View Full Version : Cyprus government instigating a run on the banks and a collapse of their banking system
tmleadr03
03-16-2013, 13:46
http://www.dailystar.com.lb/Business/International/2013/Mar-16/210381-cypriots-stunned-by-forced-savings-cuts.ashx#axzz2NjGTeqxx
Their government is raising a tax on savings accounts. So they don't have to cut pensions and salaries.
BushMasterBoy
03-16-2013, 15:03
The average schmuck loses 6.75% of his saving account. Thats gotta suck!
tmleadr03
03-16-2013, 15:24
The average schmuck loses 6.75% of his saving account. Thats gotta suck!
I thin you are not catching the implications. If your money is not safe from plunder in the bank what do you do? Pull the money from the bank. A run on the banks in Cyprus could cause a run on the banks in Europe. This would cause the whole European banking institution to collapse. With how linked all our multinational banks are the damage to our economy is potentially very high.
Could be worse then Y2K.
buckshotbarlow
03-16-2013, 15:45
better get your funds secured...
hollohas
03-16-2013, 16:02
Crap. This really could be bad.
ChunkyMonkey
03-16-2013, 16:03
Here comes the bank and bread lines... soviet style!
jerrymrc
03-16-2013, 16:28
Just think about it. Wake up one day and the .Gov has just taken 6.75-9.9% of all the money in the banks. Pass a little law late on a weekend and BOOM, Instant $$$$
Declare some strange Emergency like the .gov is going to shut down and with the wave of the scepter take 6% of all the money in the banks. See, debt problem solved. Easy-Peasy for the king. Though it is 99.9% impossible here that .1% scares the crap out of me.
Aloha_Shooter
03-16-2013, 16:41
... and this is different from the Chicago Mercantile Exchange and SEC allowing Corzine's company to loot depositor accounts to pay off their bad gambles how? I'd love to be shocked at this but unfortunately, the US of A has already been there.
JohnTRourke
03-16-2013, 17:17
This is really bad. And if you are holding money in the bank you should re-think it. The depositors got fucked (6.75% to 9.99%) and the bondholders got made whole. Even though depositors rank ahead in law (yeah i know, like law matters)
It's not like they are paying you to keep it in the bank.
But it's ok, because something like this could never happen here.
Cylinder Head
03-16-2013, 17:43
I thin you are not catching the implications. If your money is not safe from plunder in the bank what do you do? Pull the money from the bank. A run on the banks in Cyprus could cause a run on the banks in Europe. This would cause the whole European banking institution to collapse. With how linked all our multinational banks are the damage to our economy is potentially very high.
Could be worse then Y2K.
I would agree with this, if Draghi hadn't agreed to backstop euro-zone banks last year.
Kraven251
03-16-2013, 18:33
Crap. This really could be bad.
or awesome.
centrarchidae
03-17-2013, 00:21
http://www.dailystar.com.lb/Business/International/2013/Mar-16/210381-cypriots-stunned-by-forced-savings-cuts.ashx#axzz2NjGTeqxx
Their government is raising a tax on savings accounts. So they don't have to cut pensions and salaries.
How is that different from when Helicopter Ben devalues the shit out of the dollar? Aside from being a little more honest, that is.
generalmeow
03-17-2013, 07:45
They won't do this here, because they don't need to. They have the option of printing money here, so they essentially already do this every year through inflation.
whats the real inflation rate? 5-10%? Then the government already took 5-10% out of all of our bank accounts this year. Same exact thing.
Aloha_Shooter
03-17-2013, 08:24
They won't do this here, because they don't need to.
The point of my post is that this isn't new, they have ALREADY done it here. The government and CME allowed Corzine's company to TAKE depositor assets -- in some cases, precious metals that the company was charging a fee to hold -- and use it to pay off creditors like JP Morgan before depositors got any of their money back. If anything, the Cypriot approach is more honest because they passed it as open legislation even if it was done in the middle of the night.
BushMasterBoy
03-17-2013, 11:17
Personally I think the best thing you can do is have some savings in silver or gold, and keep it in a safe place in your home. Wall Street and the government are some of the biggest scumbags on the planet.
Our government has been looking at taking our 401k accts. and replacing them with an IOU. Is anyone that pays attention (i.e. works for a living) surprised?
hollohas
03-17-2013, 15:10
They won't do this here, because they don't need to. They have the option of printing money here, so they essentially already do this every year through inflation.
whats the real inflation rate? 5-10%? Then the government already took 5-10% out of all of our bank accounts this year. Same exact thing.
The same loss to the account tho account holder, yes. However not being able to buy the same amount of goods with each dollar because of inflation doesn't make people panic. Most people see $$$ only, not buying power, so inflation doesn't have the same effect. What they are doing in Cyprus could very easily make people stand up and say "F U, I won't let you steal 7% from me so close my account." And blammo, you got a bank run.
People are weird like that. Increase their income tax and they don't complain too much. Take 7% from their deposits and I can see them getting uber pissed. The easy way to keep that 7% to themselves is simple...don't use the bank anymore.
JohnTRourke
03-17-2013, 17:02
Here it comes: http://www.zerohedge.com/news/2013-03-17/german-commerzbank-suggests-wealth-tax-italy-next
jerrymrc
03-17-2013, 18:41
Here it comes: http://www.zerohedge.com/news/2013-03-17/german-commerzbank-suggests-wealth-tax-italy-next
The only thing I will say on that one is the Italians have hid there income for years. http://articles.businessinsider.com/2012-02-13/europe/31054099_1_luxury-cars-tax-man-tax-authorities
divideman
03-17-2013, 18:42
Heads up people, here it comes!
Our government has been looking at taking our 401k accts. and replacing them with an IOU. Is anyone that pays attention (i.e. works for a living) surprised?
For the reason of this thread subject, and the above, I do not have 401Ks/IRAs. I have completely lost faith in Fiat currency. Since the invention of the dollar in 1774, in 2011 ONE dollar has the same purchasing power as $0.034. http://en.wikipedia.org/wiki/United_States_dollar#Value
hollohas
03-18-2013, 11:54
Cyprus just closed ALL their banks because their was a bank run panic. What did they expect?
JohnTRourke
03-18-2013, 13:21
no, not quite correct. The banks were closed and today (monday) was a normal holiday and they announced this after the banks had closed.
However.............
Now, the banks are closed thru at least Thursday (and hopefully the government falls long before then to pitchforks and rope).
the more interesting thing is why aren't there runs on the banks in Spain, Italy, Greece, etc??????? Are they as stupid as american's???
This has been brought up- taxing deposits in US banks... Problem with it is, and of course our Gov doesn't care about this, what's deposited in your bank acct is already taxed income, so it would be double taxation. If this really did happen here (not some company, I mean en masse, every bank, every account) we would see the collapse of our economy and banking system as we know it.
Past 2 years has been Ireland, Spain, Italy, Greece.
I wonder how many countries in eurozone will have trouble.
losttrail
03-18-2013, 15:14
When Jay Carney, White House lap dog, was asked about this today, his answer was like spilling oil on a hockey rink then trying to run the length of it barefoot. VERY SLIPPERY.
When Jay Carney, White House lap dog, was asked about this today, his answer was like spilling oil on a hockey rink then trying to run the length of it barefoot. VERY SLIPPERY.
;) Yup, they are already thinking about it and are probably working on the 'spin' that most sheeple will swallow.
When Jay Carney, White House lap dog, was asked about this today, his answer was like spilling oil on a hockey rink then trying to run the length of it barefoot. VERY SLIPPERY.
So pretty much just like every time before when Jay Carney speaks. He doesn't answer any questions, and of course, "journalists" never call him out on this and say "Hey Jay, answer the damn question, we all know you can dance you moron!"
;) Yup, they are already thinking about it and are probably working on the 'spin' that most sheeple will swallow.
Because socialists know how to spend your money better than you do.
Aloha_Shooter
03-18-2013, 18:04
;) Yup, they are already thinking about it and are probably working on the 'spin' that most sheeple will swallow.
Hell, they floated the trial balloon last year of imposing a 1% "financial transaction" tax -- 1% on every financial transaction you make, every sale, every deposit, every withdrawal. They don't want to stop at double taxation.
I'm watching Cyprus closely via Zero Hedge -->http://www.zerohedge.com/
The Cypriot reaction will tell us if this government behavior will continue immediately or if the EU will hold off for a while.
If you have convertible paper assests I'd start thinking about moving them to a "defensible assest" as Ann Barhardt would say. A defensible asset is something (gold, silver, booze, food, medical, ammo, components, firearms, car parts,) anything you can control within the confines of your home or shop or cabin or whatever.
Thanks to this little fiasco, Bitcoins are trading at around $75 a pop. I bought them at $11.
Silver has seemingly hit a low point, and has been running flat for the past month, granted volatility has been high, it's averaging flat. If you're not buying any now, you might want to start considering it. I see little to no reason to expect it to drop further.
Cylinder Head
03-26-2013, 15:40
Anyone here who is saying that this Cypriot crisis is going to be anything other than a bump in the road is taking full advantage of Amendment 64. I traveled with two CFA's today who both said, almost simultaneously, that this will amount to nothing and reiterated that the US produces more in GDP by lunch time every day than Cyprus does in a year.
Take it from me or don't. I kinda do this for a living.
Anyone here who is saying that this Cypriot crisis is going to be anything other than a bump in the road is taking full advantage of Amendment 64. I traveled with two CFA's today who both said, almost simultaneously, that this will amount to nothing and reiterated that the US produces more in GDP by lunch time every day than Cyprus does in a year.
Take it from me or don't. I kinda do this for a living.
I don't think the GDP of Cyprus is the focus here. As roberth said above, it's more about the reaction to it and if it indicates government behavior like it will continue. Every reaction is indicative to one degree or another.
Cylinder Head
03-26-2013, 15:53
I don't think the GDP of Cyprus is the focus here. As roberth said above, it's more about the reaction to it and if it indicates government behavior like it will continue. Every reaction is indicative to one degree or another.
Economies of scale, Cyprus has 10bil in total deposits, most of which is "stashed" money by wealthy Russians and ME'ers. Draghi guaranteed deposits for the big boy banks. Nobody who owns Italian sovereign debt has been asked to take a 53% haircut.
If you're looking for a reaction, the FTSE was up, Euro only fell .02% to the dollar and gold was down today. Are those indicators of an impending crisis? I'd avoid Euro banks right now but I would double down on Sanofi, Kone, Reckitt, BAT.
BushMasterBoy
03-26-2013, 16:13
Silver has seemingly hit a low point, and has been running flat for the past month, granted volatility has been high, it's averaging flat. If you're not buying any now, you might want to start considering it. I see little to no reason to expect it to drop further.
Stash some in your gun safe. You will always see ads that say trade for silver.
JohnTRourke
03-27-2013, 05:53
Anyone here who is saying that this Cypriot crisis is going to be anything other than a bump in the road is taking full advantage of Amendment 64. I traveled with two CFA's today who both said, almost simultaneously, that this will amount to nothing and reiterated that the US produces more in GDP by lunch time every day than Cyprus does in a year.
Take it from me or don't. I kinda do this for a living.
So, the EU just said that in a EU country:
a. bank protection means dick and your money isn't safe from the government
b. the law doesn't say what it says it does (just like GM)
c. banks will be made whole at the cost of inverting the capital structure
d. well connected people can still get their money out (they didn't close the branches in London or Greece, almost 3 billion has been removed, regular people don't go to London)
e. Capital controls will be imposed in a EU country ongoing
f. Banks have been closed in an EU country for going on 2 weeks now with no reopening in sight.
But hey, it's all ok, keep putting your money into banks and we won't take your retirement, look, we promise.
hey, it's the EU, it's not the US, really, don't worry, party on, DOW is making new highs, there is no inflation and the deficit is totally under control.
why would anyone run a business in this environment?
Economies of scale, Cyprus has 10bil in total deposits, most of which is "stashed" money by wealthy Russians and ME'ers. Draghi guaranteed deposits for the big boy banks. Nobody who owns Italian sovereign debt has been asked to take a 53% haircut.
If you're looking for a reaction, the FTSE was up, Euro only fell .02% to the dollar and gold was down today. Are those indicators of an impending crisis? I'd avoid Euro banks right now but I would double down on Sanofi, Kone, Reckitt, BAT.
I didn't see a dramatic movement in either direction either.
Cyprus isn't a watershed for the financial markets, it is a watershed for government confiscation of private assets that people do not maintain direct possession of. The lesson is that the government considers all monies to belong to the government and the government will take them when it sees fit. The only assets a person truly owns are the assets within a persons direct control, i.e. the safe in your basement.
JohnTRourke
03-27-2013, 06:51
I didn't see a dramatic movement in either direction either.
Cyprus isn't a watershed for the financial markets, it is a watershed for government confiscation of private assets that people do not maintain direct possession of. The lesson is that the government considers all monies to belong to the government and the government will take them when it sees fit. The only assets a person truly owns are the assets within a persons direct control, i.e. the safe in your basement.
exactly!!!!!!!!!!!!!
http://www.telegraph.co.uk/finance/financialcrisis/9952979/Cyprus-bail-out-savers-will-be-raided-to-save-euro-in-future-crises-says-eurozone-chief.html
Cylinder Head
03-27-2013, 08:12
exactly!!!!!!!!!!!!!
http://www.telegraph.co.uk/finance/financialcrisis/9952979/Cyprus-bail-out-savers-will-be-raided-to-save-euro-in-future-crises-says-eurozone-chief.html
Does anybody actually read entire articles anymore? I sent that to a manager who runs $58bil yesterday and he sent me back this quote from the wee bottom if the article:
Last night, the Dutch finance minister tried to row back from his comments by insisting that "Cyprus is a specific case"."Macro-economic adjustment programmes are tailor-made to the situation of the country concerned and no models or templates are used," he said.
There is not FDIC insurance in Europe. Depositors only had the "word" of the bank, not actual insurance.
Does anybody actually read entire articles anymore? I sent that to a manager who runs $58bil yesterday and he sent me back this quote from the wee bottom if the article:
There is not FDIC insurance in Europe. Depositors only had the "word" of the bank, not actual insurance.
I one word from Dr. Sheldon Cooper, "Hokum".
The whole FDIC insurance we have here in the states is all just a feel-good measure. The FED is doing exactly what Cyprus' govt wanted to do, except in our case the FED is simply printing their own money to avoid the riotous reaction of the populous. The effect is still the same. The regular Joe loses money. In reality, everyone, depositor or not, who utilizes the federal reserve note for monetary transactions, has been swindled out of 20% of their money this past decade. Plain and simple.
Sheeple simply care about their overall balance and watching it grow... I think a lot of folks here care more about actual assurance, as opposed to insurance, myself included.
Let's say there was a problem here in this country.
How would the FDIC get the money to pay back to the "insured"?
Would this "pay back money" be borrowed on the good faith and credit of the almighty government and given to the insured?
Does anyone actually believe that there is an account sans IOUs standing for the FDIC?
Social Security is full of IOUs, there isn't any money there, the government already took it and spent it on something for which it wasn't intended.
Faith in the government is misplaced because the government no longer exists to protect the citizen (if it ever should have) financially. The government's three-fold purpose is to grow itself, to protect itself, and maybe to protect the few on Wall Street who have embedded themselves in the government.
Cylinder Head
03-27-2013, 09:09
I actually couldn't agree with that last statement more.
JohnTRourke
03-27-2013, 09:59
Does anybody actually read entire articles anymore? I sent that to a manager who runs $58bil yesterday and he sent me back this quote from the wee bottom if the article:
There is not FDIC insurance in Europe. Depositors only had the "word" of the bank, not actual insurance.
wrong
the EU guarantees depositors up to 100,000 euro's in all EU banks.
their version of FDIC
also, the FDIC has like 25 billion dollars in assets, against like 290 billion in demand deposits
uh huh, that ain't going to work.
and remember, the real key is that the depositors (even about 100,000 euros) got fucked more and before the senior bondholders which is not the capital structure.
Cylinder Head
03-27-2013, 10:32
wrong
the EU guarantees depositors up to 100,000 euro's in all EU banks.
their version of FDIC
also, the FDIC has like 25 billion dollars in assets, against like 290 billion in demand deposits
uh huh, that ain't going to work.
and remember, the real key is that the depositors (even about 100,000 euros) got fucked more and before the senior bondholders which is not the capital structure.
The EU "promises", there is no insurance. They do not have a centralized agency. Capital structure means diddly in socialist economies. Their only saving grace is that the ECB will patch things up before there is a major bank run. Germans want the Euro weak to support their exports
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