Baltic Dry Index. 892 +05
LIR Gold Target by 2019: $30,000. Revised due to QE programs.
Why did I take up stealing? To live better, to own things I couldn't afford, to acquire this good taste that you now enjoy and which I should be very reluctant to give up.
The Eurozone, with apologies to Cary Grant. To Catch A Thief.
Cyprus is to get an insane EU bailout of 10
billion euros, slightly more than half what it wanted, but the Eurozone finance
ministers are forcing Cyprus to steal 10 percent of Cyprus bank depositors
money. This is insane because if this sort of theft can happen once, it can and will happen
again, and not necessarily confined to a 10 percent hit. Where next in the
crooked Eurozone? France? Italy? How about Germany? Every European now needs to
be holding a survival holding of physical gold and silver. The fiat currencies
are going down this century, with the euro as we know it likely going down this
decade. But if the euro is going down, will the QE to infinity dollar long
survive it?
To bailout brain dead EU banksters, from the
folly of investing in EU sovereign debt and the derivatives casino gambling
spawned by the Great Nixonian Error of fiat money, a cabal of Eurozone finance
ministers have just ordered legalized theft. Once on this road there’s no going
back. Europe is now on the road from Reykjavik to Buenos Aires and Harare! Make
no mistake about this bailout. It’s structured like this purely to help get
Chancellor Merkel re-elected in September. The Beppe Grillo revolution will now
sweep across vast sections of Euroland. The great Bilderberger EUSSR project
just came up with one act of theft too far. The day they ordered Cyprus to
steal the deposits of the Cyprus banks for the benefit of a German political
party, will go down in history as the day they broke the monetary union. The
EMU isn’t working for any European anymore, not just the hapless members of
Club Med.
“Those who don't know history are destined to repeat it.”
Edmund Burke
Cyprus depositors face up to 10% haircut as part of bailout deal agreed at Eurogroup
Saturday March 16, 2013
The euro
zone struck a deal on Saturday to hand Cyprus a bailout worth 10 billion euros
($13 billion), but demanded depositors in its banks forfeit some money to stave
off bankruptcy despite the risks of a wider bank run.
Cyprus
becomes the fifth country after Greece, Ireland, Portugal and Spain to turn to
the euro zone for financial help in the wake of the region's debt crisis.
In a
radical departure from previous aid packages, euro zone ministers forced
Cyprus' savers, almost half of whom are believed to be non-resident Russians,
to pay up to 10 percent of their deposits to raise almost 6 billion euros.
----Without a rescue, Cyprus would default and threaten to unravel investor confidence in the euro zone that has been fostered by the European Central Bank's promise last year to do whatever it takes to shore up the currency bloc.
But on
the Mediterranean island, initial incredulity at the decision gave way to
anger.
Co-op
credit societies, normally open on Saturdays, were shut for business in the
coastal town of Larnaca as depositors started queuing early in the morning to
withdraw their cash.
"I'm
extremely angry. I worked years and years to get it together and now I am
losing it on the say-so of the Dutch and the Germans,» said British-Cypriot
Andy Georgiou, 54, who returned to Cyprus in mid-2012 with his savings.
"They
call Sicily the island of the mafia. It's not Sicily, it's Cyprus. This is
theft, pure and simple,» said a pensioner.
The
bailout was smaller than initially expected and is mainly needed to
recapitalize Cypriot banks that were hit by a sovereign debt restructuring in
Greece.
The levy
on bank deposits will come into force on Tuesday, after a bank holiday on
Monday. Cyprus will take immediate steps to prevent electronic money transfers
over the weekend.
----Cyprus originally estimated it needed about 17 billion euros - almost the size of its entire annual output - to restore its economy to health.
But
because a loan of that magnitude would increase its debt to unsustainably high
levels and call into question its ability ever to pay it back, policymakers
sought to reduce it by finding more revenue sources in Cyprus itself.
Separately,
euro zone ministers agreed to extend the maturity of emergency loans to Ireland
and Portugal to smooth out their return to market financing this year and next,
but details of the extensions will be decided only in April.
More
The Cypriot government has betrayed its people
About a month ago I received a letter from an anonymous Cypriot. Across two typewritten pages, “W”, as the author signed themselves, set out detailed allegations of money laundering, terrorist financing, drug dealing and corruption.
----My
piece, in turn, had been partially informed by revelations in Germany’s Der
Spiegel newspaper a month
earlier that the German foreign intelligence service (BND) had identified about
$26bn (£17bn) of Russian money deposited in Cypriot banks – more than the
entire national output of the tiny eurozone state.
With the eurozone
considering a possible €17bn (£15bn) bail-out for the stricken nation, the BND
warned politicians that the beneficiaries would ultimately be, as Der Spiegel
put it, “Russian oligarchs, businessmen and mafiosi”.
----I mention all this because Cyprus’s status as a recognised tax haven and suspected money laundering state is central to Brussels’ apparently ruthless handling of the country. It is one thing to rescue a country in distress, altogether another to prop up alleged criminal enterprises.
Europe
drove a very hard bargain in its negotiations with President Nicos
Anastasiades. In return for a €10bn eurozone rescue package, Cyprus was told to
make those suspected money launderers and tax avoiders chip in as well. The
government would have to find €5.8bn to qualify for the bail-out funds – about
a third of its national output. In the UK, it would be equivalent to coughing
up £500bn.
Clearly,
Brussels insisted the money be grabbed from depositors. But the Cypriot
government’s solution was brutal. Instead of just targeting the well-off, it
hit all depositors – from the labourer to the granny.
Here, I
confess I am straying into speculation because we don’t yet have the detail,
but it seems highly unlikely that Brussels demanded ordinary Cypriots suffer.
Germany is already seen as Europe’s evil emperor, and ordering the country to
make victims of innocent pensioners hardly seems sensible. Besides, Germany’s
truck was with those “oligarchs and mafiosi”.
I assume
that the detail of the plan was left to the Cypriot government and, that being
the case, it betrayed the people.
All
deposits in Europe up to €100,000 are fully protected against loss if a bank
goes bust. So any depositor with less than that amount must have felt
absolutely safe. Instead, they will lose 6.75pc of their entire savings.
Those
with more than €100,000 would have lost everything above the threshold. In
other words, someone with €120,000 on deposit would have lost €20,000. Under
the government’s tax plan, though, they will lose 9.9pc – or just €12,000. The
deposit tax has saved them €8,000.
Extend
that to depositors with €1m, and it gets far worse. Instead of losing €900,000,
that super-rich saver ends up €99,000 out of pocket. That’s a direct transfer
of €801,000 from Cyprus’ ordinary people to just one of those “oligarchs and
mafiosi”.
More
EU raid on savings to fund bail-out for Cyprus 'threatens recovery'
The decision to raid people’s savings to fund a bail-out for Cyprus sets a “worrying precedent” that could jeopardise the European economic recovery, financial experts have warned.
The
island’s government has announced that, following pressure from finance
ministers in the eurozone, it is introducing a levy on all bank deposits in the
country to pay for a rescue package for its troubled economy.
Suggested
levies of 6.75 per cent of all deposits up to €100,000 (£86,500) and 9.9 per
cent for larger deposits sparked chaos as people unsuccessfully attempted to
withdraw their money from banks. Cyprus had to stop people accessing their
savings — an emergency measure that is unlikely to be lifted in the coming
days.
But it
was the precedent that may have been set by the terms of the bail-out that was
causing concern among international investors who were previously hopeful that
European economies were finally recovering.
There
were fears that savers in other nations in economic difficulty may start
withdrawing bank deposits, a move that could have disastrous consequences.
Financial figures from across the world warned of the dangers.
The levy
is “a worrying precedent with potentially systemic consequences if depositors
in other periphery countries fear a similar treatment in the future,” wrote
Joachim Fels, the chief economist at Morgan Stanley in London, in a note to
clients.
Lars
Seier Christensen, the chief executive of Denmark’s Saxo Bank, wrote: “If you
can do this once, you can do it again.”
Mohamed
El-Erian, the chief executive of Pimco, the world’s largest bond investor,
said: “In Europe, it [the Cyprus bail-out] could well undermine the recent
tranquil behaviour of depositors and creditors in other vulnerable European
economies – in particular Greece, Italy, Portugal and Spain.
“Despite
assurances from European officials that Cyprus is 'exceptional’ and the
measures are 'unique’, this weekend’s actions have increased the risk premium.”
Tomorrow, Cyprus could vote to leave the euro. This is political dynamite
There are two ways to look at the hugely controversial bailout agreed for Cyprus in the early hours of Saturday morning, in which the small island nation – accounting for only 0.2 per cent of eurozone GDP but whose troubles will have an impact far beyond its size (including on some 25,000 Brits in Cyprus) – received a €10bn rescue package in return for a series of unusually harsh conditions. In a shock to everyone, including admittedly Open Europe, the deal included a “tax” on depositors: 6.75 per cent for anyone with less than €100,000 in a Cypriot bank account, 9.9 per cent for anyone with more than that.The first way to look at the deal: lessons have been learned. Unlike in the case of Greece, Cypriot debt will come down to around 100 per cent of its GDP, following this deal. While not great, it’s not the type of maddening cocktail of continued austerity and increasing debt that Greece has been forced to swallow (the country’s debt is at 160 per cent of GDP this year). At least the combination of the deposit tax and privatisations in Cyprus will give the country some breathing space. And the alternative, letting Cyprus sink and leaving the euro, showing the world that the single currency is no longer "irreversible", would have been far worse.
The second way: All bailouts are unfair – the people who screwed up almost never pay – but this is in a league of its own. Seventeen Eurozone finance ministers locked themselves in a room and decided that every Cypriot depositor – whether super-wealthy or dirt-poor – will, out of the blue, see part of their hard-earned money seized. Remember, Cypriot President Nicos Anastasiades explicitly promised in his election campaign, only a few weeks ago, that depositors were safe. The Cypriot electorate now faces losses on deposits as well as years of austerity (under the bailout loan). What’s worse, deposits under €100,000 are supposed to be protected by EU law, not raided by EU leaders. And Cypriot banks have frozen close to €5.8bn, i.e. imposed capital controls which is meant to be illegal under EU single market rules. This is political dynamite.
"The great merit of gold is precisely that it is scarce; that its quantity is limited by nature; that it is costly to discover, to mine, and to process; and that it cannot be created by political fiat or caprice."
Henry Hazlitt
At the Comex silver depositories Friday final figures were: Registered 42.47
Moz, Eligible 121.11 Moz, Total 163.58 Moz.
Crooks and
Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
No need of crooks today when we have European finance ministers willingly
usurping their role.
"Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money."
Daniel Webster
The monthly Coppock Indicators finished February:
DJIA: +111 Up. NASDAQ: +129 Up. SP500: +148 Up. All three indexes are giving the same signal since
January, up, but surprisingly February’s
move in all three was weak, suggesting that the indicators are topping
out. Will sequestration turn March into a
down month? So far so good.
No comments:
Post a Comment