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

Yakpoo:
You win a free internet for that pic!

Has anyone coined the Stooges? I'm too lazy to Google it ...

 

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Potentially up to 77.5% when including frozen funds.

http://economictimes.indiatimes.com...es-on-their-deposits/articleshow/19304699.cms

 

I have to wonder if any politicians in Cyprus, or at the EU level, are going to take a dirt nap because of this...

 

Very much a possibility. That is why they are blaming the EU collectively. If its the decision of a faceless bureaucracy its harder to know who to whack.

 

Quite a few in "responsible" positions have apparently been able to move their assets out in time ... Article in English: http://www.spiegel.de/international...ations-of-covert-capital-flight-a-891925.html Then again, while the BI Forum is quite political anyway, mostly due to what causes PM price changes, we are pretty darn close to "mere" politics here.

Christian

 

"In 1539, the Knights Templar of Malta, paid tribute to Charles V of Spain, by sending him a Golden Falcon encrusted from beak to claw with rarest jewels--but pirates seized the galley carrying this priceless token and the fate of the Maltese Falcon remains a mystery to this day."

 

I suspect we're approaching an Investor Death Spike for BitCoin's value. Don't be surprised to see a -75% retrace in short order. "Got Gold?"

Here's an update on the BitCoin/USD chart:


Here are 'currency events' charted in BitCoins:


Interesting site:
http://bitcoin.clarkmoody.com/

 

Enterprising Cypriot traders skipped Gold for BitCoin.

http://blog.willis.com/2013/03/5-financial-news-stories-you-may-have-missed-wakey-wakey/

"While that is hardly a lot of money in foreign currency terms (foreign exchange markets trade $4 trillion a day) what makes it particularly intriguing, and topical, is that when Cyprus imposed restrictions on moving money offshore this week, it is believed that certain enterprising Cypriots bought Bitcoin with their restricted Euros. Bitcoin is transferable anywhere with the touch of button. While it is unclear what impact the Cyprus announcement had on the e-currency, Bitcoin values rose 20% …this week! It’s not clear if regulators can, or plan to try to, control this rather odd market– but, trust me, Cyprus is already doing the homework."

 

Bitcoin is back by the full faith and credit of what???

 

The same can be said of the USD?:dead-horse:

 

Nice call Juan. :thumb:

 

Regulators can not currently control BitCoin. They could potentially control various exchanges to a large enough degree to accomplish the task.

It's backed by an algorithm and a transaction log. Better than fiat currency in many ways, but not every way.

 

While the effect is the same, the Government never STEALS money. They Tax so it's not illegal. Now the tax may very well be Unconstitutional, but still legal. Congress pretty much ignores the part of the Constitution that says, "Congress shall make no law...".

 

Guess I still prefer real currency over something that, within a few days, goes up to 266 USD at Mt Gox, then drops to $105, and is at $179 a few hours later.

Christian

 

I think you're the one who is mixed up. It's a regressive tax which takes more from the small savers than the large savers who are more likely to make massive withdrawals and throw the banking system into chaos..

 

I may be wrong but I think people misunderstand deposits. I could be very wrong but I think in effect they are actually like loans to the financial institution thus why we need the FDIC to guarantee money in case of bank failure. So since as I understand this was basically bank failures it seems logical to me that depositors over the new deposit insurance in Europe would be expected to take a haircut. So where is my disconnect.

 

Why not have the banks act appropriately and make such costs come from their profits, not taxpayers or depositors. I sure as heck PAY a lot more interest to a bank than I ever receive. Part of this money should be to cover losses, and such losses should not be the responsibility of either taxpayers or depositors.

I am not one to "blame the bankers" for the world's ills, but they ARE responsible to ensure they make enough profits to cover these things. The unique situation in Cyprus was that the Russians, (and their mafia), was using Cypriot banks as tax havens. The government allowed this since it was generating taxes, but it blew up on them. For only this reason I am not quite as upset about it happening to Cyprus large depositors than almost anywhere else. I guess I would say similar about deposits in the Cayman Islands or other havens. If the same thing happened in Germany, France, UK, Canada, or other countries I would much more upset.

 

Btw, no a deposit is NOT a loan, that would be a bond. A deposit is supposed to be there for safe keeping. Pragmatically banks are allowed to loan out certain percentages of these deposits, but its strictly regulated to try to prevent a situation where a bank fails. As such, I blame regulators just as much as bad bankers.

 

I am not saying actual loan but affectively loans since money is only guaranteed to a certain level and interest is paid to attract those deposits. Without FDIC insurance wouldn't depositors lose their money if a bank failed?

 

But its not a loan per se. A loan is backed up with either assets or general business. A deposit is higher priority than that. Pragmatically they can appear the same if a bank fails, but legally they are not. If a bank failed, the order or priority would be depositors before most other people owed money. The exceptions would be employee payroll, payroll taxes, (Uncle Sam wants his before you get yours), then depositors. After them, THEN it would be loans, then equity.

I see why you think that, but legally deposits are in a special class of assets. Think of it how banks began, and how they still have SDB's. You put something in, they hold it, and give it back to you when you want it. When they started allowing fractional banking, they allowed banks to pay YOU interest instead of them having to charge you money to hold your cash. However, its still a bailment arrangement, like your SDB. If your bank goes bankrupt, they cannot empty your SDB and sell the stuff to pay back loans, right? Theoretically, your cash deposits are SUPPOSED to be similar. But, if the regulators do their job poorly, sometimes the cash is just not there. Hence insurance.