(News & Editorial/ Bank theft Government: Cyprus loots private bank accounts)
A. CONFISCATION: Panicked Europeans Rush ATMs as Leaders Move To Seize Funds Directly From Bank Account Holders
16 Mar 2013, SHTFplan.com, by Mac Slavo
Pasted from: http://www.shtfplan.com/headline-news/confiscation-european-leaders-move-to-seize-funds-directly-from-bank-account-holders_03162013
Over the last few years political and financial leaders in Europe and the United States have implemented policies, regulations and bailouts costing global taxpayers trillions of dollars with the promise that these measures would lead to economic growth and recovery.
What happened in Europe today is yet further proof that nothing they’ve done has fixed the underlying fundamental issues surrounding the events that led to the crash of 2008.
For those who don’t believe the government is prepared to take extreme measures that may include the seizing of retirement accounts, cash savings or even gold, look no further than Cyprus, the latest recipient of bank bailouts.
As of right now, citizens of Cyprus are scrambling to withdraw funds from their bank accounts after the EU, with agreement from the Cypriot government, announced they will decimate funds held in personal bank accounts to the tune of up to 10% of existing deposits.
You read that right.
The European Union has made the determination that the people of Cyprus are now responsible for the hundreds of billions of dollars in bad bets made by their government and bank financiers, and they are moving to confiscate money directly from the bank accounts of every citizen in the country.
Restrictions have been imposed to stop people emptying their accounts or moving their money out the country after the Cypriot government announced that up to ten per cent of deposits will be seized and used to bailout the island’s crisis-hit banking system.
The deal with other eurozone finance ministers is the first time that ordinary citizens’ deposits have been directly raided in this way.
One furious expat said: ‘This is plain theft. I’d love to hear someone explain to me why it isn’t.’
Under the deal, all bank deposits over €100,000 will be hit with a levy of 9.9 per cent. Those with smaller savings will pay 6.75 per cent.
The move sparked panic and violent protests yesterday as crowds desperately tried to withdraw their money at cash machines.
‘Why would you risk putting your money in Greek, Spanish or Portuguese banks after this?’
British expats were stunned by the news, with many left high and dry by the restrictions on accounts.
Cash machines had been working, but many ran out of notes because of the panic withdrawals.
But financial experts said the raid – designed to stop Cyprus crashing out of the euro, potentially destroying the currency – would send shock waves through the eurozone.
If savers in other troubled nations fear their accounts might be next, they could withdraw their money and spark a catastrophic run on the banks.
Source: Daily Mail
They’re calling it a “tax.”
As Market Ticker’s Karl Denninger notes, “Like hell that’s a tax. That’s direct confiscation of the funds of people who did nothing wrong!”
It should now be obvious. There is no recovery. There never was.
No matter where you live, your government is likely preparing measures to deal with the coming financial and economic collapse. This means they are going to be coming for anything of value that they can get their hands on.
If you have the majority of your net worth allocated in bank accounts, money market funds, retirement plans, stock markets or the host of other ‘safe’ assets recommended by your financial adviser, then you are playing Russian roulette.
And in this version there’s a bullet in every chamber.
When they come, they will take everything they can
B. The Cyprus Bank Bailout Could Be A Disastrous Precedent: They’re Reneging On Government Deposit Insurance
16 Mar 2013, Forbes.com, by Tim Worstall
Pasted from: http://www.forbes.com/sites/timworstall/2013/03/16/the-cyprus-bank-bailout-could-be-a-disastrous-precedent-theyre-reneging-on-government-deposit-insurance/
“There’s a little detail in the just announced bailout of the Cypriot banks (and Cypriot economy as a whole) that could be setting an entirely disastrous precedent for the entire European banking system. Please note the “could be” here, it depends upon how people react next.
That Cyprus and its banks need bailing out is beyond doubt. The banking sector is absolutely vast as compared to the size of the economy (largely as a result of a couple of decades of use as a secure location for Russian deposits) and the banks are indeed bust. Largely because they were heavily invested in Greek Government bonds which then, as we all know, suffered two substantial haircuts.
So, something needed to be done. And something has been done. More money is being sent in to recapitalise the banks, Cypriot loans are being rescheduled, the government will sell off assets to help plug the gap and so on. However, there is this one further detail that could have seriously bad effects: