Sunday, March 17, 2013

Cyprus ponders a shift, but global damage may already be done

Seeing that the wealth confiscation from depositors' bank accounts has set off panic at home, the parliament in Cyprus ponders if it can get away with the proposal by shifting more of the burden to the so-called rich as it seeks to meet criteria established by the EU for a financial bailout.

Reuters reports:
The originally proposed levies on deposits are 9.9 percent for those exceeding 100,000 euros and 6.7 percent on anything below that. 
The Cypriot government was on Sunday discussing with lenders the possibility of changing the levy to 3.0 percent for deposits below 100,000 euros, and to 12.5 percent for above that sum, a source close to the consultations told Reuters on condition of anonymity.
Either way, the move's already delivered a blow to consumer confidence of the international banking system. Sure, this just involves Cypriot banks, but it was the EU that demanded the concession for a Cyprus bailout.

If it skimming plan stands in Cyprus, what other EU country in crisis might be next?

And what prevents our own Congress from pulling a similar stunt going forward? It and the Federal Reserve have already shown little respect for responsible savers. They're focus since 2008 has been on maintaining a facade of sustainability.

How many assets on deposit in banks around globe will be withdrawn in the coming days, finding their way into gold or silver or even currencies that can be stuck under the owners' mattresses?

1 comment:

  1. Zero Hedge zeros in: Could The "Cyprus Fiasco" Occur In The United States?