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Cyprus bail-out means losing 80-100% of savings to bank confiscation
  • This is amazing. Under the terms of the bailout for Cyprus, all account holders with more than 100.000 Euros of savings will immediately forfeit 10% of their money. Wow. I wonder how long it will take before other bailouts across Europe mean that savings accounts will be taxed 10% or more to pay for the mistakes of the governments. And of course Cyprus has a lot of Russian money laundering cash in their banks....

    http://www.bbc.co.uk/news/world-europe-21814325

    http://www.reuters.com/article/2013/03/16/eurozone-cyprus-anger-idUSL6N0C81DL20130316

    http://pawelmorski.wordpress.com/2013/03/16/cyprus-a-brutal-lesson-in-realpolitik-2/

  • 60 Replies sorted by
  • @ahbleza

    It is not amazing, it is just smart move to force bank panic across Europe.
    Banks in Greece, Spain and Italy already see big amount of money moved outside.
    This is just measure to force even dumbest guys to move money to proper guys.

  • time to start stuffing my dollars in my mattress.

  • time to start stuffing my dollars in my mattress.

    Do not worry, make you store them in the matress is first step. Second one is imposing fine for any bank operation involving cash, in say 35-50%. And in same time reducing non card maximum payment to $10.

  • @ahbleza

    Issue is not who will be next, issue is that big guys needed this to light things up a little. As I said, they are playing with gradient now, so need some play to find maximum decline angle that not results in real revolutions :-)

  • @Vitaliy_Kiselev Worryingly, some of the things you've been saying are starting to happen. Who are the real big guys here?

  • Worryingly, some of the things you've been saying are starting to happen. Who are the real big guys here?

    Big guys are guys who own real things :-)

  • If it's not too late ... the only proposal I have heard that might avert the total melt-down of the global banking system is for the US (and then Europe) to implement Glass-Steagall legislation which will split and quarantine the activities of banks -- quarantining the "real deposits and basic lending" activities of the banks from the speculative activities (e.g. derivatives exposure). Effectively this would be an "orderly bankruptcy re-organisation" rather than a chaotic melt-down.

    Glass-Steagall is named after two US congressman from the 1930's and this banking legislation was implemented by Roosevelt to clean up the banks after the 1929 crash. It provided for relatively stable banking up to the 1990's when Wall Street managed to convince the US government to repeal the laws in order to keep the speculative bubbles going.

    I am not sure who is pushing this reform in Europe, but the US push is lead by Lyndon Larouche. They have the legislation on the floor of the congress. Video background at:

    I am curious if anyone on this forum has ever heard of this stuff and/or formed any opinions?? In terms of a political cause that could use some smart movie makers, social media and intelligent advancement, maybe this could be of relevance. I am not affilliated with any political party, but I like the sound of Glass-Steagall.

  • @cp_from_oz Yeah, I studied this when I did economics at uni. It was a huge mistake to repeal Glass-Steagall (Smeagol?) within GLB, and the other blunder was in 2004 when the SEC raised US banks' capital to equity reserve ratio from 12:1 to 30:1 -- which flooded the market with a lot of fake capital, and hugely increased systemic risk.

    Sadly though, not all of the problems can be laid at the door of GLB. Instead, the real issue was the unrestricted investments in residential mortgages and residential mortgage-backed securities--which GLB never really affected.

  • it's not too late ... the only proposal I have heard that might avert the total melt-down of the global banking system is for the US (and then Europe) to implement Glass-Steagall legislation which will split and quarantine the activities of banks -- quarantining the "real deposits and basic lending" activities of the banks from the speculative activities (e.g. derivatives exposure). Effectively this would be an "orderly bankruptcy re-organisation" rather than a chaotic melt-down.

    It is good known old fuck and his proposals. That are absolutely useless now.

    Sadly though, not all of the problems can be laid at the door of GLB. Instead, the real issue was the unrestricted investments in residential mortgages and residential mortgage-backed securities--which GLB never really affected.

    This is not true. This question had been discussed here many times, so called "unrestricted investments" had been, in fact, solution, not problem. And no, chenging things in this department won't help.

  • time to start stuffing my dollars in my mattress.

    LoL. See if you can get all your cash from bank at once. Most likely you can't.

  • Things are getting even more interesting in Cyprus. Forgetting the fact that leaving the money under your mattress looks like the best investment at this time (even though that is eroded through both inflation and currency risk.)

    And now they are planning to change the % for the deal. Latest rumors suggest:

    • Under 100k: lose 5%

    • Under 500k: lose 10%

    • Over 500k: lose 13%

    The Germans really want to start by taking $2bn.

    More quote from BBC:

    "This simply looks like confiscating money that doesn't belong to you," Mr Medvedev said on Monday.

    "This practice was unfortunately quite well known and familiar from the Soviet period, when money was exchanged at certain ratios or not returned," Mr Medvedev said.

    "But here we are talking about a country that's supposed to be a market economy and an EU member."

    He added that Russia would have to "make some adjustments to [its] position" in Cyprus, without elaborating.

  • @cp_from_oz Glass-Steagall worked so well that the Banksters hated it and finally got rid of it under Clinton. Global financial regulation is a case of the foxes guarding the hen house. Did you watch "Four Corners" last night on the ABC? If you didn't it's being repeated tonight. Also take a look at the documentary "Inside Job".

    I smell IMF riots coming soon.

  • Glass-Steagall worked so well that the Banksters hated it and finally got rid of it under Clinton.

    This thing is pretty minor in present situation.

  • @ahbleza Vader clip is hilarious

  • Vitaliy you seem to think Glass-Steagall is not an option (for reasons unspecified). Do you think that the whole situation is absolutely destined for hyper-inflation, riots and war? Or do you think there is scope for reasonably peaceful reorganisation? As you are on the ground in Europe, what specific political/economic events do you think may unfold in coming weeks/months? Who will flex what muscle?

  • @cp_from_oz The end game is the destruction of the middle class and global fascism. We are seeing it playing out now. Governments don't serve the people they serve their masters. Why do you think the Glass-Steagall act was repealed? Anyway as Vitaly said things are now way beyond that. GFC 2.0 is about to hit. Better batten down the hatches!

  • Vitaliy you seem to think Glass-Steagall is not an option (for reasons unspecified). Do you think that the whole situation is absolutely destined for hyper-inflation, riots and war?

    Whole situation is limited from above. By energy and resources (and degraded elites consisting from criminals).

    Or do you think there is scope for reasonably peaceful reorganisation?

    Reasonable peaciful reorganisation is possible if you could find reasonably peaciful method of killing hundreds of millions. I don't know one.

    As you are on the ground in Europe, what specific political/economic events do you think may unfold in coming weeks/months? Who will flex what muscle?

    Chris, I am not Vanga and can not predict all future events :-) I can tell only elites will be fucking you, but at this stage they'll be doing it soft enough. I can't tell you exact pose it'll happen.

  • @Vitaliy_Kiselev

    I can tell only elites will be fucking you, but at this stage they'll be doing it soft enough. I can't tell you exact pose it'll happen.

    Hopefully they will use lube.

  • The same confiscation has gone on in every other country; it just doesn't show up as a "tax". But it's the same loss of wealth, as assets are shifted from ordinary people to large financial institutions.

    Consider bank deposits in "safe" countries. Sub-inflation CD rates, sustained only by government guarantees of the deposits, amount to a subsidy to banks, and a tax on savings accounts -- compared to what people would be earning, if the banks weren't "too big to fail" and interests rates weren't kept below market-value by sovereign banks. In four+ years, this loss of savers' income is much higher than the proposed Cypriot tax.

    Or what about the zero interest loans offered by governments to investment banks? This is money lost to the general public, as public services are cut because of reduced income to the government.

    By some measures, none of the big investment banks would be profitable today, if not for the market value of the "too big to fail" guarantee. And you're paying for it, in the form of increased poverty, reduced government services and lower wages.

    At only 5%-10% confiscation, the Cypriots are getting off easy....

  • I'm currently working on a documentary, part of which will highlight alternate currency systems, such as Bitcoin. I'm starting to think that the arguments I've been hearing from the Bitcoin advocates about the ongoing erosion of trust in "fiat currency" may have some merit.

    Right now, I suspect the best investment in terms of value retention and future good prices would be a nice set of Cookes or Zeiss SuperSpeeds...

  • I'm currently working on a documentary, part of which will highlight alternate currency systems, such as Bitcoin. I'm starting to think that the arguments I've been hearing from the Bitcoin advocates about the ongoing erosion of trust in "fiat currency" may have some merit.

    Bitcoin is criminal induced thing. It is not serious thing at all. But sounds modern.