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Post by boxcar on Mar 26, 2013 18:49:35 GMT -5
From Katie Pavlich
Despite the small country of Cyprus receiving a bailout from Russia to prevent an economic collapse and bankruptcy, many with deposits in the banking system will see as much as 40 percent in losses. Before the bailout, the Cyprus government suggested confiscating private bank savings to solve the short term problem. Some have argued the confiscation of personal funds can only happen in tiny countries like Cyprus and of course couldn't happen anywhere else however, it looks like Italy and Spain are getting ready to raid private bank accounts in an attempt to offset decades of poor economic decisions.
Savings accounts in Spain, Italy and other European countries will be raided if needed to preserve Europe's single currency by propping up failing banks, a senior eurozone official has announced.
The new policy will alarm hundreds of thousands of British expatriates who live and have transferred their savings, proceeds from house sales and other assets to eurozone bank accounts in countries such as France, Spain and Italy.
The euro fell on global markets after Jeroen Dijsselbloem, the Dutch chairman of the eurozone, announced that the heavy losses inflicted on depositors in Cyprus would be the template for future banking crises across Europe.
(If the Euro fell in relation to other currencies that would suggest a money transfer to Western countries is under way.)
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Post by mcnoch on Mar 27, 2013 1:55:28 GMT -5
Cyprus got no bailout from Russia and the rest of the article is BS too. The Euro just showed a little lose and had stabilized then again as soon as it was learned that the comments of Jeroen Dijsselbloem were taken out of context. The ECB is not reporting major transfers, only an increased transfer to UK and Russia, but nothing out of line.
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Post by boxcar on Mar 27, 2013 3:57:39 GMT -5
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Post by mcnoch on Mar 27, 2013 5:41:38 GMT -5
They are discussing the repayment plan for an existing loan. No fresh money, just keeping the existing one a bit longer. A new credit was refused by Russia last week.
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Post by Deleted on Mar 27, 2013 20:43:57 GMT -5
The often used method of spending money hidden in tax havens is by credit car, the card holder has it issued in his/her name from a privately owned company and the credit card debt is paid from one account into the credit card account automatically. The the card issuing banker is usually offshore too
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Post by Sir John on Mar 27, 2013 23:43:40 GMT -5
I have read that the Russians had US$31 billion on deposit in Cyprus.
Not sure what form that would have taken, but will assume that it is fixed term deposits etc all earning interest. They are talking of a 'haircut' of 40%, and very possibly more.
That is about US$12 billion down the drain.
OUCH!
SJ
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Post by boxcar on Mar 28, 2013 0:04:49 GMT -5
That was just one account of the Russian Gazprom.
I am told that some of the depositors, who represented commercial businesses, saw it coming and got out early. Were this not the case, there would be many multi-billion dollar companies going belly up today. Cyprus has put a stop to money leaving the country. This alone would sink legitimate businesses.
Cyprus will never be the tax heaven it once was. They can kiss foreign money goodbye.
And what happens to Cyprus today will happen to Italy and Spain tomorrow.
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Post by mcnoch on Mar 28, 2013 0:20:00 GMT -5
Italy and Spain have different problems; Malta and Slovenia are the more likely candidates, suffering from the same problems that their out-of-proportion banking-sector is sucking up so much rescue-money that it is causing increasing problems to these small states. In the wake of the Cyprus action the bank-customers there might now be the one that might withdraw their money. And in those two cases this would be even beneficial to both states as they no longer would have to guarantee the big sums of foreign investments and it would become much easier to restructure the banking sector and close or merge banks.
It seems that foreign Russian and UK customers were withdrawing a lot of money while the banks where closed in Cyprus. How this worked is still under investigation and as the accounts were blocked and the foreign banks knew that, they might have paid out the money on their own risk and lose it. I wonder which banks can be so stupid.
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Post by boxcar on Mar 28, 2013 0:51:10 GMT -5
>And in those two cases this would be even beneficial to both states as they no longer would have to guarantee the big sums of foreign investments <
I thought the guarantee was only up to E 100,000. Big business had billions over there as working capital and that money was fluid.
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Post by Swampy on Mar 28, 2013 1:27:23 GMT -5
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Post by mcnoch on Mar 28, 2013 2:15:10 GMT -5
Yes there is a guarantee for 100 000 for private accounts. To safe their banking industry these small countries try to safe the big accounts too.
5 Bio€ have been transported to Cyprus, in case a large number of people want their money back. They are prepared for this. At the same time the police is reporting the arrival of suspicious persons, so we most likely will see the crime-rate go up with so many money in the houses.
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Post by Sir John on Mar 28, 2013 2:46:44 GMT -5
"5 Bio€ have been transported to Cyprus, in case a large number of people want their money back."
Maybe they are expecting a run?
...and the longer a 'run' continues, the weaker the bank gets, until soon it is insolvent.
SJ
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Post by Deleted on Mar 28, 2013 3:32:28 GMT -5
The future: EU better than third world just, North America surviving and growing, Asia Pacific doing better, China and India too
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Post by Swampy on Mar 28, 2013 9:30:23 GMT -5
The future: EU better than third world just, North America surviving and growing, Asia Pacific doing better, China and India too You're right, Premier. Cypriots are lining up to get their money, and, with capital controls, this means a Euro in Cyprus will not be the same as a Euro in Germany. So this is the end of the Euro - in one way or other, that currency will die, as it must.
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Post by mcnoch on Mar 29, 2013 2:05:43 GMT -5
It will not die, this debate becomes as ridiculos as the Climate debate here. Don't be that blind!!!!
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