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For Everyone Shocked By What Just Happened... And Why This Is Just The Beginning
Today, lots of people woke up in shock and horror to what happened in Cyprus: a forced capital reallocation mandated by political elites under the guise of an "equity investment" in insolvent banks, which is really code for a "coercive, mandatory wealth tax." If less concerned about political correctness, one could say that what just happened was daylight robbery from savers to banks and the status quo. These same people may be even more shocked to learn that today's Cypriot "resolution" is merely the first of many such coercive interventions into personal wealth, first in Europe, and then everywhere else.
For the benefit of those people, we wish to point them to our article from September 2011, "The "Muddle Through" Has Failed: BCG Says "There May Be Only Painful Ways Out Of The Crisis", which predicted and explained all of this and much more. What else did the September BCG study conclude? Simply that such mandatory, coercive wealth tax is merely the beginning for a world in which there was some $21 trillion in excess debt as of 2009, a number which has since ballooned to over $30 trillion. And with inflation woefully late in appearing and "inflating away" said debt overhang, Europe first is finally moving to Plan B, and is using Cyrprus as its Guniea Pig.
For those who missed it the first time, here it is again. Somehow we think many more people will listen this time around:
Restructuring the debt overhang in the euro zone would require financing and would be a daunting task. In order to finance controlled restructuring, politicians could well conclude that it was necessary to tax the existing wealth of the private sector. Many politicians would see taxing financial assets as the fairest way of resolving the problem. Taxing existing financial assets would acknowledge one fact: these investments are not as valuable as their owners think, as the debtors (governments, households, and corporations) will be unable to meet their commitments. Exhibit 3 shows the one-time tax on financial assets required to provide the necessary funds for an orderly restructuring.
For most countries, a haircut of 11 to 30 percent would be sufficient to cover the costs of an orderly debt restructuring. Only in Greece, Spain, and Portugal would the burden for the private sector be significantly higher; in Ireland, it would be too high because the financial assets of the Irish people are smaller than the required adjustment of debt levels. This underscores the dimension of the Irish real estate and debt bubble.
In the overall context of the future of the euro zone, politicians would need to propose a broader sharing of the burden so that taxpayers in such countries as Germany, France, and the Netherlands would contribute more than the share required to reduce their own debt load. This would be unpopular, but the banks and insurance companies in these countries would benefit. To ensure a socially acceptable sharing of the burden, politicians would no doubt decide to tax financial assets only above a certain threshold—€100,000, for example. Given that any such tax would be meant as a one-time correction of current debt levels, they would need to balance it by removing wealth taxes and capital-gains taxes. The drastic action of imposing a tax on assets would probably make it easier politically to lower income taxes in order to stimulate further growth. (See Exhibit 4.)
Curiously, not even BCG expected the initial shot across the bow to be so bad that everyone, not just those above the €100,000 threshold would be impaired. Alas, that is the sad reality in Europe, where as the chart above shows, a total of €6.1 trillion with a T in additional wealth confiscation tax is coming.
Oh, and US of A... fear not - your turn is coming too: with a price tag of €8.2 trillion in wealth tax pending as of 2009. This number is now somewhere north of €15 trillion.
The full BCG study which we urge everyone to read
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went home at 2 with a 10
woke up at 10 with a 2
that's when Gilda turned into Rita.
Read Nag Hamadi much?
Pretty sure Sophia doesn't give a toss about the eternal joo-bankster. Her focus is not quite that petty.
Pandora may have a thing or two to say about this situation though.
http://theuglytruth.wordpress.com/
^^^^^^^^^^^^^^^^^^^^^^
there will be small bank runs all over the world, u.s. included.
BAck in August 2011 when they downgraded the US interest rates went negative on deposits to burn savers for the illusion that the banks have so much liquidity......
And now, when those bankrupt fucking bankers who no longer can generate " interest" from their blaoted sky high inflated balance sheets they go after the savers ...
A safe heaven 10Y US T pays 1.999%, where teh fuck am gonna make 6.7% and 9.9% to offset this fucking tax! From my slavery job!
FUCK THE STATUS QUO
It's getting exposure now. By Sunday it will be everywhere and the perps feet will be cold enough it may not pass the vote.
http://finance.yahoo.com/news/cyprus-parliament-vote-savings-levy-000315...
Wonder if any Pimps have money in those banks???
Paraphrasing Flyguy:
My bank better have my money
Through rain
Sleet
Or snow.
My bank better have my money
Not half
Not some
But all my cash.
Because if she don't
I'm gonna put my foot dead in her ass.
Squeeky Fromm, Girl Reporter
https://www.youtube.com/watch?v=2yUpGTeJnBE
all i can say at this point is cue the........
south east asia fucking gongshow in 3,2,1....
where's the next diversion coming from
First you say Cyprus is a haven for Russian money, (no doubt ill-gotten gains), then you complain about said money being dinged at 10%. Hey it's just a small vig for getting to keep your money outside of mother Russia, so what's the problem?
There is suppose to be honor among theives
jb
They did not impose a Levy on ILLEGAL funds simply ALL Funds. Guess who will have had the tip off to move their Assets BEFORE the Haircut was imposed !!!!
If politicians have stolen Russian Mafia money they will be sleeping with the fishes very soon.
Didn't Simon Black say to put money in Cyprus?
This is pretty good.
The Federal Reserve Debt Scam As Explained By 70s TV Show 'Good Times'Whooo boy...this is getting interesting.
Cash machines EMPTIED across Cyprus as 60,000 British savers face losing MILLIONS after £8.7billion EU bailout imposes tax on all of nation's bank accountshttp://www.dailymail.co.uk/news/article-2294388/ATMs-emptied-Cyprus-save...
Loved this bit:
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Confidence inspiring ... move along ... nothing to see here.
Do you think that Blankfein, Bernanke, Greenspan, Geithner and Lew are now getting nervous?
Probably not one bit. The entitelment and hubris of people like this is bottomless. Also, I don't think Timmay is in these other guys league.
* Robbery: The felonious taking of personal property from someone using force or the threat of force.
===
Call it like is is.
JB
The oil and gas potentials of Cyprus could have been used as collateral for the bailout. Why didn't they look into that option? Oh.....they did but thought of it unsuitable for the plans to create the EUSSR.
Don't forget to add a dash of equities spice to your stack of gold, silver, bitcoin, beans, and bullets. I'm thinking of a portfolio of manufacturers in the near term. Rope, torches, and pitchforks should be in high demand soon :-)
I did a writeup on Cyprus (direct stealing from people's bank accounts and more). They use the Euro.
I think it will help a lot of people understand the situation fairly quickly. It's a small country and a small portion of the EU, however the approach to directly just take assets from people's bank accounts is astounding.
http://oahutrading.blogspot.com/2013/03/cyprus-confiscates-money-deposit...
Is anyone surprised?
Will anyone be surprised when this theft becomes more widespread?
I hope the sheeple start to wake the fuck up and realise that they are being bent over the boardroom table
It's supply and demand folks. We now have 7-8? billion people in this world. There isn't enough to go around. Finance is just a bullshit way for you to get a diminishing piece of the pie while the oligarchs get rich. The richer they get the quicker your slice shrinks to a sliver. It could be equalized but that would be Socialism. It's much better to go on with our Corporatism. /sarc We are far from what is real Captitalism. I think we are not far from the release of a new virus which will depopulate. CRE????
That's an unexpected and ugly precedent.
Austerity deals and now raiding deposits. Notice the 9.9% figure - the same trick retail advertisers use to make prices appear cheaper by lowering the conscious threshold. What's next? PM confiscation? Tax on breathing?
Once you set a precedent, it becomes the new normal. Just another daily twinge of pain for the sheep to mutter complaints about, but rationalised by the propagandists as a necessity for security, stability, blah blah blah. Hell, they've been taking a huge cut out of every penny everyone earns without much complaint for over a hundred years which began as an "emergency" income tax, and nobody does anything about it.
I expect some VTB managers to end up floating in the river, at least the ones who escaped jumping from rooftops.
"Tax on breathing?"
Ask the EPA about CO2. It's coming.
Notice how clever is this Bangsta-Gangsta action : Confiscation is not a default ; therefore no CDS protection is triggered. No real property is impacted, therefore the numerous tourists who have been allegedly sold the SAME property in Cyprus will not be impacted (aside from the difficulty in figuring out just WHO owns the property). The Japan FinMin and PostBank can observe the whole process - as it provides an excellent case study for how to recapitalize their insolvent butts - using "social equilization" as a Japan solidarity cover. For the Banksters this amounts to an Anti-Grillo "V-Day Celebration"!
So much for Deposit Insurance ! I do hope Depositors throughout Europe are watching. Germans had a Lastenausgleichsgesetz 1952 which to date has transferred 115 BILLION D-MARK and still exists - wait for the EU Version.
First Capital Levy then Capital Controls. Time to nationalise Goldman Sachs in each territory where it functions and make the Staff Civil Servants to carry out Government Instructions
Hope it's not too late for "orderly" withdrawal of my fiat. Wish my stacks were higher.
We don't have to worry about that. It's much more palatable to just buy MBS monthly and put the bill on our grandchildren, and their children, and their children.... it's nice to be the reserve currency, Oh wait, what's this about a Russian-Indian-Chinese reserve bank being set up? Damn, there goes the neighborhood.
Severe shortage of ammo all sizes in my area of Masshole. Rationing customers to 200 rounds. Big price rise coming next?
Hey you TBTF banks, I was only kidding when I sarcastically said four years ago that you might as well just open everyone's account and take the money.
I guess I saw it coming, and I now know you knew it was coming all along too.
I prefer to just keep calling it theft. Then I only have to remember two words about money, theft and gold.
Minimum cash in bank, physical silver stashed and hidden.
Curious....If 10% confiscation "saves" the banks...what happens to them when depositors remove 50% on tuesday?
It will probably be a short term event... and only done by locals... their banks are apparently dodge havens for russians and brits and the 10% will be seen as the cost for the dodge... it's way less than the dodger's local taxes. Money will move from Cyprus over time, but to where I don't know.
I can't understand why everyone thinks gold is a safe investment. If gubmint can take your money right out of teh bank then why can't they implement additional taxes on gold sales?
Sure, I know that most here experience 'boating accidents' but isn't that the same thing as trying to cheat the IRS? Unless you are connected or Tim Geithner then it ain't gonna help ya.
Great. Down arrows I expected but why are there no intelligent responses?
It gives you some flexibility .... you can choose the hour of your execution .... can you imagine being hauled out of bed at 6 AM .... to go to the guillotine .... oh, the indignity ?
http://p.washingtontimes.com/news/2012/dec/10/obamacare-fee-of-63-per-pe...
Prepare for daily shocks. In 2014 our small company, of 150 employees will have to pay a "fee" of $63.00 per insured (including dependents) to pay for pre existing conditions. That fee will be a $18,000.00 hit to our profits, or what's left of them. Big unions and crony capitalist with their $$$ access of influence are working deals to be exempted from this tax, leaving small business in the dust. Of course, the elite Boehners, McShame, Lindsy Grusesome and others stay silent.
The story I see so far is one of EU political criminals dancing to the tune of banking criminals. Both groups are criminals who conspired to create the crises, each for their own reasons (political power and financial power/profits respectively).
The banks have threatened to bring down the whole financial system if they don't get ever more money to shore themselves up. They are thus described as 'Too Big To Fail'. The events in Cyprus are a continuation of that bailout process. I see little evidence that the political criminals are changing tactics and calling the banking criminals' bluff. CBs are printing money to buy up bonds to support bloated state spending and to create inflation. I'm sure Cyprus will not be the end of it. More likely it's the beginning.
The war is - and always has been - against ordinary people with savings and deposits. They're the only people with any money left. The restraints so far on how much of their money to steal - and which criminal process to use to do it - are the risks of not being re-elected, riots on the streets, banks being firebombed and getting lynched.
If theft of private deposits happens in Spain and Italy, expect some serious trouble. They've already had enough and summer rioting weather is almost here.
And as ZH says, savers and depositors in the US and UK are also on the radar...
Don't be silly...
We always tax the peasants to pay the gambling debts of the Lords.
That's just the way it works. It always has.
Now be quiet and finish polishing the silver...There's going to be a big card game tonight and everything must appear perfect.
Oh, and shoo those beggars away from the kitchen door. They smell bad.
The path of the righteous man is beset on all sides by the inequities of the selfish and the tyranny of evil men.
This was done over a holiday weekend in Cyprus. Very soon is the big Easter weekend in Italy, Greece, Portugal, Ireland etc etc
This is the first use of the ESM, right?
Any mention of an ESM program, no matter how innocuous, will cause even more knee-jerk bank runs, from here on out.
Does anybody have the list of the safest banks in the US it's time I move what cash i do have.
For my Cypriot friends:
http://www.amazon.com/Passion-Natural-Water-Based-Lubricant-Gallon/dp/B0...
So we're using Mesopotania as an economic model? Just mash the clay tablets... If that's on the table why not consider reinstuting slavery? It has a record of success. : (
I had been holding off on making a deposit into any EU bank, but after this expropriation instantaneous fair-sharization I think Krugman must be right about the ridiculousness of that pesky confidence fairy.
The losses are there. After wiping out equity holders, is it better to screw bond holders, depositors, or taxpayers-at-large?
U.S. screwed all the taxpayers in 2008; many wish they'd wiped the floor with the big bank's bondholders and depositors first.
Caveat depositor.
proper debt/GDP level?
Says who cares? With everything manipulated or ignored this just another scribbled note handed to the bank teller by a bank robber
In the end, this is why society MUST have guns.
Granted, detractors will say, "Well if you want guns, why don't you use them?". The whole point of having them, is to DETER shit like this from happening.
Why would any Cypriot put money in a bank after this?
Why couldn't the Greek crisis .... have been resolved .... with such economy of time ?
The laymen on this site obviously still cannot see that RECOVERY SUMMER 4 is just about to begin!
Where did all the comments go? There were 10 pages, now it's just 3. wtF?
I wonder about that question, OccupyTVstations. For the first time ever, I have just noticed that a comment, and my reply to it, have disappeared from this Zero Hedge article ???
Oh boy.... ought to be interesting...