Future Bank Failures Will Be Paid For By Investors

Europe has been debating who will ultimately pay for the financial system failure...if it fails.

Surprise!  It will be bank shareholders, bank bondholders and any SAVER who has more than $132,000 at the bank!  That will sure teach you to save money!!

But I guess the good news is that the agreement is made to shield taxpayers from having to pay for all the banks when the Ponzi scheme fails.

The European Union agreed on Thursday to force investors and wealthy savers to share the costs of future bank failures, moving closer to drawing a line under years of taxpayer-funded bailouts that have prompted public outrage.

After seven hours of late-night talks, finance ministers from the bloc's 27 countries emerged with a blueprint to close or salvage banks in trouble. The plan stipulates that shareholders, bondholders and depositors with more than 100,000 euros ($132,000) should share the burden of saving a bank.

The deal is a boost for EU leaders, who meet later on Thursday in Brussels, and can show that they are finally getting to grips with the financial crisis that began in mid-2007 with the near collapse of Germany's IKB.

"For the first time, we agreed on a significant bail-in to shield taxpayers," said Dutch Finance Minister Jeroen Dijsselbloem, referring to the process in which shareholders and bondholders must bear the costs of restructuring first.

The rules break a taboo in Europe that savers should never lose their deposits, although countries will have some flexibility to decide when and how to impose losses on a failing bank's creditors.

"They can affect German savers just as well as they can affect any other investor in the world," German Finance Minister Wolfgang Schaeuble said after the meeting.

Taxpayers across much of Europe have had to pay for a series of deeply unpopular bank rescues since the financial crisis that spread across the bloc to threaten the future of the euro.

Here;  http://www.reuters.com/article/2013/06/27/us-eu-banks-idUSBRE95Q02L20130627

Remember what happened in Cyprus a handful of months ago?  They simply closed the banks and gave their savers NO ACCESS to their money.  After a few days they would open for a few hours but limit withdrawals to a few hundred dollars.

Of course they pretty much HAD to do that...knowing full well that everyone would take out all their money and send it to some German bank.

Can you understand now how the entire paper money system it based on faith and confidence?  Who wants to buy your printed paper dollars when folks realize that no one else in the world wants them...and in fact everyone else in the world is trying to get rid of them?!

That's what happens when a currency collapses.

One day it will happen in America.  We just have NO IDEA when.  However, we are guessing it is going to happen a lot sooner than most people can fathom.

Hat tip to Tom F.