Originally posted by angelchemuel
Apparently the banks are staying shut till Thursday now......how are people there going to eat let alone anything else!!
Italy has no debt crisis (with net assets at 173% of GDP) - significantly more than the Germans at 124% - "so it would make sense, in Italy a one-time property tax levy," he suggested. "A tax rate of 15% on financial assets would probably be enough to push the Italian government debt to below the critical level of 100% of gross domestic product." So there you have it, the 'new deal' in Europe, as we warned, is 'wealth taxes' and testing the "capacity of Cypriots" appears to be the strawman on what the public will take before social unrest becomes intolerable
Originally posted by MarkJS
I don't see what the big shock is. Cyprus, and other southern countries in the EU are all drowning in debt. They supposed to be paying to the EU all this time. When the opportunity presented itself, it's like.... "sure, we'll join the EU!!"... So for 12 years or so, they enjoy all the bene's of being in the EU- trade barriers are eliminated, immigration to other EU countries is free and easy, other EU countries buy all kinds of vacation property in their warm climate....
Now that it's time for Cyprus to pay, they find that don't have the money. So what happens? Germany bails them out with loans... and another loan, and another loan... Interestingly, I didn't hear an uproar from Cyprus when Germany was doing that.
And now guess what? They don't have the money to pay Germany back or pay their EU club dues... Is the 10% 'withdrawal' Germany's fault? Is it the EUs fault?
It's only 10%. People need to calm the #@# down. I don't see it was being that big of a deal, at least right now.
p.s. I'm not a EU citizen or German... just calling the shots like I see them.
edit on 18/3/2013 by MarkJS because: (no reason given)
Originally posted by jefwane
I've come across a few differences in European and US banking that should be mentioned. First there is no European equivalent to FDIC.
Second, the capital structure seems to be different. In the US capital structure goes in order of being wiped out first:equity, bondholders, depositors. This means when a US bank fails stockholders are wiped out first, then creditors (bondholders), and finally depositors over FDIC insurance limits. I've read that in Europe that bondholders and depositors are equal in terms of capital structure. That being said, there is a precedent in the US for certain politically connected bondholders to be treated more equally than others in a bankruptcy (the way the UAW was with GM).
Could something like this happen in the US? Absolutely, look at the pile of assets siting in IRAs and 401ks. There have already been some rumblings about "requiring" those types of accounts to invest in treasuries. But more likely the FED would use it's ability to print money to accomplish the same wealth transfer through higher inflation. The digits in your accounts would remain the same but the purchasing power would be 3-10% less due to the inflation.
How would I react if I were in Europe? If I were in Germany or Scandinavia, I'd note the event and watch for signs in my banking institutions, and probably pull a little cash out just to have some cash for emergencies. However, if I were in Greece, Spain, Portugal, Ireland, or Italy I'd be pulling every cent out today, and trying to convince everyone I know to do the same.
If the Banksters get away with this in Cyprus, depositors in Greece, Spain, and Italy are surely next.