Posted on 03/31/2013 1:36:58 AM PDT by John W
Major depositors in Cyprus's biggest bank will lose around 60 percent of savings over 100,000 euros, its central bank confirmed on Saturday, sharpening the terms of a bailout that has shaken European banks and saved the island from bankruptcy.
Initial signs that big depositors in Bank of Cyprus would take a hit of 30 to 40 percent - the first time the euro zone has made bank customers contribute to a bailout - had already unnerved investors in European lenders this week.
But the official decree published on Saturday confirmed a Reuters report a day earlier that the bank would give depositors shares worth just 37.5 percent of savings over 100,000 euros. The rest of such holdings might never be paid back.
The toughening of the terms will send a clear signal that the bailout means the end of Cyprus as a hub for offshore finance and could accelerate economic decline on the island and bring steeper job losses.
(Excerpt) Read more at worldnews.nbcnews.com ...
And, even if you do have something ‘tangible’, like a piece of land, it means little unless you can defend your ownership. The government already uses ‘Eminent Domain’ to take property. They won't stop at that.
But the Welfare class don’t have savings. They would support it.
If you were to deposit $100,000 in a bank, it's not as if the bank is going to take your money and keep a pile of $100,000 in $100, $50 and $20 bills in a vault somewhere. The bank uses the money to conduct its core business function: they lend it to others at a higher rate of interest than you are getting.
I don't know all the facts surrounding the Cyprus banking disaster, but it sounds as if the government-owned bank in Cyprus took the money from depositors and made a lot of loans that went into default and therefore ended up being worthless.
When you put money in the bank, you are loaning your money to the bank. They don't store it for you in the vault - they loan it out to their buddies to finance projects that might or might not be successful. If they get paid back by enough of their buddies, they'll be able to give you your money back. If too much is wasted on gambling junkets to Vegas and drugs, the bank closes, and you have to depend on the government to make you whole - or not.
I’ve attempted an explanation here.
When we used a gold or silver standard, they could confiscate the property and one could redeem the script for gold/silver.
Any physical standard was removed in favor of fiat dollars based on...credit. An example we all recognize, “based on the GOOD faith and CREDIT of the United States.”
What does that mean? Those dollars/euros etc. should represent what? Recently I walked into a car dealership and walked out the same day with a new used car, based on a credit score and my signature. I didn’t even need to produce any proof of income! Why? Good faith and credit.
But what did I really do? I enslaved myself. So if that is a truism, then your question, “ How can the government confiscate 60% of something for which there is only 10% at best?” Is only answerable by one thing...the Cypriot has been sold into slavery to the EU.
When we say that every man, woman, and child owes our own government $xx,xxx.00 we are enslaved. But this didn’t happen by accident. And as upsetting as watching events in Cyprus are we were sold the same bill of credit in 1933.
... Like any other debtor, the federal United States government had to assign collateral and security to their creditors as a condition of the loan. Since the federal United States didn’t have any assets, they assigned the private property of their “economic slaves”, the U.S.
citizens as collateral against the unpayable federal debt.
- See more at: http://www.henrymakow.com/us-citizens-property-collatera.html#sthash.r1FNhLL8.dpuf
All we are truly witnessing is the result of government’s claiming what has been loaned through slavery. Is the average citizen to blame or have the masses been tricked & deceived. That “60% of something,” is your life, your work, your productivity and that of your children. It is that promise that somewhere out there the men who produce work...produce it. But no matter how hard you work, anywhere in this world today, you cannot buy your freedom with the useless dollars in your wallet.
The day of Americans or anyone creating their ‘wealth’ is gone. Anything new created is already enslaved to the government. They looted that property from you long before you were ever born or your work and ideas ever even dawned in your mind. It already belonged to someone or something else. And this is true the world over for the Cypriot is not seeing anything new in these actions, he is just realizing how much of a slave he is in the world.
“60% of something” loaned out on a 10:1 scale...how enslaved are they really...how enslaved are we?
It has been done at banks. Uninsured deposits almost always take a loss in payout; depending on how the assets are sold, they may or may not take a loss in other types of bank liquidations.
“Let the socialists try that in the USA. Watch the rebellion.”
They just gotta sort out that irritating little gun problem first.
Excuse me, since the money stolen from successful people went to pay down a debt how can it “save” the Nation? If none of it went towards correcting the conditions which caused the banking crises what is to prevent it from happening again in 6 months or so?
The only thing that was “saved” were the politicians in Cyprus and the bureaucrats in Brussels and elsewhere.
I wonder what's the morning line for the next banking crises in Cyprus?
It already has happened here.
One of the big differences between the United States and Cyprus is that the U.S. government can simply print more money to get out of a financial crisis. But Cyprus cannot print more euros, which are controlled by international institutions.
Thomas Sowell
http://jewishworldreview.com/cols/sowell032613.php3
As I said, I don’t have money in banks, precisely because I don’t trust them or the FDIC. However, I stand by my statement that the vast majority of people who put money in banks don’t do so as an investment. Buying bank stocks would be an investment. Putting your money in a savings account is essentially a contract with the bank, ‘we will keep your money safe and with the FDIC guarantee it will be there for you, and you allow us to use your money to make a profit for ourselves’.
Essentially, what you are saying is that it is foolish to trust the contract you entered into when you put your money in that bank. That, unfortunately, is turning out to be true.
“Have already started considering yanking my savings out of the bank so Obama(care) can’t steal it.”
It’s called INFLATION!
The only way to hedge inflation is to use your cash to purchase actual physical property and materials.
For instance: Buy a car for $25,000 today or you can wait until Obama gets through with you and the same car will cost $50,000 next year...and you won’t be able to afford it.
As far as precious metals go, take the gamble but don’t cry when that market crashes...and it eventually will.
Since interest rates are so low, take your money out of savings accounts and put it in a Safe Deposit Box in the same bank. They Can’t touch it there and you can take some or all of it any time.
By the way, for every dollar you switch this way, the bank will need to come up with $20 of capital!
And they will. As soon as we get rid of that pesky 2nd Amendment. Its for the children....
The same could be easily done here. As with the SCOTUS decision on Obamacare just declare that confiscation of your bank account or other assets is a “tax” and no Constititional mandated just compensation for the seizing of your property is needed. Justice Roberts opened the door to total government taking of anything you own.
Thanks to the FED we are Cyprus...http://pricedingold.com/us-dollar/
I’m breaking my reply into two parts. Part 1 (USA):
“If you’re not paying for something, you’re not the customer; you’re the product being sold.”
Banks take risks with your money, period. If they did not, they would be charging you for the services they provide. The bank is acting as a broker between you (who has money) and someone else (who wants money). The bank is giving out mortgage loans, buying bonds, etc, with your money, and paying you for the privilege of having the use of your money with interest and services.
If you have your money in a bank and that bank fails, your money is insured (up to $100,000) by the government through the Federal Deposit Insurance Corporation. The money comes from insurance premiums that banks are legally required to pay the FDIC. You’re being charged (indirectly) to pay for the stupid decisions of poor bankers and their customers. If the FDIC runs out of money, it has a line of credit from the Treasury and you’ll be directly paying via taxes.
The FDIC is Social Security for your bank account. It, and other government deposit insurance, is socialism by definition.
Part 2 (Cyprus):
In the case of Cyprus, not only are their banks failing, but nobody wants to loan their government money. So the government, who has no money, cannot pay out on their own version on the FDIC. Failed socialism, in other words.
If the Cypriot government decided not to bail out their banks, their customers would lose all their money. Maybe they could sue and get something out if it. This would be 0% socialism.
Instead, Cyprus has chosen to bail out its banks with EU money instead of their own money. We’ve moved from national socialism to international socialism. As a condition of the loan of that money, it’s not paying out 100% on the accounts, it’s paying out some amount less. This is actually more capitalistic than paying all the money back - you’re making the bank’s customers take some of the heat.
The ludicrous alternative is that large foreign (Russian) investors get bailed out at the expense of Cypriots, who will be paying off the EU loan with their taxes.
Saying that the Cyprus bailout should be 100% is like saying that TARP would have been great if only it was bigger. A larger bailout is not less socialism than a smaller bailout.
No gun rights in Cyprus!
The same happens here but it’s called taxes.
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