Monday, March 18, 2013


The ATMs are empty on Cyprus as people attempt to avoid the 7 to 10% 'tax' on bank deposits announced over the weekend. All banks on Cyprus are closed until at least Thursday while their government attempts to renegotiate with the IMF to steal a lesser amount from small depositors and give a 15% haircut for big depositors. The big ones are mostly Russian money of questionable origin amounting to 50% or more of bank assets. Putin isn't too happy about all this, or maybe that's only his public stance. Most of the money comes from Russia and nearly as much goes back again, it's simply being laundered.

It's rumored that the IMF originally wanted to take 40% which is what they commonly impose on third world countries. This won't be the end of it no matter what numbers are agreed to. The IMF always loots everything that can be carried off and burns the rest. Cyprus is just a tiny island and hardly worth anything, so the larger goal has to be the destabilization of other EU countries like Italy and Spain where there are real assets to steal. Perhaps they are even going after Russia, but they wouldn't be able to actually take the Bear, they would need to have a deal with an inside operator. This incident wouldn't be enough to have any real effect on Russia, but we haven't seen what's coming next.

There is talk of course that US banks will be brought down by this, but for the near future this is just talk. The USD is benefiting from the Euro's decline, so don't go out and buy any right-wing gold offers. US corporations have set yet another record in cash holdings, they're planning to buy assets for pennies on the dollar using dollars. Gold is a commodity, not money, never has been. Even the Romans marked the coins with their value, it wasn't the gold that made the coins 'valuable'.

Your bank deposits here are perfectly safe if you stay under the FDIC insurance limits, provided we can keep the Republicans from taking over the government. This is a long term problem, the current Great Depression started in 2006 (yes 2006) and is many years away from being resolved. Canned goods are still a good investment.


Anonymous said...

Stop scaring me! I'm trying to listen to karaoke in Bend, OR...ground zero for the last speculative bubble. All the young kids seem happy enough, and why not...if anything at all can grow in this non-radioactive Chernobyl, why can't we all harbor hope for the future.

Hasn't the rapacious beast moved on to the lesser economies?

By the way, not everyone can carry off a Steely Dan tune. It's a gift, apparently. Is that bad?



Anonymous said...

What is so unusual about what is being speculated to happen in Cyprus? During the Bush-Cheney Depression I lost 50% of the value of my residence and my IRAs. Now the scutlebutt is the devaluing my Railroad Retirement and military pension (Vietnam) with the "chained CPI". We might be better off in Cyprus. The chained CPI means if you are now eating cat food, when it's price increases to where it can no longer be afforded you swicth to genaric dog food.