Cyprus bailout = money shift to tangible assets (gold, silver, etc...)

Cyprus bailout agreed to last Friday, after banks closed for the weekend (3/15), translates to a Nuclear Strike on savers and all forms of cash held in banks. In case you have not heard, Cyprus banks will remove 9.9% from all <100k Euro accounts and 6.5% from >100K Euro accounts on Monday as a new "tax on cash", before the banks re-open for business. Expect bank runs throughout the EuroZone as Monday morning opens. Look out below!

In the mean time, expect lots of money to flow from bank deposits to hard assets over the coming weeks and months.

 

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Scary to think that they can do that. wow

 

I think the point is that if the EU can do this to Cyprus, it can do it to Spain, Italy and Greece as well. And if the EU can do it, so can the US Government. Watch for the bank runs to begin in Europe in about five hours.

 

I read the article too..it scares the tar out of me. I said to myself, oh-oh..here we go. Unprecedented times, and I wonder what smart moves to take before this happens here in the U.S. the down-side of a rollercoaster..

Lucy

 

Rush to ATMs in Cyprus on EU bailout tax
As Cypriots heard the news of the tax, they started lining up outside of ATMs to withdraw money. Banks have placed withdrawal limits of €400 and many ATMs were running out of cash over the weekend.

http://money.cnn.com/2013/03/16/news/economy/europe-cyprus-bailout/index.html

 

Yet another example of the benefits of having a little bullion insurance...

 

It's like everything is turning to crap before our very eyes.

 

Yeah, I haven't had time today to look into this story, just what I heard on NPR on the drive to work. So, to protect the banks, they decide to confiscate a chunk of everybody's savings, at a higher rate for smaller depositors? What did they think people were going to do, besides run on the banks and riot in the streets?

I hear something about "money laundering by rich Russians", which would of course explain why they're penalizing large accounts less. And I'm sure the 400-euro ATM limit will be all they need to stem the run, because certainly the people wiring eight-figure sums back and forth wouldn't be a significant portion of the outflow.

 

If this happened here, I wonder if the FDIC would reimburse us for money stolen by our own government. :too-funny:

 

I think you've got that mixed...the higher rate was on sums above 100K Euro and the lessor one on sums below 100K. The thing I'm not clear on is if crossing the rate threshold subjects the entire amount to the higher percent. I wouldn't put it past them to be that dastardly. There is no honor among thieves and these are some of the ballsiest thieves I've heard of in my lifetime.

Just because your money is in a bank and not in your mattress, it's fine and dandy to steal it. I suppose they realize that it wouldn't go so smoothly for them if they did have to remove it from your physical clutches.

 

Indeed, and when they come for that, first to go will be the lead 'bullion' as I squeeze it out the end of a hammer forged tube.

 

Check the fine print of YOUR bank account contract. You may not be even permitted to withdraw $5k when the US bank holiday hits.

Alot of Cypriots probably awoke Saturday wishing they'd bought Gold and stuffed a SDB, no?
It will be the same here (USA: for many of us) at Zero Hour.

 

This is very important to note that it was not Cyprus that made this decision but the EU. This will be the model going forward when repackaged debt obligations are not met and austerity is no longer viable, such as was voted against in Italy last month. This is the trial run.

As I have for a few years now, I only keep enough in the bank to pay my credit card and other bills off each month.

 

If people in the EU "realize" this sort of "inevitability", I'd suggest this might be very BULLISH for (Eurozone) bullion prices near-term.

WATCH THE PREMIUMS.

 

As I write at 1:30 p.m., the stock market has come back significantly. This will all blow over in a week. But it's a great wake-up call for non-believers in bullion.

As I have tried to hammer into some thick skulls here, THIS TIME IT'S DIFFERENT. Virtually nothing from the past predicts or controls what's coming in the next few years. There has never been a time when ALL of the industrialized nations have been technically bankrupt. Now, with Japan setting the precedent, get ready for currency wars to bail out the weak hands' exports.

I will admit that of this morning, I have left one big area unprotected; I've put away plenty of silver, but I still have major exposure to dollar-denominated assets and/or cash. I need to fix this soon. All my accounts are in a credit union, but I don't think that will help much, although the fine print reads differently than a bank's.

 

I would love to know what happened to Gold and Silver premiums in Cyprus from, say, last Monday through next (fortnight = two weeks.)

That chart may be interesting.

If the EU clawback on Cypriot accounts ($13 billion) moved the US stock market -0.5% and Gold +1% the net change is 1.5%, what would a $50. bln or $100 bln clawback do to the PM mkts?

 

Just asking sir, WHY is it different? Is it different like the depression? Many like to call this the "great recession". Well during the depression the US passed a law making gold illegal to own and forcing everyone to sell it back to them at a fixed price. Anyone trying to barter with gold was locked up. Since that is a PRECEDENT in this nation, and has never been overturned legally, isn't this a stronger possibility than people blind predictions of what the future may hold? This is why I am nervous about ever holding TOO much of my wealth in PM, (amongst other reasons).

So, unless they confiscate PM, stocks, bank accounts, bonds, and farmland I am hoping I will have some way to eat.

Worrying about the US seizing bank accounts when they never have before, but ignoring the risk of them banning the ownership of PM when they HAVE done this before, just seems odd to me.

 

Howdy folks,

Cyprus is a special situation, but how many other special situations are there?

It set itself up as an int'l money and tax haven and a lot of russians had laundered ruples through and into Cyprus. The banks involved are all insolvent and have zero equity but enormous deposits making them so much larger than the entire GDP. They estimated that we would need 40 more JPM's to duplicate the ratio. Well, part of the ECB's rationale was to cause Cyprus to exit this type of banking and so they conditionalized a $17B bailout with $10B from the ECB and $7B from the Cypriot bad boy banks. They did not set the specific terms at the ECB - that was the Cypriot gov't. Now they're postponing the gov't vote on this until they can get it right. The confiscation below $100E was the rubicon as these accts are guaranteed up to $100E - just like ours. What they'll do? WTF knows.

BTW, our gov't is confiscating from anyone that has a savings acct about 3% or so. That's because the FED is artificially keeping interest rates at zero. So let's not any of us get smug.

peace,

rono


http://www.bloomberg.com/news/2013-...d-turmoil-as-cyprus-deposit-levy-at-risk.html

 

Howdy,

While the outlawed private ownership of gold back in the '30's, they never went around confiscating it. However, they could very easily do it again. Or they could require that you put some percentage of your retirement accts in gov't bonds. Or they could surcharge tax any of our stuff - very easily. Will they? Probably not, but there is a chance.

For this reason, I do think you are spot on with your preparation. You diversify your wealth. Not just your portfolio, but your wealth. About 5 years ago I read a quote from the Elder Baron Rothschild that to protect yourself, you wanted 1/3 of your wealth in securities, 1/3 in real estate and 1/3 in rare art. I'll let all y'all define rare art, but do yourself a favor and run your numbers and see where you stand. When I first ran mine, I was 90/8/2 and I almost blew chunks. I'm now 60/25/15 and still working at it.

peace,

rono

 

Well, of course misinformation may be the key, but from sources other than our country, it seems that there are some points we may be missing. ( All my opinion from my reading this morning). Germany and the EU didn't ask for bank tax on accounts under 100,000euros. The Cypriot administration is somewhat concerned that the many high value Russian cash accounts there would affect future such, unless all of the depositors were taxed, including to 20,000 or less. Compromises on % didn't seem to help when Germany said it was the amount, not who paid it. Also I am sure many high ranking Cypriot politicians and industrialists ( ??) have such cash accounts.

The taxed people will get corresponding shares in the 'refinanced bank' backed by cypriot gas deposits, so it is not a complete 'snatch'. As to why this was done is that the Cypriot banks are far over extended and if the EU gave them a straight bailout, it wouldn't solve the problem, so they asked for an increase in the banks book of over 5Billion euros. It is my understanding that the administrative branch of the government and the Central Bank's idea to enact the cash tax to raise this amount. The idea was that once the Cypriot banks are 'stabilized' the value of the cash in the bank be worth more and the loss will be regained. Obviously , many do not believe this including Putin, PIMCO, and others. This doesn't seem to portray any similar scenario is the US or even nations like Germany. I certainly would not use it as an excuse to buy PM due to it, as the effects on PM will be limited or go down if the Euro gains strength from the solution against the USD ( which is doing very well IMO)

Jim