unemployment in the Sierra de Cadiz is now 40%.
#9 If things get bad enough, even essential services may start shutting down. Authorities in Greece are legitimately concerned that there may be interruptions in the supply of natural gas and electricity. Suppliers are leaving bills unpaid for extended periods of time, and one day millions of Greeks may wake up to find that the power to their homes has been cut off…. Greece’s power regulator RAE told Reuters on Friday it was calling an emergency meeting next week to avert a collapse of the debt-stricken country’s electricity and natural gas system. “RAE is taking crisis initiatives throughout next week to avert the collapse of the natural gas and electricity system,” the regulator’s chief Nikos Vasilakos told Reuters. RAE took the decision after receiving a letter from Greece’s natural gas company DEPA, which threatened to cut supplies to electricity producers if they failed to settle their arrears with the company.
#10 In an economic depression, many people begin to totally lose hope. An increasing number of parents in southern Europe are facing such desperate situations that they are actually abandoning their babies. The following is from a recent CNBC article…. According to SOS Villages, a European charity that attempts to help families in financial hardship before abandonment occurs, in the last year alone 1,200 children in Greece and 750 in Italy have been abandoned. That is almost double the 400 children abandoned in Italy a year ago, and up from 114 children abandoned in Greece in 2003.
#11 Just like we saw during the Great Depression of the 1930s, there is a spike in suicides when an economy crashes. Greece has never seen anything like what is happening now. The suicide rate has been absolutely soaring. The following is from a Reuters article back in April…. On Monday, a 38-year-old geology lecturer hanged himself from a lamp post in Athens and on the same day a 35-year-old priest jumped to his death off his balcony in northern Greece. On Wednesday, a 23-year-old student shot himself in the head. In a country that has had one of the lowest suicide rates in the world, a surge in the number of suicides in the wake of an economic crisis has shocked and gripped the Mediterranean nation – and its media – before a May 6 election. If you live in the United States, you need to watch what is happening in Europe very closely, because similar conditions will come to the United States soon enough. Just like Europe, we have allowed ourselves to become enslaved to the bankers, and now we will suffer the consequences.
Sadly, most Americans do not even realize how we got into this mess. The following is from a recent article by Professor Steven Yates…. It should have been clear that the country—indeed, Western civilization itself—was on the wrong trajectory as governments and central banks, working in tandem, severed ties between their currencies and precious metals, allowing massive credit expansion to run rampant and the national debt to skyrocket—making, e.g., the pseudo-prosperity of the roaring 1990s possible. Nixon had “closed the gold window” on August 15, 1971; our national debt was around $400 billion. Slightly over ten years later, the debt crossed the $1 trillion threshold. Ten years after that, it reached $6 trillion. When George W. Bush left office having been the biggest spending Republican in U.S. history, it had risen to over $11 trillion. Today, under the watch of the catastrophic Obama presidency, by the time this reaches print the national debt might have surmounted $16 trillion with no end in sight.
The United States has accumulated the greatest mountain of debt in the history of the world and it will totally crush us at some point. Unfortunately, the vast majority of Americans are living paycheck to paycheck and are totally unprepared for the economic chaos that is coming.
One study found that 64 percent of all Americans have less than $1000 in the bank. Can you believe that? Even though we could be on the verge of another global food crisis, most Americans do not have enough food in their homes to last a single month. Even though the U.S. economy is on the verge of another recession, most Americans are still running out and buying toys that they don’t need and paying for them with credit cards that they should not be using. If you want to see where we are headed, just look at Greece and Spain. They are going through economic hell, and we will be joining them soon enough. Get ready while you can.
B. 20 Reasons Why America’s Next Bank Holiday Will Be a Nightmare
June 18th, 2012, SHTFplan.com, James Wesley Rawles
Pasted from: <http://www.shtfplan.com/emergency-preparedness/20-reasons-why-americas-next-bank-holiday-will-be-a-nightmare_06182012>
This article has been generously contributed for your reading pleasure by James Rawles of Survival Blog.
The world is on now on the brink of a global credit crisis that could be far worse than the tumultuous events of 2008. The ongoing sovereign debt crisis in the southern reaches of the Eurozone indicate that bank runs in the region will continue, and that more bank closure “holidays” will be declared. Under a bank holiday, virtually all deposits could be frozen and irredeemable for days, weeks, or even months. The key question is: Will this crisis spread to the rest of Europe and then even to the United States? I urge SurvivalBlog readers–particularly those in Europe–to be proactive, to stay “ahead of the power curve.” While the Generally Dumb Public (GDP) wakes up some morning to hear news of a bank holiday, you will have long hence prepared yourself.
Digits Lost in the Ether–Redeemable Mañana?
Most people don’t realize that printed U.S. currency and minted coins amount to less than $800 billion, worldwide. That is just a small portion of the aggregate Money Zero Maturity (MZM) money supply that now exceeds $7 Trillion. So what is in your bank account is just electronic money, and there is absolutely no way that even a fraction of depositors could get physical cash to redeem the digits in their accounts. If there is a bank holiday declared, there will undoubtedly be severe restrictions on cash withdrawals when banks re-open. Given the precedent of the limits on withdrawals of a few institutions during the Savings and Loan crisis of the 1980s and 1990s, I predict that withdrawal restrictions could go on for many months.
Here are 20 Reasons why America’s next bank holiday will be a nightmare:
1. A bank holiday will create a virtual blackout of information on not just checking and saving accounts, but also automated mortgage payments, CDs, and more. Our presently quite transparent banking system will suddenly become opaque. Your bank balance will become invisible. Your handy-dandy online banking web page will be replaced by a “Service Temporarily Unavailable” notice. The willingness to accept checks will evaporate in less than a day. The FUD factor (Fear, Uncertainty and Doubt) will be overwhelming.
2. Most businesses will no longer honor personal checks, corporate checks, or bank money orders. Showing a merchant your most recent bank statement isn’t likely to sway him. Again, the FUD factor will rule.
3. All checks in the U.S. are cleared through the automated clearinghouse (ACH)network. Most of this network is inside of banking system firewalls. Many Federal, State, and local tax payments are also handled through ACH. (A similar network exists for European banks–the Pan-European Automated Clearing House (PE-ACH), under the Single Euro Payments Area (SEPA) system).
4. Credit cards might not be accepted. The FUD factor will dictate that anything even peripherally related to the banking system will be suspect. (Even though the credit card companies have their own credit clearing mechanisms that are only attached to the banking milieu.)
5. Except for a few grandfathered recipients, Social Security payments are now made exclusively via bank direct deposit.
6. Military monthly pay, housing allowances, and ration payments are now made exclusively via bank direct deposit, in CONUS. That is true virtually across the board (Active component, Reserve, and National Guard.) Ditto for monthly military retirement payments.
7. Many State and Federal employees no longer get physical paychecks. They too, are trapped in the “direct deposit only” world.
8. Many Americans are now very dependent on bank debit cards (also known as a bank cards or check cards.) In fact, many people don’t even carry more than a few dollars in their wallets. If our world suddenly goes “cash only” most people will suddenly be out of cash.
9. ATMs, debit card transactions, and online banking can be shut down in minutes. This huge vulnerability of banking customers has already been evidenced by a few minor glitches.
10. Online payment systems like PayPal will be sharply degraded, because they rely on their ability to move funds to and from banks. More importantly, online payments are inextricably tied to credit card processing. If credit card processing is suspended, then online payments will be “dead in the water.”
11. Many regular monthly payments such as mortgages, insurance premiums, and some utilities are automatically debited from checking accounts. These will all come to a screeching halt.
12. SWIFT wire transfers will probably be suspended, freezing a good portion of global commerce. Similarly, International ACH transactions (IATs) will also be shut down, since they access the U.S. ACH network.
13. The ability to process credit card payments will be dubious, at best. Many merchants will wisely “just say no” to credit cards, even if their countertop POP terminals are still functioning and show available credit. And the fact that many credit cards are now just debit cards in disguise will only add to the reluctance of merchants to take any credit cards.
14. Point of purchase (POP) processing of credit and debit cards at gas stations has become ubiquitous. Nearly everyone now uses the “pay at the pump” option. Gas and diesel could become “cash only” transactions.
15. Most American families keep less than $300 in cash at home at any given time, including their kids’ piggy banks. For most families, that wouldn’t cover even one month’s rent.
16. Formerly distributed as “Food Stamps”, the USDA‘s Supplemental Nutrition Assistance Program (SNAP), provides benefits to low income families through Electronic Benefit Transfer (EBT) card payments. These cards look much like credit cards. And like checks, EBT payments are all routed through the ACH network. Again, this is a network that is inside banking system firewalls. If the banking system goes into holiday mode, then it may take days or even weeks to get EBT processing back on line. If the EBT payments stop, we can expect riots in metropolitan areas in less than a week.
17. Gift cards will be “iffy.” There are now two types of gift cards: “open loop” (or “network”) cards and traditional “closed loop” cards. Open loop cards are issued by banks or credit card companies and can be redeemed many places. It is likely that only closed loop cards will be honored by the issuing stores, because merchants will fear that open loop cards might have been zeroed out elsewhere. (If they can’t confirm the available balance, the card will be refused.)
18. Most Internet vendors are almost entirely dependent on credit card processing. If that processing system is disrupted, then mailorder firms will either have to cease operations, or have them slow to a snail’s pace, and be restricted to only non-bank money orders.
19. Reversion to U.S. Postal Service money orders (commonly called “PMOs“) will only be partially viable solution. This is because many small town and rural post offices don’t keep enough cash in their tills to be able to hand you $1,000 when you go to cash a PMO. You may be thinking, “Oh well, I’ll just ask them to write me a blank PMO, in exchange. Nope. A recent change to postal regulations designed to curtail money laundering banned money order-for-money order issuance. Bummer. And if you are considering using “Forever” postage stamps, hold your horses. Under a hygiene regulation published in the Domestic Mail Manual (DMM), postal clerks are not allowed to cash out (“buy back”) stamp booklets unless they are still in their sealed clear plastic master packages. So it might take decades to use up your Forever stamps, or you will be forced to liquidate them on the gray market at a slight loss.
20. Bank safe deposit boxes will probably be inaccessible. Plan accordingly.
Some Observations and Mitigation Steps:
Because so many pay and retirement benefit systems are now handled via bank direct deposit only, we could easily live through a frustrating “Roach Motel” period of several months when “Dollars check in, but they don’t check out.” Be prepared to ride through that period.
If the European credit spreads to the United States, then immediately visit your company’s payroll office, and ask to be removed from their direct deposit system. This change might take a couple weeks. With a paper paycheck, you can probably cash it elsewhere, even if you own bank closes its doors–perhaps even at your local grocery store.
Keep plenty of well-hidden cash at home. Since it won’t be earning interest, some of this cash might as well be in $2 rolls of nickels. That method will also give you a hedge on inflation, and also serve as insurance against a currency reform. (Where a zero could be lopped off the Dollar, overnight.)
Be prepared for times for when anything other than greenback cash or perhaps silver coins will be eyed with suspicion, or rejected outright. Even USPS PMOs and drug store money orders may be refused. In the era of bank holidays, cash will talk. Keep plenty of it on hand. Oh, and needless to say, don’t store your cash in a bank safe deposit box. You probably won’t have access to it during a bank holiday.
Be wise and circumspect in storing cash at home. Don’t tell anyone other than your spouse about that cash. See the SurvivalBlog archives for suggestions on building secret hiding places, like this one.
A good portion of your “stash of cash” should be in the form of $1 and $5 bills. This is because during a banking crisis, many people will not be able make change for small transactions. And if your local power, water, and phone companies refuse checks, then you will need to be able to pay them the exact amount of your monthly bill. (They probably won’t have much “change”, either.)
Apply for at least one gasoline station chain charge card. In turbulent times when they won’t take your check or your VISA card, they might still take their own chain card.
If you have to pay your utility bills in in cash or by PMO, do you know where their business offices are located? And consider the sort neighborhood where those offices are located. (Unless you live in a free state for open carry or Constitutional Carry, do you have your CCW permit, and plenty of pistol practice?) For safety, it might be wise to form a neighborhood posse to go pay those bills in a group of of six people once a month. Your local supermarket may declare “cash only.” This is yet another reason why it it is vitally important for every family to have a comprehensive food storage program. By the same token, fuel storage also makes sense, if your local fire code allows it.
At the tail end of a banking crisis–when the bank doors do re-open–the Federal Reserve will certainly have to crank up the printing presses. Even people that never had “mattress money” will want some. All this new cash will increase the velocity of money, locally. This will be inflationary, even at the same time that a the macro level, we will witness a huge dollar deflation. (This is because the multiplier effectof every dollar on deposit will work in reverse, as withdrawals are made.) These will be strange times, indeed. If you start to see any evidence of mass inflation kicking in, then be ready to spend your dollars as quickly as possible to parlay them into practical, barterable tangibles. Don’t be the last one standing in the game of Dollar Musical Chairs.
The threats of credit crunches, bank runs, and bank holidays are not new. No society is immune from them. We’ve been fortunate here in the United States to have not suffered any limits on bank withdrawals since the Savings and Loan crisis of the 1980s and 1990s. But don’t expect this stability to be permanent. We live in a dynamic world with rapidly changing threats to our lives and livelihoods. Prepare for the worst and hope for the best.
C. NatWest customers fear running out of food and electricity
“NatWest’s online forum becomes a diary of disillusionment as those unable to go to the bank’s branches run out of money
24 June 2012 , guardian.co.uk, Caroline Davies
Pasted from: <http://www.guardian.co.uk/business/2012/jun/24/natwest-customers-online-forum-disllusionment?newsfeed=true>
[Note: National Westminster Bank Plc, commonly known as NatWest, is the largest retail and commercial bank in the United Kingdom and has been part of The Royal Bank of Scotland Group Plc since 2000. The Royal Bank of Scotland Group (RBS) is ranked as the second largest bank in the world by assets. – wikipedia. Mr Larry]
“NatWest’s extended opening hours which saw some branches opening on Sunday for the first time has done little to appease angry customers.
Customers affected by the NatWest fiasco are venting their fury on the bank’s online customer forum, which has became a diary of distress, distrust and disillusionment.
Some feared running out of food and electricity as they were unable to physically get to the bank’s branches to withdraw cash. Others claimed if direct debits went unpaid, homes and holidays, theatre and gig tickets, even weddings were at risk from missed payments. And with some still unable to access online accounts on Sunday afternoon, there were calls for compensation.
The posts indicated the breadth of the disruption across the UK, and the knock on effect on those who were not themselves customers.
“You have stuffed us,” wrote philsmiler, from near Corby, Lincs, on the NatWest forum. “We have to attempt to get to your bank in the morning. I’m disabled in a wheelchair and my daughter’s autistic but we have to as we have no food left and electric on less than 50p. Family of 6 it’s unfair and ridiculous”.
“I should of been paid Friday,” wrote nothing left from the Midlands. “I have cancer and I’m very ill at present. I’m down to my last pence and can’t afford electric meter”.
“When will this be sorted out,” pleaded Barrow, from Rickmansworth. “I have my wedding next Saturday. Will we have food to eat as I can’t pay caterers and disco, so no money, no wedding. thank you”. “Mum was relying on her pension on Thursday, she’s 74 and she couldn’t access her account or savings for money. I travelled 32 miles to give her the pension money, and I’ll have to travel another 32 to get it back off her. Shame on you’s for all of this,” was another contribution.
Anger remained the overwhelming emotion, with many spelling out the extreme disruption caused to their daily lives.
“Unable to get petrol yesterday and missed a full day’s work which will be unpaid, very unhappy,” said one from Rickmansworth, Hertfordshire.
“I only have enough diesel to get to work 50 miles away. I have no money in the bank until tomorrow which will enable me to get back home. Will my wages be in my account? inquired another, from Portsmouth.
Some suggested physically taking payslips into NatWest branches as proof to withdraw cash.
Others, on benefits which had not registered as being paid, would be unable to do so. “Not had any money in my account since Friday, carers allowance, child tax credit. Went into bank who told me they can’t give me any money if it does not show on my balance, so how to they expect me to buy food.” Others were concerned about incurring penalty charges for late payments.
“Can’t pay credit card, got £12 charge, NOT GOOD. Got D/D going out soon will these be affected?” wrote a customer from Kent, who called for a gesture of goodwill from NatWest ‘”to all its inconvenienced customers who could receive charges from 3rd parties due to ‘lack of funds'”.
By 11am on Sunday one employer from Harlow was “still trying to pay 8 guys wages from Friday, most are young lads that rely on this money”.
A customer from south Gloucestershire complained his mobile phone had been “cut off because you have not honoured my direct debits from both my business and personal accounts”.
The bank’s extended opening hours, including opening on a Sunday for the first time, did little to appease many. “Absolutely pathetic,” wrote Ken from Warrington. “I don’t even bank with NatWest but my wages are paid out of it. It’s not as if I can go into a branch and ask for money. Why was there no back up system in place?”
A another bemoaned: “Still can’t access account online. Am in Bulgaria… obviously I can’t get to a local branch.”
One resident of Aberdeen wrote: “After an 11-minute call to the premium-rate 0845 call centre number I was assured that Aberdeen’s only branch of NatWest would be open Saturday . After an 18 miles round trip I found it was not open at all. LIARS. Next branch is Dundee – 60 miles away.”
Some, however, managed to remain sanguine. “No pension, no gas, no electricity. However, things have been worse in life and I am not dying. Mistakes happen to everyone,” wrote a contributor, from West Cornforth, County Durham.”