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Cyprus

So what sane person will keep their money in Greek, Spanish or Italian domiciled banks?

19 Comments

  1. Sam Duncan says:

    Insane, isn’t it?

    I can’t see our lot pulling that kind of trick yet, but if Ed’s mob look like getting in come 2015, I’ll be down the bank first thing on election day. They have form: remember the “windfall tax”?

  2. Sam Duncan says:

    Not, now I come to think of it, that there’s likely to be much left in my account by then, the way things are shaping, but still…

  3. Barman says:

    It is chaos here (in Cyprus)…

    Bank holiday today – all electronic transfers frozen over the weekend, cash machines empty… we are told that the banks will remain closed Tuesday and possibly Wednesday too…

    Everybody but everybody is planning to get their cash out as soon as they open or can access their funds electronically…

    It will be interesting to watch the reaction in other Eurozone countries today while we are still in lockdown.

  4. Lynne says:

    Just about everyone in the UK whose bank has been gobbled up by Santander.

  5. CountingCats says:

    Capital flight over the next week will devastate the economy. Who is going to leave anything in a country where the gvt loots bank accounts? That anyone thought this would be a good idea is astounding.

  6. Crazed Weevil says:

    There comes a point when I see things like this that are so retarded, so utterly insane, that I think that maybe that was the idea. Just how could anyone be that stupid? Seriously…how would they manage to get out of bed in the morning without killing themselves? There must be a reason for it other than complete insanity. This is going to cause a lot of damage, and they must know this, so what reason is there for causing this damage? How does it help them?

    On a side note, as someone whose main bank account is with Santander in the UK, where would be a good place to move? It just seems that nowhere is safe anymore other than Mattress Plc. In theory Santander UK should be covered by our government, not the Spanish one, if everything explodes in Spain, but I really don’t trust ours not to play silly buggers…

  7. Whilst government generally hectoring and cajoling and looting its populace/livestock is par for the course, the sheer audacity and retrospective nature of the latest theft is breath-taking.

    It would be hard to find and apologist for this right? No-one could sensibly defend the measure which amounts to “we need the money so we are taking it for your own good and our political ends” Step forward Robert Peston blogging on the subject if you care to look

    http://www.bbc.co.uk/news/business-21812853 *

    First we have a rebuke to anyone who put their money in one of the banks

    “The levy serves as a caution to lenders to banks that they should take care where they place their funds”

    Fair enough, but don’t statists tell us not to worry about that and not to withdraw our funds because the government guarantees them? I guess we know what government guarantees are now worth.

    “precisely the same arguments – for what is known as a “bail-in” by private-sector creditors – were put by liberal-market purists at the peak of the banking crises in Ireland and Spain”

    Wouldn’t be the Beeb without blaming the market somewhere. You see how the attention is shifted from the criminal EU money grab towards those nasty market theorists. It’s their fault really, not the people actually doing the looting or whose wild over-spending actually caused the problem.

    “Why has the precedent been set with lenders – many of them Russian – to Cyprus’s banks?”

    Never mind, it’s not the Cypriots it’s the Russkies we are looting. So if you are a Russian who can’t trust your own banking sector or government, but think others may not be gangsters, that’ll learn you.

    “Partly because there is a widespread view that if caveat emptor should apply to well-heeled lenders to banks”

    Blame the rich and ignore the fact that everyone (including the very poor, old ladies, children) will be hit by this theft. And let’s not forget that until Friday the government faced exactly the opposite way with their guarantees. This is indeed one of the main supposed justifications for central banks.

    “But if such an increase in financial stress is not caused by the spanking of Cypriot bank creditors, perhaps that should be seen as evidence that the acute financial phase of the euro crisis is over”

    See if as a pink rabbit if you want Robbie; trust me, this is far, far from over, whatever Pollyanna-speak you come out with.

    “On that analysis, private sector lenders either to Spanish banks or to the Italian government – as two topical and relevant examples – need not fear that it is their turn next to take a write-off”

    Trust the banks, you won’t be looted ~ in some way. Don’t withdraw your money plebs, it makes it harder for your masters to loot.

    Bertram Scudder could do no better.

    (* I don’t know how to embed in the comments section)

  8. Robert Edwards says:

    The suspicion that Cyprus is a ‘test case’ must loom large. We know that all the Club Med nations are in the glue and will remain so provided the Euro persists. Once the precedent is set (whatever they manage to haggle over before the banks re-open) then the principle of the capital levy becomes the last bullet in the arsenal. Or the last turd in the water pipe.

    It has been done before, but generally only in time of war and only as an absolute last resort, because tax rises are too slow to take effect. The cash – the physical stuff – is what is needed.

    So, an island economy, but Greek in its responses. Hmm…

    Try this in France, and they would run out of piano wire within hours.

    What is alarming is the response of Europhile statists, who are wrapping themselves in the “well, something must be done…” argument, without addressing the core issue, that these policies are purely designed to allow the European Union to carry on exactly as it is, ignoring the logic of markets. The refusal to accept a haircut: “It’s not fair”, etc…

    The crisis has echoes of Mexico in the 1970s; “Countries cannot go bankrupt…”. Some argue that the Mexican economy has never recovered…

  9. Barman says:

    Banks now closed until Thursday….

  10. Single Acts of Tyranny says:

    @ barman – to allow scum criminal politicians more time for the stitch-up no doubt. if they can do retrospective taxes like this, they deserve bills of attainder concerning their current conduct.

  11. Robert Edwards says:

    I fear that a Bill of Attainder is an alien concept in Club Med Land. Or, indeed, anywhere else outside here or Scandinavia. But, you are right, of course. It is the nervous poker player dropping the guard. Nothing good will come of this, but perhaps something better…

  12. Single Acts of Tyranny says:

    One might also wonder why the government does not simply say to Cyprus “Loot your own people if you will, but loot our army at your extreme fucking peril” Even if they won’t pick up arms to defend themselves, simply threaten to abandon the Island or move the base a few miles North East whilst recognising Northern Cyprus. I am sure the Turks would welcome us with open arms. Three and a half thousand service personnel make a significant contribution to the economy of an Island whose population is about one million.

    This bailout of military personnel simply makes the UK government complicit in all this and if they can’t protect their own army from being robbed one wonders what is the point in their ongoing existence. You will note the meme says the army is protected from this. In fact it is compensated. Two very different things.

  13. CountingCats says:

    They can’t move the base’s, their current locations are British sovereign territory, not Cypriot territory. I don’t understand why banks in British territory are even affected.

  14. Single Acts of Tyranny says:

    I wasn’t suggesting they should move their base per se, I was suggesting they simply threaten to close it down and relocate North. That would probably be enough if the government had any balls.

  15. John Galt says:

    “I don’t understand why banks in British territory are even affected”

    Although the bases, primarily Akrotiri and Dhekelia are classified as British Sovereign Territory, they don’t have facilities such as banks on the base and my understanding is that salaries for staff based there are Euro equivalent.

    The base is critical to UK military operations in the middle east and the Ministry of Defence would not wish to undertake any action that would put the existence and operation of that base under threat. There are enough protests from local Cypriots about the base being on their territory as it is.

    Most base personnel will bank locally with Greek Cypriot banks or alternately with Greek Cypriot branches of UK banks and so any local accounts will be hit by the ‘tax’ (really a form of straight expropriation of funds).

    The fact that the Ministry of Defence is prepared to refund soldiers and government employees in Cyprus is a recognition that this is a cost (hopefully small) of them being in the service of the UK government on the island and for which they should be compensated.

    You don’t want a bunch of soldiers and bureaucrats getting twitchy over not being supported by the UK government as it will make it more difficult to operate the base.

  16. CountingCats says:

    SAoT,

    They can’t threaten to close it down and relocate north, the bases (more than one) are literally British sovereign territory, not Cypriot. They can no more be moved than can Gibraltar be relocated somewhere else in Spain. Or France somewhere else in Europe.

    http://en.wikipedia.org/wiki/Akrotiri_and_Dhekelia

  17. RAB says:

    This is theft, pure and simple. Once upon my Lifetime we had a cash economy. Notes and coin were passed from hand to hand in return for goods and services. The majority of the population did not have bank accounts and therefore could not have their money stolen from them at a stroke. It was a saner time of relative fiscal probity. You saved your money and you bought what you wanted when you had enough of it. Delayed gratification it was called.

    Now we all have bank accounts and credit cards and gratification is instant, but the money is not real anymore. It hasn’t been real since the 30′s.

    Here’s a good article on it…

    http://www.telegraph.co.uk/finance/comment/jeremy-warner/9938659/Cypriot-savers-have-it-cushy.-Weve-had-worse-haircuts-in-Britain.html

    The basic question is of Trust. We have to use banks in the course of daily life now. Money is paid into our accounts and extracted by us, but rarely by the physical folding stuff, but electronically. It might as well not exist at all (It doesn’t) and we are in the middle of a worldwide game of Monopoly using toy money backed by nothing at all but the faith in it being able to be exchanged for stuff we need to live with.

    Trust is everything in the world of money. If we lose our faith in the currency being able to hold its value and purchasing power then the Emperors New Clothes suddenly disappear, because we now see that there is nothing there at all, just a Mirage of solvency.

    Well the latest news is that the Bank Robbery in Cyprus has been rejected. If it had been allowed to succeed then even though Southern Cyprus (the North, a turkish Colony is not affected) is a piss in the ocean of monetary bailouts, it could well have destroyed the Western Banking industry entirely. Once the trust that a bank is keeping your hard earned, after all the motherfuckin taxes you’ve already paid, if they arn’t keeping it safe and maybe paying you a little interest on it for you allowing them to lend it out to others, if they think they can just help their fuckin selves to it when they get into self inflicted trouble, then banks will become history and Mattress PLC becomes king, along with barter again.

  18. John Galt says:

    It’s not just the fact that trust in money is required to keep the world economy ticking.

    At the present moment in time there is no easy transition between our fiat currency based economy and a barter economy. In the event of a failure of fiat currency we can move to a hard currency based system, but that will take:
    – a store of value, such as gold and silver
    – a restoration of trust in the new hard currency
    – a certain amount of time

    In between the failure of a fiat based currency and the rise of a new hard currency would be an interregnum of unimaginable proportions, we would have to learn again the values that have been lost.

    This place has a name, it is Bartertown.

  19. Paul Marks says:

    Keep your money in gold and silver – and do not let anyone know you have got much.

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