Lebanon is going through its worst crisis in history. The destruction of public wealth and wipe out of private wealth is unprecedented in the nation’s history.
The collapse never needed to be so dramatic. Deposit losses would have only been at around 20% a year ago, instead of 70% today, had the government embarked on some sort of soft landing, orderly restructuring.
Instead, the Lira is in freefall, with no ceiling for demand and little expectations for significant inflows in the near future. Those who created the crisis seem intent on worsening it.
Remittances and NGO funding can buy some time, but eventually, Lebanon will need substantial dollars from outside to prevent total economic collapse.
The economy needs quick adjustments and external funding. The IMF appears as the only solution for a somewhat orderly restructuring. Government factions continue to obstruct developments on various fronts, such as by blocking the forensic auditing of BDL.
The auditing would uncover operations of financial engineering and commercial banks’ balance sheets, providing a transparent breakdowns of gains and losses.
An alliance between banking families and government factions seem to oppose it on two grounds:
– it will lead to the insolvency of the entire Lebanese banking industry, followed by a consolidation into four or five major banks.
– It will unveil the exorbitant corruption of spending ministries.
Instead, the government’s inaction takes the country in the direction of the total lirafication of all deposits, and the loss of their purchasing power through the deliberate engineering of domestic inflation.
The economy is a circular phenomenon. Your deposits are comprised of future value. That future value is related to the state of bad loans, state assets, Lirafication and printing, traders’ exploitations, shady government deals and wasteful subsidies. These all contribute to worsening the future of all dollar liabilities in the system, including your deposits.
WILL YOU REMAIN SILENT WHILE YOUR DESTINY IS BEING ROBBED?