Cyprus - The Answer Is Uniastrum

Tyler Durden's picture

Submitted by Mark J. Grant, author of Out of the Box,

And the Answer is Uniastrum
It's funny how things are done in Europe. Nothing is as it seems. Then everything is orchestrated to try to get you to believe what they want you to believe. The Cyprus fiasco is one good example. The Dutch Finance Minister and Chairman of the Eurogroup broke ranks and spoke the truth; there is now a template in Europe for financial bail-outs which include losses for bond holders and depositors. The ECB had almost all of its members deny that there was any template. Then Spain denied, Portugal was on the tape so many times yesterday denying that you thought it was the newest Cadillac commercial and then virtually every other country in Europe had somebody in the Press with their own denials. "One-off" was the word of the day and the giant European propaganda machine worked well into the night.
The problem is the way these things work. The reporters, from any news agency, are handed out stuff from the government. They have to publish it. There is no choice. So it appears as official jargon that they hope we will all believe. Then the members of the Press cannot be too critical or say too much or they will be shut off and ostracized by Brussels or Berlin or wherever they reside. Consequently much of what we read in or from the European Press is less than forthcoming. Not lies necessarily; but not exactly all of the truth. I do not fault the Press one iota here because there is nothing else they can do but I caution you not to believe too much of what you read. America has much more, significantly more, freedom of the Press than Europe allows.
So let us then turn back to Cyprus and see why the Russians are not quite so upset as they were at the beginning of the crisis. The answer to this question is Uniastrum bank which is headquartered in Moscow. Eighty percent (80%) is owned by the Bank of Cyprus. After the crisis began and right up until the capital controls were implemented the bank was open for business with no restrictions upon withdrawals. So the crisis began, was all over the Press and the Russian depositors walked into the local bank and withdrew their money from Uniastrum, the Bank of Cyprus, or had it wired in from the other local Cyprus banks and it was then withdrawn. Problem solved!

At the same time Laiki bank and the Bank of Cyprus had operating branches in London. There were no restrictions there either so people could walk into those banks and withdraw their money as well. No restrictions at all right up until the time of the Capital Controls. In the meantime, in Cyprus, people and institutions could not get at their money so the Russians and many British took out their money, closed their accounts while the people in Cyprus were left high and dry.
Then the EU and the ECB took a fresh look at the deposits in the Cyprus banks and went ballistic. A huge chunk of the money that was thought to be in the banks was now gone. The amount the depositors were supposed to cover of the European loan was now not what anyone thought or was lead to believe when they were having their late night summit on Cyprus in Brussels. The EU could not reconvene and look like idiots. The CEO and the entire Board of Directors at the Bank of Cyprus was fired and the European Union flew into a tizzy, announced nothing, and had the ECB cover up the disaster. The Cyprus Parliament will be investigating all of this we are told but in the meantime; the money is gone. How much is anyone's guess but I would bet that a significant portion, billions and billions, is nowhere to be found. The EU will make the loan as described, the ECB will provide the rest of the money that can no longer come from the depositors and the cover-up is locked down. That is my assessment of what has happened.
In the short term the Europeans were stupid but in the medium and longer term they were really, really stupid. For a paltry amount of money they ruined Cyprus and it will be in worse shape than Greece in the not too distant future. Cyprus has also played the game badly based upon the fear of leaving the EU and they will suffer dramatically for their poor judgment. The fallout from Cyprus is that the Russians, other Europeans, the British have now been shown exactly what can and did happen when the European Union needs to bail-out some country or another. I predict you will see major capital outflows from Luxembourg, Malta and anywhere else that was once deemed a safe haven.
Goodbye and thanks for all the fish!
Europe, in their flight to pass the burden of bail-outs from the taxpayers so as to lessen their own political fallout has just ruined not only Cyprus, who will require more money certainly, but also the nations of Luxembourg and Malta who may also now be forced to turn to the EU for help. Then we have Slovenia on the brink and the much larger Italy and Spain that are standing there with them. Trouble in River City and BIG trouble in my opinion will be coming to a theatre near you shortly.
The imposition of Capital Controls will also cause further contagion. Quite obviously if it can be done in Cyprus it can be done anywhere the EU so chooses. The definition of a mattress is being re-defined in Europe. Some money may flow to the German banks but more, in my opinion, will flow to the American and Asian banks when that is a possibility. I would suggest that over the next few months that what money that can be moved out of European banks will do so and that the collective amounts will not be small. Europe has pulled out its German luger and shot itself in the foot or maybe the groin. Not dead perhaps but seriously wounded is going to be the result here and the markets, slow to catch on perhaps, will begin to get this joke which will cause all sorts of problems for the European bond and equity markets. Wider spreads, higher yields, more trouble funding and so on. If the Europeans wanted to find a way to cause the Euro to fall against the other major currencies they have done so but the cost will be significantly more than the gain.
When playing with revolvers it is a good idea to make sure the gun is not loaded. The Europeans obviously forgot to check!

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eigenvalue's picture

Poor silverbugs. Despite yesterday's deadcat rebound, silver is enjoying its erectile dysfunction again. Even $29 has become a level too far. Millions of silverbugs are now weeping and moaning. What a tragedy!

RSBriggs's picture

Not weeping one little bit, dipshit.   Most of my 1,000 ounces were accumulated at under $10 / oz.  If it drops to under $20 / ounce, I'll gladly average my cost up with another 1,000 ounces...

fx's picture

Mr Grant, you are writing a lot, but every piece is similarly clueless. For alle the silly moves in this fiasco by europe, the ONE that isn't silly is the major one: Dont continue to pump money into a black-hole like country, who's 'business model' and hence entire economy has ceased to function long ago.

Bastiat's picture

Isn't that exactly what they are doing?

hedgeless_horseman's picture



Print their own currency?  They can't do that AND stay in the EU.  Only the UK, Switzerland, Russia, Norway, Sweden, and Denmark can do that!




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Bastiat's picture

I know that.  I meant " they" ie Europe is pumping money into Cypriot banks-much more than they planned because it looks line most of the big deposits they hoped to tap went out the back door.  

hedgeless_horseman's picture



I wasn't banging on you, Sir.  And I believe that Switzerland, Russia and Norway were really smart and stayed out of the EU, as well as the EMU, right?

Yes, the ECB will pump even MOAR Euros into Cyprus than, "expected." 

When your only tool is a printing press, every problem is deflationary.

AlaricBalth's picture

"At the same time Laiki bank and the Bank of Cyprus had operating branches in London. There were no restrictions there either so people could walk into those banks and withdraw their money as well."

Thanks Mark, for telling us that which we already knew 2 days ago.

"The London branches of Laiki and Bank of Cyprus never closed. If fact they allowed unlimited withdrawals during the bank holiday."

"This is on the front page of the Bank of Cyprus UK website:There is no effect on deposits with Bank of Cyprus UK Limited which is a UK bank."

hedgeless_horseman's picture



I believe that SocGen's Cyprus bank may also have had branches open for business in France during the bank holiday.  N'est pas?

DeadFred's picture

After "Boris the Blade" visited their homes did you expect the bank CEOs to close ALL the branches? This means my polonium 210 futures are going to take a big hit.

BorisTheBlade's picture

Polonium is way too sophisticated and expensive, with recent budget cuts more cost efficient ways to handle situation are employed. Here's the template: . As for investment advice: go long machetes, hand guns and ammo and don't owe Russians any money.

SubjectivObject's picture

Mr. Grant:  It strains credulity to imply that the ECB regime members would not anticipate that Cypriot banks would have foreign branches, and that if preventing capital flight were the priority, that controls must be placed on these also and publicized.

The fact that such controls were not implemented, or the discrete conduit publicized, speaks volumes to the covert interaction between the large Russian interests and the ECB ... Pulitburo.

You have nothing authentic or substantive to offer, Mr. Grant, and after reading a few of your blogs, i have to accept that you are either clueless or a con man shill for the criminal bankster oligarchy.  Guess which of those I think is really the case for you?  In eithr case, I will not subject myself to your ... peculiar ... disinfo any more, and will suggest others do likewise.

macholatte's picture


I do not fault the Press one iota here because there is nothing else they can do....




Umh's picture

Have you ever really tried to talk sense into a bureaucrat?

Miss anthrope's picture

WOW HH.... zero hedge never disappoints and you sir are part of the reason why!


                       THANK YOU!!

Handful of Dust's picture

HH, Norway Sweden Denmark...probably why traffice jams increasing heading up there from the loaded with savings removed from harm's way....from the banks in the weaker countries in the south. There is no need form them to drive all the way to Asian or America to protect their wealth.

Postkey's picture

Cyprus should be treated similarly to Ireland?



"The end-December figures from the Central Bank revealed that, while the amount that the Irish banks had borrowed from the ECB fell by €4.4bn to €132bn in the final month of 2010, this was more than offset by a €6.4bn increase to €51bn in the amount that they had borrowed from the Irish Central Bank.

With the ECB confirming that it is the Irish Central Bank that is creating this money and that the money is not being borrowed from the ECB, what is now happening is that the Central Bank is printing its own money. This money is then being lent to the Irish banks to plug the holes opening up in their balance sheets as nervous depositors continue to withdraw their money."

MillionDollarBonus_'s picture

The bank levy needs to be enacted on a global level, with NO exceptions. I won't stand for russian oligarchs escaping a haircut, when average Cypriots are making tought but necessary sacrifices to save their economy.

mayhem_korner's picture



MDB...try this riddle: what happens if the levy rate is greater than the reserve rate?  Because the only possible outcome is total depletion of available fiat, either by depositors or the statist governments.

But as long as "banks" excludes my backyard, I'll sit back and pop some corn.

agent default's picture

Stop asking MDB these questions, you are making his happy tinny brain hurt.

mayhem_korner's picture



MDB is a nothing but a traffic-generator.  I just like to springboard random things off of his sarcasm.

General Decline's picture

I wouldn't be surprised if MBD were one of the Tylers.  That would be brilliant.

Doubleguns's picture

Cypriots are making tought but necessary sacrifices to save their BANKS!!


Fixed it.

Matt's picture

The banks do not have the assets to pay out all their depositors. This means it is not possible for everyone to get all of their money. Anyone with over 100,000 Euros in their account who did not even try to go to a bank in another country and withdraw their money, well they don't exactly deserve their losses, but still, they should have made the effort. 

old naughty's picture

I guess British was saying to Diesel Bomb: "Up yours."
How do you say in Russian?

mkkby's picture

Mark Grant, don't be silly.  The UK branches were left open PRECISELY TO LOOT THE BANKS in this manner.  Bank managers, Cyprus politicians/elite and Russians all got out scott free.

And good for them.  Fucking the EU/Germany is the entire business model of these socialist states.  And they deserve to be screwed because they were stupid enough to fund their socialist trash "cousins" for all these years. 

I'm guessing they'll be stupid for a lot longer because they have Spain, Italy and France doing the same thing.  Think decades... then the fireworks can begin in the UK, Japan and finally the US.

Bastiat's picture

You won't stand for it?  I suggest you track one down and kick him in the shins.

W74's picture

I can't tell anymore whether this guy is a sarcastic troll playing devil's advocate, a paid Hasbara agent, or just a sheep who hasn't woken up.

Blano's picture

ZH's finest troll, I just wish he'd quit disappearing so much.

Ratscam's picture

starting today I will upvote MDB for his sarcasm

glenlloyd's picture

Sometimes your idiocy can amaze....really

Blano's picture

How's the Herbalife revenue stream these days?

Rustysilver's picture


Who gives a shit what you will or will not stand for.

El Oregonian's picture

"Not lies necessarily; but not exactly all of the truth. I do not fault the Press one iota here because there is nothing else they can do but I caution you not to believe too much of what you read. America has much more, significantly more, freedom of the Press than Europe allows."


So, your telling me not to blame the poor little reporters in any of this because they only can report the lies they are told? Seriously? What the hell good are they then?

And our press has significantly more freedom, but still chooses to lie as an acceptable form of reporting?

I call BULLSHIT to your thesis there.

One, eventually leads to the other because the lying presstitutes failed to hold their participants in their storylines accountable. Therefore, they failed to hold themselves accountable to their readers, thereby leaving their readers the responsibility to find the truth hidden somewhere in their printed lies?

What a bunch of BULLSHIT and is a very sad state of affairs and a damning indictment on our George Orwell'esque media...

Damn them!


Umh's picture

Well he is telling a bit of truth. The media in many countries is more controlled than the media in the U.S.A. and yes it is "a very sad state of affairs and a damning indictment on our George Orwell'esque" governments.

Radical Marijuana's picture

To reply to fx:

I appreciate Grant's research into named details, which are informative. The editorial comments upon that are worthwhile too, although, only that. Personally, I used to believe that there was more "stupidity." Certainly, the political puppets appear to be incompetent. However, these days I tend to believe more in ulterior purposes and deliberately malicious designs of the puppet masters.

The more deeply I attempted to understand what was going on, the less able I was to still believe in simply stupidity and incompetence (although those who were the public face of that appeared to be so.) Instead, the more I tended to believe there was a much more nasty overall design, driven by the covert political puppet masters.

I do NOT believe that those puppet masters are sane. Rather, I think that they are utterly irrational, and quite runaway insane. However, I also believe that thousands of years of history have delivered backroom covert control to a shadow government, who had a long history of being  extremely dishonest, and being willing to back that up with violence, and who have insane plans to continue their kinds of social habits.

I regard everything that happens as manifesting through basic toroidal vortices, as series of events that loop back upon each other, through and through. Therefore, these days, I tend to believe that the main reality is an OUROBOROS OF INCORPORATED ROBBERIES. There are thoroughly ouroboric aspects to the ways that the sovereign powers of the people have been effectively privatized more than 99%. Although the ownership of the economy spreads out, and out, and interacts with enormous numbers of people, through government mandated funds, etc., there is still a very, very tiny group which covertly controls.

There are overall systems, with many millions of participants, all of which have their small shares of the organized lies, operating organized robberies, which we call the "economy." However, by definition, the components which exert the most control over those systems as a whole are the most labile components, which tend to be the shadow government actors, who arose from the history of being the most dishonest and violent. Those are the puppet masters, jerking the strings of the political puppets. Therefore, those puppets appear to be quite stupid and incompetent. However, their puppet masters are more malicious than is possible to imagine. Therefore, these things, I believe, are NOT happening due to mistakes, but rather, are aspects of an insane overall plan.

It is misleading to emphasize "black hole countries" because the sovereign powers of those countries were long ago almost totally privatized. The banksters which were able to control governments, to legalize private banks counterfeiting money out of nothing as debts, are THE BLACK HOLE.  They are the center of gravity of the system. However, they are mostly invisible, and have to be inferred from the behaviour of the systems that surround them. Those covert players with most influence over the history of making and maintaining that system are the puppet masters, pulling the strings of the political puppets which the public sees.

It is misleading to focus on any country, or any other kind of label, as being the central players in these financial games. Of course, it is important NOT to have any linear conception of those "BLACK HOLES Of POWER."  The basic theory of how such financial systems work is still up in the air, and open to radical debate about how it might work. Furthermore, the paradoxes abound that the OUROBOROS OF INCORPORATED ROBBERIES are toroidal vortices, and their full power comes from the combined sovereign powers of the nation states. But nevertheless, the central social fact is that the most important of all sovereign powers was given away to private banks, by those countries, in ways which appear to be insane, and irrational, because giving away the power to make money out of nothing to private banks appears to have been the single stupidest and incompetent thing that the political puppets could have done ... HOWEVER, THE REAL HISTORY HAS BEEN THAT!

Therefore, in this utterly irrational and insane triumph of organized crime, controlling governments, and which has driven larger units of those governing powers to serve the puppet masters, of mad, malicious central bankers, the background central social fact is that MONEY WAS BACKED BY MURDER. Therefore, the "black hole countries" revolve around bigger, and mostly invisible, bigger black holes.

The operations of the ouroboros of incorporated robberies have become directed by more than 99% privatized power. Therefore, the so-called sovereign countries have become manifest absurdities, which appear to be controlled by political puppets whose degree of apparent incompetence goes off the scale of intelligibility. 99% of the superficial ownership of the established systems APPEAR to be distributed to the citizens, and other relative stakeholders of these economic systems. However, the ways that those systems actually operate have a long history of the triumphs of the methods of organized crime being able to take over control of the governments, and to build larger units, via treaties, etc., whereby the sovereign powers to rob and to kill are effectively directed by extremely tiny groups of maliciously insane people, who are the current puppet masters, who come from the history of the previous puppet masters who were able to create the established systems where more than 99% of the sovereign powers have been privatized out of the control of the 99% of the people who superficially appear like they should be able to control things, and which, on paper, appear to be the owners and citizens of these systems as a whole.

In order to understand these financial "black hole countries," one should understand the far greater BLACK HOLE of the about 99% privatization of those countries' sovereign powers to private banks, which was done through the methods of organized crime, for a long, long time, and so, resulted in almost all the public political puppets appearing to be stupid and incompetent.

Since more than 99% of the public act like Zombie Sheeple, who refuse to face the fact that money must be backed by murder, and that the economy must be some system of organized robberies, they end up being fleeced, and set up to be slaughtered. The original power that everyone has to rob and to kill was assembled into sovereign states, and then channelled into private banks. One should not try to understand this Ouroboros of Incorporated Robbery by looking at the superficial social facts about various countries, and various public political puppets. One should look at the transnational banksters, as the puppet masters within those systems.

I Am Not a Copper Top's picture

Most importantly, it is still 1,000 ounces, same as it was yesterday

W74's picture

I'd say my dollar cost average is around $21, although at this point who really gives a shit?  It's just fiat bucks I'm tossing away in exchange for real wealth.

I only wish that I could be paid in ounces of silver, the only thing that's diminished over the years is the price of my labor when factored against real world commodities.

Stud Duck's picture

RS, I aquired mine at $3 and a lot of it. Nice to know the profit margin on it, but will probably make bullets out of the silver! You never know when some vampire or ghost will need shooting!

PiratePawpaw's picture

+1  I agree. I dont quite have 1000 oz YET, but most of mine was bought back at $6-9. I have and will continue to buy slowly whenever I can find it below $30. My average cost is still under $10.

 I dont consider it much of a risk that I will EVER see silver below $10 again, and the odds of it going up...............:)

ArgentoFisico's picture

Well, actualy I'm praying they will slam it under 20! :D ... mmmmm gnammy!

ArgentoFisico's picture

Ah! I remember when i was saying to myself :"fuck! i'm crazy to buy this Lunar series (I) silver ounces for 15-18 euro  each!" .....

mayhem_korner's picture



Silver bugs don't watch the ETF price.  We just stack and add to our still single digit wtd average cost of accumulation

savagegoose's picture

true man, tks to the etf price we have low metals prices, keep it up stooges, the lower it goes the more we gget.

Lets_Eat_Ben's picture

short SLV use profit to buy phyzz. easy day...u fag

homersimpson's picture

eigenvalue must mean "dumbass-fiat lover" in some language no one gives a damn about