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Europe Does It Again: Cyprus Depositor Haircut "Bailout" Turns Into Saver "Panic", Frozen Assets, Bank Runs, Broken ATMs
Europe has done it again.
Late last night, after markets closed for the weekend, following an extended discussion the European finance ministers announced their "bailout" solution for Russian oligarch depositor-haven Cyprus: a €13 billion bailout (Europe's fifth) with a huge twist: the implementation of what has been the biggest taboo in European bailouts to date - the impairment of depositors, and a fresh, full blown escalation in the status quo's war against savers everywhere.
Specifically, Cyprus will impose a levy of 6.75% on deposits of less than €100,000 - the ceiling for European Union account insurance, which is now effectively gone following this case study - and 9.9% above that. The measures will raise €5.8 billion, Dutch Finance Minister Jeroen Dijsselbloem, who leads the group of euro-area ministers, said.
But it doesn't stop there: a partial "bail-in" of junior bondholders is also possible, as for the first time ever the entire liability structure of a European bank - even if it is a Cypriot bank - is open season for impairments. The logical question: why here, and why now? And what happens when the Cypriot bank run that has taken the country by storm this morning spreads everywhere else, now that the scab over Europe's biggest festering wound is torn throughout the periphery as all the other PIIGS realize they too are expendable on the altar of mollifying voters and investors in the other countries that make up Europe's disunion.
Bloomberg's take on the sacrifice of Cyprus' savers:
Officials have struggled to find an agreement that would rescue Cyprus, which accounts for just half of a percent of the euro region’s economy, without unsettling investors in larger countries and sparking a new round of market contagion. Policy makers began meeting at 5 p.m. yesterday in a hastily convened gathering, seeking to overcome differences on bondholder losses while financial markets were closed.
“Further measures concern the increase of the withholding tax on capital income, a restructuring and recapitalisation of banks, an increase of the statutory corporate income tax rate and a bail-in of junior bondholders,” according to a communique released by ministers after the talks. It didn’t specify whether bank or sovereign bond holders could be affected.
The European Central Bank will use its existing facilities to make funds available to Cypriot banks as needed to counter potential bank runs. Depositors will receive bank equity as compensation.
Finance Minister Michael Sarris said the plan was the “least onerous” of the options Cyprus faced to stay afloat.
“It’s not a pleasant outcome, especially of course for the people involved,” said Sarris. The Cypriot parliament will convene tomorrow to vote on legislation needed for the bailout.
Needless to say, the locals are delighted:
In the coastal town of Larnaca, where irate depositors queued early to withdraw money from cash machines, co-op credit societies that are normally open on Saturdays stayed closed.
"I'm extremely angry. I worked years and years to get it together and now I am losing it on the say-so of the Dutch and the Germans," said British-Cypriot Andy Georgiou, 54, who returned to Cyprus in mid-2012 with his savings.
"They call Sicily the island of the mafia. It's not Sicily, it's Cyprus. This is theft, pure and simple," said a pensioner.
For the real response, look to Russia:
The island's bailout had repeatedly been delayed amid concerns from other EU states that its close business relations with Russia, and a banking system flush with Russian cash, made it a conduit for money-laundering.
"My understanding is that the Russian government is ready to make a contribution with an extension of the loan and a reduction of the interest rate," said the EU's top economic official, Olli Rehn.
Almost half of [Cyprus'] depositors are believed to be non-resident Russians, but most of those queuing on Saturday at automatic teller machines to pull out cash appeared to be Cypriots.
While "saving", pardon the pun, yet another insolvent country merely has the intent of keeping it in the Eurozone, and thus preserving Europe's doomed monetary block and bank equity for a little longer, this idiotic plan will achieve two things: i) infuriate not just Russians but very wealthy, and very trigger-happy Russians. The revenge of Gazpromia will be short and swift, and we certainly would not want to be Europeans next winter when the average heating level of Western European will depend on the whims of Russian natural gas pipeline traffic; ii) start a wave of bank runs first in Cyprus and soon everywhere else that has the potential of being the next Cyrpus.
Sure enough, here come the bank runs:
While the tax on deposits will hurt wealthy Russians with money in Cypriot banks, it will also sting ordinary citizens. Some ATMs in the country have run out of cash, Erotokritos Chlorakiotis, general manager of the Cooperative Central Bank, told state-run CYBC.
Forzen assets and "national bank holidays" are baaaaack:
Funds to pay the levy were frozen in accounts immediately, ECB Executive Board Member Joerg Asmussen said. The levy will be assessed before Cypriot banks reopen on March 19 after a March 18 national holiday. Sarris said electronic transfers will also be limited until then.
Europe's response: this is a unique situation. Just like the Greek bailout was unique; just like the Irish and Portuguese bailouts were unique; just like the bailout of Spanish banks was unique.
“As it is a contribution to the financial stability of Cyprus, it seems just to ask a contribution of all deposit holders,” Dijsselbloem said, noting the country’s financial industry was five times the size of its economy. The plan includes “unique measures” that address the “exceptional nature” of Cyprus and show “inflexible commitment to financial stability and the integrity of the euro area.”
Curiously, even everyone's favorite liar, former Eurogroup president, Jean-Claude Juncker, has a warning that this "bailout" is the worst thing Europe could have done:
Skeptics including Luxembourg’s Jean-Claude Juncker had said that imposing investor losses in Cyprus risked reigniting the financial crisis that has so far pushed five of the euro zone’s 17 members to seek aid. Last year, the euro area took what officials called a unique step to ask Greek bondholders to absorb losses.
But fear not: Europe has promised this absolute resolution taboo won't repeat itself...
When asked if a deposit assessment could be ruled out for future rescues, Rehn said in an interview: “It can and there is no concrete case where it should be considered.”
... Until it does repeat itself of course - after all the fundamental problem for Europe has never been resolved: the continent is still broke, and it still is running out of good, unencumbered assets (which as being repledged by the banking oligarchy) with every passing day.
Now the only thing unknown is Russia's response:
Corporate tax rates in Cyprus will rise to 12.5 percent to 10 percent as part of the deal, Dijsselbloem said. Rehn told reporters that Russia, whose banks have loaned as much as $40 billion to Cypriot companies of Russian origin, would ease terms on its existing loans to Cyprus as the rescue unfolds. Cyprus’s finance minister is scheduled to fly to Moscow on March 20.
What is known, however is that Cypriots have taken the news in stride.... and to their local ATM machine, which sadly is showing the following message: "Your transaction has been cancelled due to a technical issue. This ATM cannot complete withdrawals at this time" (courtesy of Yannis Mouzakis).
It didn't take long before the Cyrpus Cooperative bank issued a statement saying "some ATMs run out of cash" - by some they likely mean all as the entire country is now gripped in a full force depositor run.
Some other snapshots of what is currently happening in Cyrpus, where locals are using excavators if not to force the ATMs into "compliance" then to block bank entrances out of blind fury. From Philenews:
Indignant citizen who has the testimony of the Cooperative Credit Society Kyperoundas, cut the morning the entrance of the branch of the SEA, located on Avenue Nikos and Despina Pattichi in Limassol.
He said he believes that deceived by the assurances that the relevant deposits are insured citizens and decided how to express his protest, parking the excavator outside the entrance of the branch of SEA
And more from iefimeirda:
With the first light of day after the unprecedented decision to the Eurogroup on the terms of the Memorandum of Agreement and the taxation of savings, hundreds of people flocked to Cyprus stores credit cooperatives Larnaca to withdraw their deposits.
With the opening of stores found they could not withdraw all their money, because the electronic system of credit cooperatives was not working. And when it became possible, writes the Daily Cyprus, the system seemed to finally hit the appropriate amount of the new tax, which provoked strong reactions. Even after the government ordered the stores eventually closed.
At the same time, according to information or ATMs of banks give no money so that there is a huge inconvenience.
After lunch return to Cyprus President Papadopoulos Nikos Anastasiadis from Brussels in the morning reached political agreement on the rescue of the economy, while in the meantime the Presidential prepares emergency meeting of ministers of the government.
According to all the information, will this weekend be submitted and voted on bills in the form of urgency, before the banks opened Tuesday morning.
In the text of the agreement, with the characteristic title "We caught napping," the website says Sigma Live Nicosia agreed terms "under threat of closing banks." painful Describing the agreement, Sigma relies on sources from Brussels you speak of night thriller and roll jams, and the Cypriot delegation warned even withdrawal from the negotiations.
Congratulations Cyprus savers - you were just betrayed by both your politicians, and by Europe - sorry, but you are the "creeping impairments" in the game known as European bankruptcy. And so is anywhere between 6.75% and 9.9% of your money, which you were foolish enough to keep with your banks (where at least you were compensated with a savings yield of... 0%).
More importantly, as of this morning Europe has finally grasped that there is a 6.75% to 9.9% premium to holding physical cash in your mattress rather than having it stored with your local friendly insolvent bank.
Luckily Cyrpus is so "small" what just happened there will never happen anywhere else: after all in Europe nobody has ever heard of "setting an example". Or so the thinking among Europe's unthinking political elite goes.
And congratulations Europe: just when people almost believed you things are "fixed" you go ahead and prove to the world that you are as disunified (because size doesn't matter in a true union), as confused, as stupid and as broke as ever.
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bullshit ryhmeswith Japan if you have seven other lines in the ryhme that actually do ....er....bullshit
So many G-7 bugs in search of a windshield: Japan, UK, Euro-land, China.
I'm convinvced the next big wave will begin when one of these countries defaults on their debt and devalues. I don't know how it affects the dollar. Is it dollar positive as people flood in USTs? (Dollar positive = deflation.) Or do they say, 'Screw the dollar. They're the next to default.' and dump the dollar. (Dollar negative = inflation). I don't know. The outcome is path dependent, and you've got to figure in central banks manipulating the outcome along the way.
Personally, I'm a deflationist and I think the dollar will strengthen until the 'big print' comes. It's going to be one hell of a ride.
http://www.youtube.com/watch?v=ugMLUE1fDkE
The US government has its sights on the 401K and IRA accounts. It won't be just a haircut. They will take it all and say it is for our own good.
"Is this the beginning of the end?"
I think it's more like the end of the beginning.
Savings should be OUTSIDE the bankster system, there will be very few places left to run to, and these will be very crowded very soon
Throughout Europe everyone is going to start withdrawing their money. This was the fastest way to have a bank run around the world. Who knows what other government will do this. Too bad countries haven't gone Iceland instead.
This will crash the banking system.
Iceland currently has capital restrictions on its money leaving or entering the country. As a result they're going to see some bad inflation.
The 10B Euro bailout money for the Cyprus banks was enough as long as the situation remained stable. Attaching a tax on depositors knocks that stability on its ass and they will see a massive run on the 68B Euros in its banks. The depositors will be lucky to get half and the rest of Europe will start emptying the banks as well.
Remember in 2008, we were within 24 hours of a worldwide bank run, which is why the FDIC insurance was raised to cover $250,000 per account.
No one should maintain deposits in a periphery bank; yet, the sheeple continue to keep their savings there despite all of the red flags.
More importantly, this is only the first Cyprus bailout. Cyprus will not achieve a 100% debt to GDP ratio by 2020. The troika must be assuming a 3% growth rate with a perfectly balanced budget for the next 7 years to get to that number. Show me one crisis country that has been able to muster 3% growth with no budget deficit.
http://dareconomics.wordpress.com/2013/03/16/cypriot-debt-will-not-be-su...
NOT the end. Just Banksters winning again. But then, they do winl every time. Don't they?
Yes it is.
"Is this the end of Rico....err Euro?"
unless I see people hanging by lamp polls, shot down outside of banks... this is a tempest in a teapot - TPTB are immune from harm - they can do this and more and the Western Man takes; oh he complains, he throws things, but in the end he's back in front the of TV and all is good - the Arab on the other hand - now there is a bunch of men that aren't afraid to die or kill for something bigger than their flatscreen - maybe they do deserve to run the world - very tired of all this lamenting and gnashing of teeth in vain....
the second amendment deserves to die - it has outlived its purpose - it was designed for a people that would take back their government, no such people to be found - hence the access to guns is really moot...
Too much division in Amerika ... by design.
I see your point, hampster; but I truly believe you're wrong. Five million brave men can do it, and I think we've got 'em.
.
edit: brave *adults.*
.
3%
Several generations of people have lived in euro-peon welfare states, never knowing what it was like to survive on ones own merits.
Intellectually most of them are still hoping the show to go on. They will be like Greeks. Protesting at the REMOVAL of big government.
It's frightening for them to contemplate living in economic freedom, I have met this type of person, the one who thinks that it is all important for "the trains to run on time" and who says "they should do something about (problem)".
This welfare state euro-peon will be like those unfortunate Russians who were interviewed on TV after their collapse, they talked about how the heating and power was turned off and how they had to turn to crime to survive because their military pensions weren't worth squat.
It was sad to see them, and if you had offered them their serfdom back they probably would have grabbed it with both hands.
People take time to adjust, it will be difficult...
The end of the Beginning. The real fun starts now
Fuck you Ben Bernank. Fuck you Paul Krugman. Doctor Paul Krugman.
We'll be fine as long as GoBombEm doesn't hear about how to do this.
Aah! This is not the end. It is not even the beginning of the end.
But it is perhaps the end of the beginning.
Yes, I think so. The "money quote" is this:
Congratulations Cyprus savers - you were just betrayed by both your politicians, and by Europe - sorry, but you are the "creeping impairments" in the game known as European bankruptcy. And so is anywhere between 6.75% and 9.9% of your money, which you were foolish enough to keep with your banks (where at least you were compensated with a savings yield of... 0%).
More importantly, as of this morning Europe has finally grasped that there is a 6.75% to 9.9% premium to holding physical cash in your mattress rather than having it stored with your local friendly insolvent bank.
Coming soon: your bank informs you that due to the bank emergency equality act, accounts in debt will be indebted a further 9.9% from their current account status, because debtors had the opportunity to gain from credit that was extended to them. Bitte disponieren Sie entsprechend bitchez.
When real estate and the stock market crashed in 2007 that was the beginning of the end. Try to keep up.
And this is news? It's been the plan the entire time...
It's news because it's happening now. I've been waiting for 5 years with gold coins building up in a safe (or at the bottom of the English channel) plus as much debt as I am comfortable servicing, no more pension contributions convinced that I am right. So far I have been considered a nut job by my friends but this looks like my denouement. Thank you zerohedge. I love you.
Zero Hedge and FOFOA gave me the tools to sleep soundly at night, knowing that my financial butt is safer than before, that our daughter has more risks covered than before.
As N N Taleb would say (but my words here):
"Rather than predict the future, fix the RISKS & VULNERABILITIES you face."
***
I of course am sorry to hear of your loss of gold coins at the bottom of the Channel. You may have to start buying them again. Please be more careful the next time you travel with your gold.
Hope you are joking about it being in the Channel ?
Spoke to my sister this morning,was she pissed,all her money was in Cypriot banks(she lives there).
Did warn her,Oh well.Its only fiat.
It could be worse. I lost mine when my sailing boat capsized over the Mariana Trench. Now it's for the fishes and James Cameron.
Wow 52 likes
A good and well-timed post, that's why!
I liked "denouement." I also think they can pile on more bullshit.
if there were not bank runs in greece by now I'd say these people may have not been paying attention.
Got to have money to "have a run" on.
It has been a bank stroll so far, but this will certainly quicken the pace, especially in Spain. Maybe Italians will stroll down to their bank too, se sono intelligenti, and get their mattress stuffing Euros before they can only get 90% or less of them. On the other hand, the New Lira might be softer for stuffing and you might get thousands more bills than in Euros.
No you don't. You can have an overdraft, as long as you don't have to pay too much for it. A bird in hand is worth 2 in the bush
Trial balloon. If it goes well expect it in nations with larger deposits.
Bingo. I guess we'll see if the Euros really are pussies or not.
I don't understand why they don't just do like Bernanke and monetize the bad assets of the Cypriot banks. Confiscation through monetary inflation is more subtle than simply stealing people's money in broad daylight.
Maybe it's useful having gbp as an extant currency so they have something to experiment on
They need the obvious theft so that people don't see the hideous one.
Because it is election year this year in Germany. Monetizing debt is a hard thing to sell to the Germans who along with Netherlands, Finland and Austria have been bailing out everybody. Nobody in these countries gives a damn about Cypriot bank account holders. And it is a haircut. They are still being bailed out by the other countries. As for the Cypriots, who in his right mind would leave their money on the bank knowing there is an EU conference trying to 'deal' with this problem?
This is gonna cause capital flights from other weak Eurozone countries' banks to "safe" countries' banks in Germany, the Netherlands or Finnland, thereby increasing the Target2 imbalances between the Eurozone countries.
+ 1
And perhaps capital flight into physical gold.
give this man a price...he gets it...
now watch'em really try to drop the phony paper price of the only 2 forms of real money...
popcorn anyone?
I can't see any effort unfolding to drop the paper price of real money -- farmland.
It is very hard to cover all of your bases. I hear you, but we who are older and not equipped to be farmers, well, it depends on how all of this plays out. If the grid goes down hard, we (two) may die... But, if the SHTF in a milder way, we'll be fine.
Farmland can be taxed or otherwise encumbered. Owning farmland, make sure you have LOTS of liquid assets to pay off .gov or other local gangsters.
And you'd better be a well-connected oligarch, because farmland is the easiest thing for a corrupt government to confiscate. They can simply tax you out of existence, declare a national food emergency, Ask the former white farmers in Rhodesia how that went.
Anyone who paid attention to Rhodesia now knows that farm land actually has to be farmed for it to be useful. The idiots that took over that farmland ran it into the ground because they weren't farmers, for the most part, as I understand it. That'll happen again unless the gov't uses carrots instead of sticks, not that I have an idea which one they will decide to use.
I think one of the biggest risks is simply a large number of people who aren't prepared. What do you do with that? If things really degenerate, it is going to be an epic clusterfuck.
The .gov can always come for your ass, so don't think you can evade that if it gets to that point. Take sensible precautions and move on with life.
After much thinking, reading, and such, I settled on moving to a small town in AK (30k people) which is 600 miles from the next largest city. In approximately a 600 mile radius the total population is probably well below 100k. To put that in perspective, TX at its widest is about 800 miles across. Let that sink in.
I won't be living like a king in hard times, but I won't starve either. This isn't the end of humanity, just gotta make it through to the other side.
Best of luck y'all!
Regards,
Cooter
That's always been my thinking. It's not the government you have to worry about, and which this site is always warning about. It's your desperate and gun packin' neighbor, with starving children to feed. Good luck with that ...
I was raised in Alaska. Love it there and return to my family up there as often as I can. The brutal winters up there are worth it during the incredible summers. People don't understand how well potatoes, cabbage, carrots, berries, etc grow up there. Fantastic soil, 20+ hours of sunlight, plenty of water. And it's easy to fill a freezer with fish and meat.
Every time I complain a bit about milking a cow in the cold down here, I remember true cold and stop my whining.
Miss being surrounded by those with the Alaskan Spirit of independence.
Or you can buy shares of LAND, then have someone else farm it for you.
That is a bit like paper gold.
Expect a run on Italian banks next week.
Of course bondholders should be made whole at the expense of depositors. See [edit: Sentinel]. Until the guillotines come out, that is.
Actually they won't. Bondholders will have to pay too.
What the article doesn't make clear is that Germany is the one that asked for depositors to take a haircut. This is a Lehman moment for EU bank bailouts. We'll see if the consequences are comparable.
This is an anti-capitalism move. It is discouraging saving and encouraging consumption. As saving, the engine of capitalism, declines, investment in productive activities will decline. It will induce savers to spend their capital rather than save it. All to save banks which should be allowed to die so their remaining assets can be bought and put to productive use. Bondholders that invest without assuming the associated real risk should suffer the consequences.
Few people understand the role gold can play in protecting capital. Alas.
Zero interest rates are what discouraged saving. This move discourages the use of banks as a storage mechanism. I wouldn't go near a bank again ever. Putting any asset in a facility that is required to obey any gov't mandate that comes along just about guarantees some level of confiscation. For those of you with safety deposit boxes or with assets located with an entity that may be persuaded to heed a gov't threat, take notice of this concept.
Chubbar, that has always been my contention regarding "safety" deposit boxes', always sounded stupid. Banks not open, poof, no money. This old boy down the street and I talk about the mess we see and see coming and he put about 1/4 mil in his box at the bank. I keep hinting that he should get it out of there. Your statement about Gov regulations is so true. It just won't be there or you won't be able to get to it
Show your neighbor this video. This is one of many MLM stories where the bank has confiscated the contents of a valid customer's box. There are many videos like it.
http://www.youtube.com/watch?v=ygG29W0DQno
"BRUSSELS—Depositors in Cypriot banks will be hit with a one-off tax on their savings, as part of a €10 billion ($12.96 billion) bailout for the Mediterranean island from the euro zone and the International Monetary Fund.
The deal, announced early Saturday, marks the first time in the euro zone's five-year-old financial crisis that depositors in bloc's banks will lose money. Accounts with more than €100,000 will be taxed at 9.9%, those with less at 6.75%, raising an expected €5.8 billion for the near-bankrupt nation."
Back up article...
http://online.wsj.com/article/SB1000142412788732407770457836218003976715...
Who wants to bet this aint no one time deal......it will be yearly
None of those people look like they've ever been on a boating trip...
Neither did they know anything about "preparation".
' They ' just don't get it... these kind of measures will make things even worst.
It's a temporary patch if that, the real cost is the loss of public confidence.
Let the bank runs proceed.
I started my bank run three or four years ago.
s2man
You're on fire today, yes, + 1. Even little by little, you can cover a fair amount of ground using time as your friend. If you started years ago, you may have a nice diversified stash built up. Thinking ahead helps a lot. Not predicting, just covering your bases.
am i the only one who didn't buy gold at $253/oz?
You are not. My average cost basis would be something over $1200... It's cool though.
Mine is 1450 and I still feel relieved I came to see the light by reading ZH
The Russian Oligarchs may go Archduke Ferdinand on this one. They have the money and resources to take out those who arbitrarily taxed them.
This is good for gold and silver. Bitcoin and Litecoin may also be an additional option for the savers.
Just by a bunch of Kohl's Cash. It's just as worthless as Bitcoins and Litecoins.
seriously ? these people could'nt see this train comming down the tracks ?
LoL @ fools.
Aaaaand its gone...
stans first deposit was not even in a cypriot bank, was it the south park "firendly" bank?
Wait...depositors are going to have to pay...for what now?
depositors pay for everything .. because they are expendable
I'd say they are captives (by choice or ignorance).
And I'm sure a few Russians will make their voice heard if they are not made whole (under the table deal is ok and quite welcome; wink wink).
Only small depositors pay the full price as is always the case everywhere.
I'll go with 'by choice' because I'd bet these people had the same idea soooo many others have ' It'll NEVER happen to me '.. famous last thoughts :)
and yeah,under the table deals for the russian mafioso is a given.
What are the gun laws in Cyprus?
Any idiot that keeps a large amount of money in any bank deserves what they get.
+1000 , maybe this will wakie the sheepie, can't wait to see what happens elsewhere in EUoooooNooo
LoL
this is why i would never keep my money in a greek bank, only other european banks and US banks for me.
- dumbfuck
+ 1
But I would think BIG re diversification, if I could, I would have money in other universes... Gold, cash, other investments and no debts are good enough for now.
>>> Those with children should be thinking very hard now. <<<
this needs repeating , and not just for the issue in this article.
>>> Those with children should be thinking very hard now. <<<
We get children so we get new people we can offload our debts upon. But we are not getting enough of them (children, not debts)
Ideally we should find space aliens so they can either lend us money so we can wage more wars and get more people on SNAP, Medicare and Social Security or attack us and break lots of windows so we can increase the GDP.
That's why I have SetiAtHome as my screensaver.
http://setiathome.berkeley.edu/
No way man, Canadian banks are the only safe banks in the world. I know this because they told me so.
If by large amount you mean more than the $250,000 that the FDIC guarantees, I agree.
FDIC guarantee
That was funny.
Exactly.
How does the FDIC insure 7.3 trillion in savings while holding a couple billion dollars?
WITH THE ABJECT IGNORANCE OF THE POPULATION.
The FDIC will get The Fed to print to cover any nominal losses. But they'll delay payment to small account holders as long as possible, and bail out their bankster buddies first. He who spends first, spends it best, and with a shitty fiat currency, delaying payment is a form of tax.
Cantillon effect:
http://www.zerohedge.com/news/guest-post-cantillon-effect
What does the last letter in "FDIC" stand for? Uh, oh!
The acronym misses two letters it should be FUDICK
Many many many reasons to hold physical metal, this is one of the big ones.....GOT SILVER.
Imagine if you could turn time back 1 week in Cyprus, how much precious metals would be bought.
Cyprus will impose a levy of 6.75 percent on deposits of less than 100,000 euros -- the ceiling for European Union account insurance -- and 9.9 percent above that. The measures will raise 5.8 billion euros
The tax levied on savers in Cyprus is enough to buy 30% of the world's 870 million ounces of silver. Cyprus is 0.0164% of world's population.
My god, they are simply stealing from people in plain daylight and celebrating it.
Fucking government pirates, kill them all!
If the Russian's taking the biggest haircuts set out to get even, then a lot of Cyprian bankers better stock up on kevlar helmets, teflon socks, and water wings before things get ugly...
@ JustObserving: "The tax levied on savers in Cyprus is enough to buy 30% of the world's 870 million ounces of silver"
Reference? Should note that this looks like an approximate supply PER YEAR. Still a VERY GOOD POINT. I see numbers just over 1,000 million ounces supplied per year... not in total supply
Please correct me if I'm getting the data wrong
Quite right , but ...
The ability to buy PMs and hide it ... is becoming more difficult day by day .. by design ( and by Fiat ) .
Most banks in the EU-Rope now have limitations on cash withdrawals and transactions.
IIRC, figures like 1000/day , 300/days , 50/day spring to mind in France, Greece, Italy and Spain.
( can't remember the order )
In Germany, it is still theoritcaly possible to buy PMs in cash under 10,000 EUR.
Of course, you have to find a reputable dealer first who will do that.
In the end, the Govts. want your money - by hook or by crook.
My buddy in NY tells me that getting PM is now difficult w/o a paper trail. It's spreading like a gov disease.
The two above comments are simply not true. Buy and sell 15,000 Euros worth of pm's as often as you like in Germany. No i.d. no nuthin.
Also it might be an idea to have a number of credit cards with zero balance on them paid by direct debit from your account with a combined total of what you have in the account, so if this happens in your country just buy gold / silver with the credit cards and when after the confiscation there is not enough money in your account to pay them off you can say there was at the time of the purchase and let the bank and card companies fight amongst themselves over who picks up the shortfall.
+ $55,000
Very creative idea, excellent!
Although I doubt there will be a gold confiscation. House to house in the USA to collect our gold? I doubt it. They could tax it and play other games though.
First they'll take your guns...
Then they'll take your gold.
"Molon Labe"
they can have my guns, right after they take my lead..hell i may cast bullets in gold if thshtf
One of my greatest personal satisfactions occurred two days ago when I convinced an elderly lady, who is a friend of the family, to purchase 80 ounces of gold coins, which she did over the phone in my presence. She's not rich and that amount was a large part of her personal wealth, which is now out of the banking system. I'm hoping that the debacle holds off for another week until the delivery shows up. I'm very happy for her.
Good job. Somewhere you just earned some Cosmic Brownie Points for helping someone diversify. Helping others is a great thing.
+ a million!
Many will be lucky if they can buy 80 ounces of silver coins.
Silver Garbage Man:
None would be bought. These folks live hand-to-mouth.
Trial run in a small (expendable, really) country to learn how to handle the larger ones, that's all.
This plus it's an island, ie one can't just cross the border and chose a different bank.
+ 1
Yes, proper diversification includes geographical diversification.
... or ATM.
Actually the Cypriots can in fact walk across a border and reach foreign banks
Northern Cyprus is still controlled by Turkey, with a whole non-EU banking system, including gold accounts
The border runs through the old city of Nicosia, which is divided like Berlin used to be, tho not so dramatically 'Checkpoint Charlie'
During the Cypriot rebellion against the Brits in the 1950s, a street in Nicosia was known as the 'Murder Mile' because of all the political killings there
Might be happenin' again soon ...
The Kurgman Times reminds us that this ain't a done deal yet:
If you could save 9.9% of your bank account by burning down the capital, what would you do?
Kurgman would urge, 'Smash windows, create jobs.'
Think about that for a moment: The law is not yet in effect, but Cypriot depositors already can't get at their money because someone went ahead and turned off ATMs and Internet banking. Without a law to say so. This must have been planned well in advance. Turning off an entire payment and settlement system without notice isn't possible. These things are designed to withstand large scale disasters.
There goes what rule of law was left.
Oh, and who really believes that large Russian depositors won't get their money out intact?
Yeah it kind of makes you wonder about all the ATM problems we have been having recently, testing the kill switch.
You could cross the 'green line' into Turkish Cyprus.
I'm sure the Greek Cypriots wiould get a warm welcome.Very warm.like
go to Hell,type warm.
well played
Over their 'long weekend'..........
Ireland has one too
Those scrambling to get THEIR currency are obviously criminals and should be thrown into the international courts/prisons!!! /sarc
Do not mind the drone above your friendly neighborhood bank..its for your protection!
its for your protection!
funny thing is , that's exactly the words I heard on my local news this evening when it was announced that LEA is now using drones .
14 mins ago: Cyprus president says without bailout banks faced 'collapse' - @AFP
+ 1 for good quick reporting. I had better test my BAC ATM card, like now!
BAC ATM card worked OK (cash withdrawal) at about 1:45 PM US ET.
I wonder what they "face" without any depositors?
FUCK the banks.
Does that tax only apply to bank accounts or also brokerage accounts?
When do we have impairment of depositors in the US?
Never mind, it has happening every day since Bernanke lowered interest rates to zero.
If you boil a frog slowly enough .....
If it were to affect brockage accounts, all those that did not have the requisite 6.7% or 9.9% in cash would have to have some of their assets liquidated in order to cough up that cash --- what happens then, when sudden, government-enforced mass sales of stocks, bonds, etc. take place?
Lulz @ "brockage"
"Brockage" is Chinese Citizenism accented discourse for unpleasingish multi-thousand pig carcass situation toward Huangpu River. Instead, Huang poo on roadside.
Make me laugh!
But, but, but....it's "just."
First National Bank of Serta. Know it trust it.
I do my banking at Sealy Bank & Trust, myself.
So this is a near bankrupt nation and yet...
The levy is a maximum of 9.9%
It will raise €5.8 billion
Suggesting the total amount of deposits are at least €58 billion
Cyprus GDP is about €17 billion
So, bank deposits in Cyprus are about 350% of GDP?
I wonder why the state is bankrupt?
massive amounts of land purchases paying well above market rate?
rampant tax evasion?
excessive state spending?
The country is the most corrupt in Europe, and I for one will shed no tears..
If you read the article, it would appear that a lot of that money is Russian in origin. So, in effect, it is a tax on Russian oligarchs to bail out European banks. Good luck with that.
russian oligarchs are keeping money in greek banks?
p.s i am not being sarcastic towards your post. i am just surprised to see that.
Yeah, I don't know the ins and outs of Russian mafia finances. Maybe there are tax benefits? or they have vacation villas in Cyprus and it's convenient to have local bank accounts? I don't know.
i don't see the benefit of pissing russia off.
Vladimir will have his choice of the Cyprus women.
i don't see the benefit of pissing russia off.
Or any of their mafioaso. That russian on the Sopranos that they left in the woods scared the shit out of me and he was on TV.
The game was that Russian companies sell goods to Cyprus at a discount, then sell from Cyprus at fair value (booking the gain in Cyprus), then get the bank to make a loan back to Russia, so they get the money but avoid Russian tax. This is why the Cypriot banks have massive balance sheets relative to the size of their economy.
Russian gangsters...er...oligarchs are not known for being tolerant of people taking their money. And all such decisions are made by people. I would not like to be one of them.
+ 1, yes. You lay down with dogs, you get fleas. Be self-reliant and honest in your dealings. Save some in gold.
Flea dog night?
Jelemiah was a burrflog ...