|He is hungry and he is looking for your savings!|
“If there is a risk in a bank,” he said, “our first question should be ‘Okay, what are you in the bank going to do about that? What can you do to recapitalize yourself?’ If the bank can’t do it, then we’ll talk to the shareholders and the bondholders, we’ll ask them to contribute in recapitalizing the bank, and if necessary the uninsured deposit holders.”
In other words, shareholders and bond holders can expect a major haircut.
Then consider what the Bank of England and the American Federal Deposit Insurance Corporation (FDIC) have been jointly considering how savings deposits which are said to be guaranteed for the average saver or depositor will instead be used to bail out failing banks. Hard to believe. (See more on this at http://tiny.cc/z4jcuw ) In other words, savers who thought their deposits were guaranteed for up to the first 100,000 may want to rethink that position.
In Spain, the Finance Minister has said that the Spanish government will put a levy (read tax) on banks based on the total amount of savings they hold. Bank account holders in Spain can expect to pay this indirect tax through higher fees and lower service levels. (See more at: http://tinyurl.com/cedrumy)
To reduce this to its most basic, the logic and math of the economists says:
Banks and governments need more money to sustain their debt and overleveraged risks.
They cannot raise more through taxing a declining economy.
They are running out of accounting tricks to kick the can down the road.
Printing money is not working.
Savers have money.
The banks and the governments will change the rules so they can get the money.
Seen collectively, the economists who work for the banks and the government know where your money is and they need it. They are casting a predatory eye on your savings.
Unfortunately, the politicians will not stop this. Their own positions are closely aligned to the banks so they will assist the process. (See http://tinyurl.com/cdrnm7f)
This is economics for the rest of us. Savers beware.