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When Is A Euro Not A Euro
With the 'temporary' capital controls being imposed in Cyprus, Credit Suisse explains why a Cypriot euro not equal to a euro from any other member country. Furthermore, the clear fabrication of a 'seven-day' period for these controls (when monthly and quarterly limits on spending are also included) is questioned as they ask how such capital controls could eventually be lifted with no obvious cure of the underlying problem, i.e., the risk of a bank run. Since every guarantee is only worth as much as its guarantor, we would expect that in absence of a European wide deposit guarantee (which for political reasons and the aforementioned template look very unlikely) these capital controls are likely to stay for longer than originally planned. Unless this vicious circle is broken, this attempt to save the euro could ironically even become the template of how a member state could leave the currency union.
Via Credit Suisse,
A euro is not a euro
...Capital controls are being imposed as part of the [Cyrpus] deal. While this is legal according to the Treaty on the Functioning of the European Union (TFEU Art. 63, 65 and 66), it creates a situation in which a Cypriot euro is not equal to a euro of any other member country from an economic perspective. In fact, while euro bank notes in Cyprus are still worth the same amount as in other countries, in a market for euro deposits, a euro in a Cypriot bank account would now most likely not be trading at par with those of other member states.
Moreover, at the moment markets are being told that these capital controls are only temporary. But we are wondering how such capital controls could eventually be lifted with no obvious cure of the underlying problem, i.e., the risk of a bank run. With the aforementioned template in place and the necessity of a second bailout looking likely as a result of the economic shock currently rippling through the country, depositors are strongly incentivised to take out their money as soon as capital controls were to be lifted. In fact, this might already be in evidence, as we hear that large Russian deposits have been moved out of the country via foreign subsidiaries of Cypriots banks, who did not seem to have been restricted by the same capital controls as domestic banks. This is likely to increase the pain for the local Cypriot population, even more so now that the local bank holiday has been extended for two more days.
Since every guarantee is only worth as much as its guarantor, we would expect that in absence of a European wide deposit guarantee (which for political reasons and the aforementioned template look very unlikely) these capital controls are likely to stay for longer than originally planned.
Unless this vicious circle is broken, this attempt to save the euro could ironically even become the template of how a member state could leave the currency union.
...
Drifting apart
There is another development that eventually could become a serious threat to the long-term existence of the euro. Its roots lie in the fact that the euro has always meant different things to different people. It would be too simple to reduce this to one dimension, but the role of the ECB and how it balances its priorities of price stability versus financial stability is just one example.
So while in good times the euro seemed to have managed to be all things to all people, now in economic distress, the difference in believe of what is needed to keep the currency alive are becoming a lot more visible. As a result, inner European resentment is increasing, with the core being blamed for too little help under too strict conditions and the periphery sometimes perceived to be too reluctant to change.
This is dangerous, since without the general acceptance of the strings attached to the common currency, the risk is that the euro loses its appeal to both sides.
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all € are equal, but some € are more equal than others.
I have some Euro coins with the Guinness Harp on them that I am willing to trade for the "equivalent" Euro coins with the Nazi Eagle. What type of premium should I expect to pay?
http://www.zerohedge.com/news/guest-post-eurozone-x-factor#comment-2319890
shouldn't gold be exploding?
Why it hasn't yet is a mistery. Because of the madness of the crowds, perhaps.
Template, Template, Template.... It's a template, considered a template, could be a template.
This is how you know they are making this shit up as they go along..
I will let that sink in a minute.
By the way Tylers you might want to explain this article to your contributor.
"...while euro bank notes in Cyprus are still worth the same amount as in other countries..."
Only if you can get them out of the country.
[Good luck with that...]
safety is still perceived as cash, bonds, stocks, even derivatives which are just wisps of paper bullshit.
I guess it takes a while for value to adjust to reality especially when the media is force-feeding us BS.
I would refer anybody who thinks cash under the mattress is a good 'last resort', to any random selection of Zimbabweans now sleeping under railroad bridges in Harare.
For perspective, imagine where Mugabe kept his stash - I'm prepared to bet that it wasn't in local currency, and it wasn't under any mattress anywhere in Zimbabwe.
Zurich, maybe.
Ogabe is so fucking ignorant, I'll bet he's got all his dough in FDIC insured banks here in the US.
Gold will not explode unless China invades the US and declares an end to the favorite jew "confetti du siècle"
Alternatively it could explode the day that the Arabs run out of cheap oil completely.
Oil + Dollar + Jewish fractional reserve banking nirvana
Happy Fake Easter FWIW
+1
You have found the fromt me. Who is behind the curtain?
It is. You are looking at the wrong kind of gold.
they'll explode after the CB's of the world restock their valuts.
Where have you been? CBs are buyers already. As long as the confetti can be printed ad infinitum and without any consequences, the price will stay manipulated. Who is auditing the Fed? There are NO checks and balances anywhere.
The paper is a tool and it's created from thin air and its value enforced at gunpoint on the rest of the world.
How can the US recover economically from the shit that almost brought the global financial system to a halt and is coming out at the other end looking better than the rest?
It's time someone somewhere declares a war on the US and the USD. Unfortunately the elite will not fight for their own lives because Americans are being told they're the good guys and need to fight for Wall Street's cause. That's how it's going down.
The spot price of gold is set by bankers.
Russia and China are buying physical. Not that I'm a fan of either Russians or Chinese but I can't wait for the day that those two make an attempt to bring this Jewish American shit show to its knees. Maybe then can we rebuild and be free. FYI, Putin is purging Jew-Rossi oligarchs after expelling much of the Pseude Jews from Russia to Israel over the years. Nobody is blaming his policies for the apparent genocide in slow motion. That Russian oligarch money lost in Cyprus was stolen from Russia by the Jewish oligarchs.
In Russia there's no love for Jews it seems. U$srael having a cow over Russia's political protection for Syria and Iran. Makes sense. The Bear is prepping for a non-zionist NWO and if I'm understanding the tea leaves correctly, Germany is a partner of the strategy and maybe even the Euro. Hard to say at this point if this is a setup to get us rid of the pretentious and imperialist zionist USD dictat?
euro faltering = dollar gaining = gold technically could lose value in us$. The fact that it's holding and gaining slightly with dollar rising is a reasonably good sign.
Why would it go up when we are seeing currency destruction?
Hey Gang - its me again - Blots...
.
The 'harp' symbol has its occult roots, just like the other occult symbology on other currencies around the world.
.
The harp is on Prince William's Coat of Arms.
http://projectavalon.net/forum4/showthread.php?17674-Prince-William-and-...
(Harp of David)
Would rather have one of these
http://upload.wikimedia.org/wikipedia/commons/0/0a/Augustale.jpg
and btw the Eagle was used on German coins and state symbols before the Nazis. They just recently made the Eagle so fat.
Yeah, these orderly Nazi-Robot-Germans, cold and emotionless...
https://www.youtube.com/watch?v=Phaj6s9cW0Y&feature=player_detailpage#t=...
PY...
.
For consideration... i think the 'Eagles' which are used on many a national flags...German, US, Polish, Albania, Mexico, Ecuador, Eygpt, Russia, Austria, Serbia...
may actually be the mythical and occult animal the 'Phoenix'.
.
As symbolically shown at this years London Olympic Games...
http://www.riseearth.com/2012/08/2012-london-olympics-closing-ceremony.html
None, because it doesn't matter where they are minted. It only matters where they are kept...
Expect to pay A LOT of premium. I have seen the linked coin for sale online for years now. I think it was used as door stop or as a shim. I repatriated the Euro crap I saved years ago. It just does not hold up well over time. I am sure that there will be a market for it someday but it's not for me.
I might eventually have to buy this coin just to show some mercy. Not today though. A coin can have character but then there is the "what the fuck happened here" factor. Don't get me wrong, I want it, but not at this ridiculous price. Stong strike...from a hammer or sickle? Both?
http://www.mycoindealer.com/Anna-1-Rouble-1738-St-Petersburg-type-VF-30-Strong-Strike-K-p-968.html
hedgeless, come on, it's not a Nazi Eagle - Germany has always used the Roman Eagle that became the symbol of the reborn "Holy Roman Empire" since the year 800, as well as the Eagle used by Austria - and the American Eagle is derived from the Roman too, as much as the name of the Capitol, etc. etc. (see here Coat_of_arms_of_Germany - Coat_of_arms_of_Austria)
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after years of financial propaganda from London, constantly complaining that the EU and the eurozone are monolithic, freedom-wasting blocs some should just recognize that both are confederations, and that the member states are sovereign, and so perfectly capable of doing what Cyprus is currently doing
which is against the EU and eurozone rules - except in an emergency, which Cyprus declared as such
knowing a bit Cyprus most of those emergency limitations won't work anyway, but that is a different story
if we would use gold you know what? the situation would be the exact same one
with the only difference that it would be more clearly silly to everybody to say "an ounce of gold is not the same because the Cypriot President is enforcing financial repression"
Roman eagle??? Give me break. As a German I would prefer to call it Nazi eagle, it sound much tougher and longlasting than some mediteranian crap!
the Roman eagle lasted about 1000 years - it's reborn HRE version lasted from 800 to 1806 - and you should know that the version on the euro coin has a nick: "Der Pleitegeier"
I'm with Dalio. Ironically, the first major country to leave may be Germany.
And I still hate Krugman.
Now, why would they ever wanna leave? They are running the surplus because of the Euro (DM would be by now at least $15). They get to boss everyone around. They get to posture and stomp and puff and huff and everyone is trembling just like Germans want to see them.
By the time anyone officially "leaves" they all will already be gone in practice. They'll claim the EU is still intact even when it's in pieces. Denial is all they have left.
The solution to the Euro-Crisis will be an territorial expansion of our tripple-A-rating...
Apparently Easter is cancelled for the German parliament. See the Washington Post.
Just sayin'....
This gives a whole new meaning to the term "bank hostages"
All bankster assholes are assholes, but some are shittier than others.
Some PIIGS are less equal than others.
heh heh.. great minds and all that :D
Going long metal detectors in Cyprus?
Basically, Cypriot Euros are much less liquid than other euros. Would you rather have €1000 in a bank account in Germany or in Cyprus?
http://dareconomics.wordpress.com/2013/03/26/cyprus-no-longer-in-eurozone/
This is a hoot.. so tell me how liquid a euro in an insolvent EEE-YOO bank is?
I just learned that German Euros are separated from French Euros, Italian Euros, etc......by using a special serial number.
German using serial numbers to separate things.......wow that sounds AWFULLY familiar!
Euro notes (currency) from Germany have serial numbers starting with "X".
So, we have a "quick and painless" conversion out of the Euro in terms of technical "execution", because the conversions are "baked in" via serial tracking of Euro notes and coins. I.E. "We had xyz Marks in circulation which were replaced by xyz Euros of serial number X." The implication here is a parallel tracking of "what a Euro of serial number x would be if it were a lira, or dmark, or ffranc, or kroner, or what have you". The fx is thus already in place and can be pre-figured with some accuracy.
If a country veers towards leaving or makes indications that they may leave the Euro, all Euro notes and coins of their given serial number (of the originally replaced currency) can be filtered out from the banking system (via a bank holiday in which banks actually, literally, remove the notes and coins of serial number X like children picking pennies from a can of spare change) so that the remaining Euros in circulation are not suddenly joined by their exiled Euro brethren from no-longer-member-nations.
The Euro cats are NOT dumb as it's being seen by most. They are quite intelligent.
Unfortunately I have no link, cannot remember where I read this. But I do recall reading during the Greek turmoil a few years ago that people had begun to hoard the German Euros, foreseeing exactly what you describe. The idea was that if there was a Euro breakup, the currency would be valued according to where it was minted. Those holding the Euros of Germany were presumed to be sitting pretty.
Euro coins don't have special markings or ID codes like paper notes.
They have something different: the B side contains a national portrait or whatever of the EZ member state, which of course makes them easily identifiable.
dont forget the serialization is only for euro notes; not the 1's and 0's digital euro currency - which is the majority of the euro supply
Digital accounts are even easier to tabulate. They don't even have to be actually there.
XP, i'm old school, ;)
With an assist by IBM.
Does IBM still uses punch cards.
I believe many coins and paper Euros have country of origin, and serial numbers to designate such, no? Similar to our coins and bills, depends what mint/state, city they come from
stack 1932 S quarters!
Sure, each member state of the EZ has notes with its own code before the serial number for ID purposes. List of codes widely available.
When Is A Euro Not A Euro? When it's a peon*.
*Peon (n.) - A debtor held in servitude by a creditor,
Cyprus is a template for Euro fragmentation? ..hahahahaha!
The only guarantee for Cyprus is a bank run.
I remember driving across the midsection of the U.S. as a kid with the rest of my family.
Every once in a while something would happen with the car, and my dad would find a coat hanger on the side of the road to secure the tailpipe to the frame, or jam a stick somewhere to make sure something else was in place.
That's where we are now, duct tape and coat hangers are holding this thing together. I doubt we make it back home in one piece.
The duct taping has only begun! I've built and maintained ramps that were in time magically skateable only because of the duct tape holding together ripped/cracked/frayed/holey masonite. And let me tell you, the skating can go on for quite a while with some sticky new tape. How much duct tape (bailout) will it take to make this ramp (euro) skateable? Apparently all the tape in the universe can't manage to do that. One hell of a ramp we got here boys.
Ahhhh....your post brings back memories of the good old days in the Wagon Queen Family Truckster.
"All your duct tape and coat hangers are belong to us." - Bernanke
*Dead Granny sold separately
The Money Masters.
https://www.youtube.com/watch?v=YOoaHSsJQCM
When is the U.S.T. going to get in on that game. We can have 'Rust Belt $' , 'Northern Plains Crude $', ' South West Entitlement $', ect... We can trade them like chits.
Actually, for the first couple of decades of the US Federal Reserve, from 1913 until under Roosevelt, if I recall correctly
The US Fed actually did have SEPARATE INTEREST RATES for the different regions of the country
That is the whole reason there are 'Regional Federal Reserve Banks' ... Fed fiat 'money' was a different 'price' in different areas of the country, in Alabamy versus New Yawk
Back then I think there was no banking across US State lines ... and so in some ways the 'dollar' did have a different value depending on where you were
The system sort of continues today, with the US Fed having an internal 'TARGET2' type system ... they still account for 'dollar transfers' from one region to another in the US, and the Fed regions theoretically 'transfer gold' to make up imbalances ... not to say that they really have the gold they claim they do
Maybe when the USA breaks up into 10 or more pieces ... perhaps a few years after our euro-zone breaks up ... there will be different currencies once again in the US regions
Smaller and sovereign is indeed better
Breaking up is (always) hard to do.
In summation,
"The Euro is screwed"
Everyone in Euro is equal...except when they are ruled by Banksters, then they are equal still, but less equal
Some animal farm animals are simply more equal than others... Komrade
Thats okay. I am getting a story every 5 minutes about how much Buffet likes banks. Everything must be fine out there.
"I am getting a story every 5 minutes about how much Buffet likes banks. "
He'll keep liking them until he cleans up his portfolio.
I remember when he said silver was a "good investment". If fell by half in the next few months.
All his charity giving won't keep the old liar out of hell.
Need a southern and northern Euro.
The Euro was dangled to countries not fit to join, so that they'd also join fucking NATO. NATO was the real agenda, to push the borders ever closer to Russia, and surround it from all sides.
The old Guard of aristocrats (living in fashionable places in London, Paris and New York) wants Russia back. Old money (laundered long ago), old grudges, old connections, old clubs & societies -- all joined under a common purpose of greed and ancient/divine right of entitlement.
The Euro was dangled to countries not fit to join, so that they'd also join fucking NATO.
And NATO is pushing to take over the British military bases in Cyprus.
Pure coincidence, of course.
When is a stock market not a stock market? Answer when it's run by POMO's & Algos.
In the final analysis all treaties and government forms and policies are only held in place if the oligarchs of each country choose to abide by them.
The key to a free and fair society for all is to first domesticate the oligarchs.
It seems that the days when western democratic nations and republics could reign these people in have come to an end. This means things will only get worse until a new government is imposed that can whip the oligarchs into line by threat of force, implying a slow degeneration until we change our form of government to something more authoritarian.
Now excuse me while I go washout my mouth with soap.
I buy 2 euro from you for 1 euro. Then I take your 2 euro in a suitcase out of Cyprus. And now I buy 4 euro from you for 2 euro. Infinite money hack, bitchez.
And it's still taking about $4 billion a day from Benny boy to keep the S&P and Dow up around their current levels - S&P back at 1560, Dow back over 14,500 again...
DavidC
Central banks continue to buy gold
According to figures from the International Monetary Fund, purchases totalled around 20 tons last month.
http://homment.com/centralbanks-gold-buy
i guess a New York Dollar , should now be worth more than a Misssissippi dollar
an earlier ZH article today said that you can still pull money out of Cypriot bank branches in the UK and in Russia because they are not under the EU banking umbrella. So it seems to me that if you live in Cyprus, it would be worth it to get on a plane to the UK and get your goddam money out!!
Also heard that these capital controls affect British who have money in Cypriot accounts. Again, this would be rubbish if you can pull your money out of a UK branch of a Cypriot bank.
Discuss.
I find this whole subject very odd.
It is true that any foreign bank in London abides by UK banking regulations, not those of its parent country. But IMHO that should not mean Cypriot-based account holders are able to withdraw funds from their Cyprus bank account from the London branch. Especially if the Cyprus branch has shut down all external transfers as they claimed to have done.
Bernanke you fat fingered fuck, our order has been filled so stop the silver beatdown you stupid motherfucker. I realize it's imperative to have an ignoramus who doesn't really understand what's going on behind the scenes running the printing operation, but I could find hundreds of brooklyn hacks who would be better counterfeiters than you, asshole.
I think that went in one ear, and out the other.
Capital controls in the Eurozone area are permitted under exceptional circumstances for limited periods but are prohibited under the Single Market Treaty.
Thus, IMHO Credit Suisse are slightly disingenuous to simply say they're legal under some other set of EU/EZ rules.
If they continue for any length of time, it must raise the serious issue of whether Cyprus remains part of the EZ even if it continues to use the same paper currency.
The Euro is fine. It's just going to be worth a lot less over time.
http://bullandbearmash.com/chart/euro-daily-declining-sharply-channel-su...
And the land of entitlements over the last 50 years while pilfering Africa (amongst other places) will have to adjust their expectations.
The Dullar is the most hated thing on the earth and yet it goes up.
That's also what feminists and lesbians say about the male penis.
Fuck 'em if they can't take a joke!
There is absolutely no way to stop their bank run - any day or time that the banks are open, there will be a line eager to get their money out. All the twisted rules and restrictions only serve to re-inforce the panic and destroy any confidence in the banks. There is no Jimmy Stewart standing up in Cyprus to stop the bank runs.
Capital controls will be lifted like the Fed will one day unwind it's balance sheet, as in maybe, possibly, somehow, someday, when monkeys fly out of my butt (credit Mike Meyers).
If it walks like a template....
Derivatives are financial weapons of mass destruction which could unwind during a crisis. Here is a simple explanation of what they are and why they can be both good and dangerous. It is written in plain language so a non-specialist can read it without a dictionary. With the current “difficulties” in Cyprus about to spread, it will be curious to see if derivatives raise their ugly heads again. Who knows how much exposure the TBTF banks have once things unwind a bit?
http://tinyurl.com/blhtc3q
Moto:
Based upon the examples in your linked article, I can see no reason for not banning all derivatives. None of the examples the authors quote (not even the trucker company) justify using them. In fact they should have never been allowed. Since they do nothing to improve the flow of capital into the markets which is what markets were intended for, but amount to greedy speculators and sheisters to gamble. And in the case of the financial institutions, place the global financial system at risk.
"In fact, while euro bank notes in Cyprus are still worth the same amount as in other countries, in a market for euro deposits, a euro in a Cypriot bank account would now most likely not be trading at par with those of other member states."
i assume they mean non insured bank accounts.... so let's see....no headline here...just the basics of putting currency into banks in amounts over a guarantee are an investment in that bank that generate a % return commensurate with that risk, including whatever the agreements are between the bank and their investors...like how fast one can withdraw the investment....kinda like, what are those letters...etfmmfmf and tbtf.....
"the risk of a bank run"
so, again, the under 100k crowd take out all their euros in paper, and as noted in the article: 'In fact, while euro bank notes in Cyprus are still worth the same amount as in other countries,...' so until the paper runs out, everything is aok. load up the paper printer and ship one there...or bundle some on a plane...of course that's happening already....my guess. so under 100k, no problem.
over 100k....paying a big price for their education, i'd agree. hope the planet is paying attention so as to reduce it's downside on these risks...
not gonna cut anybody any slack, except for food and water, handed out, if it were my choice, prioritized for those who started with the least, and are suffering because of the lack of education on the part of those could have afforded it before...
there's more, but i've typed enough for now....
off to the wilderness...
:)
This is very interesting, so you have 2 forces driving the value of the euro in cyprus, first there will be a shortage of euros due to bank runs (they have been bringing massive amounts into the country to help) this should make physical euro's more valuable in cyprus, but then your going to see people trying to leave the country with them and put them in another country, implying they are more valuable out of the country. the euro's in the bank accounts now, are clearly less valuable then ones in foreign banks, so you have a discrepancy bank euros < physical euros. hence the cause of the bank runs. so the less euro's people are able to get out of the bank the bigger the discrepancy will be and the higher the demand for physical euros. all in all very interesting to watch, economists porn.