Agreed, the unintended consequences will be that people will no longer trust their savings to a bank. Home safes, strong boxes and home furniture will be the new savings method.
It will not be the run on the Banks that will kill them, it will be the lack of deposits. And the velocity of money will stagnate to near zero or possibly even go negative. That is what will kill the banks.
It will take a whole new generation of citizens to build the trust again.
Once those deposits leave, a society will quickly generate into black market, barter and other types of transactions which become very hard to track and even harder to tax.
The socialist Utopians in the EC could be looking at a societal collapse just as quick and dramatic as Russia's eastern European satellite states in 1988.
Those outside the Eurozone like the UK and our own socialist masters will not be able to keep it from crossing the English Channel and even the Atlantic.
The bottom-line reason the banks blew up in Cyprus was that they were using their reserves to buy Cypriot gov’t bonds. Beyond the folks now not trusting the banks with their Euros nobody but nobody will be buying gov’t bonds. Not only are the banks on their way out of business but the gov’t will now be limited to it’s tax income stream-——————————————————————————————————————Hang on folks-—the exact same thing is coming to a bank near you. The biggest US bond trader in the US, Bill Gross of PIMCO, announced some months ago that he was on his way out of US bonds entirely. I sold all mine back in the mid 90’s when Clinton was scaring me and haven’t owned one since. Greece drew the map on gov’t bond defaults and our own genius Beranky doesn’t know a dammmmm thing that the Gleeks didn’t know. He’s printing/digitizing/papering/faking/ imagining some 85 billion dollars a month of unsecured US bonds, they can’t be sold at zero interest rates, and there is absolutely no way to make them good. Divide Obamuzzie’s 17 trillion dollar debt by the 300 million people who are on the hook for it ( can’t do it here because I don’t have enough zeros) and you see how much money each of us is on the hook for——and doesn’t have.
That's why we'll go the inflation route. Less than half the country will understand it. The rest will attribute it to greedy corporations, oil sheiks, etc.
I would agree. Banks in small towns of 5k residents will just about disappear. It’ll become a cash-only society within weeks. You can figure that fifty percent of the bank employees on the island re finished...they need to find a new occupation, and move on.