I am posting two articles below from today's edition of AM Costa Rica about the banking crisis that has recently hit Costa Rica, starting with rumors on certain Yahoo groups, notably Costa Rica Living, but I am sure there are others.
These rumors have been circulating for a month now, but hit a crescendo Monday and Tuesday, sparking many depositors to panic and to attempt to withdraw money from the bank anyway they can.
However, they apparantly have nothing to fear, as it is reported that at least in the Moravia and Pavas branches, the bank was open until 11 PM last night, and was paying people off.
The BAC banking group has banks throughout Central America, and also a bank in Florida. They also own and operate the Credomatic credit card issuing and merchant processing service, which probably has about 60-70% of the merchants and consumers in these countries using their service. They are the main affiliate for MasterCard in Costa Rica, and, I understand, the ONLY processor for MasterCard in some of the other countries they are in.
Several years ago, Visa allegedly attempted to blackmail Credomatic to force them to quite issuing and processing MasterCard charges. They reportedly threatened to revoke their Visa lincense if they didn't drop MasterCard and American Express.
Rather than give into Visa's demands, Credomatic reportedly told Visa that they would prefer to keep MasterCard and AMEX, and told them to go ahead and cancel their Visa license if they wanted to. Apparantly, after a year or so, Visa backed off on this, its apparent attempt to gain a monopoly in the credit card business in Central America sent down in flames. Credomatic made the right choice, and became after this the largest credit card processor in the region.
It should also be noted that the BAC group is considered to be an offshore banking group, and we have mentioned before how the British, US and Canadian governments have a hidden agenda called Project Victory to crush all offshore banks and offshore countries.
A move such as spreading false rumors against a major banking group they didn't like would thus be in character with what the US, IMF, World Bank, and UK use as terror tactics against countries who do not behave themselves.
Costa Rica should take note of the IMF track record, and should ask Nauru and The Bahamas whether cooperation is a workable strategy for their countries, or whether following their recommendations and demands is instead turning these and many other countries in the world into economic basket cases.
Then, for the biggest example recently of what happens to countries that do what they are told by the bullies, all they have to do is look to Argentina, which still has not recovered from their "IMF riots."
Recently, the Costa Rican government appears to have done several things to upset the IMF and the US. They are on the verge of taking their name off of Bush's ludicrous mis named "coalition" in the war of aggression in Iraq, which Bush lied with every breath he took to bring about, meaning that he and the US government now have zero credibility in everything they say. They have taken Hitler's BIG LIE principle to lengths that would have even made Hitler blush!
And last week, the National Assembly denied landing rights to US aircraft pursuing their phoney "war on drugs," which is nothing more than a war on the people of this world, as is the contrived "war on terror," holding up a CIA operative, Osama bin Laden, as public enemy #1 while doing cozey deals with his family in Saudi Arabia.
So, it would appear that this viscious rumor most likely eminated from none other than the US Embassy, as did a previous rumor about 2 years ago that failed to spark a crisis.
Costa Rica is in this mess because they have followed US policies to a certain extent, and Project Victory in particular, causing them to shut down The Brothers investment firm, which had been pumping over $400 million per year into the Costa Rican economy, which is almost the exact amount that Costa Rica has had to borrow from the banking cartel ever since.
However, all indications are that this plot will not succeed, BAC San Jose will survive, and so will Costa Rica.
If we might make a suggestion to Costa Rica, we would simply say that this shows what happens when you cooperate with these gangsters. Doing what they tell you only destroys your country. So, what you need to do is the EXACT OPPOSITE OF WHAT THEY ARE TELLING YOU TO DO! That is the road out of this mess.
Your first order of business should be to immediately cease your witch hunt against the Brothers, drop all charges, and welcome them back into business with open arms, to conduct business as usual, and start bringing the capital back into this country every year for free that you are now borrowing from the IMF, World Bank, and other criminal organizations.
Don't pass any of the ridiculous "reforms" that the IMF has insisted on, and instead maybe a TAX CUT combined with the return of the Brothers would put Costa Rica back on the solid footing it has been for so many years. Strengthening your offshore status, combined with changes to ecnourage Las Vegas style gambling would also do a lot of good for the country.
It needs to be remembered that Nevada at one time was the poorest state in the US, with almost no resources, and nothing but dry, barren desert wilderness. By simply changing their laws to do the EXACT OPPOSITE of what the other states were doing, made all of the difference in the world, and now Nevada is one of the most prosperous states in the US, and STILL HAS NO INCOME TAX, and the lowest overall taxes in the nation!
And they did this by going AGAINST the practices of the Federal government and all other states at the time. They legalized gambling and prostitution, they don't have any income taxes [but they do tax the casinos and hotels a lot, and these are what pays most of the bills], and in many counties in Nevada to this day, you STILL DON'T EVEN NEED A BUSINESS LICENSE UNLESS YOU ARE IN THE GAMBLING OR PROSTITUTION BUSINESS! Laissez Faire capitalism works for Nevada, and it will work for ANY COUNTRY that wants to put the Free Market to a test!
Turning San Jose into Las Vegas South would work wounders, guarantee full employment for all, and attract more tourists than Costa Rica would know what to do with. Maybe they should import some advisors from the state of Nevada to show them how to do it.
At the same time, Costa Rica could use its new found advantages to attract the entertainment industry to the country, as that industry is not happy at all with the restrictive laws and high taxes of Southern California, and some producers, actors, musicians, etc., are already making moves here, and just need a little encouragement to turn Costa Rica into the motion picture capital of the world! Costa Rica is very close to this dream already, and the changes suggested above would pretty much GUARANTEE that this happened.
This would be so much better than adopting the policies of the failed European welfare states that the IMF, USA, and EU are trying to make them do. That road will only lead to disaster, permanent debt, and poverty.
Doing the OPPOSITE of what these turkeys want is the ONLY HOPE for the people of Costa Rica and their economic prosperity. Just tell these snakes to BUZZ OFF!
Here is the news article:
Rumors cause a run on major San José bank
By the A.M. Costa Rica staff
BAC San José, one of the country’s strongest private banks, is in the midst of a run that officials think was sparked by rumors fabricated in bad faith.
The bank, based downtown, has about 20 branches around the country and is popularly considered a customer service-oriented organization for businessmen.
The rumor started Monday afternoon and by Tuesday crowds of depositors were at the various branches at least in the Central Valley seeking return of their money. When the banks closed at 7 p.m., some depositors tried to withdraw money via automatic teller machines. Others camped in front of the bank so they would be near the head of the line when offices open at 8 a.m. today.
A.M. Costa Rica became aware of the rumor about midday Tuesday. A number of expats prefer the institution, formerly called Banco de San José, over the national banks.
By 7 p.m. the manager of the bank, Gerardo Corrales Breñes, took to the television to assure depositors that there was no reason for the
bank run and that there was no open investigation of the bank. Curiously, the bank did not post anything to its overworked Web page to assure depositors.
Costa Ricans seem to be engaged in the bank run because they fear another collapse. Bantec and more recently Banco Elka were shut down by the Superintendencia General de Entidades Financieras, the government oversight agency.
In addition, there is a general fear of the economy and distrust in the government’s ability to protect citizens from economic woes.
Luis Diego Vargas, president of the Consejo Nacional de Supervisión del Sistema Financiero, called operations at BAC San José absolutely normal in a television interview. It was he who cited the bad faith aspects of the rumor.
Oscar Rodriguez of the Superintendencia, said in the same segment that BAC San José is a very strong institution. He and Vargas agreed that deliberately circulating rumors to harm a business was a crime in Costa Rica.
Alfonso Rodriquez was not overly concerned.
A.M. Costa Rica/José Pablo Ramírez Vindas
A fast food worker and friends seeks her pay
Teller machines were out of service for evening withdrawals
By Saray Ramírez Vindas
of the A.M. Costa Rica staff
Automatic tellers of BAC San José were out of service last night. Some depositors went through the downtown unsuccessfully seeking a machine that would return them some of their money.
Some were unhappy, including one employee of Kentucky Fried Chicken on Paseo Colón who said her employer had just deposited salaries into
the bank. She was unable to make a withdrawal.
Even as late as 10:30 p.m. depositors were trying to make withdrawals.
Bank officials had posted a message from Gerardo Corrales Breñes, the general manager. But it said little more than he had said on a television show. Officials also posted in one place a page of the La Nación Web site that said the bank panic was without foundation.
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