The Cypress Crisis

[August1991]

What does bankruptcy for a country mean?

This is a good question.

First, a country is not a government (nor a State). Governments (politicians) typically desire to confuse these terms. (The best advertisers are politicians, and the very best those who claim to represent the State.) Canada is one thing. The Canadian federal government something else.

Second, a government can possibly be bankrupt, even a State, but never a country. A country is a place, the rocks and trees, and people speaking whatever language. In 5000 years, I doubt whether Canada (and its flag) will still exist. But I believe that the St. Lawrence River will flow to the ocean.

Third, the US Constitution (the State) gives the US federal government the power to tax people like Bill Gates, Warren Buffett and the Estate of Steve Jobs in any way it wants. The US federal government has the power to seize property from over 300 million people whenever it wants.

---

Why is Obama such a powerful guy in the world?

The US Constitution gives him (with the agreement of the US Congress) the power to tax people like Bill Gates and Warren Buffett.

The top guy in China or Russia could wish for so much.

Edited March 29, 2013 by August1991

[Michael Hardner]

World debt is not sustainable, people need to understand the size and scope of the problem. Things are not going to get any better, in fact they will get even worse. The only solution is a general debt amnesty, an option not available until modern times. As we slip into a world of macro-economic considerations there appears to be few available options to a one world currency, a one world bank, a one world economy. A debt amnesty is a far better alternative.

The system that replaces it will need to be far more open, though, for people to trust in it. There appear to be robbers slipping in the back door constantly, and politicians slipping in the front door and withdrawing trillions to pay for their promises to the people.

The thing is - there is more wealth today than at any time in history - but our patchwork systems to manage the economy and the political economy are failing us.

[RNG]

This is a good question.

First, a country is not a government (nor a State). Governments (politicians) typically desire to confuse these terms. (The best advertisers are politicians, and the very best those who claim to represent the State.) Canada is one thing. The Canadian federal government something else.

Second, a government can possibly be bankrupt, even a State, but never a country. A country is a place, the rocks and trees, and people speaking whatever language. In 5000 years, I doubt whether Canada (and its flag) will still exist. But I believe that the St. Lawrence River will flow to the ocean.

Third, the US Constitution (the State) gives the US federal government the power to tax people like Bill Gates, Warren Buffett and the Estate of Steve Jobs in any way it wants. The US federal government has the power to seize property from over 300 million people whenever it wants.

---

Why is Obama such a powerful guy in the world?

The US Constitution gives him (with the agreement of the US Congress) the power to tax people like Bill Gates and Warren Buffett.

The top guy in China or Russia could wish for so much.

If you read the news at all you would know they have that power now. It's called police and armed forces.

The only thing they are lacking is constitutional authority o/e but they just don't let little things like that bother them.

[Pliny]

The system that replaces it will need to be far more open, though, for people to trust in it. There appear to be robbers slipping in the back door constantly, and politicians slipping in the front door and withdrawing trillions to pay for their promises to the people.

The thing is - there is more wealth today than at any time in history - but our patchwork systems to manage the economy and the political economy are failing us.

Banks will have to become what their original purpose was...warehouses.....warehouses safe from government confiscation.

[Jerry J. Fortin]

I think that the original stated purpose of the bank was at odds with its creation. I disagree with the premise, banks were never warehouses of money, they always were and always will be place where money changes hands and becomes the personal property of the bank. Once it becomes the banks money it immediately gets circulated after being inflated to the tune of many hundreds of percent that is either paying or earning interests at rates neither truly regulated nor actually enforced.

The banks never actually lend out depositors money. That deposited money is not actual paper currency, it is only the monetary equivalent of gold, nothing more. Cash money is a fiat currency that is not even supported by gold. It has no true value or any real worth. The gold does have value, but when it goes into the bank it doesn't come out. Gold is different than money, it does not earn interest, but it does have value. That is why there is no longer a gold standard, money is no longer support by gold. Anyone can print as many bank notes as they want. Go ahead and print some money. It grows on trees.

I believe that there are actually two problems with the financial system. The first problem being the so-called central banks, and the second being the fractional reserve system. Central banks were created to provide industry standards that would enable the free movement of capital to facilitate modern business ventures, and these central banks from the day they were created were privately owned. These institutions have acquired the authority to create monetary policies, and set currency values. Nations no longer control their own money supply, the bankers do. The second problem as I see it is the source of the money supply itself, a fiat currency brought into being as interest bearing debt, not cash money but simply the monetary equivalent thereof.

The way I see it, there is little more than fraud going on a worldwide scale. More money is created by bankers than actually exists in their depositories. This money created from nothing earns interest from nothing creating even more money in an apparently never ending cycle. The simple act of lending out more than you have has a very logical result that surprises nobody but the bankers. The pyramid schemed of the modern financial world is coming unglued at the seems.

[GostHacked]

http://www.bbc.co.uk/news/business-21982652

Now it looks like anything over 100gs is subject to a 60% haircut. People who actually have tried to save money here are the ones getting screwed.

Bank of Cyprus depositors
with more than 100,000 euros (£84,300; $128,200) could lose up to 60%
of their savings as part of an EU-IMF bailout restructuring move,
officials say.

The central bank says 37.5% of holdings over 100,000 euros will become shares.

Up to 22.5% will go into a fund attracting no interest and may be subject to further write-offs.

The other 40% will attract interest - but this will not be paid unless the bank performs well.

It was known that the wealthiest savers at the Bank of Cyprus
would take a large hit from the bailout deal - but not to this extent,
the BBC's Mark Lowen reports.

So now this is sanctioned theft of personal bank accounts in order for the bank to remain even in the crappy state it currently is in. Deposits are being morphed into shares so the bank can continue to do business. Those shares will only make a return if the bank makes some solid and profitable investments. And the money that remains won't make any interest money because the bank will never perform like it used to. Well that's if you believe the system was solid in the first place.

The global financial markets are going to really show their cracks this year. Well more so than we have seen in the past few years.

Edited March 30, 2013 by GostHacked

[Canuckistani]

Bank of Canada is owned by the Minister of Finance on behalf of the Queen. So it is not as you describe it. I believe you said it was govts that should print money, well that seems to be the case in Canada. Bank of England was nationalized in 1946. I don't pretend to know enough about banking to argue other points with you, but if you can get this wrong, what else did you get wrong.

I do agree we seem to be in some sort of permanetn appearing crisis. It may just be the shifting of dominance away from Western nations tho. Or, it may be that we've exceeded the carrying capacity of the planet for humans.

[Jerry J. Fortin]

Bank of Canada is owned by the Minister of Finance on behalf of the Queen. So it is not as you describe it. I believe you said it was govts that should print money, well that seems to be the case in Canada. Bank of England was nationalized in 1946. I don't pretend to know enough about banking to argue other points with you, but if you can get this wrong, what else did you get wrong.

I do agree we seem to be in some sort of permanetn appearing crisis. It may just be the shifting of dominance away from Western nations tho. Or, it may be that we've exceeded the carrying capacity of the planet for humans.

The Bank of Canada was created as a private bank, that is a matter of public record. The shareholders of that bank are not a matter of any public record I can find and I have looked very hard. The bank was made into public business in 1938, by an act of parliament to create a special kind of crown corporation. The Bank of Canada changed its name and became the Canadian Bank of Commerce and is now known as the Canadian Imperial Bank of Commerce. The new central bank was formed, and the terms and conditions of the transfer of ownership are nowhere to be found. I believe it is safe to say that the owners of the Bank of Canada were compensated in some manner that was never disclosed to the public. I do not believe for a minute that the owners of that bank suffered any loss.

The Bank of England was in private hands for two hundred years, and there are no accessible records regarding that transaction either. There is a large difference between share and bond holders in legal terms. Those terms were defined by the financial world, private not government banks. Bonds can be very interesting investments, the same cannot be said for shares that are subject to swings in market values. Bonds require different record keeping and come under different regulations. In addition, some bonds can be converted to shares......................

Governments print money, that is true. What is also true is that banks create credit, governments don't. Banks make money, governments don't. By the way more than 90% of the worlds money supply is not in bank notes and hard currency but instead it is interest bearing debt, issued as credit by a bank.

[Pliny]

The Bank of Canada was created as a private bank, that is a matter of public record. The shareholders of that bank are not a matter of any public record I can find and I have looked very hard. The bank was made into public business in 1938, by an act of parliament to create a special kind of crown corporation. The Bank of Canada changed its name and became the Canadian Bank of Commerce and is now known as the Canadian Imperial Bank of Commerce. The new central bank was formed, and the terms and conditions of the transfer of ownership are nowhere to be found. I believe it is safe to say that the owners of the Bank of Canada were compensated in some manner that was never disclosed to the public. I do not believe for a minute that the owners of that bank suffered any loss.

The Bank of England was in private hands for two hundred years, and there are no accessible records regarding that transaction either. There is a large difference between share and bond holders in legal terms. Those terms were defined by the financial world, private not government banks. Bonds can be very interesting investments, the same cannot be said for shares that are subject to swings in market values. Bonds require different record keeping and come under different regulations. In addition, some bonds can be converted to shares......................

Governments print money, that is true. What is also true is that banks create credit, governments don't. Banks make money, governments don't. By the way more than 90% of the worlds money supply is not in bank notes and hard currency but instead it is interest bearing debt, issued as credit by a bank.

Very good post.

A demonstration of how difficult it is to find out how international banking and finance is really structured.

Just one point. The last time I looked at the Bank of Canada's website it stated that the Bank had a single share held

in trust by the Minister of Finance. It did not say who owned the share. It states that the trustee is the Government of Canada. I suspect it is owned by English Royalty since our government legally represents the Crown and not the people.

The people in Canada like to think their government represents them.

Edited March 31, 2013 by Pliny

[GostHacked]

Very good post.

A demonstration of how difficult it is to find out how international banking and finance is really structured.

Just one point. The last time I looked at the Bank of Canada's website it stated that the Bank had a single share held

in trust by the Minister of Finance. It did not say who owned the share. It states that the trustee is the Government of Canada. I suspect it is owned by English Royalty since our government legally represents the Crown and not the people.

The people in Canada like to think their government represents them.

I think that makes it confusing to know what state our Bank of Canada is in.

Since out central bank is tied into all the other central banks, what risk is it in? And what does that mean for the big 5 Canadian banks?

I've seen CBC reports regarding the banks and 'too big to fail'. Then there is the finance minister essentially manhandling the banks to keep the interest rates slightly higher at the same time to tell the banks they must hold more capitol on hand.

But if 90% of the money out there is debt money (meaning still being owed to someone) then who/what is all this money owed to? Or is it a matter of the bank simply conjuring money out of thin air? I go for a loan, and they put 250,000 in my account. Now where do they get that money in order for me to pay interest on it? Seems like I am paying interest on money that never existed in the first place. Throw inflation into the mix and all the money is created out of nothing, backed by nothing other than future labor and loaned at interest.

None of this fractional reserve banking makes sense to me at all, the ponzi scheme is running it's last lap.

[eyeball]

Seems like I am paying interest on money that never existed in the first place. Throw inflation into the mix and all the money is created out of nothing, backed by nothing other than future labor and loaned at interest.

None of this fractional reserve banking makes sense to me at all, the ponzi scheme is running it's last lap.

The idea that it's all based on future labour makes sense until you consider that the natural capital, like trees and fish for example that labour is applied to, are either gone or degraded to the point that there's little if anything left to work with.

That said, if our money supply really is just backed by pie-in-the-sky we should be able to borrow against the day we start exploiting the natural capital that's floating above us in outer space. THAT at least really does go on forever.

Edited April 1, 2013 by eyeball

[GostHacked]

The idea that it's all based on future labour makes sense until you consider that the natural capital, like trees and fish for example that labour is applied to, are either gone or degraded to the point that there's little if anything left to work with.

That said, if our money supply really is just backed by pie-in-the-sky we should be able to borrow against the day we start exploiting the natural capital that's floating above us in outer space. THAT at least really does go on forever.

Well future labor does not need to be tied to natural resources. As long as the debt-slaves work in some fashion, we have essentially a built in servitude society where we work for the money junkies.

Fractional reserve banking without a gold standard or something of real value to back it up means it really is not worth anything.

[eyeball]

Fractional reserve banking without a gold standard or something of real value to back it up means it really is not worth anything.

This is even more true of our economy and environment, the former is not possible without the latter.

[GostHacked]

You don't even need to bring the economy or the environment into it. The money is not backed by anything of value. So the economy is not backed by anything of value (sure it has value, but what is the real value considering how money is created out of thin air).

[Canuckistani]

You don't even need to bring the economy or the environment into it. The money is not backed by anything of value. So the economy is not backed by anything of value (sure it has value, but what is the real value considering how money is created out of thin air).

How will using gold and giving it an artificially inflated value be any better?

[GostHacked]

How will using gold and giving it an artificially inflated value be any better?

I really don't know that answer. But if the currency is not backed by anything, how does one understand the value of the currency? What is it based on? And how did we move from a gold based valued currency to what we have now? We know for a fact it's not based on gold anymore.

But maybe that would prevent inflation, with having it tied to something of value. But even that can all be negated by simply firing up the printing press again which helps devalue the dollar.

For what it is worth, I have seen inflation always rising faster than the cost of living. Random thought, not sure if that really fits into what we are talking about.

[Canuckistani]

No matter what, the capitalist system seems to be based on faith. Faith in paper money, faith in gold, I'm not sure there's much difference. They had bubbles and collapses when I believe they were stil on the gold standard. What we seem to need tog get rid of is easy money, ie money made by speculation. That seems to be where the weakness of the system lies. OTOH, I guess that speculation also raises the capital that allows for booming economies. So we'd have to be satisfied with much slower growth rates, lower material standard of living. And of course somebody would always go for the speculation, make a bundle, everybody else would want in, and kaboom

I don't think capitalism is sustainable, it's always going to outpace the resources. A sustainable economy is what we need, but I don't see how we can get there from here. We're pretty well hardwired to grow.

[Pliny]

How will using gold and giving it an artificially inflated value be any better?

Artificially inflated value? What are you willing to pay for it? If you had some what would you be willing to sell it for?

Power is far too concentrated when a single agency can create or delegate the creation of money.

A commodity backed currency prevents that concentration of power.

I suppose we could argue that it didn't prevent Rockefeller and Carnegie from concentrating power. but the problem with that argument is that Rockefeller was able to buy politicians and with the Rothschilds wrote most of the banking legislation to protect their assets. A commodity based currency was a problem to bankers and governments both but that has since been taken care of as an obstacle.

There were indeed bank failures when the gold standard was in place. The reason was the practice of fractional reserve banking, essentially lending out more bank notes than was held in gold deposits - basically doing the same thing of creating money out of thin air. The central banking system was devised to prevent runs on banks. The central bank would stockpile a good percentage of a bank's deposits and move it to wherever it was mostly needed but the central bank set the fractional reserve rate thus controlling the member bank's ability to make profits. The Central Bank was thus a kind of

insurance for member banks against bank runs. The idea was sold to the public as protection and a greater guarantee of their deposits as well as protection against unscrupulous bankers who created too much money out of thin air. In other

words stealing a small amount of money from a large amount of people is acceptable. Scrupulous bankers know not to kill the goose that lays the golden egg.

[Pliny]

Canuckistani, on 01 Apr 2013 - 11:41, said:

No matter what, the capitalist system seems to be based on faith. Faith in paper money, faith in gold, I'm not sure there's much difference. They had bubbles and collapses when I believe they were stil on the gold standard. What we seem to need tog get rid of is easy money, ie money made by speculation. That seems to be where the weakness of the system lies. OTOH, I guess that speculation also raises the capital that allows for booming economies. So we'd have to be satisfied with much slower growth rates, lower material standard of living. And of course somebody would always go for the speculation, make a bundle, everybody else would want in, and kaboom

I don't think capitalism is sustainable, it's always going to outpace the resources. A sustainable economy is what we need, but I don't see how we can get there from here. We're pretty well hardwired to grow.

Faith in paper money most certainly. You don't have to have much faith in gold - it has never in all of history been

worth zero.

The single thing that cannot withstand a no growth economy is government which is why they frantically try to pump it

up and run up deficits to get through them hoping to pay them off (HaHa) when the economy is growing again. People will do whatever to get through rough economic times.

Do you think socialism is sustainable? It usually doesn't last past a generation (about 75 years). Capitalism gets going and is usually corrupted by governments or Kings by debasing the money plus intervening in the market.

[GostHacked]

This man has been covering the banks thing for some time, hard to disagree with much of what he says.

http://www.youtube.com/watch?v=KXgL3dRZzPQ

[Pliny]

This man has been covering the banks thing for some time, hard to disagree with much of what he says.

The people of Cypress are getting shares in the banks. The problem is that the banks invested all their cash from the

Russians in Greek government bonds. I want shares in those guaranteed winners! Those lucky Cypriots.

He has got it right that history is repeating itself but he doesn't go back far enough. It goes all the way back to the Roman Empire. Although it took the Roman Empire about 5 centuries to destroy itself - it happened pretty much the same way that the current civilization is destroying itself and many Monarchs destroyed their Kingdoms. The decay starts with

taking over production of the money supply, debasing it, until it is pretty much worthless and blaming all the resultant economic problems on Bush...er...I mean the market and greedy, hoarding capitalists that are keeping all the money for themselves.