that's cause anybody with two functioning brain cells will empty their account only to put just enough in them from now on to pay bills...
Posted on 03/16/2013 9:51:45 PM PDT by dennisw
You can be forgiven for thinking that you don't need to give a hoot about what's going on in Cyprus this weekend.
After all, it's just a little island somewhere in the Mediterranean.
But what's going on in Cyprus could actually matter--not just to the rest of Europe, but to the rest of the world.
Here's the short version of what's happening:
Cyprus's banks, like many banks in Europe, are bankrupt.
Cyprus went to the Eurozone to get a bailout, the same way Ireland, Greece, and other European countries have.
The Eurozone powers-that-be gave Cyprus a bailout--but with a startling condition that has never before been imposed on any major banking system since the start of the global financial crisis in 2008.
The Eurozone powers-that-be (mainly, Germany) insisted that the depositors in Cyprus's banks pay part of the tab.
Not the bondholders.
The depositors. The folks who had their money in the banks for safe-keeping.
When Cyprus's banks reopen on Tuesday morning, every depositor will have some of his or her money seized. Accounts under 100,000 euros will have 6.75% of the funds seized. Accounts over 100,000 euros will have 9.9% seized. And then the Eurozone's emergency lending facility and the International Monetary Fund will inject 10 billion euros into the banks to allow them to keep operating.
(Excerpt) Read more at businessinsider.com ...
ping
In each cash in exchange for the assets you have on deposit with the bank that are frozen, you are given “shares” in the nearly bankrupt bank.
The logical outcome is that people all over the EU will move money out of their bank savings accounts and put them into other things, like fixed assets, gold, diamonds, land, or sovereign debt bonds, etc.
This could be basically be a really bad things for banks and financial institutions in general. Some credit unions which were open on Saturday essentially had a run as people tried to withdraw their money so it would not be confiscated on the formal date of next Tuesday with Monday being some kind of holiday.
This will change banking in Europe forever.
I sort of wonder if this is the idea behind the Occupy Whatever Movement's idea of tax the rich. Only it is all people who have scrimped to have a savings account as opposed to those who have not saved and are living hand to mouth and day to day.
It’s going to be a bloodbath on Wall Street come Monday.
Goldbug ping.
I’m guessing part of the depositors savings came from welfare state spending. Taking money from the entitled usually causes the loudest protests.
Try this link to read the article:
http://www.businessinsider.com/cyprus-bailout-risks-europe-bank-runs-2013-3
Maybe now, back here in the States, Warren Buffett will take Gov. Christie’s advice: “Shut up and just write a check.”
The way a bank run would play out in America is one day you will wake up and find that only half your money can be withdrawn or used in any other way. The remainder will be placed (by Obama/Bernanke or their ilk) in long term Treasuries of some special non-negotiable kind for your own good that can only be cashed in 2—3-5-10 years from now. Just think of them as Federal Reserve IOUs
Wow. If this doesn’t goose gold starting Sunday in Australia, I don’t know what will.
Karl Denninger quotes a WSJ article which calls this theft a “one-time tax”.
http://www.market-ticker.org/akcs-www?post=218812
And they have the balls to call it a “contribution.”
Amazing.
that's cause anybody with two functioning brain cells will empty their account only to put just enough in them from now on to pay bills...
“What’s just happened is the IMF has backed up, lauded, supported, and publicized, as if it were a victory, the taking of 10% of what really turns out to be 80% of Russian ‘black money.’ Russian ‘black money’ is KGB money, now in business. The leader of Russia (Putin) was a former KGB official. Who’s money do you think they have taken? This is the biggest mistake the IMF could possibly have ever made.”
http://www.jsmineset.com/2013/03/16/sinclair-one-of-the-most-important-events-in-history-gold/
Thank god i am Broke.......
You are probably right, the markets will react badly to this..
I don’t think it will move in Australia at all. Gold and stocks are in a Bernanke created fiat money DisneyLand zone for the time being. The national mood right now has conservatives on the defensive and hard money on the defensive with 0bama fiat bucks on the ascendant and looking good
Yah you might be right — how many times have we heard “flight to the safety of the dollar, gold up in Euros but Euro down compared to dollar, therefore gold down in dollars” over the years.
I would find it hard to believe that the Russians didn’t know this was coming months ago. Cyprus’s government and banking system are known to be corrupt. Russian ‘black money’ is corrupt. The Russians know corruption. They are not naive nor stupid. I would be truly shocked if there was much in the way of ‘Russian black money’ still in the Cyprus banking system.
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