Tuesday, September 09, 2014

Trillion-Dollar Deficits

The International Monetary Fund (IMF) published a horrifying paper, called...

The Fund’s Lending Framework and Sovereign Debt

That paper in turn was based on one from December 2013, called...

 Financial and Sovereign Debt Crises: Some Lessons Learned and Those Forgotten.

All the Network media ignored all of this, of course.

The December 2013 document, right at the start, says that “financial repression” is necessary. Here’s what it says:
The claim is that advanced countries do not need to resort to the standard toolkit of emerging markets, including debt restructurings and conversions, higher inflation, capital controls and other forms of financial repression.

As we document, this claim is at odds with the historical track record of most advanced economies, where debt restructuring or conversions, financial repression, and a tolerance for higher inflation, or a combination of these were an integral part of the resolution of significant past debt overhangs.

So, in order to fix debt overhangs—currently at horrifying levels—financial repression is not just an option, but required.
That’s not my interpretation; those are their words.
And, of course, they’ve already had a trial run, when they stole funds directly from individual bank accounts in Cyprus. Here’s how that went down:
  • March 16, 2013: Cyprus announces a bank holiday and sets the terms of a “bail-in” to save the banks: 6.75% of all bank balances under €100,000 and 9.9% of balances larger than €100,000 will be confiscated. In honest language, the word for that is “theft.”
  • People screamed, and the government hemmed and hawed for a number of days.
  • March 24, 2013: People are permitted to withdraw €100 at a time from their bank accounts.
  • March 25, 2013: A bail-in deal is announced. Accounts with over €100,000 lose either 47.5% of their money (Bank of Cyprus) or 100% of their money (Laiki bank).
And as it happened, a number of very rich people and companies were permitted to withdraw their money in full, regardless of the “bail-in.”

The IMF report goes on to say:
Governments can stuff debt into local pension funds and insurance companies, forcing them through regulation to accept far lower rates of return than they might otherwise demand. ….

Domestic defaults, restructurings, or conversions are particularly difficult to document and can sometimes be disguised as “voluntary.”
The paper that they slipped out also adds this:
The Fund would be able to provide exceptional access on the basis of a debt operation that involves an extension of maturities.
That means that 30-day notes can be instantly turned into 30-year bonds.

The US Treasury Is Already on the Job

It’s not just the IMF, of course. The US Treasury has had a group working on these ideas since the Bush administration.
And in August 2010, the US Departments of Labor and the Treasury held joint hearings, deciding how best they could take control of all assets in IRAs and 401(k) accounts. The decision was that they’d replace them with “Treasury Retirement Bonds.”

More Examples
  • In 2009, the government of Ireland swiped €4 billion from its National Pensions Reserve Fund in order to prop up its insolvent banks. The following March, they stole the remaining €2.5 billion for another bailout.
  • In November 2010, the French parliament took €36 billion from a reserve pension fund to pay the debts of a “social” fund.
  • Also in November 2010, the government of Hungary effectively took 2.7 trillion forints ($13.5 billion) from 3 million retirement accounts.
  • The government of Poland nationalized one-third of future contributions to individual retirement accounts. That money will almost certainly disappear into the state treasury, robbing savers of some $2.3 billion per year.


Understand that the financial powers that be—the IMF, World Bank, Bank for International Settlements (BIS), assorted central banks, and your local government—are ready to rob you.

When the time comes, all their usual sucker-bait will be pulled out: “It only hits the rich,” “We have to trash the economy to save it,” “We must all sacrifice,” “It’s for the children,” and so on.
All the right-thinking people on television will wring their hands and say it’s the only way out. Perhaps they’ll even let a bank or two crash for good effect.

But in the end, they aim to steal your money. Government and the big banks will continue unharmed.

If you want to protect yourself, you need to get your wealth out of registered accounts, because that’s where they’ll grab first.
Understand that these people have only two real choices:
  1. Reform their system, close the central banks, and give up their power.
  1. Start grabbing the only big pile of portable wealth remaining: your retirement money.
I don’t think any of us believe they’ll take option number one.

Don't think it can't happen? It already did April 5, 1933


excerpted from:http://www.lewrockwell.com/2014/09/paul-rosenberg/theyre-coming-for-your-assets/

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