The Swiss newspaper Le Temps published on October 6 an exclusive piece of information that did not get the coverage it deserved: the International Monetary Fund (IMF) knew as early as 2016 that the Lebanese banking system was going to collapse, but the central bank and its governor, Riad Salamé, had the fourteen pages of the report that anticipated the disaster deleted. The IMF went along with it and did not sound the alarm when there was still time. The crisis erupted three years later, during the revolutionary movement in the fall of 2019, when banks closed their doors and depositors panicked.
Since then, Lebanese savers have lost everything: they no longer have access to their accounts, banks have failed, the Lebanese pound has collapsed, inflation and shortages are exploding, and those who had dollars in their banks no longer have access to them. It is the reign of cash and the constant price changes, while power cuts (power stations can no longer buy oil) are paralysing the lives of the population and several vital sectors. The country is sinking into a crisis. The explosion in the port of Beirut on August 4, 2020, devastated the economic lung of the country.
The World Bank estimates that the country's GDP per capita fell by 40% between 2018 and 2020, a collapse of a brutality usually seen "during conflicts or wars." The disappearance of this alert on the Lebanese financial system will have nevertheless allowed the "informed" people to shelter their wealth abroad, while the "little people" left their savings in the banks, before being fleeced.
Small question: who was the head of the IMF at the time? Christine Lagarde. We understand her silence on the subject. Especially since the current head of the institution, Kristalina Georgieva, has seen her position questioned because - at the time when she was number two at the World Bank - she would have manipulated data to allow China not to lose a place in the prestigious annual report "Doing Business", widely read by investors around the world. In the end, an extraordinary board of directors meeting on October 12 narrowly decided to keep her in her position. So, is Christine Lagarde in danger of losing the presidency of the European Central Bank? Obviously, the question should not even be asked.
The lesson for savers: don't wait for the IMF, the World Bank or the OECD to warn you that your banking system is in serious trouble. They won't tell you anything. Yet these international organizations are paid, by our taxes, to scrutinize our economies... Don't dream, "the information", it is not you who will get it, but the power and the oligarchs, who will take advantage of it to put their money aside.
These measures must be taken beforehand. The banking systems in Europe are fragile (we have known this for a long time), the debt is growing, and the context is becoming more uncertain with the return of inflation. So you should not rely entirely on your bank, it would be very risky. It is necessary to hold assets outside the banking system and outside the euro, in order to build a resilient asset base. An idea that should not be forgotten in these times.
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