We are watching a live broadcast of the crisis

Although it is not said out loud anywhere, the EU is going to centrally manage banks, de facto nationalize banks. The effects of the whole thing can be catastrophic.


A new regulation is being prepared in the EU: banks will have to have "gender" balanced management and The EU will determine for banks what money to buy for what money, what to invest in.

If so, how Petr Mach writes in his article, we have something to look forward to.

The new EU regulation - if passed - is to force banks to invest their money in "risk-free" assets to some extent. Which assets are "risk-free" will be determined by the EU - above all, they should be EU state bonds.

Central planning per excellence

To date, it has been practically a bit difficult to explain how, while the central bank can (or is trying to) manipulate interest rates, how it is a form of central planning.

Now that explanation will be much easier.

I have a riddle for you: you decide where the company will save its clients' money and its own, what products the company will offer, who will manage the company to what extent.

The question is: who are you? The owner or a high-ranking manager of a company (here a bank), or a "government" official? You are second in the future EU. Not only will officials have the de facto power to run entire banks. Thanks to the EU regulation, even the owners of the bank or its management will not be able to disobey that directive. The bank's managers will become operational maintenance workers, and real decisions will be made by the clerk.

Sure, the official won't be from the state planning commission today, but that doesn't change anything. His powers will be the same, if not greater. It is only a matter of time before it is no longer just about banks, but also about many other "important sectors".

Banks will be nationalized, moral hazard stirred up

If the original owner can no longer decide on the operation of his business, it means that he is no longer the owner.

But what is the EU doing? By its regulation, the EU deprives property rights to owners and appropriates them. It is a real nationalization of banks.

Banks will be decided by officials, the responsibility will lie with the (former) owners. Decision-making without responsibility leads to moral hazard. It is the same as if the state guaranteed bank investments.

If banks have to invest in the bonds of the most vulnerable countries and these assets are considered "risk-free", this is utter madness.

Not only are "risk-free" assets essentially non-existent, but bonds of vulnerable countries are certainly not even "minimally risky". Why are yields on distressed country bonds rising? Because holding their bonds is an increasing risk! The whole regulation goes against elementary logic.

Of course, drowning money in this black hole will have an impact. In these high-risk bonds, much more money will be deposited under the guise of "EU lawlessness" than usual. The moment these investments really stop coming back, the banks run out of money and a massive banking crisis comes.

It will then spill over into the whole economy with strong vigor, as the banking crisis will affect financial markets, commodities and more.

Only those who make decisions but are not responsible can afford to order something like that dangerous and liquidation. This catastrophe is possible only in an environment of moral hazard, in an environment that the EU creates.

Remember: the banks are not to blame for that crisis, but the EU, which will actually manage them!

Debt monetization

When banks run out of money, politicians will take advantage of the situation promptly and force the ECB to provide liquidity to the banks - figuratively speaking, "press the money".

Keep the talk of the ECB's "independence" for grandmothers. Today, the independence of the ECB is perhaps not believed even by the biggest naives, especially if Europe is ruled by the Merkel-Sarkozy duo.

Given that banks will have to buy EU bonds, states will be happily in debtbecause they will have some sales for their debts. This is also a moral hazard - States will be indebted many times over.

The market will not warn them that "it is already too much", because the market will be blocked. Banks will be managed centrally, and the purchase of bonds will simply be ordered.

What does it mean? That "when it fails, it will be a real mess" - it will really be "big money". Today's national debts will be just a drop in the ocean compared to the future situation.

If the ECB is forced to supply huge amounts of money to banks, it will also mean significantly higher inflationthan we are used to. Sure, private creditors can take out "inflation insurance," but Remember that banks will no longer be private creditors.

When certain economists predicted the monetization of debt, many laughed at them. Today we have it here in black and white. By the way, do you remember the CMEA? This is basically her second version.

Government debts will be paid by the poorest

Higher inflation has the worst impact on the poorest. It is necessary to realize that after pouring new money into circulation, the ones closest to the banks will be the first to get the new money. Those with new money buy at old prices.

Prices will then start to rise - and will rise before the poorest get the new money. They will become even poorer - It will be they who pay the state debts. They and all the savers in money.

Rising prices and widespread poverty will, of course, be significant social impacts. The banking crisis and the ensuing economic crisis will bring for some time high unemployment, followed by poverty.

Will the EU approve its own end?

Such crises and aggravated situations blame extremists. Needless to say, that one of the reasons for Hitler's rise was hyperinflation and that one of the last races in the devaluation of the currency ended in World War II.

The culprits of the whole crisis will be identified as "capitalist banks" that went "fed up with profits". Ironically, it will actually be completely opposite.

As a result, however, it will lead to even greater resistance to open markets. He's coming protectionism "To protect jobs", massive redistribution and central management "to help the poorest" and "eliminate the recurrence of the crisis".

In short, the Plan will come. Central plan. The road to slavery will be completed.

Either way, the idea of ​​the EU will be dead. Disillusionment with the crisis will destroy it. On the one hand, it can be nice. On the other hand, what comes will be more reminiscent of Orwell's 1984 than the liberal world of free trade, low (or no taxes), freedom and responsibility.

If that regulation is approved, a bleak future can await us all. It can, it doesn't have to.

What future do you want?


  1. What you mention today is just one of the bad things about "saving" the EU from the recent crisis and collapse. I haven't been here for a long time, so I don't know if you mentioned any of it as well, but the direct future classified rescue contribution in the estimated amount of CZK 250 billion is definitely worth attention. You can also find this information on the website of free people, it is related to the change in the functioning of the EU (ratification of the change in the Lisbon Agreement).

    Regarding the problem of non-risk assets of banks, the Czechia is in a special situation. On the one hand, we have (today) quite healthy banks whose assets are mainly deposits and debts of small savers. So this step would clearly worsen their stability.
    The second strange thing is that most banks are foreign. Only during the alleged attempt to harm the mother of our KB did I think about what would really happen to KB if this bank was taken over by the state or decided not to continue operating or change in our market.

    By the way, the fact that KB had bought quite a few bonds was a public secret.
    In the past, I tried to find out how the banks with our bonds are, but without results. If the EU wants to take a protective step, then banks must publicly inform their clients what assets they hold. Clients will still have to consult with experts, so feel free to let the bank publish it in general.

    The fact that the Czechia has not yet signed an agreement on bank regulation does not mean that the parent bank in its country has not already done so and therefore has no reason to change its plans for the daughter bank. What will we do when the parent bank orders the bank-subsidiary to hold mainly bonds, and it will be sanctioned by EU laws?

    Lately, I've been trying to spread the word to less common places, but people don't care much. Even the fact that the current rescue step - the purchase of bonds of over-indebted eurozone countries - means a direct devaluation of the Euro.

    "Euro - a currency covered by worthless bonds" is on my tongue.

    Nobody just wants to admit that people will be forced to pay the debts that politicians hacked when the banks lent them money that the same people had previously entrusted to them, including interest.

    It is also interesting that the EU itself and the ECM together with the IMF do not seem to realize that their steps to save the EU, the eurozone, the euro, are going against each other. As a result, the situation is deteriorating. There is no trust in states, banks, currencies, markets,…

  2. Officials, bureaucrats, they are clear, they will only make it worse. Commodities will also be protected, the problem will be when they are banned as in the USA.

    I used to think if it is even possible to do something - I mean something real, because, for example, leaving the EU today is, in my opinion, an absolutely unfeasible step, it has no chance to go through.

  3. What can you do? It may not be approved. But who believes in common sense in the case of EU officials and politicians?

    We can leave the EU before that regulation is introduced. But is it realistic to catch up?

    There is no point in moving, because the effects will be global.

    Well snad and perhaps only - to save in anything, but not in paper money. Invest. I don't know if it's for gold, silver or anything else, but maybe everything is better than paper money.

  4. Now all you know is how to protect yourself against it, or ideally whether something can be done about it.

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