Subject: Cyprus bailout- are our deposits safe?
Posted by: satguru
Date: Mar 24 13
Cyprus have just announced a bailout deal with the EU in exchange for taking cash from bank accounts holding over 100,000 Euros. This has avoided riots as relatively few are now affected, but has set the dangerous precedent our deposits are no longer safe.
How does this make you feel about whether this could happen elsewhere in similar circumstances? Unlike America we don't have a constitution to protect us in Europe, on a side note maybe it's time we did?
Posted by: satguru
Date: Mar 24 13
Cyprus have just announced a bailout deal with the EU in exchange for taking cash from bank accounts holding over 100,000 Euros. This has avoided riots as relatively few are now affected, but has set the dangerous precedent our deposits are no longer safe.
How does this make you feel about whether this could happen elsewhere in similar circumstances? Unlike America we don't have a constitution to protect us in Europe, on a side note maybe it's time we did?
19 replies. On page 1 of 1 pages. 1
bob114 
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100,000 Euros is equal to $128,730 dollars, US. For most of us it is not a worry. This however is not the point. The point is it should not be done to anyone or any amount, period! We earn our money and deposit it in good faith. It should be available to us at any time with the same good faith intentions. So, do we continue to "trust" these institutions to operate in our best interests, or revert to the "old days" when people hid their money "Under the mattress?" Reply #1. Mar 26 13, 8:32 AM |
satguru
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They have been incredibly clever handling this. Originally money would be taken from everyone, and of course the instant reaction made them withdraw the idea and think again. That had the dual effect of taking only a tiny minority of people into trouble, and causing the others such deep relief (although they were not a penny better than they were before) they would be content simply having been spared. The best part of all last night was when a top EU official said it would now represent the standard form of future bailouts (even though the previous week they said it was a one off) and then tried to withdraw the statement soon afterwards. That has sent the clearest message yet to all Euro members that they had better watch out and can no longer trust the banking system entirely. They also said Cyprus would now suffer a 10 year recession, and it makes me wonder how either bankruptcy or leaving the Euro could possibly be worse for them than what has now happened. I'd like the government there to answer that as I can't see an answer. Reply #2. Mar 26 13, 11:26 AM |
houston1127
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Just wait, kiddos, until the hungry beast comes not just for your savings account, but for your private retirement accounts and -- God help us -- the silver and gold you have stashed under Grandma's quilt in the back of the closet. Although these scenarios could be avoided if various governments would quit accumulating debt. But since no part of the electorate is willing to give up their own piece of the largesse, the debt will continue to grow, and money grabs like this will continue. Reply #3. Mar 26 13, 12:47 PM |
| houston1127
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Buy Bitcoins. Reply #4. Mar 26 13, 12:48 PM |
| bob114
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Never heard of Bitcoins and just looked them up. Fascinating reading to say the least. I would really have to study this and perhaps talk with someone before considering a venture. Reply #5. Mar 26 13, 2:01 PM |
| houston1127
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Alternative and crypto-currencies may be a good way to avoid the troubles of holding currencies exposed to massive debt and circumventing unscrupulous financial institutions. At the very least it is wise for people to investigate all methods of protecting their assets from corrupt institutions. http://reason.com/blog/2013/03/26/bitcoin-atm-could-be-opened-in-cyprus Reply #6. Mar 26 13, 3:05 PM |
| satguru
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The day the banks open gold has fallen rapidly, and Bloomberg say those inside the area say the Cyprus bailout has sealed the future of the Euro. I'd tend to go with whatever they're thinking. Vicky Pryce said Greece would never fail weeks before they got their act together, so I'd tend to go with the experts on this. http://www.bloomberg.com/news/2013-03-28/gold-headed-for-worst-quarterly-run-since-2001-amid-weak-demand.html Reply #7. Mar 28 13, 1:06 PM |
daver852
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The Swiss Franc is probably the safest currency. The U.S. dollar is also a traditional safe haven, although if we keep spending ourselves into insolvency, who knows? The U.S. must be the only nation in the world that has never devalued or demonitized its currency. A Federal Reserve Note issued in 1862 is still legal tender today - although its collector's value would probably exceed its face value, unless it was in truly horrific condition. Reply #8. Mar 28 13, 2:59 PM |
| houston1127
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Daver, the dollar has been seriously devalued since the founding of the Federal Reserve in 1913. Both in terms of general purchasing power and in relation to gold and silver, the dollar -- like the old gray mare -- just ain't what she used to be. But you are probably right about the Swiss Franc. Didn't they (the Swiss) have to devalue their currency a year or two ago because the supply of the Euro, the Dollar, the Yen, and nearly every other currency was being inflated so much that their (the Swiss) exports were becoming prohibitively expensive? Their currency was so strong that Swiss chocolate and watches were beginning to cost too much for the French and Americans who have to suffer under negligent management of their nation's currencies. Reply #9. Mar 30 13, 12:21 PM |
| satguru
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Today the first details are coming out, and by avoiding a civil war and not touching the insured depositors are now removing between 40-80% from the rest. The numbers involved, as they previously calculated, are not enough for a civil war or even a medium sized riot, but if as they also claim the majority is from Russian organised crime I'd be sleeping with one eye open from now on if I was part of their government. Reply #10. Mar 31 13, 3:38 PM |
| satguru
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Oh yes! A month or so on and the EU have just arbitrarily demanded another 6 billion Euros on top, around a 25% hike on the original agreement. Yet they still stay in and intend to pay it back. I have no sympathy for them at all, the government are prepared to sacrifice their own citizens for a political aim and prefer to remain in the Euro than help their own people, I am truly disgusted to see the state 21st century politics has stooped to. http://www.dailystar.com.lb/Business/International/2013/Apr-12/213453-cyprus-bailout-cost-jumps-by-6-billion-euros.ashx#axzz2QGhbtqJf Reply #11. Apr 12 13, 10:53 AM |
mountaingoat
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Wish I could afford a mattress, to hide the money I don't have, under. Reply #12. Apr 13 13, 6:25 AM |
| satguru
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The soap opera continues, as the conditions have been changed the Cyprus government have decided it needs another vote, which should be next week. To be honest I'm not sure what they're actually voting on, the EU have given their conditions, they are not actually up for negotiation now, and if they are rejected the country will probably find themselves instantly bankrupt if the EU decide not to go ahead. My personal take is they'll use this as a sop to the public to appear to be doing something more democratic, but the EU would never pull out under any circumstances as they have to keep everyone in place at any cost. Cyprus could refuse every single term and they'd still be slapped on the wrist and lent the money on unconditional terms- look at what happened to Greece. Reply #13. Apr 22 13, 7:43 PM |
| mountaingoat
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I must admit Satguru I am a bit dirty on Cyprus for being a tax haven for the Russian mafia and other wealthy crooks around the world. Reply #14. Apr 23 13, 10:54 PM |
| satguru
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Sure, it's a self-imposed disaster, but the majority of depositors are ordinary citizens with no power over government decisions, and maybe a quarter Russians whose money was probably as you say dirty anyway. But they've just accepted the conditions in full today so will be living in abject poverty with little control over their everyday policies for decades ahead now so will have a long time to look back and think about it. Not a possible one to know, but I wonder if any others will follow now the mould's been set? Reply #15. Apr 30 13, 9:13 PM |
| satguru
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Yay! On Thursday the EU agreed to make the Cyprus plan the standard way to fix failing banks, with money coming from bank investors (including everyone with over £85,000) which is planned to become law by the end of the year. Governments will no longer bail out banks but take the money directly from their owners and depositors. http://theeconomiccollapseblog.com/archives/new-eu-plan-will-make-every-bank-account-in-europe-vulnerable-to-cyprus-style-wealth-confiscation I doubt the enormity of this will sink in until it actually operates again, especially if somewhere big like Italy or Spain next time. It should be interesting if it does. Reply #16. Jun 30 13, 7:32 AM |
| satguru
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Poland have followed the trend, and while I am not capable of unravelling either the reason or consequences of doing so, have basically sequestred the private pension funds with no compensation to service the national debt. I suspect this move will be so complex few if any citizens (besides the actual victims who will know directly) will understand it to realise, if anything, what has happened, but it doesn't look good. If nothing else it proves Cyprus has acted as a precedent and not as a one off. http://www.zerohedge.com/news/2013-09-06/poland-confiscates-half-private-pension-funds-cut-sovereign-debt-load Reply #17. Sep 07 13, 4:37 PM |
| houston1127
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"To summarize: 1.Government has too much debt to issue more debt 2.Government nationalizes private pension funds making their debt holdings an "asset" and commingles with other public assets 3.New confiscated assets net out sovereign debt liability, lowering the debt/GDP ratio 4.Debt/GDP drops below threshold, government can issue more sovereign debt And of course, once Poland borrows like a drunken sailor using the new window of opportunity, and maxes out its new and improved limits, it will have no choice but to confiscate more assets, and to make its balance sheet appear better, until one day, there is nothing left in the private sector to confiscate. At that point the limit itself will have to be legislated away, and Poland will simply continue borrowing until one day there are no foreign lenders willing to take the same risk as the nation's private pensioners. At that point, Poland, which is in the EU but still has the Zloty, can just go ahead and monetize its own debt by printing unlimited amounts of its currency. Of course, we all know how that story ends." Reply #18. Sep 07 13, 6:23 PM |
brm50diboll
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This problem is bigger than Cyprus. The whole Euro Zone is suffering because certain countries, mostly in southern Europe, have an unacceptable debt-to-GDP ratio, which is not helped by bailouts from Germany. There is a lesson in this for the US, but I doubt many will hear it. Reply #19. Nov 09 13, 5:10 PM |
19 replies. On page 1 of 1 pages. 1
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