CYPRUS VOTES AGAINST BAILOUT DEAL — 0 VOTES IN FAVOR en-us Wed, 31 Dec 1969 19:00:00 -0500 Sun, 28 Dec 2014 22:18:02 -0500 Matthew Boesler Euro Exit Disaster Tue, 19 Mar 2013 17:59:01 -0400 Exactly. Cyprus is tiny and the fallout effects of its demise would be very limited, but they would make a great example. Countries contemplating Eurozone exit would backpedal immediately if they see what the cost of Eurozone exit truly is. Cyprus would go through an economic depression unlike any other in modern history. Worse than Greece. Euro Exit Disaster Tue, 19 Mar 2013 17:30:22 -0400 I'm not talking about German banks, I'm talking about the other European countries. Cyprus is a member of the European Union, they can't simply unilaterally decide to screw their creditors over and ignore all rules of the European internal market. It's not just a rise in borrowing costs, their European Union membership is at stake. If they lose free access to the European internal market - the biggest economy in the world, with half a billion consumers - it would severely hurt their economy. Especially considering the fact that their economy is tied to the other European countries. Alignment with the Middle East or Asia would take decades. As for a currency peg, I still have big doubts that it would work. If it's such a great solution, why is Zimbabwe printing trillion dollar bank notes? They could simply peg their currency to the U.S. dollar and pledge their vast natural riches to support it. skrivitor Tue, 19 Mar 2013 17:26:18 -0400 By hacking problems you mean wallet security? Since Cyprus has all of these troubles it seems that they had no control to begin with. Maybe the truth is that bankers control the money supply, since they generate 98% of it. Anyway, thank you for your reply. I am eager to see how this history plays out. Euro Exit Disaster Tue, 19 Mar 2013 17:07:54 -0400 How is Cyprus going to introduce a new currency anyway? The logistics of a currency change are consistently vastly underestimated. It's impossible to do overnight, it needs lengthy preparations. Probably a year or more. They need to mint coins, print bank notes and spread these across the country. They also need to adjust ATMs, reprogram (bank) computers, redenominate contracts, renegotiate trade deals, pass legislation, and so on, and so forth. It's a huge countrywide operation. Preferably, it needs to be done in total secrecy too. If not, they would experience enormous capital flight. After all, no one would want their valuable euros to be converted into worthless Cypriot pounds. And the harsh reality is that it's impossible to change a currency in total secrecy. People need to bring their bank notes and coins to the bank in order to convert them into the new local currency. But even discounting that insurmountable obstacle, since a currency change is a countrywide operation, it would surely leak out. Catastrophic capital flight is unavoidable. It's therefore an utter disaster and Cyprus would go through an economic depression unlike any other in modern history. In comparison, even the Greek economic crisis would seem like an ordinary walk in the park. don roberts Tue, 19 Mar 2013 17:00:37 -0400 Someone said a huge Bank run is ahead. It is up to the people of Europe to show their disgust at the Bankers and Pollys by taking their money out of the Banks. That way they will get noticed.............street demos a waste of time.........even if it does give the huge unemployed something to do for a few hours jsreilly Tue, 19 Mar 2013 16:56:30 -0400 Did it do that in Iceland? The Krona didn't nosedive, nor did it wipe out savers' purchasing power. I understand your point (especially with any currency named Drachma), but our latest case study, remarkably similar in many ways indicates that this would not be an issue. jsreilly Tue, 19 Mar 2013 16:54:47 -0400 I agree, they would attempt to retaliate by raising borrowing rates etc etc. Howeer, Cyprus has other friends than German banks, and could simply turn to Russia for secured loans secured on promises of gas and oil extracts to Russian companies. Retaliation only works in a closed market. Part of dumping the Euro is to get out of that closed market. And I don't think the currency would be worthless. 1) Cyprus could tie it to a foreign currency as a guarantee of value (i.e. dollarization but not necessarily with a dollar) or they could 2) tie it to their gas/oil extracts similar to how the value of Canadian oil sands influences the value of the Canadian dollar. I'm not saying it would be pretty, I'm just saying it is an option. As for inflation, no I don't think so. This is a trick that was used by the Brazillian wonderkids to get rid of hyperinflation during Brazils economic disaster. A similar trick could be used here. Economics, though somewhat based on reality, is very psychological. Brazil and Iceland proved that. Matthew Sanford Tue, 19 Mar 2013 16:52:22 -0400 no way to stop a bank run now... It is going to happen, they should have just taken the money from the depositors, fact is 90% is better than nothing, which is what they are going to get. Id bet the only reason they voted it down is because the rich are going to be first in line to get their money out, and the poor are going to get nothing. jsreilly Tue, 19 Mar 2013 16:50:31 -0400 I wouldn't recommend. Ignoring the hacking problems, Cyprus would have no control over bitcoins. They have no control over Euros now, why replace one master for another? Karen Tue, 19 Mar 2013 16:43:49 -0400 Samuel Whittemore. And you're absolutely right with your warnings. It surprises me that anyone might not realize that we're in a crisis at this very moment - those proverbial half-boiled frogs. A very wise man, Ezra Taft Benson, former U.S. Secretary of Agriculture and president of the Church of Jesus Christ of Latter-day Saints, said, "[N]ations ofttimes sow the seeds of their own destruction even while enjoying unprecedented prosperity....When it appears that all is well, ofttimes the very seeds of destruction are sown, sometimes unwittingly. Most of the great civilizations of the world have not been conquered from without until they have destroyed themselves from within by sowing these seeds of destruction." Anyway, thanks. Financial Collapse Tue, 19 Mar 2013 16:38:55 -0400 If this deal was a blow to confidence, wait what will happen if the deal is truly rejected. It will bankrupt the Cypriotic banks and depositors will see even less money back. The Cypriotic government is broke and they can't compensate depositors. jj Tue, 19 Mar 2013 16:37:24 -0400 True, but the problem for savers is that once they convert all the deposits into the local currency, the currency will problem nosedive and wipe out all the savers' purchasing power. Putin Approved Tue, 19 Mar 2013 16:29:51 -0400 Sorry, but you don't know what you're talking about and you haven't really thought this deal through from Russia's perspective. Putin was never happy with rich Russians depositing their money outside Russia and it's not without reason that the Russian government has a special de-offshorization policy. This deal is a blessing in disguise for Putin. If the Russian government was really worried about this tax, they could avoid it completely with a €5 billion loan for Cyprus. But they're not going to do that, since they're behind the scenes very happy that Russian tax evaders are now being punished. With some luck, they will transfer their money back to Russia now, too. people, please Tue, 19 Mar 2013 16:21:07 -0400 This will get worked out, nothing to worry about. When you hear about Obama going to Camp David, Merkel to some former E. German airbase, Bernake , J. Dimon and L. Blankfein retiring to "be with their families" and Soros "vacationing" to some farm in Patagonia - all in the same weekend - THAT'S when you have to be worried. Spiritù Tue, 19 Mar 2013 16:20:57 -0400 Rompey, did you notice how low the V1 are flying this morning? depression Tue, 19 Mar 2013 16:13:24 -0400 no , if anything this crisis will show to the PIIGS just how desperately they must stay in the union ...(thereby making a chance of an EU breakup less ) This island is small , it's effects will only be regional ... They will serve as a good example to the rest of the EU ... Romper Tue, 19 Mar 2013 16:10:29 -0400 The dumb people don't care about the history. I assume that you are a woman or in your 20's. Or even both. Prometeus Tue, 19 Mar 2013 16:08:51 -0400 You have no brain if you think that Putin himself and his friends and his friends of friends have no money in Cyprian Banks. depression Tue, 19 Mar 2013 16:05:56 -0400 If the kind of crisis your preaching about comes to America , you had best get on board with the American response ... none of this "i'm in it for me and mine " because i can ASSURE YOU that there is NO WHERE in America that you can move to that will put you beyond the reach of YOUR government .... when our ship goes down it will be all hands on deck .... if ANY OF YOU think you can run away , you've got another thing coming ... Iceland Tue, 19 Mar 2013 15:59:37 -0400 Iceland is still an enormous mess, with capital controls all over the place. They still haven't resumed their pre-crisis growth path and the Icelandic krona is a living corpse. Without the very damaging capital controls, their economy would collapse immediately. Why do you hate Cyprus so much to tell them to follow Iceland into the abyss? Especially considering the fact that Cyprus doesn't have its own currency, so what they would go through would be much worse. Situation is not comparable at all. Spiritù Tue, 19 Mar 2013 15:52:24 -0400 Did you notice that we are closer to 2039 than 1939? Maybe it's time to get out of your bunker. kryptic Tue, 19 Mar 2013 15:51:55 -0400 Yes, that was the problem. basically punishing people who didn't cause the problem. Alternative now is to put the banks into bankruptcy and cover what deposits they can based on the assets available. Putin Approved Tue, 19 Mar 2013 15:51:23 -0400 Scared? Putin is very happy with this move. He wasn't pleased with Russians depositing their money outside Russia. This is sweet revenge. MegaYacht Tue, 19 Mar 2013 15:50:16 -0400 Agreed! I know a number of people in Italy and Spain who have said that they will be pulling their money out of the banks as soon as the banks open. MegaYacht Tue, 19 Mar 2013 15:48:34 -0400 Iceland did the same thing, told the ECB, Europe and England to go to Hell. Then they arrested as many of the criminal bankers as they could catch. Cyprus needs to do the same, indite the criminal bankers, use the system against those who have rigged the system in order to steal the fruits of peoples labor. Groupon? The Federal Reserve is NOT a Federal Government Agency but a private Corporation. The U.S. Dollar is a Dead man Walking, it is just a matter of time. Spain is not far behind Greece in its race to the bottom. Merril Lynch and Countrywide were/are criminal enterprises and the people in charge should have been prosecuted and served hard time. orangeduck Tue, 19 Mar 2013 15:47:02 -0400 This whole thing boils down to 3 words: Ready...set....bankrun! Phungible Tue, 19 Mar 2013 15:46:59 -0400 I can't wait to see that "country" kicked out of the EZ. With a bit of luck they will be kicked out of the UE as well. Euro Exit Disaster Tue, 19 Mar 2013 15:44:38 -0400 Sounds somewhat good in theory, but in practice, creditors would retaliate en masse. If they unilaterally decide to screw everyone over, they would be sued into oblivion and likely forced out of the European internal market as well. As for their currency, pegged or not, no foreigner would accept their worthless currency. Import costs would drastically increase and they would experience super high inflation. Perhaps even hyperinflation. Furthermore, any new Cypriotic banks would not be trusted and they would be locked out of the international financial system. Cyprus is screwed if they don't accept the deal. They can't escape reality. Romper Tue, 19 Mar 2013 15:43:56 -0400 Hahahaaaaaaa they got scared because of the Russians. Now the slaughter of the Cyprian Banks will begin. European Union is a disaster governed by idiots who serve only one country - Germany. Nazi Germany is the real problem of the EU - and NOT the other countries. M Simons Tue, 19 Mar 2013 15:32:07 -0400 Should have tried no reductions on accounts < 100k, and adjust the percentage above that to make up the difference. Although the whole thing is illegal anyway, I'd be out there with pitchforks looking for anyone in parliament that had voted for it. skrivitor Tue, 19 Mar 2013 15:29:37 -0400 Instead of creating a new currency, could Cyprus adopt a digital currency like Bitcoin? I don't even know where to start with this idea. The price of bitcoin would need to inflate 100 times (from ~$50 to $5000USD/BTC) to match their GDP. (Current bitcoin market cap is approx. $500 million USD) I am most interested to know what both of your thoughts are. Thanks. junk science Tue, 19 Mar 2013 15:25:15 -0400 "Cyprus is the proverbial Canary in the Coal Mine" thats what i heard about: - spain - greece - ireland - iceland - merril lynch - countrywide - the US dollar - the Fed - groupon ETC ETC ETC where is my crisis? i feel ripped off by all this teasing Tobby Tue, 19 Mar 2013 15:17:18 -0400 Agree. The sacrosanctness of the small deposit (under e100k) has been pierced by this hair-brained scheme. Expect runs on banks in the PIGS countries which will have an impact on banks in other countries including Germany. Anybody remember the jittery nerves here in the US in 2007 back when the FDIC was essentially insolvent, and the future of US banks was in doubt? Remember how it took multiple federal guarantees of deposits up to $1 million? And that was here in the US where no depositor has ever lost a dime since 1932. George Smith Tue, 19 Mar 2013 15:15:58 -0400 Hmmm, I guess stealing from the Russian mob wasn't such a good idea after all. MegaYacht Tue, 19 Mar 2013 15:11:02 -0400 Cyprus is the proverbial Canary in the Coal Mine, a harbinger of things to come. Please remember, what happens in Europe will happen in America. This demand by the Germans is only the beginning, there will be more . While I a certain that I am preaching to the choir, keep as much cash on hand as you possibly can, and by hand I mean in your hands. Trade all of your spare cash into .10 through 1/2 ounce Gold coins, get 1/2 to 1 ounce Silver coins. This is and will remain the only real money. Stock up on stable food which will not require refrigeration, invest in weapons and ammo, then learn how to use them. Develop a mindset that it will be you or them, your life and the lives of your family will depend on it. Please, please move as far away from any large population center as possible, the farther the better. Develop a network of life minded people but keep your stores secret because you never know who will sell you out. Lastly prepare for all out war, what is coming will not be pretty, it could very well develop into a true American Revolutionary War against tyranny for our freedom and the freedom of our children and grand children. The choice is yours fight and possibly die or become a slave and die at the hands of your masters. Look up Captain Samuel Whitman and find out what a True America Hero did to stop tyranny. One man can make a difference, if you are going to go down take as many of the bastards with you as possible. There are more freedom loving Americans than there are tyrants, remember they are paid mercenaries who will run when the fight goes against them. If you love freedom stand and fight when the time comes. You will not be alone. junk science Tue, 19 Mar 2013 15:09:15 -0400 more like: FROM: russian mafioso TO: world i already charge everybody 10% extra in anticipation of busts, seizures, etc jsreilly Tue, 19 Mar 2013 15:08:20 -0400 Not necessarily. Cyprus is an independent country. At any moment in time they could declare bankruptcy, cease use of the euro, and reintroduce a new currency in limited supply (Drachma? Not sure what they had before). If they peg the new currency to the USD or GBP or RUB, it will psychologically sooth the fears of the population. Convert all deposits currently provable (i.e. receipts, books, previous months statement) into the new currency up to 100k. Declare all debts in euros to be noncollectable. New banks will quickly form to replace the defunct ones. In a few years when things calm down, release the currency from pegging against something else. Yes, their borrowing rates will go up for a short while, but that isn't something they can get around like Iceland. junk science Tue, 19 Mar 2013 15:08:01 -0400 no, it means more contrived "crises" followed by a predictable last-minute "deal" i can't be the only one with crisis fatigue It's all about Savings Tue, 19 Mar 2013 15:00:55 -0400 This is a victory for human rights. Oh, Mr. Dijsselbloem tried to package it as 'fair' and 'a tax' but everybody knows it the start of a larger governmental money-grabbing campaign. And that, Mr. Dijsselbloem - is illegal in a democracy. Europe should have forgiven that 6 billion to avoid the risk that is now looming over the Cyprus banks. Or found another way, surely for that amount some deal could have been made. But never - ever - touch depositors savings. Better to go broke then to fade on principle rights. And somebody please fire that amateur. JuanMa Tue, 19 Mar 2013 14:57:48 -0400 Things can be quite different if the cypriots decide to confront the EU. They have plenty of gas to be extracted by... only russian companies?... They can also sell themselves as a great replacement for the Syrian bases practically lost for Moscu in the siryan civil war... in exchange of financial support while they break up with the euro and the European Union. Endless possibilities... All of them bad, granted! But nobody should feel they can do nothing but say amen to Europe. Cyprus is not Greece. This crisis can become very strategic jbarton91 Tue, 19 Mar 2013 14:55:06 -0400 FROM: Russian Mafia Capo TO: Cyprus President CC: Every member of the Cyprus Parliament BCC: Angela Merkel, Vladimir Putin SUBJECT: Nobody makes a move Until I say it is OK to move. AndyB Tue, 19 Mar 2013 14:52:42 -0400 So the totalitarian total enslavement has hit a bump; time for nooses and guillotines; be afraid you banksters and corrupted pols; be very afraid depression Tue, 19 Mar 2013 14:46:02 -0400 well technically speaking yes .. As soon as their banks open up ,the biggest bank run you've ever seen in your life will occur ... at that time their banks will become insolvent .. we are looking at another Iceland minus the ability for them to print their own money ...They will have no choice but to leave the Euro in a messy exit and begin printing their own worthless currency that few will want ... however i think it's more likely that the EU will let them twist in the wind for awhile before coming to the rescue , but it will be under EU terms and the crips will have no choice but to vote yes on whatever is proposed at that point . Giorgos Tue, 19 Mar 2013 14:44:38 -0400 Europe Why are you Eating your Flesh? Sometime in the past I studied economics and now I see that everything I have learned is rubbish. History is rubbish too for Eurogroup Decisions Makers. For 5 billion dollars these gentlemen are jeopardizing the financial and banking stability not only of Europe but of the whole world. Please gentlemen stop ruin our lives and please read about the post-war Europe and where did it led. Stop ignoring history, stop ignoring common logic and stop ignoring every macroeconomic theory of the last 100 years… jj Tue, 19 Mar 2013 14:43:00 -0400 Unfortunately, the damage has probably already been done. Let the bank runs commence... PepinoCosmico Tue, 19 Mar 2013 14:41:40 -0400 No good solution in sight. A bank run is inevitable, as weel as the crisis. Thanks OhShhhi Tue, 19 Mar 2013 14:32:20 -0400 What happens now then? That means default right? alanadler Tue, 19 Mar 2013 14:32:16 -0400 It's good they voted no, but the idea has now been implanted in the minds of bank depositors all over the globe. I think there will still be a massive run on the bank as people feel the situation could reverse at any time. This has dealt a severe and possibly irreversible blow to confidence in deposits at a bank. Now the big question, are brokerage accounts vulnerable to this type of confiscation? They hold vast amounts of stocks in street names. Would this make investors want to hold the actual stock certificates instead? arj5 Tue, 19 Mar 2013 14:32:05 -0400 Spain, Portugal, and Italy if now they say yes they lose all the dignity of their forefathers. jdam2 Tue, 19 Mar 2013 14:28:51 -0400 i can't wait to see the bank run to happen to them. junk science Tue, 19 Mar 2013 14:27:16 -0400 WELL THERE GOES THE WORLD ECONOMY i have already stopped work. there's no point.