It is really surprising what surprises some people!
If you trust your money to a bank, you are the debtee of the bank. There is no way the bank would keep “my money” safe. It is only insured up to 100,000 €, the remainder is subject to the usual insolvency procedure in case of a bankruptcy. Of course, the capital that used to belong to the owners is gone and the same is true for those who bought “bonds” from the bank that were insured, such as bank loans or derivates, etc.
Now this might be boding ill, but it is not really a surprise: if a state is bankrupt, then so are its banks. After all, huge parts of the federal debt were bought up by the banks using the money their customers had given them. Or would it be better if banks refused to finance the state? Basically, private debtees can only get rid of their debts inside the legal order. That makes the private debts safer – which is a fact mirrored at the bond market during the last years.
But then, how else could the enormous savings capital of the citizens be invested if not through the state and administrative units? To be sure, the citizens might invest in naturals, but especially in Germany, this is done less often than in the rest of Europe. For example, we have less property owners than Cyprus. So what really matters – be it savings for old age or for one’s education – is that states are kept in good solvency in order to organize an important characteristic of money: maintaining its value.
If a state spends more money than it gets from its citizens through taxes, fees, customs, etc., then its solvency is reduced. But he has the right to fall back on the fortune its citizens have built up. Because we democrats gave all our rights to the sovereign.
So what options does the state have in order to create a basis for a new currency after said state went bankrupt (= nobody was prepared to give it any more money)?
Here is a list of torture instruments, I am sure it is nowhere near complete:
- Currency cut at exchange ratio;
- Obligatory mortgage on property;
- Obligatory loan for all bank accounts and deposits;
- Exchange control regulations;
- Replace money by coupons;
- Forbid the ownership of gold;
- Property taxation;
- Compulsory expropriation;
- Inheritance taxation;
- All property goes back to the state;
- Increase all taxes and other fees;
- Debt cut through refusal of paying back state loans;
What an impressive list!
(Translated by EG)