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The End Of Systemic Trust: The Canary Just Died

Tyler Durden's picture


Submitted by Lucas Jackson,

“When it becomes serious, you have to lie."

-Jean Claude Juncker, PM of Luxembourg, and the head of the Eurogroup council of eurozone finance ministers

May, 2011

Prior to yesterday, if you were trying to handicap how the unelected leaders of the Eurozone were going to react to a tough situation, you only had to refer to the quote above from Mr. Junker to understand their mindset.

But so long as someone at the ECB was willing to flood the world with free EURs (with significant backup provided the US Federal Reserve) the market closed its eyes, held its breath and took the leap of faith that all was well.

However, post the Cyprus decision, the curtain has been pulled back and wizard revealed with all his faults and warts.  The age of innocence is dead and with it died institutional and retail trust, confidence in the system writ large and the rule of law.

It would be hard to over-emphasize how significant the Cyprus situation is.  The EU demonstrated under no uncertain circumstances that they will destroy the rule of law to maintain their own power.  It was a recognition of tyranny that many of us have always assumed was the case but yesterday became reality.

The damage done here is not related to the size of the haircut - currently discussed between 3 and 13% - but rather that the legal language which each and every investor on the planet must rely on in order to maintain confidence in the system has been subordinated to the needs of the powerful elite.  To the power elite making the major decisions in DC, London, Berlin, France, Brussels, et. al., laws are like ice cream, easily melted.

Which begs the question, who is next?  Will it be Portugal?  Greece? Spain?  Italy?  France???

Will they impose a “one-time” tax on your bank account?  Your house?  Your stocks and bonds?  Retirement accounts?

The major banks of Europe are levered beyond anyone’s wild guess.  They cannot afford a hit to their capital base lest they be exposed for the over-levered giants they are.  This, of course, opens up the exposure all of these banks have to the greater than $1tr derivatives market where the failure of any one of these derivative banks could lead to the collapse of them all.

So, of course, the powers that be in Europe must do everything in their power to prevent the world from noticing that their banks are broke.  This means they will lie and take anything they deem necessary.  Including the forceful seizure of savings accounts of innocent people. 

The Government Is Your Friend?

Markets have been rallying for years on the back of the idea that government’s are going “all-in” to save the current economic system.  To many of the talking heads on the business channels, we are supposed to view this as a good thing.

This has produced all kinds of non-market based solutions such as the bailout of the major US banks and their subsequent TBTF moniker, the “bailout” (I use the term loosely because this was really a political stunt) of GM and a never-ending stream of free money being handed out by the major central banks.

The markets have seemed to like this ham-handed involvement and have rallied to all-time highs.

But all along the way there have been those of us who have said that there will eventually be a price pay.  With the Cyprus decision, investors now know what the price is: your money is not really your money.  Your bank account is not really your bank account.  Your bonds, stocks, home and anything else you think you own isn’t really yours.  The governments of the world will take it from you whenever things get bad enough.

Look at China.  Do you think if the global economy ever shrinks far enough that the Chinese will allow all those American companies to keep their assets on Chinese soil?  How likely is it that the Chinese will suffer through their own problems of inflation and social instability and yet allow Apple, GE, GM and the rest to keep benefiting?

Think about global mining and oil stocks?  Most own assets in countries other than the home domicile of the company.  If the prices of precious metals and/or oil ever meaningfully breaks out, do you think the poor governments that originally granted the mining/drilling concessions will simply respect the rule of law and allow these multi-national corporations to keep sending their country’s wealth abroad?  Not likely.

How about in the US?  Could the US declare a bank holiday and unilaterally devalue the currency in one swift move?  I will get over 9,000 responses saying this could never happen in the good ol’ US of A but of course it could.  In fact it has already been done before during FDR’s first 100 days in office.  The template already exists.  Electronic banking only makes the process that much easier.

Technically, since the Fed has been running a policy of monetary inflation since about 1920, the government here already has been quietly taxing the savings accounts of its citizens without their permission for decades.  The subtle difference between what Europe is doing in Cyprus and what the Fed does every day to American citizens is that the Cyprus theft is happening in one discrete event while the Fed’s theft drips in slowly over years.

But no matter which way you look at the situation, expect things to deteriorate from here


Lehman Part Deux

What could be next?

Bank runs will continue apace where they are already going and will begin in countries previously seen as impervious to such events such as France, Germany and even Switzerland.

The difference in pricing between the paper and physical precious metals markets will rise.  Good luck to those of you owning paper gold and thinking this will help you when things get bad.  The legal language on your piece of paper is worthless.  If savings accounts aren’t sacrosanct, then neither is that ETF.

Did you or your firm stash a bunch of money off-shore in some tax-friendly haven that probably has a favorable relationship to the British Crown?  Best of luck with that.  Tax havens are nothing more than legal arbitrages.  With the value of law moving to zero, the value of your account approaches the same.

Trade wars will begin to rear their ugly heads as the losers in the currency wars retreat to their last line of defense.  Once you tear up the rule of law, trade agreements quickly get thrown by the wayside once your domestic situation deteriorates enough.

Moar and moar government micro-management of individual economies, markets, sectors and companies.  The Amateur Barack Obama and his minions will continue the tradition started by George II of abandoning free market principals to ostensibly save the free market.  Once they are done there will be little left of the market and none of us will be free.


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Mon, 03/18/2013 - 11:33 | 3342692 HedgeAccordingly
HedgeAccordingly's picture

ES going to go UNCh .. Hunch - Apple 450 sauce - 

Mon, 03/18/2013 - 11:37 | 3342713 Pladizow
Pladizow's picture

Ask the average American, "What's a Cyprus?"

The sheep are ripe for slaughter!

Mon, 03/18/2013 - 11:39 | 3342725 resurger
resurger's picture

i know .. they are old school rappers

Mon, 03/18/2013 - 11:42 | 3342745 BLOTTO
BLOTTO's picture

Hey gang - no one is talking about Cyprus on facebook...I just checked.


Therefore, everything is ok.


Whats on tv tonight - Survivor?

Mon, 03/18/2013 - 11:44 | 3342757 knukles
knukles's picture

Premier of the New Survivor Cypress

Mon, 03/18/2013 - 11:51 | 3342793 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

As a gold & bitcoin holder, I was trying to give a fuck.  


Well at least I tried for a little while.

Mon, 03/18/2013 - 11:58 | 3342816 AssFire
AssFire's picture

Looking for a soultion, the bankruptcy manager in Detroit ran the numbers with the same rates..

came up with is $4.46, 14 gold toofs and 3 cartons of menthols.

Mon, 03/18/2013 - 12:02 | 3342827 The Big Ching-aso
The Big Ching-aso's picture

GM was the  U.S. version of Cyprus.   I just figure the EU took the same playbook and ran with a proven winning pattern.  Now all they need is a good kicker for the extra point.     My guess the next football will be Italy, Portugal, or Spain.    That plus their football hides are stained darker too.

Mon, 03/18/2013 - 12:06 | 3342867 fourchan
fourchan's picture

im here to check out the chick on the tree.


ripped off on the thumbnail again, thanks tyler.

Mon, 03/18/2013 - 12:21 | 3342934 krispkritter
krispkritter's picture

Here ya go:


Just remember to use coconut oil for lube and palm leaves for paper towels, you don't want to spoil the ambience...

Mon, 03/18/2013 - 12:53 | 3343077 Edward Fiatski
Edward Fiatski's picture

Virgin olive oil is more of a theme here. :) Works just as good!

Mon, 03/18/2013 - 13:02 | 3343126 FEDbuster
FEDbuster's picture

Jon Corzine has been hired as a consultant by the Cyprus leadership.

BTW just checked my gun safe my silver, gold, ammo and guns are all safe and sound. 

Mon, 03/18/2013 - 12:59 | 3343105 TheGardener
TheGardener's picture

Nice palm tree but skinny milf. Glad she wears something.

Mon, 03/18/2013 - 14:41 | 3343609 seek
Mon, 03/18/2013 - 12:00 | 3342835 macholatte
macholatte's picture


RE: Lucas Jackson

Well said.  Well done.

Mon, 03/18/2013 - 12:12 | 3342859 fonestar
fonestar's picture


Mon, 03/18/2013 - 12:41 | 3343015 Bananamerican
Bananamerican's picture

"When it becomes serious, you have to lie" -Junker

"When it becomes more seriouser, you have to steal" -Junkie

When it becomes serious as a heart attack, only then do you kill" -Junk

Mon, 03/18/2013 - 12:14 | 3342892 fonestar
fonestar's picture

I've been on this forced meditation on the probabilistic outcomes of Bitcoin.  Ie, introducing a free-floating currency with strong deflationary tendencies into a highly manipulated, inflationary world.  In my mind every bitcoin node on the network is causing a black hole effect, or a tear in the fabric of the fiat universe.  Game theory and I don't see what the opponents move is without in effect validating my position.

This is taking me to some pretty trippy and scary places in my mind..........

Mon, 03/18/2013 - 12:34 | 3342996 fiftybagger
fiftybagger's picture

When bitcoin gets through 50, lookout.  It will run a hundred fold IMHO

The Bitcoin Channel

Mon, 03/18/2013 - 12:37 | 3343007 fonestar
fonestar's picture

I agree BJF... this thing is huge and I mean huge... $50 is a major psychological barrier and it will get a lot of attention, if not press when it crosses that.  We will see BTC do what silver has been repeatedly denied the chance to do.

BTW I noticed you have to approve comments on The Bitcoin Channel now?  I guess that's because of all the BTC haters out there?

Mon, 03/18/2013 - 16:45 | 3344362 Relentless
Relentless's picture

imho, once Bitcoin starts to accelerate, I would expect to see a large amount of govt sponsored action, both in an attempt to affect its value and also to crack its security and render it worthless. If your favorite security focussed three letter agency can crack the coding on bitcoin, then they can do whatever they want to it.

Mon, 03/18/2013 - 14:02 | 3343398 BailoutBandit
BailoutBandit's picture

Bitcoin was probably developed by the intelligence community to track black market transactions and form another angle to suppress PM's.

Mon, 03/18/2013 - 14:12 | 3343441 fonestar
fonestar's picture

Yes, I am sure it is one big scam just like the public internet is one giant conspiracy.  I find it interesting that people will trust their ATM machines, voting machines, kiosks, web browsers going to ssl enabled sites, wireless access points, RFID embedded driver's license, email money transfer, online banking, satellite communication systems... oh except bitcoin.... that one is a big scam!

If you really believe such a thing I suggest melting your computer's hard drive, sell everything for gold and hide in a deep cave.

Mon, 03/18/2013 - 17:43 | 3344606 BailoutBandit
BailoutBandit's picture

Don't get mad. Probably not 100% everything is a scam. But there's higher probability when an alternative deflationary currency is developed by an unknown source and this digital currency assigns a unique identifier to every transaction and stores it in the block chain. Oh and this digital currency is mainly used in black or grey market transactions or to avoid taxes. No one is interested in that? Ok...

Mon, 03/18/2013 - 11:57 | 3342821 Texas Ginslinger
Texas Ginslinger's picture

Keep in mind that Cyprus is an important tax haven site.

My take on this is that the IMF and EU power has decided to take care of 2 problems at one time by using tax dodger (dirty) money to fix the Cyprus bailout.

They send a strong message to tax dodgers everywhere that you can run with your money, but you can't hide.

Most of the tax dodging (dirty) money in Cyprus is Russian. 

Russia controls a lot of the gas supply to the EU.

Will be interesting to see how this plays out - tit for tat... 

Mon, 03/18/2013 - 12:24 | 3342943 pods
pods's picture

I was thinking about that angle too.

Putin on Gazprom's shoulders shutting down the switch and the gas stops flowing.  Who really runs Bartertown?


Mon, 03/18/2013 - 12:46 | 3343047 Creepy Lurker
Creepy Lurker's picture

You'd think they would have learned the last time, but they're stubborn.

Mon, 03/18/2013 - 13:04 | 3343138 RickC
RickC's picture

Maxed Out Moma thinks this is actually a lesson for Italy and she makes a good case for it.:



Mon, 03/18/2013 - 11:58 | 3342824 machineh
machineh's picture

Survivor Cypress

What's dat ... another Cajun swamp drama?

Mon, 03/18/2013 - 12:40 | 3342920 The Big Ching-aso
The Big Ching-aso's picture

The canary not only died it also took a big loose pasty shit while it flopped around the cage spraying spooey everywhere before it settled on top of the NY Times.

Mon, 03/18/2013 - 12:40 | 3343022 This just in
This just in's picture

That's not spooey. It's NYT editorial content.

Mon, 03/18/2013 - 13:01 | 3343120 wee-weed up
wee-weed up's picture

The canary not only died, but a much bigger bird just landed on its carcass - a black swan!

Mon, 03/18/2013 - 11:48 | 3342773 resurger
resurger's picture

nah! Bones on fox , the Jeffersonians are investigating Zerohedge.

Mon, 03/18/2013 - 12:19 | 3342919 TruthHunter
TruthHunter's picture

"Whats on tv tonight - Survivor?"

I believe its the Season Finale of Biggest Loser

Mon, 03/18/2013 - 13:59 | 3343385 Esso
Esso's picture

That's kind of a no-brainer. The biggest loser is the dopeys of Cyprus who had money in a bank.

2nd place, anybody who leaves money in a bank after this debacle.

Mon, 03/18/2013 - 15:14 | 3343813 Overflow-admin
Overflow-admin's picture

Google Trends "Cyprus"

Related searches weather cyprus 100


cyprus holidays






cyprus airways



cyprus flights



cyprus bank






paphos cyprus



flights to cyprus



cyprus map


Everything is ok in Wonderland... until the wolves arrive!

Mon, 03/18/2013 - 12:00 | 3342830 Meat Hammer
Meat Hammer's picture

" I could just kill a man..."  Especially if he's a banker.

Mon, 03/18/2013 - 13:49 | 3343349 Midas
Midas's picture

Ever hear a Glock go click like a camera?

Mon, 03/18/2013 - 14:37 | 3343592 Panafrican Funk...
Panafrican Funktron Robot's picture

It will be interesting when most white people in the U.S. have to deal with ghetto conditions.  I guess the hope is that we'll get our shit together enough to actually do a proper revolt.  

Mon, 03/18/2013 - 11:43 | 3342741 knukles
knukles's picture

Question before the house?

If the world's central banks have the world awash in free limitless money via the bankers, why do the bankers and politicians have to steal bank deposits from the peasantry?
Why the fuck even bother?

Because it's a.......

So, is central bank money not worth anything?
Even more so, the IMF et al just can't seem to wait to give it all away... for free, as much as they can, as quick as they can....

Sumptin's wrong, Lucy
       -Desi Arnez

Mon, 03/18/2013 - 11:44 | 3342756 resurger
resurger's picture


Because its fun!


Mon, 03/18/2013 - 13:03 | 3343132 disabledvet
disabledvet's picture

Because starting in the 90's certain people realized not just America but the whole world would be "LinkedIn"...and in very short order. Those who got in...and stayed in...are called "billionaires"...and some are worth even far more than that. "everything changed with the launch of the 4S"...and is now "changing again" with Google Apps.

Mon, 03/18/2013 - 12:06 | 3342873 MsCreant
MsCreant's picture

I have been thinking about this. I need to preface this comment with "I don't know finance very well" like a lot of folks here because it is not how I make my money.

Here goes:

By printing, everyone's money is devalued. The rich, foreign investors, everyone. Right now the printing/cash is being held onto and is not moving through the economy so we are not having an inflation experience just yet. It is like everyone is crowded onto a small cliff and no one dares move or the whole thing falls. But everyone has their money clutched to their chest.

They need to stop devaluing the money itself and start taking it from individuals so that the money keeps it's buying power.

I know, I don't buy that either, it is too little to really matter.


They take the depositor money so that they cover their tracks (story wise, narratively) for the printing. Our attention goes to the thefts, instead of the printing operations.


The system is so fucked that even a move likes this makes it look like something can actually be done about it, when in fact it cannot. The theft is an illusion designed to give us hope.


Same as before, but not about hope, but about deliberate detonation. Do this to trigger unrest, then say the collapse happened because of this event when, in fact, this is an attempt at a controlled demolition.

That is all I got babe.

Mon, 03/18/2013 - 12:22 | 3342939 Tinky
Tinky's picture

"The theft is an illusion designed to give us hope."

That is correct. But the absurdity of this particular move reveals an accelerating desperation on the part of those (politicians, mainly) who seek to kick the proverbial can down the road. And, needless to say, when a drunk driver continues to drink and accelerates, the likelihood of a fiery crash increases sharply.

Mon, 03/18/2013 - 12:31 | 3342966 ZerOhead
ZerOhead's picture

It's too late and there simply isn't enough in those accounts even if they took 100% anyway. They are merely attempting to buy time and waiting delusionally for an economic recovery that is not (cannot actually) going to happen.

Worry not however... the theft of 'money' from accounts will now stop since the idiots have realized that it threatens the immediate incineration of the same banking system they have been bought to protect.

They will now steal it the olde fashioned way... through inflartion... by quietly printing behind the scenes from here on in.

Mon, 03/18/2013 - 12:31 | 3342967 knukles
knukles's picture

Yorp, the printing of too much devalues it, OK
And spot on about everybody holding on to it so no economic recovery

The big deal here is that if they'd gone after the bondholders, most of the debt was issued under British law meaning one impairment is all impairment and an event of default so all of the Cypress debt held everywhere would be in default, have to be written down, etc., etc., etc...
So instead of further impairing the banks by writing down the debt, just steal other people's money.
Because the ECB and IMF don't want to lend anymore to Cypress because?.....
It's a bad credit risk?!?!?!?!?!?!?!

(sigh, so this is what we've come to, eh?)

Mon, 03/18/2013 - 13:20 | 3343213 sschu
sschu's picture

To that end, a failed banking system implies a reset which implies the question of why even have the Euro?  Issue your own currency and provide some flexibility to restructure.

And Euro solidarity is all that matters to the big dog, Germany.  That is the key to their export driven economy.  Without a "cheap" Euro, Germany's products, while good, would be 50% more expensive and exports would drop.  And then we know what happens to Angela's political career.

Maintaining the Euro façade (to the Deutsch at least) is far more important than a small number of depositors losing a small amount of money on some small island in the Mediterranean.


Mon, 03/18/2013 - 16:25 | 3344220 Element
Element's picture

An interesting fact that should be acknowledged as well is that it has been the MMT people who have argued at great length and in explicit detail for the need to eliminate the insane doomed euro architecture mistake, and the re-institution of National Sovereign fiat currencies. To back away from financial and political federalism, not to increase it. They are more anti the euro than the goldbugs are. In fact goldbugs often use the MMT logic as the basis for their own arguments to remove the euro.

And if you're not going to have a gold standard, then the MMT argument is sound (and more or less proven correct from the fiat theory perspective).


Mon, 03/18/2013 - 12:37 | 3343005 Skateboarder
Skateboarder's picture

I'll take all of the above - it's the perfect answer. At the level of global theatrics, I think it is safe to expect events like this to serve more than one intended or unintended purpose. Trial balloon on many counts. Guinea pigs, guinea pigs, everywhere.

Mon, 03/18/2013 - 12:57 | 3343099 Uncle Remus
Uncle Remus's picture

So, the printers are using money in the laundry and launder their freshly printed money...

Mon, 03/18/2013 - 13:02 | 3343129 ebworthen
ebworthen's picture

They steal people's money to maintain the illusion that they still practice accounting.

Rumpelstiltskin is in the castle turning straw into gold, but if the peasantry knew that the value would plummet.

Therefore, the Crown steals some gold from the peasants to act as though it is still valuable and they need some of it.

Mon, 03/18/2013 - 13:17 | 3343204 overmedicatedun...
overmedicatedundersexed's picture

have not seen this here on ZH yet: this induces money out of savings at banks and into economy...CB's have not been able to generate spending with the wealth effect of equity and lets see hit a small economy like oh say cyprus with bank runs and see if we get spending across the world..

Mon, 03/18/2013 - 14:38 | 3343598 reload
reload's picture

I wondered if the intent here was to get people spending. The problem is the cautious types who are holding cash in banks will not go on an iPad buying splurge - they will buy stiff that holds its value, is discreet, patient, durable and transportable - albeit prone to boating accidents.

I had reason to speak with a couple of coin/bullion dealers here in the UK today - bussiest day so far in an already busy year.

OMG : there is a glut of PM in the world and the evil bankers are trying to force panic buying to liquidate their own longs before collapse. Or perhaps they are just incompetant, desperate theives?

Mon, 03/18/2013 - 16:37 | 3344293 Element
Element's picture



"Or perhaps they are just incompetant, desperate theives?"

Arguably hystery would suggest they know what they're doing, Corzine sure did. And Lehmans went down because it was systematically taken down (most likely by GS), the evidence that it was a planned naked-short attack is all there. We've all seen it.

So, is this a derivative (sorry) of that sort of take-down agenda?

Mon, 03/18/2013 - 16:33 | 3344311 Lost Word
Lost Word's picture

Anticipating what circumstances that would cause Precious Metals to crash in price?

Mon, 03/18/2013 - 16:06 | 3344146 Element
Element's picture




They take the depositor money so that they cover their tracks (story wise, narratively) for the printing. Our attention goes to the thefts, instead of the printing operations.

I'm left wondering why Schauble wanted a 40% tax on deposits, straight up. That's quite a distraction, not a stabeeleetee inducing one, the reverse, a destabilizing one.

I find it hard to accept that this was a blunder and not a calculated input.

I'm trying not to speculate as to why he did this, and what he knew that caused him to decide to quash the Cypriot banks. But it does not appear to have been to save those banks, or the country from a depression.

Mon, 03/18/2013 - 16:35 | 3344309 delacroix
delacroix's picture

I don't think it's about the money at all. it's about power, and who has more. the fighting is getting dirty.  russian presence in cyprus, turkish gold activity, support for syria, natural gas.  that explosion in cypress a few years ago, was no accident.  central banks create money out of thin air. it's just a tool, to get something real.

Mon, 03/18/2013 - 16:36 | 3344317 Element
Element's picture

Actually, that's a large number of the speculations I was trying not to voice. :)

Mon, 03/18/2013 - 12:46 | 3343046 eclectic syncretist
eclectic syncretist's picture

That is the BIG question everyone here needs to be asking themselves.  Why would the central banks do something to hurt themselves, when it is unnecessary?

My personal opinion, which is still in the formative stage, is that they now wish to push the game in a new direction.  Perhaps they wish to return to a Bretton-Woods type situation before things degrade so severely that even that becomes impossible.  So they do it before they lose control of the situation.  Of course, terms like Central Bank, Federal Reserve, and fractional reserves will have to be changed in order to deceive the populace that they are actually effecting a change, but that is nothing.  One deeper question related to this possibility is what could be used to backstop public confidence if not gold?  Land? 

Perhaps they intend to initiate a war, by which they have always profited tremendously in the past.  The extensive and uncertain collateral damage from advanced warfare technologies makes this more risky than ever today, but that has never stopped the banksters at any other time in history.

In any case, the banksters plans must mature prior to a number of election cycles, which would increase the uncertainty of the successs of what they are trying to do considerably.  It must be done relatively quickly.

Protect yourself, beware the banksters, and fight them in whatever way possible, primarily by not depending upon them for anything.  They are vapid and evil, and must be exterminated at all costs if humanity is to truly progress from here.

Mon, 03/18/2013 - 13:04 | 3343140 Creepy Lurker
Creepy Lurker's picture

It's too late to return to pre-Bretton Woods type of arrangement, all the gold has been "leased out" its gone. I think this was done for the reason you suggested next, to see just how they would take it. I do wonder however, if upsetting the Russians was something they overlooked or wished to do deliberately. Do they actually think they are that powerful? Is there some kind of secret deal with Putin?

Mon, 03/18/2013 - 17:19 | 3344459 Element
Element's picture

Not sure its so much that the Banks make wars, they finance both sides and thus expand what would have been otherwise much smaller and limited pre-existing conflict. I think it's more the case that Govt State Sickurity and Strategic Planners (i.e. plotters), Diplomats and propagandists (Tribe controlled, of course) start the wars, then the Govt goes to Treasury (Tribe controlled, of course) and says gimme, so Treasury Sec goes to FED (Tribe controlled, of course) and says the Goy-verment wants another war. So good-guy's CB contacts the bad-guy's CB and they coordinate to play-off both sides deep into artificial debt. Problem is these days the war has no profit, in terms of a colonial territory for the empire to fully exploit and tax, to repay the debt, plus the 'winner' ends up paying the debt of both sides (and then some). War and conquest used to lead to plunder and territorial and resources increase, but now it's a NET-loss with no means to repay the ever greater expense of killing, or to fund the astronomical cost of damaged veterans.

Yet war is still rated as a triple-AAA+++ investment! The war ratings-agencies (NSA, CIA, DHS etc.), as we all know, are thoroughly infiltrated, and lying to everyone about the true cost of war and conflicts, and the utter failure of USA's disaster-diplomacy (Powell, Rice, Clinton, Horsehead).

These are the worst possible investment raters, advisers and managers (banksters make sure of that - Tribe controlled, of course).

Mon, 03/18/2013 - 14:45 | 3343646 Panafrican Funk...
Panafrican Funktron Robot's picture

One very simple concept:  manufactured liquidity crisis.

This one simple concept underpins most of the moves being made in the currency wars.  People focus heavily on the liquidity flood (as you mentioned), which is one side of the wealth transfer coin, but remember, they can just as easily steal from us via liquidity crises (our most recent example domestically being Oct. 2008).  It's hard to do this against large, singular entities (US/UK/Japan/Russia/China), but holy shit is this easy to do against EU countries, especially the small fries with little to no local control over their currency liquidity status.  No fiscal union = ripe for the fucking picking.  Why do you think the City of London dispatches Nigel Farage to make a highly effective public joke of the EU?  It's all to twist the knife in the side of "EU currency confidence" just a little bit deeper. 

And really, one hand feeds the other.  Periodic manufactured liquidity crises just further support liquidity flooding.  Think of it as a virtuous cycle, for satan worshippers.  

Mon, 03/18/2013 - 11:43 | 3342753 1100-TACTICAL-12
1100-TACTICAL-12's picture

The  ache breaky heart dude , with the slutty daughter.

Mon, 03/18/2013 - 11:51 | 3342791 knukles
knukles's picture

I love it! 
Didju get a tee time?

Mon, 03/18/2013 - 11:57 | 3342819 trollin4sukrz
trollin4sukrz's picture

What's a Cyprus?

I doan know, but I have a French Press. Is it a Press made in Cypr?

Mon, 03/18/2013 - 12:41 | 3343026 Skateboarder
Skateboarder's picture

Same thing as a French Press, but expect 7 - 15% of your coffee to go missing....

Mon, 03/18/2013 - 12:00 | 3342833 toady
toady's picture

A Cyprus is a tree, right?

Mon, 03/18/2013 - 14:04 | 3343409 Winston Churchill
Winston Churchill's picture

Hey,leave it off.

I have Cypriot nieces and nephews.

It is not funny.

Mon, 03/18/2013 - 12:23 | 3342946 Cacete de Ouro
Cacete de Ouro's picture

You mean Cyprus Hill dude? They got a haircut? What are you on man?

Mon, 03/18/2013 - 12:27 | 3342969 TooBearish
TooBearish's picture

I Know I know - its a tree?!

Mon, 03/18/2013 - 11:50 | 3342739 zuuma
zuuma's picture

I wonder what a "FAIR" amount to take from USA bank accounts would be?


I wonder who else is wondering the very same thing?


I'm wondering why I would keep any money in any "Bank" any more.

Barnardt's take:

Mon, 03/18/2013 - 12:02 | 3342846 WarriorClass
WarriorClass's picture

This just shows that deposit insurance is a fraud.  The bank is bankrupt and every deposit should have been guarantied up to 100K Euros.  The same fraud is being perpetrated in the US, people just don't know it yet.  Since they are saving the bank, they can steal from your account, as if YOU were the one that loaned money to Greece.

Mon, 03/18/2013 - 12:04 | 3342862 Sigep0612
Sigep0612's picture're right on. The FDIC sets the premiums that banks pay for insurance.  Wake up tomorrow and hwo knows...maybe the premium goes up 5X, 10X, or 20X.  

Look at HR-4646.  Proposed by Democrats.  A 1% tax on all financial transactions.  

Mon, 03/18/2013 - 11:54 | 3342802 Payable on Death
Payable on Death's picture

Too small to matter? So, who the hell was Archduke Ferdinand?

Mon, 03/18/2013 - 16:39 | 3344331 Lost Word
Lost Word's picture

Branch of the Hapsburg Austrian Holy Roman Empire family that controlled most of southern Europe.

Mon, 03/18/2013 - 11:55 | 3342807 Banksters
Banksters's picture

Fredick Douglass once said, "Power concedes nothing without a demand."   I'd like to add that the only solution is revolution.


It sucks, but if people think that the cancerous bankers and their proxies are going to relent, they are simply delusional.

Mon, 03/18/2013 - 11:37 | 3342694 SheepDog-One
SheepDog-One's picture

HFT machines in complete control of everything have no code lines written for 'trust'....does. not. compute.

Mon, 03/18/2013 - 11:42 | 3342695 hedgeless_horseman
hedgeless_horseman's picture



Are you afraid of bank runs, or just simply hate today's banks? Want to practice disintermediation, but still need to make purchases online and pay regular bills?

Mon, 03/18/2013 - 11:38 | 3342719 swissaustrian
swissaustrian's picture

A German court in Munich decided TODAY that Cyprus gets a large collection of stolen art back from Germany. I repeat: TODAY. It had been seized in 1997. That's what you call separation of powers when foreign courts decide on the day a bailout deal is supposed to be voted on in Cyprus.

Mon, 03/18/2013 - 11:45 | 3342762 Jena
Jena's picture

Value in the "tens of millions" in 1997 will be higher today.  Auction prices for "frescoes, icons and other artifacts" have soared since then, even in this economy.

Interesting timing.

Mon, 03/18/2013 - 11:48 | 3342774 Tinky
Tinky's picture

What, you haven't heard of coincidences?

Mon, 03/18/2013 - 12:21 | 3342931 mick_richfield
mick_richfield's picture

That's funny.  I was thinking the same thing.

Mon, 03/18/2013 - 11:38 | 3342723 CrimsonAvenger
CrimsonAvenger's picture

I don't know why you guys are so worked up about this - it's like you haven't even looked at the DOW today.

Mon, 03/18/2013 - 12:52 | 3343069 Jonas Parker
Jonas Parker's picture

The PPT is working overtime today...

Mon, 03/18/2013 - 11:39 | 3342724 Lost My Shorts
Lost My Shorts's picture

What is the alternative for Cyprus banks?

If the depositors don't take a loss, who takes it?

Come on, all ye righteous critics, name names.  Who takes the hit?

(In the event of simple default by the banks, the haircut on balances over the insurance limit would be greater than 15%, no?)

Mon, 03/18/2013 - 12:00 | 3342832 Tirpitz
Tirpitz's picture

Owners and lenders get paid to take such risks.

Mon, 03/18/2013 - 12:05 | 3342869 machineh
machineh's picture

Realistically, it's some combination of wiping out the bondholders, seeking a Russian bailout on better terms, or leaving the EZ, reestablishing the Cypriot pound (which only disappeared five years ago), and if necessary nationalizing the banks until they can rebuild equity.

Ugly choices. But when you no longer have the rule of law, you've got NOTHING left.

Mon, 03/18/2013 - 12:24 | 3342895 socalbeach
socalbeach's picture

Assuming what triggered the crisis is some Cyprus banks being insolvent (assets < liabilities, or equity < 0), put the bank into receivership and wipe out all bond holders and equity owners.  If that doesn't do the trick, make uninsured depositors take enough of a hit to make the new bank solvent, but protect insured depositors.  Maybe give large depositors who lost money shares in the new re-capitalized bank.

Mon, 03/18/2013 - 12:28 | 3342977 Lost My Shorts
Lost My Shorts's picture

OK, so in your scheme, losses to uninsured deposits are much greater than under the current proposal.

Important to note:  Cyprus banks have only 2bn bonds outstanding (according to other ZH article), and 70bn deposits (according to other reader post).  So the bonds don't go far.

After two major banks fail, Cyprus is done as a money center, so stock in the new banks is worth rather little.

Meanwhile, there is a complete bank run on every other bank after one or two big ones fail, right?  So all the banks fail.  And even little depositors are shut out of all their money until the receiver can sort things out.

I think it was noted elsewhere that deposit insurance is the responsibility of the sovereign, the Cyprus government, which is broke.  So the receivership approach results in:

-- heavy haircuts on uninsured deposits, well north of 15% (even after compensation with equity)

-- extended banking holiday and collapse of every bank in the country

What people seem to miss here is -- the EU package is just like all the others, a stop-gap kick the can measure which will only postpone the crisis, and ultimately all that bad stuff will happen anyway.  Cyprus bank depositors would do well to take the EU money and run.

Mon, 03/18/2013 - 15:03 | 3343056 socalbeach
socalbeach's picture

According to John Hussman's many writings on the topic, most banks have enough bonds to cushion losses so depositors aren't affected, but apparently not the ones in Cyprus.  So I'm not sure bank runs would happen throughout the Eurozone, but that's what central banks are for (given fractional reserve lending).  You can read more at this link or try this search.

"Every major bank is funded partially by depositors, but those deposits typically represent only about 60% of the funding. The rest is debt to the bank's own bondholders, and equity of its stockholders. When a country like Spain goes in to save a failing bank like Bankia - and does so by buying stock in the bank - the government is putting its citizens in a "first loss" position that protects the bondholders at public expense. This has been called "nationalization" because Spain now owns most of the stock, but the rescue has no element of restructuring at all. All of the bank's liabilities - even to its own bondholders - are protected at public expense. So in order to defend bank bondholders, Spain is increasing the public debt burden of its own citizens. This approach is madness, because Spain's citizens will ultimately suffer the consequences by eventual budget austerity or risk of government debt default.

The way to restructure a bank is to take it into receivership, write down the bad assets, wipe out the stockholders and much of the subordinated debt, and then recapitalize the remaining entity by selling it back into the private market. Depositors don't lose a dime..."

edit: my previous post should have said "uninsured portion of large deposits" instead of "uninsured depositors".

Mon, 03/18/2013 - 15:46 | 3344014 Element
Element's picture



"The way to restructure a bank is to take it into receivership, write down the bad assets, wipe out the stockholders and much of the subordinated debt, and then recapitalize the remaining entity by selling it back into the private market. Depositors don't lose a dime..."

John Hussman is one of those rare few that both knows his stuff and seems a decent human being, making lots of clear-headed investment sense. It's a pity he does not have more of a profile both at zh and the rest of the blogosphere, as he has plenty to contribute.

Posted today:

Investment, Speculation, Valuation, and Tinker Bell

Mon, 03/18/2013 - 15:00 | 3343738 Panafrican Funk...
Panafrican Funktron Robot's picture

"OK, so in your scheme, losses to uninsured deposits are much greater than under the current proposal."

Right, but to tie this back to the central theme of this site "on a long enough timeline, everything goes to zero", if you keep drawing this fucking shit out by once again bailing out the connected interests with a pound of flesh, eventually you run the fuck out of flesh.  Amputate the leg, save the patient.

Mon, 03/18/2013 - 12:15 | 3342906 Meat Hammer
Meat Hammer's picture

The "money" that the banks would lose was created from nothing (debt), so if the country goes bankrupt there isn't any money lost. The only thing that gets lost is TPTB's ability to continue the greatest scam ever invented.

Oh, and power.  This has nothing to do with money and everything to do with power.

Mon, 03/18/2013 - 12:26 | 3342958 TruthHunter
TruthHunter's picture

"If the depositors don't take a loss, who takes it?"


 For perspective we could ask the depositors "Do you want to own the banks or take a 15% hit?

The "Hit" might be cheaper.


Mon, 03/18/2013 - 15:53 | 3344060 Element
Element's picture

The 'hit' degrades the asset and increases the ensuing costs, while destroying deposits and passing private debts to public balance sheets, that are already deep in deficits, and thus accelerating the decline into depression, 'sovereign' defaults, and currency destruction.

But all that's moot anyway as it's already baked-in, thus the need for this 'hit' is just the material evidence of that fact.

So ... it makes no difference, one way or another, the banks and debt (i.e. the money) will be eliminated.

Carry on.

Mon, 03/18/2013 - 11:39 | 3342727 miltiadis
miltiadis's picture

We are witnessing history unfold...

Mon, 03/18/2013 - 11:42 | 3342747 Manthong
Manthong's picture

Bond covenants are routinely shredded nowadays (anyone remember GM?).

The Constitution is routinely shredded (how many born British subjects are in the White House?)

To expect that there is any absolute security in banking “deposit” accounts is foolish.

And you can take that to the bank.


Mon, 03/18/2013 - 11:47 | 3342766 knukles
knukles's picture

I was laying the rap about "Did you see what happened in Cypress?" on Mrs K and she looked at me a little oddly (which is normal most of the time) and said; "So what else is new?  Remember GM and MF Global?"


(Can I have some more cash, honey?)

Mon, 03/18/2013 - 11:54 | 3342801 Miffed Microbio...
Miffed Microbiologist's picture

My 82 year old mother-in-law lost $10,000 in GM bonds. Obama and his bankster buddies shouldn't go near her or they'd get a shotgun up the ass. It doesn't look like she's getting senile and forgetting the event. Perhaps being old and terribly pissed off staves that off.


Mon, 03/18/2013 - 12:03 | 3342855 Manthong
Manthong's picture

-just make sure she doesn’t take Biden’s advice and that she uses a pump or a semi.

(preferably extended)

Mon, 03/18/2013 - 13:01 | 3343122 Miffed Microbio...
Miffed Microbiologist's picture

I have seen it and it and,unfortunately, it is sawed off. No worries, with the large diameters of bankster anuses it should still do the job. ;-)



Mon, 03/18/2013 - 13:17 | 3343201 MsCreant
MsCreant's picture

She has every right to be hopping pissed, they rewrite the rules at their whim. If the thing failed, she may have lost the money anyway, but let it be because she made a bad investment decision, not because it was stolen from her at the whim of the emperor.

Sorry about that. I like a lady that old who can handle a sawed off. Awesome.


We all need to be training at skeet shooting now. I don't mean to keep droning on and on though.

Mon, 03/18/2013 - 14:39 | 3343316 Miffed Microbio...
Miffed Microbiologist's picture

She comes from rugged individual farm stock. Not the agribusiness corporate type but the real deal. Still runs some beef on her 100 acre spread even though we beg her not to. we were sure she'd quit after hurting her back dragging a 50# roll of fence wire last year. I think she thinks we're pussys for asking. She gives me hope that we dont have to all end up drooling in nursing homes. And yes, she handles the gun well. We were a bit shocked she had her friend saw it off for her, but her reasoning was sound.

She had always been careful and prudent in her investments. Obviously she perceived the GM bonds as a wise play at her age. We, at the time, were supportive. Now we all are mad as hell.




Mon, 03/18/2013 - 15:56 | 3344102 Element
Element's picture

Outstanding! Love it. :D

Mon, 03/18/2013 - 11:43 | 3342750 LawsofPhysics
LawsofPhysics's picture

"we are witnessing history repeat..." - fixed.  The world has been here before, time for the world to re-learn the true definition of counterparty risk, price discovery and purchasing power.

Mon, 03/18/2013 - 11:49 | 3342776 yogibear
yogibear's picture

Yeah, we are witnessing blatant stealing unfold.

Mon, 03/18/2013 - 11:39 | 3342729 Central Wanker
Central Wanker's picture

What, Me Worry?

No, Me Stack!

Mon, 03/18/2013 - 12:24 | 3342950 mick_richfield
mick_richfield's picture

That's the only vote that means anything.

You should also be accumulating the stuff you will need if the supply chains fail.  You won't be able to buy those things with PMs if no one has them to sell.

PMs are for the world that will come after the Great Purification.  Make sure that you live to see it.


Mon, 03/18/2013 - 11:40 | 3342732 LostAtSea
LostAtSea's picture

popcorn ready! 8-)


Mon, 03/18/2013 - 11:40 | 3342734 RottenAlpha
RottenAlpha's picture

Send Dimon ASAP !!!

Mon, 03/18/2013 - 11:40 | 3342737 Ancona
Ancona's picture

I say let it all come down in a flaming ball of bank fuck. The Brotherhood of Darkness just pulled the final rip-off and woke the People out of their slumber. Think Italy will put up with this shit? Think again.

This is the end of the Euro and the banksters have killed it off themselves. With no one to blame for this blatant theft, they try to justify it with the thin veil of some dark Russian oligarch, but it isn't flying. Still, they push this failing agenda on the people who saved their after tax salary in hopes of not starving to death in their old age, thinking they can get away with it under threat of expulsion from the Union. I for one, think that if they grow a set of balls and go Iceland on these fucktards in Brussels, the rest of Europe will swiftly follow.

May the force be with you. choose wisely Cypriots, choose wisely.

Tue, 03/19/2013 - 20:18 | 3342949 e m m
e m m's picture

Schaeuble (who bailed out Commerzbank with taxpayer money) said yesterday on ARD that depositors took the risk and enjoyed interest in good times, so it's normal they suffer losses in bad times. I don't recall he mentioned the banks' owners or bondholders though.

I also note, they seem try to leverage it, that in German the word 'Anleger' means both depositor and investor. It often depends on the context what you understand by it. I imagine the aim is to let the average viewer remember something like that the 'Anleger' take their fair share of the losses now, with high odds they'll confuse depositors with investors. This would rhyme with the political theme, that is gaining traction for a while now from the left, to let greedy investors take losses too in the crisis.

In another report on ARD today, depositors were mentioned as 'trustees' ('Glaeubiger') of the banks, so similarly, the unaware could confuse depositors with other kinds of trustees: bondholders = investors.

Edit: he did mention in the interview, the German government and the IMF wanted a bail-in from owners and bondholders and wanted to respect the 100K insurance. That it was the ECB, European Commission and the Cypriot government who wanted to tax depositors instead and it was the Cypriot government who wanted to extend the tax below 100K.

However, if you read these 'protocols'

there are things like: 'After another round of discussions, in which Mr. Schäuble demanded a tax of as much as 18%... '.

or 'Various formulas and calculations were kicked around, with the Germans and the IMF demanding much bigger taxes on savers' deposits, the commission seeking modest contributions from savers with less than €100,000...'

Mon, 03/18/2013 - 14:31 | 3343549 LostAtSea
LostAtSea's picture

hehe +1000 if I could.


But this may be just what the IMF/EU wants.  Convenient way to ushur in those SDRs.


Mon, 03/18/2013 - 11:41 | 3342740 resurger
resurger's picture

as long as 20 people are out there protesting, nothing will change...

Just like 2012 when ISDA declared "CREDIT EVENT" on GreeceThe entire world rallied 3%

Mon, 03/18/2013 - 12:03 | 3342857 pods
pods's picture

Nope, this one is different.  And the fact they now are not opening the banks is the hint.

You don't fuck with the average man's savings.


Mon, 03/18/2013 - 12:22 | 3342937 Sheeple Shepard
Sheeple Shepard's picture

"You don't fuck with the average man's savings"


Exactly Mr pods, this is so overt that 1: things must really be bad and getting worse fast and 2: Even your average 9-5 credit carded up, MSM believing Mr Smith picks up the pick-axe handle when someone comes for his/familys money. Its a new day baby, embrace it. Peace.

Mon, 03/18/2013 - 12:31 | 3342983 mick_richfield
mick_richfield's picture

But they do fuck with the average man's savings, all the time!

That's what drives me nuts when I talk to my human friends, and I try to tell them that, and it's like that FarSide cartoon of the guy talking to his dog.  All they hear is their names.


Ah, crap.  One of my Voices just spoke to me.  the Bad Guy voice.

I quote:

"What you don't understand is that the sheep want to be sheep.  They want what we do.  They want to be what they are, and for that you need wolves circling around, tending the flock and feeding off it.  If you killed us all tomorrow, they would create us again."


Mon, 03/18/2013 - 13:05 | 3343142 pods
pods's picture

Well, maybe I should rephrase it to you do not OPENLY fuck with someone's savings.  Even a smart sheep can subtract.

That is why they usually go the way of currency debasement, as sheep do not understand compound functions nor exponential decay.


Mon, 03/18/2013 - 11:42 | 3342746 LetThemEatRand
LetThemEatRand's picture

Anyone see this week's episode of Your Money is Belong to Us?   Real cliffhanger.  No one knows when the banks will reopen and how much money will be left when they do.

Mon, 03/18/2013 - 12:05 | 3342868 pods
pods's picture

They made a movie about that in the 80's. Starred Robert Downey Jr.

"Less Than Zero."


Mon, 03/18/2013 - 19:17 | 3344926 are we there yet
are we there yet's picture

I like the southpark episode with the iconic phrase 'aaannnd its gone....... move along, next please' ....

Mon, 03/18/2013 - 11:42 | 3342748 uno
uno's picture

IMF (Washington DC) and Brussels came up with this scam of stealing deposits.  The real target of this is the Russian oligarchs, obvious this has been planned for not playing along (maybe Iran, Syria, gold holdings).  There is so much more going on, Cyprus itself is trivial in the grand context.

Mon, 03/18/2013 - 11:44 | 3342760 Monkeyfister
Monkeyfister's picture

It's time to apply the Julian Carlton solution to the Banks and the Banksters.

Mon, 03/18/2013 - 11:48 | 3342770 Treeplanter
Treeplanter's picture

CNBC says all is well.  Buy the dip.

Mon, 03/18/2013 - 14:37 | 3343590 akak
akak's picture

So what is the ticker symbol for Jim Cramer, anyway?

Mon, 03/18/2013 - 11:49 | 3342777 kieran1968
kieran1968's picture

There's one thing Lagarde et al have over looked. The British ex-pats on Cyprus.


The British are a cantankerous lot (Disclosure... I'm British!)  and as soon as the banks open, they are going to be demanding currency over the counter. Then they won't get it of course, then they'll be even more determined. The British are not apathetic when it comes to money. There's no laissez-faire attitude.

The only hope they (the Troika) have is the passage of time, so that tthe British fall back to sleep.

Mon, 03/18/2013 - 11:59 | 3342829 uranian
uranian's picture

They have a forum here; some have noted that funds have already been withdrawn from their accounts, despite the fact that the Cypriot parliament hasn't passed this yet.

Mon, 03/18/2013 - 11:50 | 3342780 Tirpitz
Tirpitz's picture

"If savings accounts aren’t sacrosanct, then neither is that ETF."

Oh they truly are:

We hereby certify your possession of 40 printed ounces of imaginary gold.

Sincerely (after) yours,

Rothschild & Cons

Mon, 03/18/2013 - 11:50 | 3342783 Silver Garbage Man
Silver Garbage Man's picture


Mon, 03/18/2013 - 11:50 | 3342788 pods
pods's picture

When people sit down and realize the magnitude of this, it will be Lehman x10.

Die Kacke ist am dampfen.


Mon, 03/18/2013 - 12:58 | 3343061 Jethro
Jethro's picture

I would have liked to have seen Poussin's interpretation of the "Abduction of the Sabine Women" to the modern form "The Abduction of the Cypriot Depositors".

Mon, 03/18/2013 - 11:51 | 3342790 Douglasnew
Douglasnew's picture


Mon, 03/18/2013 - 12:05 | 3342864 TheSharpenedPen
TheSharpenedPen's picture

Often times a scraggly old soothsayer turns out to be the best prognosticator :)

Mon, 03/18/2013 - 12:05 | 3342870 Tirpitz
Tirpitz's picture

How much did they desposit in black money with Cyprus banks?

Mon, 03/18/2013 - 11:52 | 3342792 yogibear
yogibear's picture

Corzine will be appointed as coordinator  by  Obama and the IMF to ensure the stealing is done properly.

Mon, 03/18/2013 - 11:52 | 3342794 pods
pods's picture

Double Tap.

Mon, 03/18/2013 - 11:52 | 3342798 Sheeple Shepard
Sheeple Shepard's picture

"Come on, all ye righteous critics, name names.  Who takes the hit?"


Who takes the hit isnt really the issue here as i see it. What people are going to take from this is that their money isnt safe in any bank and the political/banking elite will do anything keep this ponzi scheme going whilst at the same time telling you to your face it wont.

We all know that far too much debt has been created and it can never be payed back, the question has always been when are the general public going to wake up and smell the shit sandwich? So far most people havent put 2+2 together because most of the theft has been by stealth, inflation, monetizing debt and so on. This is different. The con-fidence game is creaking and (hopefully) citizens are starting to realise they have been staring at shadows on a cave wall. When alls said and done whoever takes the hit on a relatively tiny amount of debt will long be forgotten but the consequences of the realization of what it all means wont be.

Mon, 03/18/2013 - 11:54 | 3342804 yogibear
yogibear's picture

Next in the long list of agenda items by the banksters is theft of IRA/401K accounts.

Mon, 03/18/2013 - 12:56 | 3343093 Jethro
Jethro's picture

And our beloved government is preparing for this by allowing the intelligence agencies to gather banking information on all US citizens.  I have to wonder about the motives of all the current bureaucrats to blindly follow orders.  The blowback will be unmerciful and spectacular.  Where is citizen Robspierre?  He'll be arriving shortly....

Mon, 03/18/2013 - 13:39 | 3343301 Creepy Lurker
Creepy Lurker's picture

They already did the retirement accounts in Europe. (Was it last year? Year before? Someone will correct me.) Just as you would expect, they converted part of the accounts to gov't bonds. I'm amazed they haven't done it in the US yet.

Mon, 03/18/2013 - 11:54 | 3342805 HurricaneSeason
HurricaneSeason's picture

Negative Nominal Interest Rates (NNIR) will:

1) Boost the stock markets

2) Increase real estate values

3) Increase bank capital

4) Increase the number of bank loans

5) Increase employment

6) Decrease the national debt

7) Decrease savings and increase credit card purchases

8) Increase growth

This is the opposite Keynesian economics and is Locknesian economics. This is how we can turn the global eceonomy around, using NNIR.

Mon, 03/18/2013 - 11:55 | 3342809 Hulk
Hulk's picture

My apologies for spamming the threads with the scariest presentation ever, but Raoul Pal called it in May:

its happening folks, the time is here and now...

Mon, 03/18/2013 - 12:02 | 3342847 ISEEIT
ISEEIT's picture

???? Me thinks not yet.

Mon, 03/18/2013 - 14:00 | 3343388 Westcoastliberal
Westcoastliberal's picture

I remember reading that post Hulk, and I laughed at the time because since 2008 I've said what we need is a big "reset".  A "Jubilee" as in medieval times (not the restaurant) is called for, methinks.

Mon, 03/18/2013 - 11:56 | 3342813 TheSharpenedPen
TheSharpenedPen's picture

Bank Run Definition:  when the banksters run off with your money.

The banks 'could' tell the kleptomaniac, tax and spend government where to shove their policies, in theory, but they're more likely to tell the government to roll over because they're snoring too loud. The bankers and politicians work in tandem to create the mess which we see today.

On the one hand, you have marxist politicians for whom social engineering is like owning their own hobby farm. On the other hand, you have marxist bankers (whom some people mistakenly believe are capitalists), who have realized that nothing funnels money to the top faster than socialism does. Together, they have now set their hungry sights on individual banking accounts.

That this tax on savers is patently unfair is obvious, but what escapes the political and banking classes is the potential damage that a move like this will inflict. This thing has all of the potential of spreading like wildfire, right across southern Europe and then right into the very core of the Euro-zone. This type of contagion, and damage, would not have been possible, had these nations remained sovereign and free of European Union meddling, but alas, its all Euros now, and borders are mere chalk outlines.

What do you think will happen when the banks finally do open in Cyprus? People will go to their banks and a.) deposit large sums of money, or b.) withdraw large sums of money. If you guessed 'b' then you've obviously been reading ZeroHedge. They will quickly force more bank holidays, and each subsequent 'holiday' will bring with it new revelers who will want nothing more than to get their hands on some of that monopoly money as fast as they can.

If I told you that a thief was coming to rob your home on Monday, and you could get back in time to stop him, would you try? If the thief had raided you, but showed no signs of being sated, would you maybe cancel your stolen bank and credit cards before he could do more damage? Of course you would. People are easily fooled the first time, but tend to learn quickly upon subsequent lootings.

The interconnectedness of the crisis will definitely lead to problems in the Euro as a whole, and desperate measures in Cyprus, will force desperate measures in Portugal, Italy, Greece and Spain - basket cases already, and also eagering looking for German handouts (even if a deal with the devil costs them something as trivial as their soul).

People are losing faith in a political class which has sold them out to large banking interests and in large banking interests which have sold them out to the political class.

When you go to the mattress store, make sure you get the king-sized.

Mon, 03/18/2013 - 11:56 | 3342814 maskone909
maskone909's picture


Mon, 03/18/2013 - 12:09 | 3342885 TheSharpenedPen
TheSharpenedPen's picture

Ya, they always try to shove some sort of moral justification down your throat when they're gearing up for the ultimate evil now don't they? What about derivatives of mass destruction? I don't hear the politicians talking about those.

Mon, 03/18/2013 - 11:57 | 3342817 astoriajoe
astoriajoe's picture

I wonder if Kyle Bass got offers for protection on any Cypriot debt? and if so, for how much?

Mon, 03/18/2013 - 12:00 | 3342831 ISEEIT
ISEEIT's picture

With recent (couple year) history as my guide, I just went long Euro to 1.3053. Yeah, it's gambling...But with great odds:) The 100 pips I pull (if) is still in the form of legal tender.

Get it while ya can.

Mon, 03/18/2013 - 12:00 | 3342837 monopoly
monopoly's picture

Investors here don't seem to even care with the DOW now down 17 points. And you can hardly find one TV station that even talks about the theft of the people. How far down the sewer have we traveled. What a useless bunch of twits we are. People's rights. Check it out in the history books. Assuming they do not get rid of those too.

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