Capital Controls And A Bank Holiday In Greece… Here’s How You Can Profit

For the unprepared, it happens like a mugging…

When you hear a central banker or politician deny that something is going to happen to bank depositors, you can almost be certain that it will happen. And probably soon.

Coming from a government official, the real meaning of “No, of course not” is “Could be tomorrow.”

There’s a reason for the dishonesty. The government needs to take the public by surprise. Otherwise they won’t get the results they want from capital controls or a bank holiday.

The term bank holiday is a politician’s euphemism. When one happens, you won’t be celebrating. You won’t be able to access your bank account, and you’ll be worried.

How will you get by, and how long will the lockout last? And when it ends, will all your money still be there? Will any of it remain?

Calling the experience a bank holiday is like calling a street mugging a surprise party.

Once the banks are closed - or on “holiday,” as the government puts it - the politicians are free to help themselves to as much of the customer deposits (including yours) as they want. It’s like an all-you-can-steal buffet.

A bank holiday usually dovetails with capital controls, which are restrictions on the free flow of money out of the country. Capital controls make it hard for the country’s remaining wealth to dodge a future mugging.

Bank holidays and capital controls are all about the government maximizing the amount of money available for them to confiscate during a crisis. Pen up the sheep, and they’re easier to shear.

It’s a common pattern… 1) country in financial trouble, 2) government denials, 3) surprise bank holiday, 4) wealth confiscation, and 5) capital controls.

It’s a pattern we’ve seen repeated in many countries in economic crisis.

We saw it in Cyprus during their banking crisis of 2013. The trap slammed shut without warning on an otherwise ordinary Saturday morning. The government declared a surprise bank holiday. Capital controls and a bank deposit confiscation followed. It occurred despite repeated promises from the highest Cypriot politicians that bank deposits would be safe.

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