There will be more wealth confiscation, without a doubt' … Savers and investors face further "wealth confiscation" in Europe as the continent struggles to resolve the single currency's problems, a bank chief has said … European politicians will take the "easy option" of taking money from the rich rather than raising taxes and cutting spending to deal with the continent's debt problem, Lars Christensen, the head of Saxo Bank, said. – UK Telegraph
Dominant Social Theme: Bank customers need to pay for banking inequity.
Free-Market Analysis: Whoops, there goes Lars Christensen running his mouth again. Christensen is one of the founders of the idiosyncratic Saxo bank, which began life online, apparently as an "Internet bank." When you read up on Saxo you will be surprised as to how much controversy it's attracted.
Most recently, it was subject to a comprehensive investigation by the Danish equivalent of the SEC, and perhaps out of frustration or perhaps because Christensen can't help himself, he spoke bluntly to the Telegraph about what is in store for Europe and perhaps the rest of the West.
And that is? … More monetary confiscation as the Eurocrats struggle with ways to bail out a drowning financial system. Employing the same kind of "implacable rigor" as pre-war National Socialist functionaries, they will not acknowledge the fatal flaws in the euro. Half of Europe is to be thrown out of work and face starvation before this abortion of a currency is finally to find its grave.
In the meantime, confiscation is the theme of the day. Here's more:
Asked if the raid on uninsured savings in Cyprus would be repeated, [Christensen] told City AM: "There will be future bail-ins [loss of deposits] and other types of confiscation of wealth in the eurozone, without a doubt.
"There's no other realistic way forward if politicians continue to fail to deal with the basic indebtedness problem across Europe. They will either have to raise taxes and cut spending, or politicians will take the easier route and take money from the rich."
Earlier this week savers at Bank of Cyprus saw 37.5pc of their balances above €100,000 converted into shares, with a further 22.5pc at risk and 30pc frozen.
Following the Cyprus deal, several senior German economists proposed that wealth taxes be used to fund future bail-outs in the eurozone, with British owners of holiday homes potentially in the line of fire.
Senior advisers to Chancellor Angela Merkel pushed for better-off households to pay towards the cost of any future bail-outs for the weaker members of the single currency. The proposals, from members of Germany's council of economic experts, raised the prospect of taxes being imposed on property in a country such as Spain if its government was forced to seek a bail-out.
Mr Christensen said confidence in currencies such as the euro, dollar and yen was being undermined and that the gold price would eventually recover as a result.
These are all fascinating comments from Christensen, and … who knows … perhaps they will get him investigated once again. The basic thrust of this argument is that as the Eurocrats have tried everything else, they are now turning to the easiest and simplest solution for the "debt crisis" … outright theft of assets based on dubious legal assertions.
This is an extremely dangerous approach, of course, and Christensen diagnoses the problem fairly well. Toward the end of the article he is quoted as follows, "Trust in the fiat [paper] currency system will slowly begin to disintegrate. We've seen it in gold. The recent sell-off was driven by buy and sell pressures in a market that is not as big as many people think. Eventually gold will pick up and go higher."
The old principle of the "prudent central bank has disappeared. We now have overt political influence of central banks, and that's dangerous." This would seem to be an honest opinion from a financial maverick. It reinforces our belief that the Eurocrats are losing control. Their solutions aren't working and now they are using the brute force of confiscation.
In the past we've pointed out that such solutions increase European chaos and this is the last hope of these people, that the mass of Europeans begin to suffer so much that increased "rigor" and a political union looks increasingly preferable to the current mess. But in the age of the Internet Reformation, this is a serious gamble, indeed.