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 ...
Somebody at ZH has already figured it’s ripe for a Hitler subtitled video gag.
It is.
Yeah. Losin’ a 100% of nuthin’ is ...nuthin’. I’m with ya’.
Probably not. Bernanke will make a few calls, assess market reaction, and make a “surprise” announcement of bigger QE. Market goes up another hundred points.
Government policy is to protect the big banks and the big money. Screw the little guy, the saver and the pensioner while rewarding the highly leveraged mega-gambler big banks that are financially propped up by taxpayers and central banks (which they control). That is the name of this global game.
Okay, confiscating a portion of deposits is such an insanely stupid idea, I have a hard time believing it. Colour me skeptical.
If true, this is bad indeed.
Also, recall that Cyprus is divided between Greece and Turkey. Things could get messy quickly.
Word on the street is that the Big Depositors were tipped off, and some even allowed to move their money out over the weekend, with the Depositors info going "poof"..
So, it would seem the intended targets of this won't be the ones who will suffer. ...
Color me surprised....although any ‘black money’ being laundered for a 10% ‘fee’ would seem like a good deal for those with such funds especially if certain depositors info went ‘poof’.
Thought this article from several months ago backs up the fact the Russians knew this was going to go down. Apparently, Germany was throwing it in their face:
I can’t help but think that this is the real goal, we ( a/k/a the government) just need to get their guns away from them first. Is there a pool starting in the EU to see who gets assasinated first?
These percentages are just a trial balloon to find out just how large a percentage the government can get away with confiscating. If people don’t complain too loudly, next time the percentages will be larger.
ping!
Could happen again.
Also, a whole lot of people think they "own gold." They don't.
The own a piece of paper that says (promises!) that there is some gold somewhere that is theirs, and by golly, don't worry - they would never give that up to the Government on your behalf.
Me too. They will have to tax my debt.
Why bother to send 10 Billion dollars to save banks that just committed suicide by stealing people’s money?
I guess I need a debit card for quick cash withdrawal....will do on Monday....
Tyler Durden calls it a “coercive, mandatory wealth tax”
One time? Why stop? Just make 10% of your saving account a mandatory witholding for wealth tax, oh yes you can file a complicated 20 page form to claim a refund
Exhibit 3 is interesting chart
http://www.zerohedge.com/news/2013-03-16/everyone-shocked-what-just-happened-and-why-just-beginning
Could the obamites seize a meager 26% of American’s bank deposits (wealth of “the rich” kept in banks- since 50 million households have almost nothing in savings) and get away with calling it a “fair share” of “wealth tax” paid by “the rich” toward debt reduction?
I predict yes.
the markets will react badly to this..<<
The real markets...yes...but the fed will pull us back from the edge with the usual manipulation....They may even concoct a story how this is a good thing and add 200-300 points to the Dow
The big impact will be on businesses. They will be the ones most likely to have more than 100K on deposit. Regular people who have 100K are more likely to have it invested.
The net effect on businesses will be to leave much less money in the bank, and work off a line of credit so that their net balance stays close to zero or slightly negative.
I'm going to guess that the bond holders had more "pull" with the EU bureaucrats than common depositors did.
I think the question that should also be asked:
If they can seize 10% of your deposits, could they not also decide one day to seize 10% of your investment accounts; mutual funds, trust funds or any other fund administered by any financial entity.
Obviously one is as unconstitutional and illegal as the other.
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