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"Depositor Repression" May Spread To Swizterland, EURCHF Spikes

Tyler Durden's picture




 

Moments ago we got news that the same kind of "depositor repression" aka wealth tax just implemented in Cyprus over the weekend, may spread to other stability and deposit havens. Such as Switzerland. Just before 7 am Eastern, the SNB's Moder, who is an alternative board member, said on the wires that the SNB will not exclude negative interest rates, which followed earlier comments from the IMF that the SNB should have negative rates if there is a renewed surge in the Swissie, and a plunge in the EURCHF, as has happened as the Euro has tumbled. Sure enough, the EURCHF soared on news that even Europe's last remaining deposit bastion is about to be impaired, because all negative rates are is an ongoing deposit confiscation, instead of a one-time "levy" as per Cyprus.

Bottom line: it is becoming increasingly clear that "your" money is not welcome anywhere, and the the authorities would rather you withdrew it, and injected it into the economy, in a desperate attempt to raise the velocity of money.

That what will happen instead is the parking of said money into deposits and other truly safe venues, not to mention conversion into precious metals and other relatively safe stores of wealth, will merely be chalked off to yet more "unintended consequences" when the chips finally fall.

In the meantime, it sucks to be a Russian billionaire oligarch: suddenly your money isn't welcome anywhere (unless of course that triplex in CPW is finally a bid, sight unseen). Well, except for Singapore...  and Japan of course. One wonders what happens to the Yen exchange rate after all the marginal wealth in the world starts buying up JPY and parking its cash in this last true bastion of depositors safety.

 

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Mon, 03/18/2013 - 07:19 | 3341612 Ag Tex
Ag Tex's picture

All available metals will be gone within three to six months.

Mon, 03/18/2013 - 07:20 | 3341620 GetZeeGold
GetZeeGold's picture

 

 

To the bottom of the sea.

Mon, 03/18/2013 - 07:30 | 3341645 negative rates
negative rates's picture

Yea, i'm gonna visit the insurance store today and withdrawl some money.

Mon, 03/18/2013 - 07:34 | 3341658 Badabing
Badabing's picture

All your FIAT are belong to me!

 

 

 got gold?

Mon, 03/18/2013 - 07:37 | 3341664 hooligan2009
hooligan2009's picture

hey...your are q/e infintying up votes!

call the fed and the ecb with that idea, instead of trillion dollar coins!

Mon, 03/18/2013 - 08:06 | 3341717 imaginalis
imaginalis's picture

I hope gold deposits are safe from negative interest rates.

Mon, 03/18/2013 - 08:15 | 3341741 BeerBrewer09
BeerBrewer09's picture

Food storage, water purification, TP, lead, bitchez.

Mon, 03/18/2013 - 11:27 | 3342650 Matt
Matt's picture

gold often does have "negative interest rates": if you deposit it into a vault, you pay storage fees, if you want the gold to be allocated and not lent out, I think.

Mon, 03/18/2013 - 07:31 | 3341649 NewThor
NewThor's picture

Along with the rest of modern civilization

if we've got a brown/red dwarf on the way.

http://www.youtube.com/watch?v=nxdnk7umtPg

Hey.

A giant celestial body tearing up all of Earth

over the next year, would be the only thing

that would make the world

governments' fiscal and monetary policy

over the last 14 years make sense.

Either that or 'The' anti-christ.

Vaya con Dios, Bitchez!

 

Mon, 03/18/2013 - 07:19 | 3341616 Non Passaran
Non Passaran's picture

Considering all that, the weakness in (paper) gold price is laughable - the damn thing has barely moved since last Friday.

Not that I mind, I hoped it won't head up like a fucken' rocket just yet 'cause I ain't done here.

Mon, 03/18/2013 - 07:25 | 3341623 GetZeeGold
GetZeeGold's picture

 

 

the damn thing has barely moved since last Friday.

 

Might have had something to do with the markets being closed for the weekend.

Mon, 03/18/2013 - 07:27 | 3341641 Non Passaran
Non Passaran's picture

OK, /sarc, that's true for the US, but they've been open in Asia and Europe where all the fun is.

Mon, 03/18/2013 - 07:32 | 3341650 negative rates
negative rates's picture

No there is fun here, all that cash on the sidelines is stored in overseas accounts and who knows? Subject to tax at a moments notice.

Mon, 03/18/2013 - 07:33 | 3341655 GetZeeGold
GetZeeGold's picture

 

 

Are you actually expecting the markets to react with a degree of normality at this point?

Mon, 03/18/2013 - 07:21 | 3341621 HD
HD's picture

Wait, so they are creating bank runs on purpose thinking that billionaires will just go on a spending spree? How many iThings does Boris the billionaire need?

 

Mon, 03/18/2013 - 07:25 | 3341636 Sheeple Shepard
Sheeple Shepard's picture

I get the feeling that there isnt a they anymore, everyman for themselves. Panic is setting in.

First one to blow their own head off wins,.

Mon, 03/18/2013 - 07:34 | 3341654 HD
HD's picture

I would love that to be true. I been reading ZH for two years and I can't tell you how many times I thought the system was about to fall over.

I'll believe that panic has set in when Cramer craps himself on-air...

 

Mon, 03/18/2013 - 07:58 | 3341700 fonzannoon
fonzannoon's picture

Sounds like Red Money eh HD?

Mon, 03/18/2013 - 08:09 | 3341724 HD
Mon, 03/18/2013 - 07:21 | 3341624 LukeWorm
LukeWorm's picture

Note that nothing has yet been implemented.

Mon, 03/18/2013 - 07:24 | 3341626 GetZeeGold
GetZeeGold's picture

 

 

I did note that actually. Today should be a full tilt retard bucket of fun and laughs.

Mon, 03/18/2013 - 07:33 | 3341657 negative rates
negative rates's picture

You nailed it. And tomorrow we are broke.

Mon, 03/18/2013 - 07:32 | 3341652 Sheeple Shepard
Sheeple Shepard's picture

Even if nothing was implemented(more likely a watered down version is introduced to make the citizens feel gratefull for only having some currency stolen), the cat is firmly out of the bag and it just got sick on the carpet. 

Mon, 03/18/2013 - 07:43 | 3341672 swissaustrian
swissaustrian's picture

Citizens and domestic companies wouldn't be affected in Switzerland. Negative interest rates are not meant to finance bailouts, but to stop the capital flight to Switzerland. They won't work, even if implemented, but that's a different issue.

Mon, 03/18/2013 - 13:43 | 3343318 Archduke
Archduke's picture

true.  like all offshore havens, the number one product is not fiscal but legal.

it's a secrecy jurisdiction.  scrap the banking secrecy controls -then we're talking.

 

 

Mon, 03/18/2013 - 07:44 | 3341674 swissaustrian
swissaustrian's picture

Exactly, it's just desperate rhetoric to stop the rapid surge in EUR/CHF. We're still gonna be trading at 1.20 within a few weeks.

Mon, 03/18/2013 - 07:25 | 3341631 fiftybagger
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As Jim Willie said recently "that's a lot of leaks.  I don't think they have that many fingers"

Silver For The People

Mon, 03/18/2013 - 07:25 | 3341634 DarthVaderMentor
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The US and the US Dollar AND Treasuries are THE KEY STABILITY HAVEN.......

Mon, 03/18/2013 - 07:26 | 3341638 GetZeeGold
GetZeeGold's picture

 

 

Well that is good news there.

Mon, 03/18/2013 - 07:35 | 3341661 negative rates
negative rates's picture

Until one is sleeping on pins and needles.

Mon, 03/18/2013 - 07:39 | 3341637 DormRoom
DormRoom's picture

Banks use depositor money to make large bets, which the public bails out, if it goes wrong.  Now the government taxes the prudent ppl who were responsible and saved, and didn't incur wild debt, during the debt supercycle.

Bunch of wankers.  Off with their heads.

Mon, 03/18/2013 - 07:30 | 3341647 Inthemix96
Inthemix96's picture

You can almost taste the desperation coming from these fools.

Bring this fucker down, lets see a banker do something 'Constructive' for a change.

Mon, 03/18/2013 - 07:30 | 3341648 sudzee
sudzee's picture

I'm thinking 2 and 20 is pretty good model for all banks.

Mon, 03/18/2013 - 07:37 | 3341663 put_peter
put_peter's picture

Too much paper... err bits we need to do something dont we.

Mon, 03/18/2013 - 07:42 | 3341668 Quinvarius
Quinvarius's picture

No bank that is under the ECB umbrella is going to survive this.  They either lose their capital base due to confiscation, or they lose it from people pulling their money out now that the Rubicon has been crossed.  If the plan was complete implosion of global banking, mission accomplished.  Why would anyone leave anything in a bank now? 

Mon, 03/18/2013 - 08:05 | 3341715 yrbmegr
yrbmegr's picture

This particular debacle is not the banks' fault, per se.  But it does make banking somewhat difficult, in that your money in a bank is all visible, and apparently accessible, by governments.  If I were a U.S. corporation with X billion in cash stashed in a bank in Europe, I would now be reassessing the cost of that U.S. tax bite.  The devil you know may be better than the devil you don't know.

Mon, 03/18/2013 - 07:44 | 3341673 The Heart
The Heart's picture

Reckon the art of juggling numbers is the new PhD taught at Ringling Bros Circus colleges these days.

This whole well planned ka-doodle sure does smack of the Hegelian Dialectic hard at work here.

NEW Vote on deposit levy changed to Tuesday as Germany says open to changing Cyprus deal:

http://www.cyprus-mail.com/cyprus/new-vote-deposit-levy-changed-tuesday-...

 

Mon, 03/18/2013 - 07:44 | 3341675 Bicycle Repairman
Bicycle Repairman's picture

So money havens: bad?  I wonder when deposits in the Cayman Islands get a haircut?

<crickets>

Mon, 03/18/2013 - 11:36 | 3342710 Matt
Matt's picture

It would be nice if deposits had seniority. That way, if people keep piling in deposits and you have no way to generate revenue off them, you can have negative interest on the new money.

As long as people are told in advance "if you deposit over X amount of money, there will nbe negative interest rates" I don't see a problem with it. A bank could just increase its reserve ratio when deposits are excessive, so if someone pulls a bunch out it doesn't collapse the bank.

As far as I can tell, that's the only thing that makes sense with Cyprus; they have built up massive deposits and lent out 98% of the deposits, and suddenly a bunch of people come to withdraw and take out something like 40% of all the deposited money.

Mon, 03/18/2013 - 07:45 | 3341679 EclecticParrot
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Given the persistence of human psychology, rarely do patterns emerge that haven't been seen before.

That said, I believe the above chart represents a unique circumstance that will cause new editions of tech analysis books and candlestick manuals to be edited for the 2014 printing season, henceforth to be dubbed the "Dead Unicorn."

Mon, 03/18/2013 - 07:52 | 3341691 HD
HD's picture

Dead unicorn?!  No, not Horny the Happy Hopium Unicorn!

Mon, 03/18/2013 - 08:02 | 3341705 GetZeeGold
GetZeeGold's picture

 

 

According to John Boehner....hope springs eternal.

Boehner says he 'absolutely' trusts Obama...

 

Reminds me of a horrer movie where you're screaming at them not to go into the room.....but they always do.

Mon, 03/18/2013 - 08:02 | 3341711 HD
HD's picture

God I hope he's lying...  I REALLY hope he's lying.

Mon, 03/18/2013 - 08:04 | 3341713 GetZeeGold
GetZeeGold's picture

 

 

I think we should just come to grips with the fact that John is now a full fledged zombie.

Mon, 03/18/2013 - 13:11 | 3343170 StandardDeviant
StandardDeviant's picture

Er, trusts him to do what, exactly?  The AP article doesn't say.

It sounds like Boehner is choosing his words very carefully.

Mon, 03/18/2013 - 08:02 | 3341710 Quinvarius
Quinvarius's picture

JPM and GS are hoping for bowel release in death to get that last skittle.

Mon, 03/18/2013 - 07:47 | 3341682 swissaustrian
swissaustrian's picture

Swiss government bonds are massively bid -> mission accomplished.

Mon, 03/18/2013 - 07:50 | 3341686 falak pema
falak pema's picture

Wonderful news for those who have NO SKIN in this rotten game and can still think straight :

1° Across the board wealth tax all over the first world. Hose out that dirty wealth from all those cockroach tax havens! Regulate the shit out of them. To bring public balance sheets to normal Debt /GDP zone after all this forced WMD threat type socialisation of oligarchy debt frenzy transfer to "we the people" book ledgers by the likes of Paulson n Jamie Dimon.

2° Make that ponzi called WS/CIty asset levitation, on sweet nothings, come down by 50%, aka DJIA to 7000; whatever it takes to allow the private debt frenzy fall n squash itself out on its own rotten, free fall momentum.

Then nationalise all the dodo banks, flush out all naked derivative plays from the markets, reinstall Glass Steagall world wide; NO TBTF banks anywhere in free market world. Have good independent market notationals not on the Oligarchy take.

3° Elect honest people to government. Bring to trial all the past corruption.

Then move to economic reset in a purged out world, thinner and more atuned to living with a receding population and alternative energy meme that avoids ecological armageddon under fossil fuel mayhem. 

Ban all nuclear weapons and small arms dissemination/anti personnel mines, MIC type crimes, in third world.

Send all MIC shills to rot in Gitmo for good. Patriot act them and water board them until they learn to say :  "thank you Julian Assange, you be the man!" 

Now I'll open the champagne and sing : Play it again Sam! 

Only problem : we don't have the will of "we the people" to achieve this. And I ain't Caesar's ghost! PIty....

Mon, 03/18/2013 - 13:46 | 3343331 Archduke
Archduke's picture

nice plan. no need to be pessimistic.  if we can but check off one item off that list, champagne will be in order.

 

 

Mon, 03/18/2013 - 08:01 | 3341707 yrbmegr
yrbmegr's picture

How many trillions is it?  U.S. corporate cash chilling overseas due to lower taxes there?  Our estimable Captains of Industry might now consider the possibility that a government, not the U.S. government, might just confiscate some of that cash.  How low are those overseas taxes, really?  Does anybody know?

Mon, 03/18/2013 - 08:04 | 3341714 Byte Me
Byte Me's picture

Bottom line: it is becoming increasingly clear that "your" money is not welcome anywhere

With respect, it's VERY welcome, provided it becomes their money.

Mon, 03/18/2013 - 08:10 | 3341725 The Heart
The Heart's picture

Shucks, that must be a chilling thought to some folks who have Swiss bank accounts. A 15-30% one time tax on all their deposits.

Mon, 03/18/2013 - 08:44 | 3341841 chindit13
chindit13's picture

So if a Value Added Tax (VAT) encourages saving, what does a Value Subtracted Tax (VST) encourage?  VST is the sound your deposit makes when it disappears.

Mon, 03/18/2013 - 08:46 | 3341844 wcvarones
wcvarones's picture

Oh, I'll withdraw it all right.

And buy some shiny relic to put in the ground.

Mon, 03/18/2013 - 10:09 | 3342212 optionsman
optionsman's picture

ongoing confiscation via negative real rates and now via negative nominal rates. the convinience yield of having access to cash must be high enough to compensate for this. and when your presumed access to cash is no longer a valid assumption as when they close banks/atms then what? what is the alternative to demand deposits if you want to hold cash? surely, all these developments will stimulate some cash withdrawals/movement. the issue is whether the most recent developments are unexpected by those who have deposits. some of course did not expect anything like this and they are the same people who do not understand the effect of negative real rates......

just saying........

Mon, 03/18/2013 - 10:43 | 3342367 Floodmaster
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Cows are overrated.

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