Category Archives: cyprus

The Great Cyprus Bank Robbery

The Great Cyprus Bank Robbery

By Ron Paul

April 02, 2013 “Information Clearing House – The dramatic recent events in Cyprus have highlighted the fundamental weakness in the European banking system and the extreme fragility of fractional reserve banking. Cypriot banks invested heavily in Greek sovereign debt, and last summer’s Greek debt restructuring resulted in losses equivalent to more than 25 percent of Cyprus’ GDP. These banks then took their bad investments to the government, demanding a bailout from an already beleaguered Cypriot treasury. The government of Cyprus then turned to the European Union (EU) for a bailout.

The terms insisted upon by the troika (European Commission, European Central Bank, International Monetary Fund) before funding the bailout were nothing short of highway robbery. While bank depositors have traditionally been protected in the event of bankruptcy or liquidation, the troika insisted that all bank depositors pay a tax of between 6.75 and 10 percent of their total deposits to help fund the bailout.

While one can sympathize with EU taxpayers not wanting to fund yet another bailout of a poorly-managed banking system, forcing the Cypriot people to pay for the foolish risks taken by their government and bankers is also criminal. In their desire to punish a “tax haven” catering supposedly to Russian oligarchs, the EU elites ensured that ordinary citizens would suffer just as much as foreign depositors. Imagine the reaction if in September 2008, the US government had financed its $700 billion bank bailout by directly looting American taxpayers’ bank accounts!

While the Cypriot parliament rejected that first proposal, they will have no say in the final proposal delivered by the EU and IMF: deposits over 100,000 euros are likely to see losses of at least 40 percent and possibly as much as 80 percent. “Temporary” capital controls that were supposed to last for days will now last at least a month and might remain in effect for years.

Especially affected have been the elderly, who were unable to use ATMs or to transfer money electronically. Despite the fact that ATMs severely limited the size of withdrawals during the two week-long bank closure, reports indicated that account holders who had access to Cypriot bank branches in London and Athens were able to withdraw most of their funds, leading to speculation that there would be no money available when banks finally opened up again. In other words, the supposed Russian oligarch money may well be already gone.

Remember that under a fractional reserve banking system only a small percentage of deposits is kept on hand for dispersal to depositors. The rest of the money is loaned out. Not only are many of the loans made by these banks going bad, but the reserve requirement in Euro-system countries is only one percent! If just one euro out of every hundred is withdrawn from banks, the bank reserves would be completely exhausted and the whole system would collapse. Is it any wonder, then, that the EU fears a major bank run and has shipped billions of euros to Cyprus?

The elites in the EU and IMF failed to learn their lesson from the popular backlash to these tax proposals, and have openly talked about using Cyprus as a template for future bank bailouts. This raises the prospect of raids on bank accounts, pension funds, and any investments the government can get its hands on. In other words, no one’s money is safe in any financial institution in Europe. Bank runs are now a certainty in future crises, as the people realize that they do not really own the money in their accounts. How long before bureaucrat and banker try that here?

Unfortunately, all of this is the predictable result of a fiat paper money system combined with fractional reserve banking. When governments and banks collude to monopolize the monetary system so that they can create money out of thin air, the result is a business cycle that wreaks havoc on the economy. Pyramiding more and more loans on top of a tiny base of money will create an economic house of cards just waiting to collapse. The situation in Cyprus should be both a lesson and a warning to the United States. We need to end the Federal Reserve, stay away from propping up the euro, and return to a sound monetary system.

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"Get Your Money Out of the Banks" Jim Rogers on CNBC 3/28/13 ‘Looting’ of Bank Accounts Has Rogers Worried

Video

Investor Jim Rogers is concerned about the safety of his money in bank accounts around the world now that Cyprus is “looting” money from big depositors to help fund the country’s bailout.

Video of Jim Rogers on CNBC this morning 3/28/13:  
“Run for the hills and hurry to get your money out”  IMF condoning stealing of people’s money.  

Posted March 28, 2013

  

“I Never Thought That The EU Will Resort To Stealing Money Just To Keep The Banks Propped Up” – Nigel Farage

See also
Not Even Gold Will Save You From What Is Coming: Marc Faber: My concern is that we are going to have a systemic crisis where it is going to be very difficult to hide. Even in gold, it will be difficult to hide.

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Cyprus banks impose ATM withdrawal limit of 100 Euros per day – govt official

By RT
March 24, 2013 “Information Clearing House” -“RT” – All Cyprus local banks have imposed an ATM withdrawal limit of 100 euros per day to prevent a run on lenders, a government official told Reuters.
A spokesman for the country’s second largest lender, Cyprus Popular Bank, said the new measure began at 1pm local time (11am GMT) and would remain in place until the bank reopens, or until confirmation of continued emergency funding from the European Central Bank. Cyprus Popular Bank had previously limited withdrawals to 260 euros per day.
A government official said the measure applied to all local banks on the island.
The news comes after Cypriot President Nicos Anastasiades took part in last-minute crisis talks with international lenders on Sunday, in an attempt to save the country from financial meltdown. The negotiations in Nicosia to seal a bailout from the EU and International Monetary Fund failed to reach a solution. 
Anastasiades then headed to Brussels to hold talks with EU, European Central Bank and IMF leaders ahead of a crunch meeting of eurozone finance ministers.
Government spokesman Christos Stylianides said in a statement on Sunday that Anastasiades and his team have a “very difficult task to accomplish to save the Cypriot economy and avert a disorderly default if there is no final agreement on a loan accord.”
The news comes just one day after Cyprus and the Troika agreed to a 20 per cent tax on deposits over 100,000 euros at the Bank of Cyprus and 4 per cent on deposits held at other banks.
“Unfortunately, the events of recent days have led to a situation where there are no longer any optimal solutions available. Today, there are only hard choices left,” European Union Economic and Monetary Affairs Commissioner Olli Rehn said in a Saturday statement.
Cyprus is scrambling to come up with €5.8 billion by Monday, or face being kicked out of the Eurozone. The cash is a prerequisite for a further €10 billion in bailout funds.
Lawmakers’ rejection of a previous proposal to tax all bank deposits prompted the European Central Bank to threaten to cut off emergency funding to Cypriot banks unless a deal was reached by March 25. Banks have been shut all week, and are due to reopen on March 26.
On Saturday, at least 1,000 bank workers in Cyprus hit the streets of the country’s capital of Nicosia. The demonstrators marched against the latest bailout measures taken by the country’s central bank.
Protesters carried banners that read, “Hands off provident funds” and “No to the bankruptcy of Cyprus.”

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The Rape Of Cyprus By The European Union & The IMF

By Mark J. Grant
March 18, 2013 “Information Clearing House” -“Zero Hedge” – I have been watching articles pour forth about Cyprus all weekend. I am almost as aggravated with the majority of them as I am with what took place. People are dancing around the edges while the propaganda machines of Europe are churning out the usual bunk.
Let’s get some things straight and look what has happened directly in the face. There was no tax on the bank accounts in Cyprus. There still is no tax; the Cyprus Parliament has not passed it and will not vote on it until tomorrow so whatever action takes place it is retroactive. Next, this was not enacted by Cyprus. The people from Nicosia did not go to the Summit and ask to have the bank accounts in their country minimized to help pay the bills. Far from it; the nations of Europe, Germany, France, the Netherlands and the rest, demanded that this take place, a “fait accompli,” the President of Cyprus said and Europe annexes Cyprus. Let’s be quite clear; the European Union has confiscated the private property of the citizens in Cyprus without debate, legislation or Parliamentary agreement.
A bank account is not a bond or a stock or any sort of investment. This seems to be lost on many people. A bank account is the private property of a citizen or a corporation and does not belong to the government or at least that was the supposition up until now in Europe.
Next there is deposit insurance in Europe. Every country has its own version but it is there. It guaranteed the bank accounts of citizens up to one hundred thousand Euros. So much for the meaning of any guarantee in Cyprus or any other country in Europe. Null and Void! If the European Union can dismantle deposit insurance in Cyprus they can damn well do it in whatever country they please and at any time.
Here’s the description of the Cypriot government deposit insurance plan:
“Participation in the DPS is compulsory for all banks authorized by the Central Bank of Cyprus, i.e. banks incorporated in the Republic of Cyprus, including their branches in other countries, and the Cyprus branches of foreign banks, incorporated outside the Republic of Cyprus or the Member-States of the European Union. The DPS does not cover deposits of branches of banks established in European Union Member States. These deposits are covered by the corresponding deposit protection scheme established in the country of incorporation. 
The DPS is activated in the event a decision is reached that a member bank is unable to repay its deposits, or as a result of a Court’s order for the winding-up of a member bank. Where a bank is unable to pay its deposits, the relevant decision is adopted by the Central Bank of Cyprus or, where a member bank is incorporated in a country outside the Republic of Cyprus, by the competent supervisory authority of the country of incorporation. 
The maximum level of compensation, per depositor, per bank, is €100.000.”
Please note that until yesterday all depositors in Cypriot banks were insured up to the value of €100,000 with any one bank.Today that solemn governmental promise has been shown for what it is; a lie. Worse and actually far worse and quite scary in fact is that the European Union and the European Central Bank and the IMF has not just allowed violation of the deposit insurance but demanded it. One thing is certain here; if they can void deposit insurance in Cyprus then they can void it in any country in Europe. Further; if they can void deposit insurance then they can void bond covenants with the scratch of a pen on paper. Nothing now; Nothing is safe!
Pay attention please. The European Union and the European Central Bank and the IMF have just advocated the confiscation of private property for their own indulgence. Bank accounts are not bonds or stocks or some other form of investments. It is private property like your house or your car. Germany, France et al came in and said, “We want it and we are taking it and it is necessary for our government.” These countries did not demand it, yet, from their own citizens though they might soon but they demanded it from the citizens of Cyprus in exchange for funds. This is not a European Union this is a European Fourth Reich!
“The moment the idea is admitted into society that property is not as sacred as the law of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
-John Adams
Mark J. Grant, is author of Out of the Box.

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Cyprus’s Cash Machines Run Dry

Video

People in Nicosia, Cyprus give their reactions to news the government is imposing a tax on bank savings as part of its bailout deal. Aside from the long-term financial implications, the levy announcement sparked a rush on cash machines, meaning many are unable to withdraw money. The levy – 9.9% on savings over €100,000 and 6.75% on savings below €100,000 – is expected to raise €6bn (£5.2bn) as a condition for the bailout.

Posted March 17, 2013
  

The Great Cyprus Bank Robbery by Financial Terrorists

Warning – Video contains adult language

Cyprus bailout Man threatens bank with bulldozer

Cyprus Shellshocked over Eurozone Bailout

By David Vujanovic

March 16, 2013 “Information Clearing House –AFP” – NICOSIA: Residents of Cyprus have reacted with shock after the government agreed to a 10 billion euros ($12.62 billion) bailout that includes an unprecedented levy on all bank deposits.

The debt rescue package, agreed with the eurozone and International Monetary Fund early on Saturday morning after around 10 hours of talks in Brussels, is significantly less than the 17 billion euros Cyprus had initially sought.

It includes 5.8 billion euros to be raised through the bank deposit levy of up to 9.9 per cent, which will apply to everyone from pensioners to Russian oligarchs and tens of thousands of British expats.

At the same time, a “withholding tax” would be imposed on interest on bank deposits, and Cyprus will have to hike corporate tax to 12.5 per cent from 10 per cent and sell off state assets to help balance the public finances.
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Though it was reached too late for Cyprus newspapers the bailout deal prompted some to queue up outside banks to withdraw cash from ATMs.

But analyst Sony Kapoor cautioned that there was no point, tweeting: “Dear Cyprus bank depositors, the time to line outside ur banks was last week, no point now.”

A flood of angry comments flowed on the internet.

“The Cyprus deal is exactly why I don’t keep money in the bank anymore. Brussels can commandeer your cash. Just like that,” one person wrote on Twitter.

Government spokesman Christos Stylianides tried to calm shell-shocked Cypriots saying: “The situation is serious but not tragic, there is no reason to panic.”

The levy will see deposits of more than 100,000 euros hit with a 9.9 per cent charge when lenders reopen their doors after a scheduled public holiday on Monday. Under that threshold and the levy drops to 6.75 per cent.

Co-operative bank branches, which, unlike the main lenders, usually open for business on Saturdays, kept their doors closed as their systems were shut down, officials said.

One furious customer reportedly parked his digger outside one such branch in the seaside resort of Limassol, claiming the government had “tricked” him into believing deposits were safe.

Cyprus – which accounts for just 0.2 per cent of the combined eurozone economy – is the fifth country to secure a debt rescue package from its eurozone partners in the three-year debt crisis.

The price tag is very small compared with two rescues for Greece worth some 380 billion euros, Ireland’s 85 billion euros, Portugal’s 78 billion and 41 billion for Spanish banks.

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