Germany Enters With The Grace Of A Bull In An Liquidating Cyprus China Shop

Tyler Durden's picture

When you have a few good bureaucratic central planners preserving a broke monetary regime, what can possibly go wrong? Perhaps headlines such as these:

  • Senior German Official - No Idea When Or If Cypriot Parliament Will Vote On Proposed Bailout Programme
  • Senior German Official - Situation In Cyprus Is Bad, Reasons For This Lie In Cyprus
  • Senior German Official - With No Programme, Liquidity To Cypriot Banks Is In Danger And They Cannot Open

And then Schrodinger Schauble himself:


Wait, being a participant in a monetary cul-de-sac, whose eventual end leads to a very painful and often times lethal, hyperinflationary outcome, is a wrong business model? Who could have known. Naturally, with well-wishers like these, who needs bond vigilantes?

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
swissaustrian's picture

Does Germany need Target2 capital inflows?

nope-1004's picture

Globally banks are insolvent.


ndotken's picture

"We can't open the doors because if we did, everyone will take their money out and we'd be out of business." <<< the banker's worst nightmare ... coming to a bank near you soon.

redpill's picture

That's exactly right.  And the reality is, we the people of planet earth could do more to help ourselves with a massive global bank run than any amount of voting or protesting ever could.

pods's picture

Their leverage can be used against them.  What was it, 250 million that took down Lehman?

All you need to do is trigger one cascading collateral call...................


Divided States of America's picture

Yeah well wasnt it obvious that the EUR was based of the wrong business model since its inception???

Nussi34's picture

Let´s bomb Cyprus. Problem solved.

Freegold's picture

No, it was adapting to a dying dollar. When the dollar loses it´s role as the worlds only reserve currency you will understand what the Euro was all about. It was preparing for a multi-currency world with physical gold at the center. The Euro will be just fine and the internal imbalances will be mostly gone once gold starts moving in size. In the open!

50K gold coming to a town near you soon.

Silver? If it can manage a squeeze b4 reality hits us.... After freegold, probably not.

Bangin7GramRocks's picture

"Now youz can't leave!"
Sonny LoSpecchio

Cult_of_Reason's picture

The entire global fractional-reserve ponzi is insolvent.

swissaustrian's picture

Meh, if you chose a robot than go with Fritz Lang's satanistic robot from the movie Metropolis:

e m m's picture

Some DAX inflows wouldn't hurt. Merkel probably needs a high DAX.

Dr. Richard Head's picture

So when does the world war break out?

yogibear's picture

A soon as China gets desperate. When their people riot they will divert with war.

Plenty of places to start.

Scro's picture

They are going to kick some irradiated Japanese ass.

machineh's picture

'They can't open' ... with euros.

Remember, the Cypriot pound only disappeared a little over five years ago.

Probably the printer still has the plates.

Cursive's picture


According to Bitcoin proponents, Cypriots could just adopt BTC for all transactions.

Cursive's picture

When and where was the last time banks were closed for over a week?  Argentina?  I can't imagine the hell this would wreak on "stable" Western democracies.

TJ00's picture

In other words, a good reason to Prep.

machineh's picture

Argentina's corralito lasted for a year:


Argentina's situation worsened for several months. The corralito was hardened during the interim rule of President Eduardo Duhalde, and turned into a corralón ("big corral"). The corralón differed from the corralito in that most deposits were forcibly exchanged for a series of bonds denominated in pesos. 

The corralito officially ended on 2 December 2002, when Minister of Economy Roberto Lavagna announced the liberation of deposits for about 23.7 billion pesos (though not of 17.3 billion pesos in formerly dollar-denominated long-term accounts).[10] The measure was coupled with exchange controls.


Study the minutes of the last meeting. Bilderbergers ain't very bright, so they tend to use the same playbook over and over, with only minor variations.

If Cyprus doesn't impose exchange controls, their deposit base will shrink 10 or 20% the day the banks reopen.

monopoly's picture

LMAO, gotta luv it.

The Invisible Foot's picture

Glad there getting along well.

Five8Charlie's picture

"OUR side of the boat is perfectly fine. It's YOUR side of the boat that's sinking."

Cognitive Dissonance's picture

Too funny! Some of my best friends are German. Can you say methodical?

<Everyone loves to hate the Germans. They've been the boogie men since Roman times.>

Dooud's picture

How can they EVER open, unless capital controls are in place, it's all Gone!

westerman's picture

If they reject the haircut this would be the biggest mishap in decades. They would have ruined the confidence in their bankingsystem for absolutely nothing.

pods's picture

That is the dumbest thing Germany can do.

Now Cyprus sees Germany holding their life savings hostage.

Seems easy to determine which German banks are a bit, overleveraged?

Cough, Deutsche Bank, cough cough.


thedrickster's picture

Actually sounds like risk could make a comeback with depositors, a positive development in my mind though I wouldn't want to see deposits used to "bail out" rather "wind down". The capital ladder needs to be maintained, deposits then bondholders.

Would you keep money at C or BAC without the FDIC? Me neither.

Element's picture

No offense but you're about the 73rd person to post that link today.

We get it.

ebailey5's picture

Subtlety is never something a German can be accused of; sometimes praised as "plain-speaking".  Regardless, the issue is, sans diplomatospeak, as the German commenters described it.

buzzsaw99's picture

germany to cyprus: we are your money masters

Rehab Willie's picture

No wonder DHS bought 1.6 billion bullets

Jeremy Roenick's picture

Such naked pessimism....  Our economists on this side of the pond would drop dead if they spewed so much truth...   Or run like vampires from sunlight. 

suteibu's picture

"...And They Cannot Open"

Extortion.  If you don't agree to this theft, we'll just take everything.


w00dmann's picture

Would someone please explain to me why countries such as Cyprus and Greece want to stay in the EUR so badly?  This is a serious question.  Why not opt out, repudiate your debt and start over?  Clearly I'm missing something (lots of something) here.  I know it's a dumbass question, but I'll ask it anyway.

BlueCheeseBandit's picture

Eurocrats promise local politicians money and power if only they'll sell their country down the river.

Winston Churchill's picture

The devil you know.

Humans hate change so they are brought to the boil slowly.

TJ00's picture

Value of currency relative to others and low interest rates, if they leave not only do they lose a huge amount in revaluation the interest rates will be much higher to keep any remaining capital from fleeing, this destroys the value of all levereged assets like houses, making them underwater, imagine if you had a mortgage for $200K and your house is now worth $10K and probably would never reach the value of the mortgage in your lifetime, do you think that might be a problem? The answer would probably be most people and companies declaring bankrupcy and lose >90% of GDP, >50% of everyone unemployed and no money for government i.e. failed state, general anarchy and the rise of warlords to protect the now destitute majority.

Sandmann's picture

Mortgages are Debt and can be written down. The problem is that Debt thinks it is Permanent and that Collateral is transient. The Error is that Banks must learn there is not enough Collateral  so Debt must be liquidated

bank guy in Brussels's picture

Overall, European politicians have been corrupted by the political euro-money and cheap credit gravy train, and the benefits flowing to themselves from the European and banking establishment

Up till recently political careers have been impossible without joining that juggernaut, fuelled for years by the cheap & easy credit times

At the other end, the common people in Europe, mostly still do not understand the role of the euro in their enslavement ... they see it as price-stable money and a connection to the larger European economy and culture, the people in the Mediterranean countries do not understand it is part of the economic disaster they are suffering

Economists and investors not connected with the EU and establishment, MEP Nigel Farage and Ambrose Evans-Pritchard in the UK Telegraph, and ZeroHedge types, etc. know and say that the euro is a disaster ...

But it is only recently, with people like Beppe Grillo in Italy, and the far left and far right in Greece, that the anti-euro parties are able to make some headway

So direct explosion has been needed to finally force the issue of the euro ... Cyprus may be that explosion

Sandmann's picture

Good post. I think Cyprus is the straw that broke the camel's back

rwe2late's picture

rephrase the question,

why do "banksters want countries to stay in the EUR"?

Ghordius's picture

it's not a dumbass question at all, in fact it's a very good one. I could give you a lot of answers from many angles (including some "elitist" ones), but your question is "why countries", i.e. also "why people"

perhaps there is something like "wisdom of the masses"? the Swiss believe that and constantly amend their constitution per referenda. debatable

- let's start with the fact that many eurozoners have the feeling that their debt (public, private and banking) is not on a runaway path. debatable, though I tend to agree

- further, many believe that living within your means is good policy for both private and public households, and leads to prosperity through savings. not what Krugman would endorse - at all

- many others would like to return to gold, though they generally understand that this wish for a very hard currency would be overachieved with the shiny metal and prefer to have it as the "even harder, saving currency". speaking about "hard" currencies, I noted that several Greeks and Cypriots were talking about this hard/soft thing - how often do you hear people around you talking this way?

- as such, the Cyprus Crisis is not about Cypriot debt - it's their big banks, who are near bankrupcy. In a similar situation Ireland went from debt/gdp of 60% to 120% in order to "fix" it. doubtful Cyprus could do that (imho) stunt, it's perhaps too small for it anyway. Iceland tried, and people went to the street and stopped their government, but Icesave et al were in a different size category - and the British and Dutch governments bailed out their customers. I don't foresee Putin doing this for the Russian depositors in Cyprus

- and yet this still does not answer "why the EUR", eh? one word: size. which makes for stabeeleetee