Tag Archive for Ecb

What You Absolutely Need to Know About Money (Part 6) – Shah Gilani- Money Morning

Our last chapter was about how the U.S. Federal Reserve was created and why. But it ended with an extreme example of how the universal central banking model works today.

Cyprus.

As another domino threatened the house of cards holding up European banks, more money had to be pumped into Cypriot banks so their doors didn’t close and rapid contagion wouldn’t implode all of Europe, and then the world.

Only this time was different.

The European Central Bank (ECB) reached straight into Cypriot bank depositors’ pockets and stole about $6 billion from them. The “how” isn’t important. It’s a simple equation, as revealed in Part V. Governments are the backstoppers of central banks; that’s where their authority ultimately comes from.

Why did the ECB steal depositors’ money? So they could turn around and lend that and more to the insolvent banks to keep them alive. It’s the latest twist in the old “extend and pretend” game.

The big question is, how did banks get so big and so dangerous in the first place?

Or, how did stodgy traditional banking morph into “casino banking” on a global scale?

Here’s how it started…

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As Cyprus Struggles, Now Is the Time to Buy Gold – Money Morning

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission. I’ll bet a few Cypriot bank account holders are paying much closer attention to gold now.Since the announcement that Cyprus was looking to confiscate up to 10% of bank deposits, gold has risen by up to $24/ounce on…

A Quarrel in a Far-Away Country between People of Whom We Know Nothing – Frederick J. Sheehan

Even for those living on a distant continent, the confiscation of state-guaranteed bank deposits in Cyprus is a reminder. (At this stage, it is not clear the Eurocrats will succeed.) Governments and central-banks blew their capital to save a financial Ouija board – not system – in 2008. Former Federal Reserve Chairman Paul Volcker reminded…

Italian Elections: Split Vote “Worst-Case” for Eurozone – Money Morning

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission. If preliminary results prove accurate, the Italian elections will result in a “hung” parliament, meaning no party will have enough seats to form a government. The lack of a definitive result could temporarily paralyze the Eurozone’s third-largest economy…

Eurozone Debt Crisis: Why U.S. Investors Still Can’t Relax – Money Morning

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission. After nearly four years, billions in bailouts and increasingly strict austerity measures, not only is the Eurozone debt crisis no closer to resolution, but the attempts to solve it are pushing the region deeper into recession. According to…