Bank Watch ...

[UndercoverElephant]

Another reason to buy gold...

[adam2]

Banks in Cyprus to be shut on Teusday and Wednesday as well as today, which was a public holiday anyway.
Looking a little doomerish.

http://www.bbc.co.uk/news/business-21823432

[JavaScriptDonkey]

Another reason to buy gold...

I'd expect a sudden spike as well.

[Lord Beria3]

Another reason to buy gold...

Yup, this decision by the Euro elites in Cyprus has smashed that fragile return of trust in the banking system across Europe. Without confidence the banking system dies.

Gold, with no counterparty risk, is definately a wise investment when you can't trust whether your money is safe in the banking system.

http://kingworldnews.com/kingworldnews/ ... _Gold.html

Sinclair has a great take on the emerging crisis in Cyprus in relation to the Russian connection. Stealing from retired British teachers is one thing, the Russian KGB/Mob is something else!!!

[Lord Beria3]

http://goldswitzerland.com/get-your-ass ... banks-now/

The Cyprus event may later, in the history books, be seen as the catalyst of the fall of a century long Ponzi scheme. This could rank in line with the shot in Sarajevo as the start of WW1 or the collapse of Kreditanstalt in 1931 as the start of the Great Depression.

Isn’t it ironic that exactly 100 years after the creation of the Fed (a private bank created for the benefit of bankers) that the fragile and bankrupt financial system is likely to fall due to the insolvency of a couple of Cypriot banks.

But what is happening in Cyprus will not be the reason for a collapse but just the trigger for what has always been inevitable.

There are only two possible outcomes of the crisis we are now in:
- Either there will now be a run on the massively leveraged (25-50 times) banking system which would lead to no debt being repaid and a deflationary collapse.



- Alternatively, we will now see the beginning of the most massive money printing that the world has ever experienced, leading to a hyperinflationary depression.

The second outcome is the most likely although the risk of an systemic implosion is very high if central banks are too slow in flooding the system with money. The deflationary outcome would lead to no banks surviving and no money in the system. And the hyperinflationary outcome would lead to money being totally worthless. In both cases gold will be a major beneficiary.

But printing money will of course not solve anything since worthless pieces of paper with ZERO intrinsic value can never create wealth. At best it will just kick the can down the road for a very short time.

Cyprus is a mini model of the world financial system. The IMF, ECB and the politicians thought they could get away with the depositors taking part of the loss. But they have clearly not considered the consequences. This action (if ratified) will not only lead to a run on the Cypriot banks but also on banks in other weak areas such as Ireland, Spain, Portugal, Italy, Greece etc. Eventually it could spread worldwide.

http://blogs.telegraph.co.uk/finance/am ... haunt-emu/

One's first reflex is to gasp at the stupidity of the EU policy elites, but truth is that most EU officials handling the Cyprus crisis know perfectly well that their masters have just set the slow fuse on a powder keg – and they can only pray that it is slow.

The decision to expropriate Cypriot savers – even the poorest – was imposed by Germany, Holland, Finland, Austria, and Slovakia, whose only care at this stage is to assuage bail-out fatigue at home and avoid their own political crises.

This latest debacle has caught me on the hop, literally, since I am in Tokyo learning about Abenomics, so let me just make a few quick points before going off for a pint of sake.

The EU creditor states have at a single stroke violated the principle that insured EU bank deposits of up $100,000 will be guaranteed come what may, and in doing so they have more or less thrown Portugal under a bus.

They appear poised to seize large sums from Russian banks – €1.3bn from state-owned VTB alone, and therefore from the Kremlin – prompting the condign riposte from Vladimir Putin that the action is "unfair, unprofessional and dangerous."

They have demonstrated that the rhetoric of EMU solidarity is just hot air, that they will not force their own taxpayers to share a single cent of clean-up costs for the great joint venture of monetary union – in which northern banks, insurers, pension funds, and indeed governments, were complicit.

Their refusal to pay is entirely understandable in one sense – and if I were a German taxpayer, I would not care to swallow these losses either – but then the leaders of these creditor countries can hardly expect the world to believe that they will in fact do whatever it takes to hold EMU together. Quite obviously, they will not.

The sooner this is made clear, the better. The sooner they take the proper course of withdrawing from EMU and organise the break-up the euro in the least disruptive way, the sooner Europe can recover.

We have already seen the EU solidarity mask slip a few times, not least in the repeated retreats over Greece, and again when German-led quartet resiled from last year's summit deal to let the ESM bail-out fund take some of the weight of recapitalising banks off the shoulders of the Irish and Spanish states.

What is clear is that Angela Merkel will not risk defeat in the elections in September by ceding a single vote to Social Democrats determined to hold her feet to the fire over a bail-out for "Russian oligarchs, money-launderers, and tax evaders" in Cyprus, or by ceding votes to the new anti-euro party Alternative fur Deutschland. She will look after her own political interests, and all the rest is humbug.

It is a fast-moving story. The Cypriot parliament may throw out the deal. It may be rejigged so that depositors under $100,000 pay less than the 6.75pc levy agreed, and those above may pay more than 9.9pc.

The creditor powers appear to think that the contagion risk is manageable now that the ECB has its bond rescue mechanism in place for Spain and Italy. But they made just such an assumption when they imposed a haircut so cavalierly on private investors in Greece, only to precipitate a full-blown crisis across Club Med. And don't forget, the reason why Cyprus has gone belly up is because of the knock-on effect on Cypriot banks from the Greek haircuts.

It is far from clear that the ECB backstop for Italy still exists, given that there is no compliant government in Rome able to meet the rescue conditions.

Portugal is not safely out of the woods. Its slump has been deeper than expected. Its debt dynamics are nearing the danger zone faster than feared. Citigroup, Nomura, and many others think it almost certain that Portugal will need a second rescue, and probably debt-restructuring. What happens then? Are savers going to wait patiently for their own scalping as this becomes clearer?

As for Spain, we learn from leaks in the Spanish press that officials from the ECB and the Commission warned Eurogroup ministers that the raid on Cypriot savers posed a grave contagion risk to Spanish banks, threatening to set off deposit runs.

EMU commissioner Olli Rehn promised that there will be no losses imposed on depositors in other countries, but the decision will be made in Berlin, the Hague, Helsinki, Vienna. He has no authority to make such a pledge. He is just a civil servant.

The danger may not be immediate but if the economies of Portugal, Spain, and Italy languish through this year in deep slump with no green shoots of recovery starting to sprout in the second half – as many fear – this new dispensation will be tested. The fatal precedent of haircuts for depositors will start to matter a great deal. Hell hath no fury like a saver robbed.

Two great commentaries on this crisis. It may seem small but I do think this is a game-changer and will be looked back as a strategic error on a grand scale by the Euro-elites and the IMF.

[UndercoverElephant]

It's funny how things work out. The people trying to keep the Euro in one piece have worked near-miracles in having avoided the whole system imploding quite some time ago, but there's no way out. No matter what they try to do to fix one problem, either political or economic reality will force another one like this out of the woodwork. And all the time the problems are getting more serious, and the options in response getting fewer.

How long can they keep it going for?

I'm half way through the process of buying a house. I feel reasonably confident the British banking system isn't going to collapse before it goes through, but I'd be seriously worried about the safety of money in banks in Eurozone countries from this point onwards.

What use is a deposit protection scheme if the EU can step in and confiscate savings?

[PS_RalphW]

Apparently, Putin is saying he will call in all Russian loans to the Cyprus government if the bank levie goes ahead, which would presumably bankrupt Cyprus anyway.

They seem to be between a rock and a hard place. They should simply let the banks go broke and pay the 100,000 Euros to Cypriot nationals only.

My wife's aunt took her retirement pot to go and live in Cyprus to avoid UK charges.

[adam2]

Another reason to buy gold...

I'd expect a sudden spike as well.

So would I, but nothing much has happened as yet.
The gold price increased yesterday, but only slightly.

[Tarrel]

Another reason to buy gold...

I'd expect a sudden spike as well.

So would I, but nothing much has happened as yet.
The gold price increased yesterday, but only slightly.

Yes, but it was against a background of most other commodities going down, presumably in response to the raised uncertainty about recovery in the Eurozone.

[adam2]

Latest here, proposal to exempt smaller savers.
http://www.bbc.co.uk/news/world-europe-21842966

[stumuzz]

Just a couple of things to add.

Gold has been nationalised and confiscated before, it is the default position when currencies lose their legitimacy.

Second, I never favoured gold but preferred agricultural land when I took the decision to get out of fiat currency. However, speaking to a German about the Cyprus thing and the agri land investment he gave a little snort and said most people had heard about hyperinflation in Germany, but not many had heard of the forced remortgaging of land and houses by the state to raise cash!

So therefore it seems that when the great unwinding happens, the state will come after what you have got whether it's cash,gold,home or land.

Interesting times.

[extractorfan]

So therefore it seems that when the great unwinding happens, the state will come after what you have got whether it's cash,gold,home or land.

Interesting times.

Because they're all descended from those thieving psychopaths of old.

[clv101]

Gold has been nationalised and confiscated before, it is the default position when currencies lose their legitimacy.

Indeed, I think all gold bugs need to consider this a likely course of action if fiat currencies fail.

[kenneal - lagger]

I suppose that it's easier to hide gold than land!!

[frank_begbie]

What if you have gold teeth?