European Banking Crisis – Seizing 10% of Everyone’s Accounts – Hello Cyprus
by Martin Armstrong
The European Banking Crisis is getting much worse and the whole structure is crumbling to dust. The banks cannot save themselves. The entire crisis is all about the structural design of the Euro, which the politicians will not address. They failed to create a single national debt and in so doing, the banks then used the debts of all member states as reserves. Southern European banks still depend on the steady flow of subsidies coming from the ECB. The politicians and academics are simply lost because they are avoiding anything that would expose the fatal flaw in the Euro design. Therefore, all we get is more of the same and with each band-aid applied failing to stop the blood gushing from the fatal wound. We need stitches at this point and there is nothing in sight that the politicians will even consider that requires them to take any responsibility whatsoever.
These European Zombie Banks, as they are being called, are creating a controversy surrounding a “safety net” that the ECB and European Commission are trying to create. Europe is desperately trying to take the DEFLATIONARY path by simply confiscating assets of all citizens in all Eurozone banks. So much for the hyperinflationists. They just do not get it. The banks are heavily indebted and cannot save themselves especially when they had to buy weakening government debt of member states and derivatives that blew them up offered by New York. The combination of toxic derivative products coming from New York and the fatal design of the Euro, it becomes impossible for many of the Eurozone Banks to survive intact.
The Eurozone is becoming an economic combat zone as this banking crisis merges with the Sovereign Debt Crisis and simply expands exponentially. Mario Draghi has injected about one trillion euros by “Longer-term Refinancing Operation” (LTRO 1 and 2) to support the banks. This, like the Fed, failed to produce inflation the gold promoters swore would happen because they failed to consider the contraction in assets we now face.