Cyprus Banking Crisis Visualized

From Demonocracy:

The infograph that takes you from why Cyprus could not bail out its banks' to its failed financing needs and the road to confiscation:.

Click here for much larger version

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Sentencing Two Populations to Generations of Debt Slavery

The first real test of establishing America’s commitment to "democracy" came from Greece after WWII. During the war, the Left Wing National Liberation Front had provided the majority of resistance to the Nazis. It also set up interim governments across the nation. Though its military government leaders were communist, the partisan governments bore no resemblance to Stalinist Russia. They were decentralized and participatory. The peasants were treated fairly and their status, raised. It was a real people’s government. The goal was to make Greece independent, free from all ties.

But Winston Churchill claimed anarchy and demanded the return of the monarchy. He wanted to keep Greece in their sphere of influence in the Mediterranean for their own political ends. In other words, they wanted to restore the old order in Greece. They wanted the King back on his throne because he was the best guarantee of British interest in Greece: political, economic, and strategic, despite the fact that all of the Greek people hated the oppressive regime of the King.

So America stepped in and a network of concentration camps were set up across the Greek islands while right winged death squads terrorized villages. A favorite technique was beheading. President Truman gave $400 million to aid in restoring the old order. In 1947, 74,000 tons of military equipment was sent to Greece including massive stocks of napalm, and during the Civil War in Greece, the Truman Doctrine was announced which was in effect to crush the peasant and worker based anti-Nazi resistance and restore the traditional fascist order. As a result, 150,000 Greeks were killed. Greece was the first major police task which the United States took on in the postwar world.

Fast forward almost 60 years, and the European feudal system is scapegoating Greece, along with its tiny neighbor, Cyprus --many Cypriots consider themselves Greeks; they share the same National Anthem, are Orthodox and of course they speak Greek--once again, only this time, instead of tanks, they're using banks.

"At least 1,600 Greek businesses - from shipping, retail to tourism - will suffer from the Cyprus bailout deal announced on Sunday after a showdown between Brussels and Nicosia, according to Vasilis Korkidis, head of the National Confederation of Greek Commerce (ESEE).

“The tragic situation in Cyprus will certainly have immediate effects on the Greek market, since a large part of the domestic businesses maintain close ties with Cypriot companies,” Korkidis said in a statement on Tuesday. He was particularly critical of the capital controls and the impending haircut on large deposits (over 100,000 euros) expected to be more than 40%.

Greece's exports to Cyprus exceed 1billion euros annually and the country is Cyprus’ biggest trade partner, followed by the United Kingdom and Germany.

According to Korkidis, the Eurogroup’s Cyprus deal establishes new, severely punitive rules for countries needing emergency aid in the future.

He also slammed the Eurogroup deal (which he called the "German plan" to stress the key role played by German Chancellor Angela Merkel in the negotiations) for “crippling” Cyprus. He said the deal is “tragic” because it “sentences” Cyprus - the country’s markets and economy - to a long period of recession and debt.

Without blinking an eye, the troika of International Monetary Fund, European Commission and European Central Bank (ECB) wipes out the savings of a people, while imposing draconian capital controls, sentencing two populations to generations of debt slavery. This is the new model. Other countries will surely follow.

Links:

List Released With 132 Names Who Pulled Cyprus Deposits Ahead Of "Confiscation Day"

With every passing day, it becomes clearer and clearer the Cyprus deposit confiscation "news" was the most unsurprising outcome for the nation's financial system and was known by virtually everyone on the ground days and weeks in advance: first it was disclosed that Russians had been pulling their money, then it was suggested the president himself had made sure some €21 million of his family's money was parked safely in London, then we showed a massive surge in Cyprus deposit outflows in February, and now the latest news is that a list of 132 companies and individuals has emerged who withdrew their €-denominated deposits in the two weeks from March 1 to March 15, among which the previously noted company Loutsios & Sons which is alleged to have ties with the current Cypriot president Anastasiadis.

From Sigma:

"Money transfers made within 15 days, namely from 1 until March 15. On Friday, March 15, had met the Eurogroup, which officially decided to impose a tax on deposits by companies and individuals in all financial institutions in Cyprus.

These 132 companies and individuals have withdrawn all deposits in euros, dollars and rubles, which were transferred to other banks outside Cyprus.

The disclosure of the list, which shows that the outflow of deposits from local banks other financial institutions outside Cyprus became massively raises suspicion that some had inside information about the decisions taken by the other 16 eurozone countries in exchange for financing deficits of the economy.

In listings, and the company is Loutsios and Sons Ltd, which carried 21 million deposit in a UK bank, while the owner of the company is alleged to have family ties with the President of the Republic, Nikos Anastasiadis.

The first column are names of companies and individuals in the second record of the amounts withdrawn in the third column refers to the amount withdrawn in the same currency, the currency in the fourth and the fifth and last column refers to the date of transfer.

The Timeline of the Unfolding Eurozone Crisis

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Nazi Underpinnings of the European Union

The EU is based on the Nazi plans published in Berlin in 1942 " The Eu was founded and initially led by "former" Nazis and fascists, as was the Charlemagne prize awarded to TONY BLAIR, EDWARD HEATH, ROY JENKINS and others for their role in removing democratic sovereignty from the nation states of Europe"

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Trillions in Fraud, Foundation X. and EU Corruption.

First, Lord James of Blackheath speaks to the House of Lords holding evidence of three transactions of 5 Trillion each and a transaction of 750,000 metric tonnes of gold and has called for an investigation.



Lord James of Blackheath talks about Foundation X, a foundation that has enough funds to bail out the entire world. More money than the Federal Reserve, IMF and Bank of England put together?



At the British House of Lords, November 1, 2010:



Now deceased Christopher Story and the EU Corruption

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Too Much Austerity Leads to Nazism.

“Imag­ine for a moment that two decades ago, a newly uni­fied Ger­many set out to take over the Euro­pean Con­ti­nent, as the pre­vi­ous uni­fied Ger­many had tried and failed to do half a cen­tury ear­lier. This time it would use money, not guns, to accom­plish the goal. . . ” (“As Europe’s Cur­rency Union Frays, Con­spir­acy The­o­ries Fly” by Floyd Nor­ris; The New York Times; 06/15/2011.)

Austria's central bank head has issued a severe warning about too much austerity, amid the eurozone's debt crisis. He said such an approach contributed to the rise of Nazism in the 1930s.

"The single-minded concentration on austerity policy (in the 1920s and 3Os) led to mass unemployment, a breakdown of democratic systems and, at the end, to the catastrophe of Nazism," Ewald Nowotny said in comments confirmed by his office on Wednesday.

Moreover, it's Germany, in particular, which is promoting such painful spending cuts as the principle way to end the bloc's sovereign debt crisis.

U.S. economist Nouriel Roubini and Niall Ferguson drew a similar historical parallel  in their joint opinion piece in the Financial Times on June 8, attacking Germany's "wait and see" approach to the eurozone crisis.

"Is it one minute to midnight in Europe?

"We fear that the German government’s policy of doing ‘too little too late’ risks a repeat of precisely the crisis of the mid-20th century that European integration was designed to avoid.

"We find it extraordinary that it should be Germany, of all countries, that is failing to learn from history. Fixated on the nonthreat of inflation, today’s Germans appear to attach more importance to 1923 (the year of hyperinflation) than to 1933 (the year democracy died). They would do well to remember how a European banking crisis two years before 1933 contributed directly to the breakdown of democracy not just in their own country but right across the European continent….

"But now the public is finally losing faith and the silent run may spread to smaller insured deposits. Indeed, if Greece were to leave the eurozone, a deposit freeze would occur and euro deposits would be converted into new drachmas: so a euro in a Greek bank really is not equivalent to a euro in a German bank. Greeks have withdrawn more than€700m from their banks in the past month.

"More worryingly, there was also a surge in withdrawals from some Spanish banks last month. The government’s bungled bailout of Bankia has only heightened public anxiety. On a recent visit to Barcelona, one of us was repeatedly asked if it was safe to leave money in a Spanish bank. This kind of process is potentially explosive….

"Until recently, the German position has been relentlessly negative on all such proposals. We understand German concerns about moral hazard. Putting German taxpayers’ money on the line will be hard to justify if meaningful reforms do not materialise on the periphery. But such reforms are bound to take time. Structural reform of the German labour market was hardly an overnight success. By contrast, the European banking crisis is a real hazard that could escalate in days.

"Germans must understand that bank recapitalisation, European deposit insurance and debt mutualisation are not optional; they are essential to avoid an irreversible disintegration of Europe’s monetary union. If they are still not convinced, they must understand that the costs of a eurozone breakup would be astronomically high – for themselves as much as anyone.

"After all, Germany’s prosperity is in large measure a consequence of monetary union. The euro has given German exporters a far more competitive exchange rate than the old Deutschmark would have. And the rest of the eurozone remains the destination for 42 percent of German exports. Plunging half of that market into a new Depression can hardly be good for Germany.

"Ultimately, as Angela Merkel, the German chancellor, herself acknowledged last week, monetary union always implied further integration into a fiscal and political union. But before Europe gets anywhere near taking this historical step, it must first of all show it has learnt the lessons of the past. The EU was created to avoid repeating the disasters of the 1930s. It is time Europe’s leaders – and especially Germany’s – understood how perilously close they are to doing just that."

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Austerity: Destroying the Social Contract Here and in the Euro

Is there any question that both Europe and the US governing powers side with the 1%? Corporate and bankster welfare queens abound! Socialism for the wealthy is alive and well, while the rest of us are subject to increasing austerity measures totally unnecessary considering the US government has well over $100 TRILLION in its CAFRS. That alone should tell you that the concept of austerity is not economic, but one of political control.

As Hugh says responding to the naked capitalism article:

Breaking the social contract is what kleptocracy is all about. Or rather it is about breaking one side of it. The 99% are supposed to honor all the duties of the contract, which largely means paying off the debts the 1% have incurred, supporting public institutions which the 1% control, and obeying the laws which the 1% write. But as regards the benefits for the 99% that flow from the social contract: personal and political rights, jobs, housing, healthcare, education, and retirements, these are being trashed, tossed, and looted by the same 1%.

In this sense, we are all Greece. Look at America’s decaying infrastructure, high unemployment, housing disaster, declining system of public education, student debt, overpriced healthcare that leaves tens of millions un- and under insured, pensions that no longer exist, are underfunded, or gutted by Wall Street gambling, and the multiple attempts by both parties to slash Medicare, Medicaid, and Social Security. How are we any different from Greece? How is the rest of Europe? East Asia, China, and Japan? Kleptocracy dominates them all. It plays out different ways in different countries. But the social contract is being destroyed, to the benefit of the 1% and the detriment of the 99%, in them all.

Links:

Greece has been ordered to reduce health care from its current 10% of GDP to below 6%.

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Real Reason Bush Wants to Invade Iran

October 2004:
The U.S. media tells us that Iran may be the next target of U.S. aggression. The anticipated excuse is Iran’s alleged nuclear weapons program. William Clark tells us that economic reasons may have more to do with U.S. concerns over Iran than any weapons of mass destruction.

In mid-2003 Iran broke from tradition and began accepting eurodollars as payment for its oil exports from its E.U. and Asian customers. Saddam Hussein attempted a similar bold step back in 2000 and was met with a devastating reaction from the U.S. Iraq now has no choice about using U.S. dollars for oil sales (Censored 2004 #19). However, Iraq's plan to open an international oil exchange market for trading oil in the euro currency is a much larger threat to U.S. dollar supremacy than Iraq’s switch to euros.

While the dollar is still the standard currency for trading international oil sales, in 2006 Iran intends to set up an oil exchange (or bourse) that would facilitate global trading of oil between industrialized and developing countries by pricing sales in the euro, or “petroeuro.” To this end, they are creating a euro-denominated Internet-based oil exchange system for global oil sales. This is a direct challenge to U.S. dollar supremacy in the global oil market. It is widely speculated that the U.S. dollar has been inflated for some time now because of the monopoly position of “petrodollars” in oil trades. With the level of national debt, the value of the dollar has been held artificially high compared to other currencies.

The vast majority of the world’s oil is traded on the New York NYMEX (Mercantile Exchange) and the London IPE (International Petroleum Exchange), and, as mentioned by Clark, both exchanges are owned by U.S. corporations. Both of these oil exchanges transact oil trades in U.S. currency. Iran’s plan to create a new oil exchange would facilitate trading oil on the world market in euros. The euro has become a somewhat stronger and more stable trading medium than the U.S. dollar in recent years. Perhaps this is why Russia, Venezuela, and some members of OPEC have expressed interest in moving towards a petroeuro system for oil transactions. Without a doubt, a successful Iranian oil bourse may create momentum for other industrialized countries to stop exchanging their own currencies for petrodollars in order to buy oil. A shift away from U.S. dollars to euros in the oil market would cause the demand for petrodollars to drop, perhaps causing the value of the dollar to plummet. A precipitous drop in the value of the U.S. dollar would undermine the U.S. position as a world economic leader.

China is a major exporter to the United States, and its trade surplus with the U.S. means that China has become the world’s second largest holder of U.S. currency reserves (Japan is the largest holder with $800 billion, and China holds over $600 billion in T-bills). China would lose enormously if they were still holding vast amounts of U.S. currency when the dollar collapsed and assumed a more realistic value. Maintaining the U.S. as a market for their goods is a pre-eminent goal of Chinese financial policy, but they are increasingly dependent on Iran for their vital oil and gas imports. The Chinese government is careful to maintain the value of the yuan linked with the U.S. dollar (8.28 yuan to 1 dollar). This artificial linking makes them, effectively, one currency. But the Chinese government has indicated interest in de-linking the dollar-yuan arrangement, which could result in an immediate fall in the dollar. More worrisome is the potentiality of China to abandon its ongoing prolific purchase of U.S. Treasuries/debt—should they become displeased with U.S. policies towards Iran.

Unstable situations cannot be expected to remain static. It is reasonable to expect that the Chinese are hedging their bets. It is unreasonable to expect that they plan to be left holding devalued dollars after a sudden decline in their value. It is possible that the artificial situation could continue for some time, but this will be due largely to the fact that the Chinese want it that way. Regardless, China seems to be in the process of unloading some of its U.S. dollar reserves in the world market to purchase oil reserves, and most recently attempted to buy Unocal, a California-based oil company.

The irony is that apparent U.S. plans to invade Iran put pressure on the Chinese to abandon their support of the dollar. Clark warns that “a unilateral U.S. military strike on Iran would further isolate the U.S. government, and it is conceivable that such an overt action could provoke other industrialized nations to abandon the dollar en masse.” Perhaps the U.S. planners think that they can corner the market in oil militarily. But from Clark's point of view, “a U.S. intervention in Iran is likely to prove disastrous for the United States, making matters much worse regarding international terrorism, not to mention potential adverse effects on the U.S. economy.” The more likely outcome of an Iran invasion would be that, just as in Iraq, Iranian oil exports would dry up, regardless of what currency they are denominated in, and China would be compelled to abandon the dollar and buy oil from Russia—likely in euros. The conclusion is that U.S. leaders seem to have no idea what they are doing. Clark points out that, “World oil production is now flat out, and a major interruption would escalate oil prices to a level that would set off a global depression.”

Update by William Clark: Following the completion of my essay in October 2004, three important stories appeared that dramatically raised the geopolitical stakes for the Bush Administration. First, on October 28, 2004, Iran and China signed a huge oil and gas trade agreement (valued between $70 and $100 billion dollars.)1 It should also be noted that China currently receives 13 percent of its oil imports from Iran. The Chinese government effectively drew a “line in the sand” around Iran when it signed this huge oil and gas deal. Despite desires by U.S. elites to enforce petrodollar hegemony by force, the geopolitical risks of a U.S. attack on Iran’s nuclear facilities would surely create a serious crisis between Washington and Beijing.

An article that addressed some of the strategic risks appeared in the December 2004 edition of the Atlantic Monthly.2 This story by James Fallows outlined the military war games against Iran that were conducted during the summer and autumn of 2004. These war-gaming sessions were led by Colonel Sam Gardiner, a retired Air Force colonel who for more than two decades ran war games at the National War College and other military institutions. Each scenario led to a dangerous escalation in both Iran and Iraq. Indeed, Col. Gardiner summarized the war games with the following conclusion, “After all this effort, I am left with two simple sentences for policymakers: You have no military solution for the issues of Iran. And you have to make diplomacy work.”3

The third and final news item that revealed the Bush Administration’s intent to attack Iran was provided by investigative reporter Seymour Hersh. The January 2005 issue of The New Yorker (“The Coming Wars”) included interviews with high-level U.S. intelligence sources who repeatedly told Hersh that Iran was indeed the next strategic target.4 However, as a permanent member of the UN Security Council, China will likely veto any U.S. resolution calling for military action against Iran. A unilateral military strike on Iran would isolate the U.S. government in the eyes of the world community, and it is conceivable that such an overt action could provoke other industrialized nations to abandon the dollar in droves. I refer to this in my book as the “rogue nation hypothesis.”

While central bankers throughout the world community would be extremely reluctant to “dump the dollar,” the reasons for any such drastic reaction are likely straightforward from their perspective—the global community is dependent on the oil and gas energy supplies found in the Persian Gulf. Numerous oil geologists are warning that global oil production is now running “flat out.” Hence, any such efforts by the international community that resulted in a dollar currency crisis would be undertaken—not to cripple the U.S. dollar and economy as punishment towards the American people per se—but rather to thwart further unilateral warfare and its potentially destructive effects on the critical oil production and shipping infrastructure in the Persian Gulf. Barring a U.S. attack, it appears imminent that Iran’s euro-denominated oil bourse will open in March, 2006.5 Logically, the most appropriate U.S. strategy is compromise with the E.U. and OPEC towards a dual-currency system for international oil trades.

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