CORRALITO (BANK RUN, BANK HOLIDAY)

CAUTION:
The following story might become real in the near future

After another frenetic week in the stock markets all around the world, people were preparing for a well deserved weekend.  It seemed like a normal weekend. Getting home for the weekend, many started their weekend routines, spending time with kids, planning a night out with friends, go to the movies with their future wife/husband or just simply watch television.

The population had been looking forward for this particular weekend. It had been a week of abundant bad economic data with a midweek’s reassuring president’s speech, promising to have total control, the people must consider itself lucky to have such visionary, strong and caring leaders.

The one’s that decided to go out on some kind of social happening were the first ones to start experiencing strange circumstances. There were a lot more policemen on the streets than normal and somehow, they had problems finding a working ATM. The system was probably down in the neighborhood.

The one’s that stayed at home, watching television, on the other side were surprised when the sports game they were watching was interrupted for a special announcement from president himself. What is going on? Are we under attack?

PRESIDENT: Quote:

“Ladies and gentlemen”, as I am sure you are aware of, the past years have been difficult on many fronts and lots of people have been suffering from the economic situation. This past week we have been under attack by heartless speculators that targeted our country to rip the people off their wealth but we will not allow this to happen. I will personally make sure that these financial predators will face all the legal consequences of their acts.

This is why, after careful consideration with the best economic experts, long talks with different world leaders, my administration has decided that it was in the best interest of the country and of the citizens to call for a bank holiday.

All bank accounts in our country will be frozen till further notice so that we can stop the plundering of these heartless financial speculators.

The president went on for a few more minutes explaining the latest executive order trying to stop the financial meltdown happening not only in his country but all around the world.

Of course this move had an immediate effect on the population and televisions commentators were trying to calm people and others blaming the president. The Internet crashed under searches for an explanation. A word became "trending topic" on the net: “Corralito”. 

Corralito was the informal name for the economic measures taken in Argentina at the end of 2001 by Minister of Economy Domingo Cavallo in order to stop a bank run, and which were fully in force for one year. The corralito almost completely froze bank accounts and forbade withdrawals from U.S. dollar-denominated accounts. (Source Wikipedia)

Are we at the level of Argentina? Could this be true? Is it possible? We thought we were superior and our leaders were much smarter than the one’s in the south.

Shit, let’s see what else the “Corralito” caused in Argentina:

• The corralito caused an immediate backfire on the government. Even more people started trying to withdraw their money from the banks, and many ended up in court fighting for their right to have their funds (and being granted that right on occasion).
• The main reason for ending up in court was that, after the corralito, and after Economy Minister Cavallo resigned, the new government led by Eduardo Duhalde and his Economy Minister Roberto Lavagna converted those funds nominated in US Dollars, into Argentine Pesos at a 1 Peso = 1 US Dollar exchange rate, while the exchange rate was liberalized (immediately going to 4 Pesos = 1 US Dollar).
• The same was done with debtors, so many private enterprises and also the Province of Buenos Aires were favoured by this measure as they managed to decrease their debts. Nine years later, several people have not yet been able to recover their savings because of the pace of Justice in Argentina. However, debtors were able to purchase properties and other items by paying their debts at the 1 to 1 exchange rate.
• At the time, the average Argentine did not employ the banking system for daily uses; many did not have a personal bank account, and dealt only with cash. Debit cards were not popular and many businesses did not have the equipment to accept them. Thus the cash restrictions only exacerbated the recession and angered the public. President Fernando de la Rúa was forced to resign on 20 December 2001 after violent riots, but the restrictions of the corralito were not lifted at the time. (Source: Wikipedia http://en.wikipedia.org/wiki/Corralito)

Our currency is US Dollars, I guess this is not going to affect us and we have a good functioning justice system too. Government will never be allowed to do this…… oh shit, they just did!

Could it be that the government is using this to devalue the USD and lower its debts artificially? That is smart but my savings will loose value too…, what is going on, what else could happen?

• Because of this allowance limit and the serious problems it caused in certain cases, many Argentines became enraged and took to the streets of important cities, especially Buenos Aires. They engaged in a form of popular protest that became known as cacerolazo (banging pots and pans). These protests occurred especially in 2001 and 2002. At first the cacerolazos were simply noisy demonstrations, but soon they included property destruction, often directed at banks, foreign privatized companies, and especially big American and European companies. Many businesses installed metal barriers because windows and glass facades were being broken, and even fires being ignited at their doors. Billboards of such companies as Coca Cola and others were brought down by the masses of demonstrators.
• Amid rioting, President Fernando de la Rua resigned on 21 December 2001.
• Confrontations between the police and citizens became a common sight, and fires were also set on Buenos Aires avenues. Fernando de la Rúa declared a state of emergency,  only to get the situation worsened, precipitating the violent protests of 20 and 21 December 2001 in Plaza de Mayo, where clashes between demonstrators and the police ended up with several people dead, and precipitated the fall of the government (Source: Wikipedia http://en.wikipedia.org/wiki/Argentine_economic_crisis_(1999%E2%80%932002))

This is not possible. This is not happening to us. What can we do? What should we do? When will our money be unfrozen again? How am I going to eat tomorrow? How can I pay the gas to make it home tonight? What do they mean with state of emergency? Martial law?

A lot of questions and no reassuring answer.

It is interesting that after all what happened in the past years, basically since the start of the financial crisis in 2008, which turned into a sovereign and economic crisis, so many people continue to trust the people that put us into this situation. Not only do they vote for them with new elections but they still think that they have the solution. They also continue to trust their banks. 

How can this be? How can you put the arsonists in charge of the fire fighters. 

The financial industry took over the world and little by little, populations are becoming slaves to the orders of the financial masters that use politicians as foremen. 

Understand who the real enemy is. Let me reassure you, it is not the one they say or try you to focus on. It is not the immigrants, it is not the Muslims, it is not a specific country, it is not a particular political party, it is not the poor. 

It’s the centralized money printing mafia, FED, Central Banks and their puppet foremen, politicians.

The population is on the road to serfdom if they don’t understand what is going on and stop accepting the rules imposed on to them by the system. Reject their Fiat Money and perpetual debt system. Reject the dictatorship of the loan sharks.

Declare yourself independent of the financial system or you will be slaves to the financial masters. Stop using their system, start using alternatives.

By the way, the one’s that were keeping gold, silver or any other precious metal, somehow came out winning from the Corralito.

James Tector
Critical Citizen

Liberté, Egalité, Fraternité


(Note for my spanish friends, although I don't like to put dates on certain predictions I make, but I think 2012 Spain will experience his very own Corralito, Bank run)