Cypriot Savers Lose 7-10% Overnight

Discussion in 'Politics, Religion, Social Issues' started by flopticalcube, Mar 16, 2013.

  1. flopticalcube macrumors G4

    flopticalcube

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    #1
    http://www.nytimes.com/2013/03/17/b...priots-try-to-get-cash-out-of-banks.html?_r=0

    Bonuses at Christmas to banking executives then! It's apparently a "one-off", "unique" event. LOL!

    For those that don't know, Cyprus is the #1 spot for laundering Russian money. Its a pity that ordinary people are hit with the same stick. This could start a panic bank run in other vulnerable Euro nations.

    Safe as a bank my a**. Got gold?
     
  2. Eraserhead macrumors G4

    Eraserhead

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    #2
    What exactly would stop the government doing exactly the same thing with gold holdings?

    ----------

    Given money laundering is illegal how do you not hit everyone with the same stick?
     
  3. Happybunny macrumors 68000

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    #3
    Given the banks ties to dubious Russian money, there was no way in hell that European voters, would have had a bank bailout, without a haircut somewhere for someone.:eek:
     
  4. eric/ Guest

    eric/

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    #4
    Well they would have to come confiscate it from your home.
     
  5. stridemat Moderator

    stridemat

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    #5
    Everyone will have to excuse my ignorance here, but compulsory tax on savings hardly seems fair or reasonable. More of knee-jerk reaction.
     
  6. Eraserhead macrumors G4

    Eraserhead

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    #6
    If you're storing gold at home you can store bank notes at home too ;).

    Fair point, I'm not sure my initial reaction was right.

    Given the money laundering, which is obviously illegal, they could have forced Cyprus (or Germany) to nationalise the banks and confiscate the Russian money to pay for the bailout.
     
  7. eric/ Guest

    eric/

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    #7
    If by bank notes you mean cash money, sure. But unless that's Euros or Dollars, I wouldn't bother. I'd just get gold.

    Even then I don't think I'd want the Euros.
     
  8. flopticalcube thread starter macrumors G4

    flopticalcube

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    #8
    Bank notes are subject to inflation and the whims of governments. Gold is not.
     
  9. VulchR macrumors 68020

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    #9
    In exchange for this one-time charge, the people holding accounts in these Cypriot banks will receive shares in them. If the shares are voting shares, then the deal is better than what happened here in the UK, where the government for some unfathomable reason bought nonvoting shares in failing banks to prop them up. So, yes, here in the UK we saw banks in which the taxpayers have shares report losses while the bankers voted themselves bonuses, and we were unable to do anything about it.

    Mind you, if the Russian mafia had money in Cypriot banks, they now own them. That can't be good either.
     
  10. flopticalcube thread starter macrumors G4

    flopticalcube

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    #10
    The shares are worthless as the institutions are insolvent. The details of the share agreement have yet to be made public. What will they be worth? Can you even sell them? What percentage of the banks will depositors own? More importantly, bond holders, who should have been in front of depositors in taking losses, were 100% protected. The EU has basically undercut the entire deposit insurance scheme in Europe to save bank bondholders from any loss. I would suspect the reason is probably that the majority of bondholders are other banks.
     
  11. astrorider macrumors 6502

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    #11
    Lunacy. Expect bank runs in the other southern EU countries next week...if you had retirement money in the bank (not to mention businesses and investors) and thought the State might take 10% would you really keep your money there?
     
  12. flopticalcube thread starter macrumors G4

    flopticalcube

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    #12
    FX markets open in 45 minutes. If there is any fallout, it might be seen here first.
     
  13. flopticalcube, Mar 17, 2013
    Last edited: Mar 17, 2013

    flopticalcube thread starter macrumors G4

    flopticalcube

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    #13
    [​IMG]

    S&P expected to drop 30 points on open tomorrow.

    EDIT: Gold now over $1600 even as the US $ climbs against just about everyone else on "safe" haven.
     
  14. jnpy!$4g3cwk macrumors 65816

    jnpy!$4g3cwk

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    #14
    Gold is certainly subject to radical price changes:

    [​IMG]

    The price of a house measured in ounces of gold went up dramatically between November 1979 and February 2001. Then, it went down again (deflation). If you want to trade in a commodity (gold), great. But, it is subject to the whims of the marketplace just like every other commodity.
     
  15. flopticalcube thread starter macrumors G4

    flopticalcube

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    #15
    Its money. Everything else is credit.
     
  16. jnpy!$4g3cwk, Mar 17, 2013
    Last edited: Mar 17, 2013

    jnpy!$4g3cwk macrumors 65816

    jnpy!$4g3cwk

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    #16
    To you it's money. To me, it's a commodity. Trading in commodities is fraught with dangers for the amateur. But, if I did decide to buy and hold precious metals as an inflation hedge, I would have looked at Platinum and Palladium because their historical trading ranges have been narrower.
     
  17. mcrain macrumors 68000

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    #17
    Out of curiosity, if you hold a significant amount of your investments in gold, and you keep those investments at home, does your homeowners insurance cover any losses you might have in the event of theft or something else?
     
  18. eric/ Guest

    eric/

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    #18
    The funniest part of all this is that Germany just gets blamed.
     
  19. mcrain macrumors 68000

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    #19
    Why is that funny? Germany has been driving the push for austerity and the demands related to repayment of certain debt obligations.

    (edit) At this point, does anyone still believe that austerity is good public policy? It's destroying the economies of every country that has enacted austerity policies.
    (edit2) And that is completely ignoring the fact that austerity is destroying the social fabric of these countries.
     
  20. eric/ Guest

    eric/

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    #20
    it's funny because these countries racked up huge amounts of debt, by avoiding austerity or at least a balanced budget, then they get mad when people who are loaning/giving them money want them to bear some of the cost too, or at least fix the problem.

    Germany should just pull out of the EU. Now I see why the UK doesn't want any part of it.
     
  21. mcrain macrumors 68000

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    #21
    Actually, I agree with you, except, I think it would be better if the countries like Greece and others pulled out. They never had the types of economies that could feed the beast, and fell into serious debt. They would be better off just walking away and telling Germany, sorry, but you're debt was just extinguished in our courts.
     
  22. rdowns macrumors Penryn

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    #22

    Nope, unless you have a special rider for precious metals. Good luck finding an insurance company willing to underwrite that.
     
  23. eric/ Guest

    eric/

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    #23
    That's a good way to start a war.

    But to be fair, from what I've read basically these countries weren't fit to get in, and US banks did some financial tricks that made them look better, only to have it all collapse once they were in. A Trojan horse, if you will.
     
  24. mcrain macrumors 68000

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    #24
    That's my understanding as well. The big banks were making money hand over fist, and used their power and influence, along with a lot of shady techniques, to keep the gravy train rolling. Now the banks want the citizens to pay for their misdeeds.

    (edit) What bothers me is that billions were siphoned off in the form of bonuses paid to countless bankers who still, to this day, claim they deserved the money.
     
  25. flopticalcube, Mar 18, 2013
    Last edited: Mar 18, 2013

    flopticalcube thread starter macrumors G4

    flopticalcube

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    #25
    To me and to John Pierpont Morgan and to the vast majority of mankind for the last 10,000 years.
    Commodities get consumed. Gold does not get consumed in any material quantity.
    Like silver, both of those metals have an industrial component so they behave in different ways. Gold is also more fungible.

    If you want a strict inflation hedge (i.e. CPI reflective), rolling T-bills are better. Gold is insurance against financial catastrophe or hyperinflation.

    As for burying in the back yard, what is safer now: gold in the back yard or money in the bank? Ask a Cypriot today or an Italian or Spaniard in a few months.

    Looks like Cypriot banks won't be opening until Thursday now. At least your gold is accessible.
     

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