Skip to comments.EU: Daylight robbery in Cyprus will come to haunt EMU
Posted on 03/19/2013 12:36:02 AM PDT by bruinbirdman
One's first reflex is to gasp at the stupidity of the EU policy elites, but truth is that most EU officials handling the Cyprus crisis know perfectly well that their masters have just set the slow fuse on a powder keg and they can only pray that it is slow.
The decision to expropriate Cypriot savers even the poorest was imposed by Germany, Holland, Finland, Austria, and Slovakia, whose only care at this stage is to assuage bail-out fatigue at home and avoid their own political crises.
This latest debacle has caught me on the hop, literally, since I am in Tokyo learning about Abenomics, so let me just make a few quick points before going off for a pint of sake.
The EU creditor states have at a single stroke violated the principle that insured EU bank deposits of up $100,000 will be guaranteed come what may, and in doing so they have more or less thrown Portugal under a bus.
They appear poised to seize large sums from Russian banks 1.3bn from state-owned VTB alone, and therefore from the Kremlin prompting the condign riposte from Vladimir Putin that the action is "unfair, unprofessional and dangerous."
They have demonstrated that the rhetoric of EMU solidarity is just hot air, that they will not force their own taxpayers to share a single cent of clean-up costs for the great joint venture of monetary union in which northern banks, insurers, pension funds, and indeed governments, were complicit.
Their refusal to pay is entirely understandable in one sense and if I were a German taxpayer, I would not care to swallow these losses either but then the leaders of these creditor countries can hardly expect the world to believe that they
(Excerpt) Read more at blogs.telegraph.co.uk ...
Cypriot banks were paying out 7% on deposits.
That screams risk.
Thanks again. I’ve been writing on the topic of the Levitical economic system (as designed, not as implemented). This should help with lending perspective.
The interest motive has been pretty small for quite some time and now EU members can be robbed through the banks, a little at a time. Why wouldn't anyone/everyone in the EU take their money out ASAP.
They have been given an entirely untrustworthy promise that other countries won't be involved. The check is in the mail, I promise I'll still respect you in the morning. That may slow it down, but the runs will start and move fast with the next country that is “taxed” in this manner.
IMO this will spread way past the EU—the only question is how fast.
I can't help but wonder if the geniuses in charge are really this dumb or if somebody thinks a world wide depression is in his interest.
New Zealand planning to rob small depositors
This is why it is wise to have some savings in the form of silver and gold as both are relatively immune to inflation unlike paper currency.
So the people in Europe are mad that the the Socialists they elected are Socializing?
Sounds like what is going on in the US....
I believe that if Putin does nothing (publicly) then it's a green light for others to start doing it too.
Robbing Russian Mafia is a task not for the faint of the heart. But that's minor details; the proposal failed to pass anyway. I think Putin now has a good possibility to position Russian banks as a safe haven - safe from EU's turbulence, at least. Russian economy is stable, thanks to high oil and gas prices. Additionally, the same well known team is in power - and they are not likely to do something exceptionally stupid with other people's money. At least because they don't need to. Perhaps Mafia figures won't be so interested to keep their ill-gotten gains in the country; however plenty of foreign (EU) clients might not care that Putin can look into their accounts.
Probably China and other major non-EU players are also interested to get into this game. They are a bit farther geographically, though - however little it matters today, in the age of instant secure communications.
It did teach me to be more aware of the warning signs that the system is about to go unstable. Yet what to do when the dollar loses its reserve currency status isn't any clearer than it is now. Somehow, in an era in which nearly every transaction is traceable, I don't think a flight to gold will work.
The above post was to be for you. Thanks again, CO