For any thinking citizen the writing is now on the wall, not hidden somewhere
in Brussels-am-Main. Don't trust the banks with your money, don't trust the
government with your private pension (they are being nationalized in several
European countries), and don't trust them with your property (a wealth tax
cometh this way) and look for them to come after your gold (France now registers
all gold purchases and the UK any greater than £5k). I genuinely didn't think
we'd hit this point until the end of 2015, but the deck of cards is crumbling
faster than anticipated....
Now it has all turned into such a complete farce, due to eurozone and troika
arrogance, assuming they could bully the little guy the 64Bn euro question is
what confidence can anyone have any longer that the eurozone finance ministers
and the IMF know what they are doing? It's their credibility that is on the
line now ... and arguably is already shot.
The lessons of Lehman Brothers, Northern Rock, HBOS, and Royal Bank of
Scotland were all the same. Once confidence evaporates, a bank is dead. No
wonder Cyprus’s deposit tax sent a shiver through the markets.
The message it sent out could not have been clearer. Deposits across the
eurozone are now at risk. No one’s money is safe. Italy, which could be first in
the firing line, even has precedent. It introduced a deposit levy under a
socialist government two decades ago – albeit at just 0.6pc compared with the
6.75pc on “insured” deposits under €100,000 (£85,700) in Cyprus and 9.9pc on
“uninsured” ones above the threshold.
Here are my suggestions for Cyprus... call it Plan C:
1. Default
2. Leave Eurozone
3. For new Currency backed by Gold - Cyprus has 14 tonnes of Gold, 58% of forex reserves.
4. As World's ONLY Gold Backed Currency against a World of fiat paper currency, watch Cyprus' economy BOOOOM overnight.
5. Sit back and enjoy how Greek, Spanish, Portugese, Irish and other Savings Deposit holders flock to Gold backed currency
(as opposed to their fiat paper currency based on their stupid trust in the Euro).
6. Gold rockets in price as World investors/savers flock to Gold/Silver
7. As a result Cyprus BOOOOMS! Its depositors >10x richer than at present.
Unfortunately, though there is no provision in any treaty for leaving the euro. Rationale being it would be too easy then for a country to leave and make a competitive devaluation. The only clause existing is the one in the Lisbon treaty for leaving the EU. This article 50 doesn't talk of the euro.
Here are my suggestions for Cyprus... call it Plan C:
1. Default
2. Leave Eurozone
3. For new Currency backed by Gold - Cyprus has 14 tonnes of Gold, 58% of forex reserves.
4. As World's ONLY Gold Backed Currency against a World of fiat paper currency, watch Cyprus' economy BOOOOM overnight.
5. Sit back and enjoy how Greek, Spanish, Portugese, Irish and other Savings Deposit holders flock to Gold backed currency
(as opposed to their fiat paper currency based on their stupid trust in the Euro).
6. Gold rockets in price as World investors/savers flock to Gold/Silver
7. As a result Cyprus BOOOOMS! Its depositors >10x richer than at present.
Unfortunately, though there is no provision in any treaty for leaving the euro. Rationale being it would be too easy then for a country to leave and make a competitive devaluation. The only clause existing is the one in the Lisbon treaty for leaving the EU. This article 50 doesn't talk of the euro.
11 comments:
Europe's economy was already weakening before the Cyprus crisis blew up, bleak economic data released this morning has shown.
Europe's private sector is shrinking this month at a faster rate than in February, and rather quicker than analysts had expected.
Markit's 'flash composite PMI', which measures services and manufacturing firms across the eurozone, fell to 46.5 this month, from 47.9 (any number below 50 means the sector contracted)
France's economy looks particularly bleak, with its service sector PMI tumbling to a worryingly weak 41.9. That's the lowest level since February 2009, and the dark days after the collapse of Lehman Brother.
And growth in Germany also slowed, with its composite PMI (services and manufacturing) falling to 51.0, from 53.3.
It suggests the eurozone recession is deepening .
BIG NEWS: The European Central Bank has announced that it has agreed to continue supplying emergency funding to Cyprus's banks until next Monday.
But if the bailout hasn't been agreed by then, the ECB would step away. It's quite an ultimatum.
Here's the statement:
The Governing Council of the European Central Bank decided to maintain the current level of Emergency Liquidity Assistance (ELA) until Monday, 25 March 2013
Thereafter, Emergency Liquidity Assistance (ELA) could only be considered if an EU/IMF programme is in place that would ensure the solvency of the concerned banks.
That sets Nicosia a clear deadline -- find €6bn by next week, in a way that satisfies the IMF and the European Union, or your banks collapse.
The voice of incompetence ----Key event
Over at Dialogue Russia-EU in Moscow, ,European Commission president Jose Manuel Barroso has said he is worried about the situation in Cyprus, but tried to sound positive:
I'm very concerned with the recent developments in Cyprus, mainly because of the consequences for the citizens of Cyprus.
We have in the past solved bigger problems. I hope that this time a solution can also be found.
Here a suggestion for Cyprus, call it Plan C:
1. Default
2. Leave Eurozone
3. For new Currency backed by Gold - Cyprus has 14 tonnes of Gold, 58% of forex reserves.
4. As World's ONLY Gold Backed Currency against a World of fiat paper currency, watch Cyprus' economy BOOOOM overnight.
5. Sit back and enjoy was Greek, Spanish, Portugese, Irish and other Savings Deposit holders flock to Gold backed currency
(as opposed to their fiat paper currency based on trust in the Euro).
6. Gold rockets in price as World investors/savers flock to Gold/Silver
7. As a result Cyprus BOOOOMS! Its depositors >10x richer than at present.
There is a clause which envisages it, but has no accompanying rules on how it would actually be done, timescale, processes and so on , so it's would be a political shambles.
I an EU lawyer.
There has been more funny money created these past few years via central banks using "Ctrl P" than the value of all the gold ever mined in human history.
Our current form of capitalism relied on never ending cheap energy and resources - this may have been sort of sustainable when the world's population was smaller, and only 20% had "Western" lifestyles. This is not the case today.
With all our accumulated debt, with the pension liabilities we have built up and demographic change we find ourselves at a significant moment in our history.
The policy response so far from our dearly beloved political leaders does not fill me with confidence that they realise the size of the hole we are in, let alone have a plan for getting out of it.
This is a simple and more elegant solution than my proposal further down. Again, it might yet end up this way. It is however a very messy solution. The average Cypriot small saver and the average British OAP will be fine under your proposal.
The big money, however, will be gone. Forever. And the offshore sector is one of the pinnacles of the Cypriot economy. It would probably be better to exit the EZ and lose a lot of the offshore market rather than staying in, making the EU happy and losing its offshore sector COMPLETELY.
But yes, your solution does work, and it might yet come to it. Prepare for law suits from the big foreign offshore banks domiciled on Cyprus which have nothing to do with Cyprus' present problems.
Stock markets fall
Europe's stock markets are sliding this morning, following the ECB's threat to withdraw support for Cyprus's banks next week (see here onwards). The disappointingly weak PMI data (see 10.05am) has also driven shares lower:
FTSE 100: down 56 points at 6376, -0.87%
German DAX: down 66 points at 7935, - 0.8%
French CAC: down 39 points at 3789. -1%
Spanish IBEX: down 92 points at 8324, -1%
Italian FTSE MIB: down 92 points at 15924, -0.6%
The euro is also dropping, hitting a five-week low of 85.05p against the pound. It's back below $1.29 against the US dollar too.
Russia's two largest state-owned banks have now both said they are uninterested in buying Cypriot banks, reports Howard Amos.
The island-state's banking assets were one of the bargaining chips Cypriot Finance Minister Michalis Sarris was hoping to be able to use to tempt the Kremlin into offering a rescue package.
“We don't, of course, have any plans of that sort,” said Andrei Kostin, the head of Russia's second biggest bank, VTB. “Our interests are that we are given the opportunity to carry out payments and access the accounts of our clients.” VTB has a subsidiary on Cyprus called Russian Commercial Bank which is at risk of losing “millions of euros” in a compulsory levy.
German Gref, the head of Russia's biggest bank, Sberbank, said last night that he had been approached about buying Cypriot banks, but had turned the offer down.
Feel freŠµ to surf to my weblog; http://mygreencoffeeweightloss.net
Cyprus bail-out: live
Eurozone ministers openly discussed Cyprus leaving the euro in an emergency call on Wednesday, as alarm over the bailout crisis escalates.
A closed sign hangs in the window of a Bank of Cyprus Plc branch in Nicosia, Cyprus, on Wednesday, March 20, 2013 Photo: Simon Dawson/Bloomberg
By Denise Roland, Rachel Cooper and Andrew Trotman
7:56PM GMT 21 Mar 2013
2063 Comments
90000
2013-03-21 20:02:42.0
http://www.telegraph.co.uk/finance/debt-crisis-live/9945121/Cyprus-bailout-live.html?service=artBody
This page will automatically update every 90 secondsOn Off
• Eurogroup pushes Cyprus to submit rescue plan quickly
• S&P downgrades Cyprus to CCC, outlook negative
• 'Open talk' in eurozone of Cyprus leaving the single currency
• New plan scraps bank levy
• Cyprus sets up investment fund as part of 'Plan B'
• Cyprus to have plan by Monday, says central bank governor
Latest
19.56 BREAKING NEWS...
S&P cuts Cyprus to CCC from CCC+, outlook negative.
19.55 The EuroGroup meeting has ended, says it is important Cyprus guarantees deposits under €100,000 and expects the country to submit a new rescue plan quickly. It is ready to assist Cyprus in its reforms but Troika analysis is needed on a new plan.
19.36 According to Bloomberg, Averof Neofytou, deputy leader of the ruling Democratic Rally party, has said that Cyprus will *only* need to raise €3.5bn rather than €5.8bn if the banking bill is passed.
19.26 More on those capital controls. Reuters reports that it's seen a copy of the bill submitted to Parliament which gives the finance minister or central bank governor the right to impose capital controls on banks.
"The purpose of this law is, in case of an emergency for purposes of public order or security, to assign powers to the (Finance) Minister, or the (Central Bank) governor to take and impose temporary restrictive measures, including restrictions on capital controls," the bill reportedly said.
19.21 Lord Mandelson has just been discussing the Cyprus situation on Jeff Randall Live. He said that the Cyprus situation was "pretty unique", given the political dimension to the bailout, and that he did not think it a "template" for other situations. Asked whether he thought Cyprus would still be in the eurozone in a year's time, he said he believed it would.
Post a Comment