The Great British Cash EUxodus Begins

Tyler Durden's picture

UK's deVere advisory group reports, "more and more expats in Spain, Italy, Portugal and Greece are now not unreasonably worried for their deposits in these countries," and are seeing a "surge" in the number of British expats seeking advice about moving funds out of eurozone's most troubled economies. As EUBusiness reports, "Whether the institutions like it and accept it or not, there is a real risk of a major deposit flight from these countries as people feel their accounts could be plundered next." It is hardly surprising obviously (as we noted earlier the bid in German bunds) but we fear this escalation in cash exodus from the periphery will increase the need for a broader EU capital control scheme sooner rather than later.

Via EUBusiness,

Independent financial advisory company deVere Group on Tuesday reported a "surge" in the number of British expats seeking advice about moving funds out of some of the eurozone's most troubled economies following the Cyprus bailout deal.


According to deVere Group chief executive Nigel Green, "more and more expats in Spain, Italy, Portugal and Greece are now not unreasonably worried for their deposits in these countries."


He added: "Over the last week, since the messy deal to bailout Cypriot banks began, our financial advisers in these areas have reported a significant surge in enquiries from expats who are looking to safeguard their funds in other jurisdictions which are perceived to be safer.


"Whether the institutions like it and accept it or not, there is a real risk of a major deposit flight from these countries as people feel their accounts could be plundered next."




Jeroen Dijsselbloem, who heads the Eurogroup of finance ministers, said the costs of bank recapitalisations should not fall on tax payers, but on bondholders, shareholders and, if necessary, uninsured deposit holders.



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wee-weed up's picture

Giant sucking sound...

kliguy38's picture

.here is where the law of unintended consequences has boxed them into a corner. Without "capital controls" like yours the money will flow OUT of the peripherals like spain and italy etc into Swiss and German banks.....BUT With capital controls the "EURO ZONE" cannot function without capital freely moving across borders....CAPITAL CONTROLS MUST BE IMPLEMENTED but at the same time Captital controls will destroy the the Euro economy growth....checkmate......They are between a rock and a hard place.....

ZerOhead's picture

So this is how 'The End Of The World' begins...

Not with a 'Bang' or a 'Whimper'...

but a terminal case of 'the runs'...


Groundhog Day's picture

Dow will be 15000 and spx will be 1600 by the end of the week and all will be well.  Stop worrying so much.  Do you understand that their are genius's like Bernake and krugman who know how to resolve these issues.  They are experts and have got our backs.


Sheep # 86868531

Ying-Yang's picture

"now not unreasonably worried"

This quote hurts my head. (sarc)

worbsid's picture

That '86868531' is tattooed on your forearm, right.

Joe A's picture

Got it at his local FEMA camp

Skin666's picture

Governments can never outgun free markets forever.

There may be light at the end of the tunnel

ZerOhead's picture

"Governments can never outgun free markets forever."

I know I may be partially retarded, but personally I haven't seen anything remotely resembling a 'free market' anywhere in years. Now they are coming up with brilliant ideas like 'depositor haircuts' and 'capital controls'...

And as for 'The light at the end of the tunnel'?

I've got a bad feeling as to what that is too...


Free Markets's picture

You all need protected for your own good.  Resistance is futile.


Sincerely Sheep #35867423

MsCreant's picture

Best to get off the tracks. 

ZerOhead's picture

I'm almost a mile in by boat Kiddo...

billybigrigger's picture

"To the extent that there is a central bank governing the amount of money in the system, that is not a free market" -Alan Greenspan


Watch Jon Stewart's brain explode, and then implode simultaneously (US Only):


For those outside US, found a transcript of the exchange:

duo's picture

those free markets then change into black markets

machineh's picture

Since Cypriot capital controls will be the de facto model, they have to be drafted carefully. It might take longer than Thursday.

Advisors from the IMF, the Federal Reserve, FinCen, the Bank of England, the Argentine government, and the Church of Satan are offering technical assistance.

CAPITAL CONTROLS, bItCHez. When you can't (or won't) fix the structural problem, fight the symptoms! (and punish the victims).

kchrisc's picture

"...fight the symptoms and punish the victims." Is that like "punish the monkey and let the organ grinder go?"



FL_Conservative's picture

Who could have guessed that this would happen, eh?  LOL!  Unfortunately, the masses keep thinking they're securing their wealth when they move funds from one country to the next, when it's all relative, because the same "illness" can (and probably will) befall all countries that have embarked on broad currency devaluation policies.  Quit playing THEIR games (the banksters) and play YOURS.  BUY PM's.

Dre4dwolf's picture

I have the solution, reverse capital controls and debt forgivness.

Forgive all debts

Raise Depositor Interest Rates to the effected areas


Sit back and drink lemonaid while the economy recovers and the people adore you.


O wait, they dont want a recovery, they want despotism... in that case, they can just steal everyones money and shoot the protestors. 

goldinpenguin's picture

Capital controls on a little jerkwater like Cyprus might work but once you write a generic capital controls law between Euro members then it really isn't a common currency union anymore.

thisandthat's picture

Problem is unintended consequences don't stop there: flight of uninsured capitals will just put extra strain on banks, and insurance funds are dimensioned to save depositors of maybe one bank, not of every bank. That is the situation "insured" depositors have to face.

goldinpenguin's picture

Capital controls on a little jerkwater like Cyprus might work but once you write a generic capital controls law between Euro members then it really isn't a common currency union anymore.

Buck Johnson's picture

Bingo, the money is moving and it's going to safe areas regardless of the interest payout.  When you start to steal the money from deposits, it's officially at the end.

SeverinSlade's picture

Europeans should just convert their Euro fiat trash into physical PMs or bitcoins.

Dr. Richard Head's picture

I love the smell of bank runs in the morning. - Rothbard on Fractional Reserve Banking, Bank Runs, and FDIC

fonestar's picture

That's right.  How did these fools come into money in the first place?  Keeping money in a bank?  Needing advice on what to do?  Morons!  Hahaha.....

Joe Davola's picture

Yeah, it's not like governments have ever confiscated, er bought, PM's from their citizenry at advantageous (for the gov) values before.

SeverinSlade's picture

If you subscribe to that defeatist mindset, then why own PMs at all?

Joe Davola's picture

On a daily basis there are plenty of articles here detailing the size of liabilities worldwide, as we continually see nothing will stand in the way of using other people's assets to cover these shortfalls - law be damned.


As Elvis advised:  I used to be disgusted, but now I try to be amused  - just not feeling the amusement today.

ElZorillo's picture

Hell yeah bitcoin.. a real safe haven for your wealth..


smear that with a shitload of sark

SeverinSlade's picture

Hey, I'm not a huge supporter of bitcoin myself.  But at least bitcoin isn't centrally controlled/manipulated.  Better to own fiat that isn't owned by the CBs (yes, yes I know bitcoin isn't "technically" fiat to all you bitcoin fanatics that were ready to pounce).

Dull Which's picture

Where the hell are they going to go? I cannot believe, for example, that the UK Government would not (be pressured to) do a Cyprus even though it's not a Euro country.

ParkAveFlasher's picture

Hey, we have lots of houses here in the US.  And, they all have marble countertops on the kitchen islands.  That's right, all of them. 

You Brits like marble countertops, yes?

We even speak English.

It's never been a better time.

fonzannoon's picture

I think you are right parkave and so is the main article linked to ZH. This whole thing could be one giant plan to get people to spend.

ParkAveFlasher's picture

Thanks for the endorsement Fonz. Probably good for 15-20 uparrows in itself.  Gotta monetize those...

My thesis from the "Euro bond" thread:

The scenario I'm tossing around is this.  Key assumption is that Ben prints but the Euro committees do not:

1) Big depositors in Euro zone go into hiding.  Euros go under mattresses, into hoards, out of circulation.  Euro scarcer, therefore stronger.  Demand is inertial.

2) Some big depositors exchange to dollars, because Ben would never bail in.  Ben is your friend.  Euros are exchanged, handed in, and return home. If they are not recirculated, Euro scarcer, therefore stronger. Demand for it is still inertial.

3) US economy keeps jackknifing left-to-right, Ben hits the gas.  All that converted wealth becomes diluted by sudden dollar weakness.  Now the big depositor would be doubly screwed to reconvert back to the Euro which the big depositor was a party to making strong on that initial conversion.  Euro still scarce, therefore stronger. Demand for it accelerates.

4) What we are looking at is a rotating pan-Atlantic di-polarity savings trap. There is certainly collusion between banks in the US and Europe. Bernanke sucks, Brussels blows.  Or vice versa, depending on conditions.  Whatever configuration necessitates the earner/saver at the fulcrum of their teeter-totter is what will be.  It's really very simple, just massive in scale and elaborate up close. we have capital flight from one region meets waiting market in another.  Substitute "new US bank deposits" in point number 3 for "down or cash payments on real estate" in this latest scenario.  Either/or. Rinse, repeat.

It's a fucking multi-continent wealth-shearing dynamo.

Good news for US homeowners is, there's a whole continent full of "bigger suckers" about to wash in on the tide of European deflation.

fonzannoon's picture

It is an interesting theory man. There is something big afoot. I tend to fall in line with the thinking on here that they are purposefully cracking down on safe havens to flush that money out into the economy. They may truly be at that desperation point. I mentioned elsewhere I was at one of the largest chain restaurants in America this am across from a huge shopping center and they were not accepting anything above $20.

That blew me away. If I was a big cash guy I would see that sign and freak the hell out. I'd start spending those big bills as fast as humanly possible. The writing is on the wall. 

I can't wrap my head fully around the multi continent aspect of it but I step back and see this being globally coordinated to flush cash of any currency out into the open.

ParkAveFlasher's picture

Right, at least in the US, they'll make up a lie or objectify a dastardly scarecrow enemy ... in our case I'll say, "Counterfeiters are ruining the economy!  No more $100 bills!  They might be poisonous!" which is of course DE FACTO CAPITAL CONTROL.

The multi-continent aspect can be imagined like the mechanical pumps of a dialysis machine:

The pump is a single arm on an axis.  One side goes up, the other down, in reality they are moving clockwise in tandem and are a whole, single mechanism.

I'm no Tyler, I'm no Jim Willie, I'm just saying, I can see it happening in slow motion.

centerline's picture

I tend to agree - adding in the geopolitical pressure.  A big, ugly chess game.  Fiat/debt is the weapon of war.

Simply amazing to watch... even if it is impossible to figure out exactly who is pulling what string.   As an example, it is quite clear that no one (even politicians) are stupid enough to simply grab deposits.  And if they tried, EU leaders would have slammed it immediately.  That leaves us with the only logical conclusion that it is absolutely on purpose and part of a much larger play.  The risks are high here, so it is a very big play.  The chips have been pushed to the middle of the table.  My jaw is on the floor at this point.

fonzannoon's picture

I hear you. I would say scenario's like these are so incredibly accurate someone somewhere just fell off their chair in Utah reading your post....or we have overestimated these assclowns so much it's amazing.

centerline's picture

It's a big club, but were not in it!  lol.  I think most politicians make perfect "tools" due to the predictability of greed.  The system policing itself now like most other parts of society.



ParkAveFlasher's picture

No, we haven't overestimated the damage they could do.  I don't believe so.  And to Centerline's point, they have to make changes in tiny increments and in perfect sequence.  I think you can look at it like defusing a bomb, or even like assembling one.  Baby steps. 

slowginfizz's picture

I wonder how your observation in the restaurant correlates to the ZH article (weeks ago)about how the Treasury has been reducing the production of every bill except for the hundred? Now capital controls on depositors.  This is all choreographed.   


otto skorzeny's picture

hurry up before blackrock buys all of the foreclosed ex-meth houses in Phoenix and New Mexico to rent to illegals

kalasend's picture

I fucking hate marble countertops.

And what is American's problem with modern house? You drive by any American neighborhood and 99% of the houses are built like they were 50 years ago.

Actually 50 years ago there were at least something called the mid-century moderns. Now all house builders go backward.

ParkAveFlasher's picture

How's that Mediterrenean villa working out for ya, mate?

Now sign right here, and ... here, and one more right here.

Kirk2NCC1701's picture

The time to buy these is when there's blood in the streets.  Remember?  E.g. my sister bought a nice house and land in Croatia (with amazing view of the Adriatic), when they were fighting the Serbs in the 90's.  For what you pay for a car.  Don't know about your car, but her place is now even more amazing with each year. 

I'd target Spain, Portugal, Italy right after they collapse.  Better recovery prospects than South Chicago.

ParkAveFlasher's picture

I imagine that her success is driven by doing her homework, paying cash, having an existing income spoken for or a very solid, good plan for new income, and beating the crowd - which implies beating the profiteers who would feed the crowd when the crowd can't help themselves. 

jmcadg's picture

Sorry you can keep your Meth Labs, I prefer boating trips ;)