Cyprus govt to seize 6.75% of all bank accounts as of Sat morning

rbmrtn said:
There may be more politics to this. The germans and russians butting heads behind the scenes.

How Russia Could Take Revenge Over Cyprus Deal - Yahoo! Finance
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I think this is the quote from the article that is the most relevent... my bold...

'"It's mind-boggling that German bureaucrats and politicians can think that this is a sensible way to share the pain," Keen said. "If you destroy the trust that depositors have in their bank accounts, you fundamentally destroy the oil of capitalism."
 
Throwdownmyaceinthehole said:
Thanks heaps for this update. I've left some money at Westpac due to high interest, so I'll be sure to make a withdrawal. Wonder how gov't will calc interest on 'taxed' funds?
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BTW, you have been awarded a prize in this weeks longest name contest. Award Central will be contacting you with details.
 
haha said:
Now that would be something new, the Germans and Russians not getting along.

Plus ça change, ...
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Russian word for German: Nemyetski

Supposedly literally means someone who can neither hear nor speak. The Germans were the first non-Slavs the Russians ran into, I guess.
 
It did NOT happen. The Government of Cyprus voted it down.

Russians are uneasy. Cyprus has been a favorite place to place bank deposits.
 
Too late. The damage has been done. Confidence in the financial system has taken a significant hit. As a European, I feel embarrassed that this sad episode has happened.
brett said:
It did NOT happen. The Government of Cyprus voted it down.

.
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Yeah, its hard to imagine there won't be a run on the banks anyway. Or at least a 'bank jog'.
 
The MSM is pumping out propaganda at a furious rate.
"A blip on the Market"
"A non-event"

The Wednesday Bernanke interview neatly dodged any questions about interconnectivity of Cyprus and US Banks, as if it were not an issue. Onward and upward!

Cyprus (insanely IMO) is keeping banks closed until next Tuesday, March 26.

The EU is currently acting as if Cyprus and the Euro were in two different worlds, while wealthy Russians have initiated a political putsch. Not one single plan on the table that shows any hope, except perhaps, stretching out the debt for 100+ years.

The Market has entered a serendipitous stage of excitement, on discovering a "bubble" that defies rational thought.

And all the while, the CYA comments by the Gurus of finance... "This may be the beginning of the "correction" that will allow the market to go to 20,000...

Let us hope that all the good wishes and the extension of the US debt will keep it all up in the air until somehow, some way, the economy recovers and everyone goes back to work at wages that will restore the economy back to the American Dream.

In the meantime, the best approach is to....
 
I think its safe to say this one case where any news is NOT good news... how many people here can't wait to invest with Cypriot banks if/when they finally open next week!

For the next 50 years, I doubt they'll have many new account applicants.
 
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I think Stanley is correct. Given the abysmal interest rate for a prolonged period now, the Fed has ensured that wealth in the form of savings (versus the actual inflation rate) is leaving the accounts of those who put money in the US banks. With continued QE3 going on, money is cheap. As always, keeping money in the savings account is a losing proposition when taking inflation into account. Arguably, the losses in purchasing power of US account holders might actually be greater over time than those that would occur in the Cyprus "tax" scheme.
 
Why the fuss? As a letter writer in today's WSJ pointed out, in the US the Fed has followed a low interest rate policy that has effectively confiscated the interest earnings of savers for over four years and given the money to the banks. As I understand it we can expect this to continue for about two more years. At least the Cyprus deal is up-front about what is going on.
 
Uh, Cyprus has about half the GDP of Tulsa, OK. This is a pimple bursting.
 
Stanley said:
Why the fuss? As a letter writer in today's WSJ pointed out, in the US the Fed has followed a low interest rate policy that has effectively confiscated the interest earnings of savers for over four years and given the money to the banks. As I understand it we can expect this to continue for about two more years. At least the Cyprus deal is up-front about what is going on.
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At least with the low interest policy, savers have had the option of withdrawing their money and seeking alternative investments. The proposed Cypriot cash-grab would not have allowed that option.
 
Milton said:
At least with the low interest policy, savers have had the option of withdrawing their money and seeking alternative investments. The proposed Cypriot cash-grab would not have allowed that option.
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Good Point!
 
HawkeyeNFO said:
I think Stanley is correct. Given the abysmal interest rate for a prolonged period now, the Fed has ensured that wealth in the form of savings (versus the actual inflation rate) is leaving the accounts of those who put money in the US banks. With continued QE3 going on, money is cheap. As always, keeping money in the savings account is a losing proposition when taking inflation into account. Arguably, the losses in purchasing power of US account holders might actually be greater over time than those that would occur in the Cyprus "tax" scheme.
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This was the point I was making earlier. At least a "one time hit" can be a "knowable". Future US inflation is not known, but if it is like the mid 70's to mid 80's, it will make the Cypriot Bank "tax" (or confiscation) seem like a non-event - which I guess it is. Maybe we should just all band together and tell our Congress Person "we don't want no stinkin' inflation." Yeah, that would probably do it.

I know we've discussed it before, but for those of us who believe inflation will soon(er or later) rage, anyone have suggestions? Bonds don't seem too good an idea. The stock market usually does well in low to moderate inflation, but rarely in the kind of inflation we had in the 70s/80s. What? Gold? Silver? MREs, guns & ammo?? It's a serious question even though I'm not expressing it seriously (in some folks eyes, anyway). I know some folks did well during the period mentioned. Either they were very, very good at picking a few winning stocks, or they were bloody lucky. Maybe we just have to wait until the belt tightening begins to (eventually) curb the coming inflation. I recall bonds and CDs at (what?) 16%? Sounds great right now, but then again, if inflation is 15%, not so much. YMMV
 
brewer12345 said:
Uh, Cyprus has about half the GDP of Tulsa, OK. This is a pimple bursting.
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If we were "jumping" a stalled car and the hydrogen/oxygen mixture under the hood were 2 to 1, we wouldn't call it a small spark when the last connection was made incorrectly. (Maybe our survivors would, heh, heh:LOL:) We know and understand the stoichiometry of the hydrogen/oxygen reaction. We do not know the "stoichiometry" of world economics. We have lots of theory, but the system is far too complicated to say we know what might happen based on some more-or-less random (and otherwise "pimple-bursting") event. Not being argumentative (at least not my intent). But look at the significant effects we are seeing from the (now) non-event.

By the way brewer, I'm fairly certain you are correct - and I sincerely hope that you are correct!!:hide: YMMV
 
Chuckanut said:
The long term solution is to let the Cyprus banks go bankrupt so that everybody learns a lesson.
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Unfortunately there are few hitches with the simple and obvious solution.
The banks are a big business in Cyprus and generate a large chunk of their GDP and employ lots of folks.

But more importantly if they let the biggest banks go under. It would require wiping out up to 30% of the value of any deposits over 100,000 euros.

Now this wouldn't be such a bad idea. Except that for the most part these deposits are held by Russian "industrialist" who are, how do we say it, well connected in the Russian government.

The Russian government has a 2.5 billion loan to the Cyrus government which is due to be rolled over. On a per capita basis this is roughly equivalent a $1 trillion in the US. Evidently screwing the Russian industrialist would have resulted in no loan roll over, making the Cyprus government situation even worse..

Not to mention, Russian "industrialist" have well deserved reputation for being rather unpleasant to those person who cost them money. The Cyprus people may toss out politicians who take their deposits, but most of them won't kill your family.
 
Koolau said:
But look at the significant effects we are seeing from the (now) non-event.
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What significant effects? The equity market rising? Some Russian gangsters squealing because they might lose some of their dirty money? The You're-a-peeins squabbling over who pays the tab for an evening out? Please.
 
I wonder what this will effect the willingness of rich Americans to deposit money in off-shore banks in small countries?
 
Brat said:
I wonder what this will effect the willingness of rich Americans to deposit money in off-shore banks in small countries?
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I rather doubt that there would be too many wealthy Americans using bank accounts in a place as small and flaky as Cyprus. Switzerland, Luxemburg, etc. would be more like it.
 
Sparkie67 said:
Meanwhile here in Oz, as of 31 May this year, any bank account that has not had a deposit or withdrawal into or from it in the previous 3 years will be taxed at 100% by the government. All banks will be required by law to deliver the money to the tax office.

Apparently you can apply to have it returned, but really.
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It is that way in most states in the US, the state has an inactive account law, that means you have to notify the bank that you know about the account. It is possible to get the money back less a handling fee also. In the US lots of states have unclaimed property web sites. Besides actual bank accounts, this includes uncashed cashiers checks, life insurance where the policy holder hits 100. Etc, so it is not new.
 
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