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Cyprus bailout
03-21-2013, 08:53 AM
Can anyone think of a reason for Portugal/Greece/Ireland/Spain/Italy citizens not to stage a mass bank run Monday? If governments are forced to steal their citizens' savings at gunpoint like this, why should anyone trust that they won't be next?
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Cyprus bailout
03-21-2013, 01:56 PM
Schauble puts again a masterful performance.While the Germans bluffed in case of Greece they do not bluff in the case of Cyprus.They will let the banks go bankrupt since the size of the country is too small to have any effect.Let's see how the Germanics played out the South:
1.They treated each country as a different case with different deals which was beneficial for them
2.As a result the countries in the South failed to collide a common front
3.The Germans could use bluff and threat of imminent collapse by just showing one member to the other as an example to be avoided.
So the middle class in all South is in a clusterfuck situation.They do not know what to do because the Germans put them in front of false dilemmas where the one choice is bad and the other even worse.The South can never gain any initiative.Germans have the general order.
By acting independantly like in the case of Cyprus the southern countires put their necks under the German sword.It is like the fish which when it moves trying to get out of the fishnet gets inside it even more.The South is really trapped and Germanics complete the encirclement in their triumph.
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Cyprus bailout
03-21-2013, 02:22 PM
*See the Cyprus situation, remember the 2001 in Argentina* Ahhh, the shitty times...
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Cyprus bailout
03-21-2013, 02:31 PM
Cyprus needs to do exactly what Iceland did. Cover all deposits and let the banks go under and prosecute the bankers. Let interest rates go to 20% and devalue their currency. Britian and Holland tried to blackmail iceland and it didn't work. They even tried having them listed as terrorists. Iceland had growth after 2 years. Unlike the PIIGS which haven't seen any real growth since 2008.
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Cyprus bailout
03-21-2013, 03:04 PM
But don't worry, Cyprus, Ireland's austerity measures have resulted in a sharp recovery, low interest rates and a plummeting employment!
/sarcasm
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Cyprus bailout
03-21-2013, 03:12 PM
Indeed, I see the greatest danger here being a Run For The Banks in other southern countries if people get the "It could happen to me too" idea.
In Brazil, it took decades of major pain, downturn and reform before some confidence was reestablished. People (and thus the wider economic scene) don't easily forget when their money is confiscated from their accounts. This is the one thing you should never try to suggest if your aim is to seek stability.
By the way, can we completely exclude that the Russians won't jump in financially? Or is it all a big bluff? I really don't know what they will do in the end, but they could, theoretically, afford it. Interesting precedent if it ever happens.
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Cyprus bailout
03-21-2013, 03:26 PM
There are strong rumours that the Laika Bank will never reopen. The Cypriot Government is meeting tonight to consider Plan B.
Cyprus is heading for Argentina style meltdown if they dont act very soon.
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Cyprus bailout
03-21-2013, 04:45 PM
I'm not an economist. Someone who knows more than me please explain if there is a real difference between these two scenarios:
The proposal in Cyprus is to simply take 10% (or so) of the deposits from the accounts in the bank. This is to pay off the creditors who could bail them out?
Is another option to get rid of the value of the debt itself? For example by just printing cash/devaluing your money? Is this what America does? Does it matter in the end if your money is just taken out at once or if it is "devalued" by 10% over a year or two without you noticing? Is this like boiling a frog versus throwing a frog into boiling water? Am I missing something? I'm not an expert in this.
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Cyprus bailout
03-21-2013, 05:01 PM
The Bear has spoken:
Russia may rethink euro in reserves after Cyprus :
MOSCOW (Reuters) - Russia may need to review the share of euros it holds in its central bank reserves over the euro zone's bungled handling of a bailout of Cyprus, Prime Minister Dmitry Medvedev was quoted on Thursday as saying.
"I would like to answer in an optimistic way but I have to say that this is a reason to think about it," Medvedev said when asked whether the situation in Cyprus was a reason to reduce the euro share of Russia's reserves, according to Interfax.
Some 42 percent of Russia's foreign exchange holdings - the world's fourth-largest - were held in euros as of January 1 this year, when Russia's total gold and forex reserves were worth $537 billion.
"This is a big money but for us, as for any other country, predictability is important, while the proposal (to levy a tax on bank deposits) was not only unpredictable but is evidence of a certain inadequacy," Medvedev was quoted as saying.
In a vote on Tuesday, the island's legislature threw out the proposed tax, which was a condition for a 10-billion euro bailout from the EU, and the country ordered banks to stay shut till next week to avert financial chaos.
"If it can be done in Cyprus, why not in Spain, in Italy, or in other countries where there are problems with finances? Tomorrow they will start to confiscate deposits there. This is a reason to begin to think," he added.
On Wednesday Medvedev also said the EU had behaved "like a bull in a china shop" and compared its proposals, which would force Russian customers to contribute to the rescue of Cypriot banks, to Soviet-era confiscations.
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Cyprus bailout
03-21-2013, 05:09 PM
Kamaki, how is the Russian poon in Cyprus?
Among population of 30.000 Russians there must be some talent, too, right?
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Cyprus bailout
03-21-2013, 05:38 PM
The Germans know that the Russians do not have the money to bail out Cyprus.They just pretend on everything.Schauble appears like the mega capitalist by saying ''they(the Russian firms) took great risk by putting money in banks which gave 4% interest rate per year so now they have to endure the consequences of their risky behaviour.''Western hypocrisy in its top.Schauble plays the South like the cat plays the mouse and is heavily sarcastic.The Cypriots understand this but have no power.
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Cyprus bailout
03-21-2013, 07:08 PM
http://www.eutimes.net/2013/03/russian-l...banks-now/
Statement from the Russian MFA sent to its embassies around the world urging all Russian nationals and businesses to divest themselves from Western banking institutions.