[The following post is by TDV Chief-Editor, Jeff Berwick]
When I first read the news I was taken aback. It said, "Croatia wipes out the debts of thousands of its poorest citizens in 'fresh start' scheme".
I thought to myself, "Could it be? A government or banking system that actually does something somewhat helpful for the poor?"
Government, that beacon of goodness, and the banking system, that place that cares not about profit… <sarcasm> … actually gave a gift to the poor?
Well, first of all, there is no such thing as something being free. Even if it were the banks who were going to "give" this money it would have been taken from the shareholders of the bank. And if it were the government who was going to "give" this money it would have come from extortion (tax) money. And if it were the central bank who were to "give" this money it would come in the form of money printing, which is inflation, which devalues every other Croatian kuna.
Alas, after just a minute of reading, it was actually none of them really giving anything to anybody… but themselves.
It turns out many/most of the loans which are going to be "gifted" are non-performing loans. In other words, that person who owed the money either didn't have the money to pay or had no intention of paying it. In other words, it is pretty much a write-off to the bank.
So, all that is really happening here is that the government is taking money from the people (taxes) and giving it to the banks to cover some of their losses!
But, in this genius piece of propaganda and public relations, they have spun it as though the government is helping the poor!
I am very surprised the US federal government hasn't got their propaganda this advanced yet!
The $16 trillion in bank bailouts by the Federal Reserve after the 2008 financial crisis should have been molded, like the Croats, into some sort of "Bailing Out The Poor" title.
Well, I guess the reason they don't have to do that is because the US populace, in general, is so dumbed down and too interested in football and beer to notice that the Federal Reserve is selling their lives out from underneath them.
[Editor's Note: Subscribe to TDV to get access to inside analysis of what is really going on and more importantly how to survive and prosper through The End Of The Monetary System As We Know It]
