When this becomes a more common occurrence people will get sick of transferring from one bank to another. A lot of these people will eventually come to the conclusion that withdrawing from the banking system altogether is the safest idea.
I'm starting to appreciate my credit card more and more. Savings account balance at a minimum, Credit card paid every month on time. Let them take 10% of that.
"What's just happened is the IMF has backed up, lauded, supported, and publicized, as if it were a victory, the taking of 10% of what really turns out to be 80% of Russian 'black money.' Russian 'black money' is KGB money, now in business. The leader of Russia (Putin) was a former KGB official. Who's money do you think they have taken? This is the biggest mistake the IMF could possibly have ever made." MUST READ: http://kingworldnews.com/kingworldn..._Most_Important_Events_In_History_&_Gold.html
Thats the first thing i thought about . Theres going to be some angry criminals looking for retribution . Or will they just write it off as an expense for their money laundering
I think this will send tremendous shock-waves through the euro-zone - the realisation that depositors money is no longer off limits is going to shake their confidence in the banking system. A euro-zone wide bank run is not out of the question, the euro is going to be looking pretty average as a currency, and gold is likely to benefit.
So, after a Bank holiday on Monday, Tuesday will arrive and what will happen? Does anyone really think that Europeans will see this theft of deposits as the writing on the wall for their own bank accounts and a domino effect commences that sweeps across Europe spinning their already struggling banking sector completely out of control in an histeria of fund withdrawals? Or that strealing just 10% of the funds of the richest of Russian elite would be considered an act of financial war and Russia will respond in some way to provide that 10% return through some other means such as gold price appreciation? We've had 2 years of Greece, Spain, Portugal Italy and Ireland. How big an impact could tiny Cyprus really have?
+1 It'll be interesting/scary to see how this plays out. By all accounts Greece and Italy have had a continuous stream of withdrawals over the past couple of years but - importantly - they have tended to simply redeposit their Euros into another European bank (notably Germany). This has enabled the ECB to simply shovel the electronic digits straight back into the Greek etc banks so that they can still operate (and is one of the major reasons for Greece not exiting the Euro I believe). To me, the critical difference is that in this instance the Cyprus Government is openly admitting that they cannot honour their deposit guarantees and that your money is not safe from confiscation in the banking system. So unlike Greece etc where people were moving banks within the same currency I can't believe that the Cypriots (and potentially other Southern Europeans) would not to want extract "hard cash" and store it at home etc, with the larger holders of deposits moving a large chunk entirely out of the system into a different asset class (notably gold). This seems significantly different to all of the previous band aids that seemed to have held the Euro together. Ecdit: It's a TAX on holding money within the electronic banking system. We all know people avoid taxes whenever possible. So it has to result in people avoiding the electronic banking system, surely.
The Russians could easily get the money and more back by charging european countries more for their gas supply, prostitutes and vodka. I don't know how many Russian elites would bother to have less than 100k in a Cyprus bank which is still getting slugged 6.75% or are currently standing in ATM lines desperately trying to withdraw all their savings. Whether other southern europeans follow suit will depend on the next 24-48 hours and how they react to the news but regardless, it has set a dangerous precedent that depositors money regardless of alleged mob ties is not out of reach of the eurocrat mob.
Also interesting to observe the Cypriot peoples reaction to this - reportedly shock and anger (and rightly so). Yet people around the world shrug their shoulders when governments engineer inflation via QE / money printing, even though the net result is the same - transfer of wealth from savers to government. The only difference is in the psychology - the levy is instantaneous, overt and in-your-face.
It is interesting how they announced this on a Friday afternoon rather than 9.00am on a regular business day. What else is happening while the common man stands in line to withdraw the 600Euros of whatever the maximum allowable daily withdrawal limit is. What is happening during these three days of branches being closed.
Paperwork. It's gotta be "legal" Brings to mind: "Kill one, you're a murderer. Kill millions, you're a conqueror. Kill them all, you're a god." "Rob one man, you're a thief. Rob millions, you're a bankster. Rob them all, you're the Government." :lol:
Credit is not cash. Credit cards do not involve cash. If there is an issue with a credit card transaction then it is the bank who bears the risk. Credit cards are great so as long as you don't have the bank hounding you for "interest payments". A minimal amount of cash in the bank, credit card(s) for transaction purposes, and savings outside of the banking system IMO is the way to go. This is straight up theft. Depositors should not bear the brunt of insolvent banks, it should be bond holders and share holders first. This may very well be the trigger for something much, much larger.
You've used the Megadeth expansion of the quote :lol: [youtube]http://www.youtube.com/watch?v=KIFQ4CWCymQ[/youtube] (Video for metal fans only - not to derail the thread)
Interesting to see if someone manipulates the price of the bank stocks higher and everyone ended up better off!
:lol: I was wondering whether to reference Megadeth or the original Jean Rostand. Ironically, I have my tracklist on random play and captive honor literally came up just after I sent it.