The Achilles’ heel of a Debt-Based Economic and Financial System
It has long been my contention that the monetary authorities, that is, the central banks of the various nations have been scrambling since at least the year 2005 to keep the economic system intact. Indeed, I believe the writing was actually on the wall concerning the soft under-belly of the Debt-based Economy and was evident back to at least the turn of the millennium in the late 1990’s, at least to insiders. So perhaps those who prepared for the Millennial Collapse in 1999 are to some degree vindicated in their preparations though the cause of a “computer glitch” was the wrong source.
Since that time the banksters, like the Great Oz, have been fancy-dancing to keep up appearances of a robust economic time. However, the eventual collapse was inevitable. Much as in a game of musical chairs, there is never enough to go around and when the music stops there is a mad scramble to get a seat. In the case of the global economy, there are far fewer chairs to go ‘round for all the players and the chairs left are rickety and decrepit.
During the Great Depression when 80% of US banks failed those with money still in the banking system lost all. Today, the banksters, in an effort to keep fewer banks from failing are inventing innovative and imaginative ways to keep them going. Hence, we see the emergence of so-called “bail-ins”. If you’re a long time reader of CRS you by now know what a bail-in is. It is the unilateral declaration that the depositors in a banking system are actually the partners, (though silent and without representation) in the bank; thus a bail-in is a type of margin call within the banking industry where the funds are forfeit in order to keep the banks solvent.
In times past, banks were considered investments, and depositors were subjecting their investments to risks, but such banking investments were considered safe, at least following the Great Depression of the 1930’s because of the various safeguards put in place by the government, such as FDIC, the Glass Steagall Act, among others. Prior to these safeguards those depositors in the era of the Great Depression lost tens of millions of deposits as banks folded.
In our days, while the Glass Steagall Act was repealed in the 1990’s the FDIC is still in place therefore many have a false sense of security in the safety of their nest eggs. However, the always inventive banksters have come up with a new ploy in making the depositors partners in the banks and tapping the savings in the form of bail-ins. Clever no?
The effects of a systemic failure are essentially the same, however, as in the 1930’s. To quote our illustrious former Secretary of State, Hillary, at this point what difference does it make? Whether our grandparents lost their hard-earned savings due to bank failure or we, their grandchildren lose it through bail-ins the effect is the same …we lose. We are the ones to bear the burden of fiduciary failure of our economic, monetary, and political leaders.
For an overview, better described as Bail-ins 101, read the below short article; it is written so a laymen can understand what has happened, and continues to happen, in our banking system.
Here is the web citation:
Richard of Danbury, D.S.G.