March 21, 2013

Cyprus depositor threat is a catastrophe for EU

Posted in Irish Independent · 162 comments ·
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The Cypriot parliament has now thrown the ball back to the EU with its rejection of the bailout. It has also opened up the door to the Russians to get involved in the EU’s internal problems by sending a delegation to Moscow. The Russians may still come out of this with a charge over Cypriot gas reserves in return for a taking equity in the bust Cypriot banks.

The EU now has to go back to the drawing board and come up with a better deal for Cyprus or else face political, diplomatic and economic defeat. If the Cypriots get a better deal from all this, many here will argue that their tactics of saying no will have served them better than our stragety of being the “best boy in the class”.

And all this carnage suffered in order to protect the euro, for which our political leaders are prepared to destroy trust within the EU both between countries and between the people and the State.

It is difficult to describe the proposed weekend bailout package to Cyprus as anything more than theft. The confiscation of 6.75% of small depositors’ money and 9.9% of depositors’ funds over €100,000 is without precedence. Now the EU is rowing back because the Cypriots won’t bear it, but a precedent has been set and the they look incompetent.

On Saturday the EU tried to confiscate people’s savings. This is a breach of fundamental property rights. Although the EU tried to present this as a one-off, it is not willing to rule out similar measures elsewhere. Why should we expect any kind of limitation to what measures the troika and EU might take when the crisis – in Spain, for example – really starts to bite?

If you can do this once, you can do it again and if you can confiscate 10pc of a bank customer’s money, why not 50pc?

This is just the latest in a series of measures designed to protect the euro. Remember, the euro was supposed to protect us, not the other way around.

But the weekend’s efforts to steal deposits in Cyprus and now the involvement of Moscow, reveals just how many moving parts have to be assessed in order to get a handle on the politics and thus, economics of the EU. The level of spin coming out of Brussels, swallowed, it must be said, by all sorts who should know better, reveals the fact that no one is in charge. It is this very lack of political leadership at a time when economic growth is falling and debts are rising, which makes so many of the EU’s decisions seem like second rate compromises.

On Saturday, the EU broke known corporate finance rules by trying to expropriate deposits in Cyprus to pay for its banking collapse. Based on the experience of the Great Depression and more recently, the Asian crisis, most policymakers realise that the most crucial initial reaction to a banking crisis is to prevent a run on bank deposits.

This is why trying to steal people’s deposits and dress this up as a ‘tax’ is precisely the worst thing to do as it engenders the very panic that the authorities are trying to avoid.

In addition, by going after depositors, the EU is breaking one of the understood rules of the game (to the extent that there are rules). That rule is that depositors are different.

Depositors are a different type of bank creditor to any other sort. In an insolvency situation, they ought to be regarded as “trust creditors” or “creditors in trust”. They deposit their money, in the main, because they trust the system. They are not investors in the traditional sense like shareholders or bondholders. They trust the system to look after their savings and as such, they need to be protected. If you actively break that trust, as the EU tried to do at the weekend, you do so at you peril.

And of course the peril or risk here is that depositors in other countries with still-unresolved banking crises, such as Spain, will see the Cypriot deposits being looted, think “we’re next” and take their money out of the banks.

This deposit flight is the bank run which is the very upshot that the authorities are most keen to avoid. Bank runs happen quickly, which is why they are called bank runs, not bank strolls or bank ambles.

The truly intriguing thing about this episode is that everyone knows all this. The people in power are not stupid.

They know that gouging people’s savings will cause panic, as we have seen in Cyprus, so why do it? Why not impose all losses on bondholders, orchestrate an organised sovereign default or change the terms of the deals?

Only politics explains what is happening. The first thing to put into the mix is the German election in September. It is clear Ms Merkel will do nothing to upset her voters before that. It is also becoming obvious that Germans and other creditor nations are becoming a bit fed up of bailouts. Equally, the southern periphery is fed up of austerity and is voting against Germanic policies in the Mediterranean. Finally, in Cyprus there is the Russian factor. Because so many of the large depositors in Cypriot banks are Russian, there is a movement within the EU to teach Cyprus a lesson about unregulated banks, money laundering and safe havens for dodgy money.

But now that move, designed to satisfy all these varying concerns, has backfired, satisfying none, where does that leave the EU? The Cypriots will not accept the deal. This puts the EU on a collision course with Russia and, maybe more crucially, blows out of the water the notion that we are working towards a banking union where all EU savers will be treated equally.

This latest crisis reveals that the crisis hasn’t gone away. In fact, it has morphed into a different beast. With Germany in election mode, nothing serious will be done until October at the earliest and thus Europe will be rudderless for more or less the rest of this year.

We will stumble from one mini-crisis to another, making enemies unnecessarily and scaring the wits out of the people in the process because they know once you let this deposit-robbing genie out of the bottle, it’s very hard to put it back in.


  1. On Top, ECB issued ultimatum until Monday…

  2. The truth about the Banking Industry’s Influence on EU-Commission’s policies

    New Laws are drafted and proposed by one instance only in the EU, the Commision. Little to none media coverage is granted to the so called expert groups, advisory bodies mainly comprised of industry interests, better known as Lobby groups.

    The infamous IIF, Institute of International Finance, spearheaded from 2003-2012 by Josef Ackermann (ex Chairman Deutsche Bank), and now by Douglas J. Flint (Chairman HSBC Group) had 23 representatives sitting in a 42 strong expert group, 25 from Banking, here 23 from the IIF, 9 investment firms and 8 others when it was established in 2010 as the GEBI, the Group of Experts in Banking Issues.

    In 2011 it was no other but the IIF that was the main negotiating partner of the EU Commission, imposing their biased influence in favour of banks. While the public spin doctors were out to paint a picture that the negotiations are performed between the Greeks and EU-ECB-IMF, in reality the so called behind closed doors negotiations between the IIF and the Troika, and only these, were instrumental for the Greek tragedy.

    http://www.iif.com/about/bod/

    It is this undeniable influence structure within the EU that is reflected by an inept body of policy makers, mouthpieces of the industry. The EU power grab that was the Lisbon treaties had worsened this situation.

    Laws are made by those whose interests are represented best, and best in this context means the biggest and best equipped lobby.

    In October 2011 GEBI was dissolved, however, the damage had been done, or perhaps better to say, mission accomplished. Quote from the archived EU Commission website, bold emphasis is mine:

    The GEBI proved to be very instrumental in assisting the Commission Services to develop new policy initiatives, mainly on capital requirements and on crisis management.  Now, with the adoption of the related proposals, we move towards a different phase, which requires less expertise in developing and drafting new rules but more focus on negotiations in Council and Parliament.  As a consequence, DG Internal Market and Services decided to dissolve the GEBI at the end of October 2011.

    Watch this short video for an introduction into the world of EU policy making.

    https://vimeo.com/58692832

    Welcome to Absurdistan…

    List of GEBI members: http://ec.europa.eu/internal_market/bank/docs/gebi/list-gebi-members_en.pdf

    Best
    Georg

    • petrapig

      where has deocracy gone? We voted it away , thats where.. We are totally controlled and our interests are way down the pecking order …. Time to protest? perhaps? if not now When …?

    • dwalsh

      “Welcome to Absurdistan…”

      Nice one Georg.

    • Deco

      Excellent post, Georg.

      There is too much material that never gets into the public discussion, that urgently needs to enter the public discussion.

      Especially, concerning the monopoly-of-power system that is the EU.

    • DECO

      Great view point i was on the radio last Monday week saying the banks are not safe people are in dinial of the financial system all my money is burried in different places in different currency i have stocked up on food and supplies i have enough to live of for three years min and 2000 rounds all hid fishing rods tac medical supplies etc everything i need so what ever happens i dont care. take care all out there the fourth reich is running the show

    • Good post Herr Baumann

      And again the MSM are acting like this is all normal and that everything is huny dory

      Hope you are well Georg.

  3. Adam Byrne

    Another excellent article.

    • jccusack

      Good article.
      The FT points out the significant interest premium that the depositors received over the past 6 years. Should the ‘tax’ have been a claw-back of this unsustainable interest? It would raise the €6b.

      Given our (Irish bank) bond holders were paid interest for a risk they did not have to carry, I have to admit ordinary deposit holders should be similarly treated. Bondholders get premium interest for not taking risks. Deposit holders in banks offering high interest rates – ask many a US Bank Depositor – take a high risk as well….Whats good for the goose…

  4. Dorothy Jones

    http://www.spiegel.de/wirtschaft/unternehmen/ezb-setzt-zypern-frist-bis-montag-a-890120.html This morning ECB says in 5 days time Mon 130326 the ELA tap will be turned of unless Cyprus reaches a ‘Bailout’ deal.

    http://www.sueddeutsche.de/wirtschaft/ausweg-aus-der-bankenkrise-ezb-stellt-zypern-ultimatum-1.1629766 Liveticker Süddeutsche: No credit cards accepted in supermarkets and petrol stations, ATMs dispensing money, but some people without any money at all as the online banking system is suspended, as are wage and other payments’ transfer

  5. Puschkin the Black and White Cat

    I think this may be the start, I just hope and pray it’s not.

    NO PASARAN !! ( I’ve said it before , anyone remember The Fiscal Compact , eh ? unlimited power , they all voted for it )

    http://www.youtube.com/watch?v=FvW_2IvDtzI

  6. Why do we still record all the money in the economy as liabilities of the banking sector?

    The argument for recording bank balances as liabilities of the banks seems to arise from the outdated ‘money multiplier’ model of banking which is still taught in universities by our out-of-touch economists who insist on using cash analogies for digital money. The idea is that a customer deposits cash with a bank and the bank records the amount as a liability. All seems well. However the convenience of the chequebook allowed the liabilities of the banking sector to be used as money, money which even the taxman will accept.

    Surely when journalists talk about the ECB printing money it’s up to the economists to point out that the banks’ liabilities are really what money looks like today. (Think of the advances beyond the chequebook and cash forming 3% of euros)

    The negligence of economists deepens when you learn that most deposits don’t even arise from people depositing cash with the banks.

    Most ‘deposits’ arise from a customer taking out a ‘loan’ and the bank simply recording a higher bank balance for the borrower. The idea that these deposits have arisen from people depositing cash is just wrong. How could the cash money supply which forms 3% of money multiply into ‘deposits’ forming 97% of money in an era when banks don’t process loans in cash form?

    The fact that the banks’ liabilities are accepted as money and now form 97% of money is a relic from the days when your bank balance recorded an amount of a gold or silver or nowadays cash at the bank. The system is so outdated.

    Economists don’t seem to recognise that a reduction in debt to a bank destroys a ‘deposit’ also. This is why there’s less money during a recession and yet the only explanation from the subject of economics is collective saving. Hence also why reducing our debts doesn’t leave the economy in a better position.

    As an extension economists also don’t seem to realise that it’s not possible for the banking sector to behave prudently. Even if banks lent only to those with the highest credit rating it’s still the case that the economy only has the partial principal of every recent loan and yet it’s expected to pay the principal plus interest.

    When the economy finally can’t increase its rate of new loans over loan repayments the money supply shrinks and the proposed solution in this case was to cancel out some of the banks’ liabilities, and hence money. Again it’s unlikely the economic advisers involved understand the accountancy procedures that would have happened but if this ‘tax’ would have happened. The banks would debit their customers’ accounts, and credit a token account, probably their bad debts account. The result would be that the money wouldn’t exist anymore. With the Cypriot economy short on money how would deleting money for the sake of satisfying accountancy rules help?

    Under full reserve banking, bank balances would be recognised as the money they are, as opposed to an agreement from a bank to pay you money. The money of the economy would not be recorded as liabilities of the banking sectors. In today’s digital world to have 97% of the money supply at risk of deletion to satisfy accountants shows how out of date the system is.

    • NeilW

      Under full reserve banking nothing of the sort would be the case.

      What you do is create a different illusion where you call some liabilities ‘money’ and not others. Which is where the 97% lie comes from.

      It’s all based on some people’s belief on what the ‘one true money’ represents.

      We have here banks that are regulated to issue liabilities that are pegged to the denominational currency. That works absolutely fine as long as you do the accounting and regulation correctly.

      Deposits up to 100K EUR are ‘trusted deposits’ beyond that they are ‘senior bonds’.

      In an insured system the central bank expands its balance sheet after the event. In an ‘in specie’ system the central bank expands its balance sheet before the event.

      The problem the Eurozone has is that their deposit system is badly designed because it was designed by neo-liberal nutters who didn’t believe in systemic collapse

      • The problem with all our electronic money existing as liabilities of the banking sector is that each liability has to have a corresponding asset. i.e. each digital euro has to have a corresponding debt. In fact we owe interest in each euro the banks create and so it’s not possible for the economy to run without loan defaults no matter how prudent the banks are.

        The other problem with today’s system is that all electronic money is temporary. When a loan is settled with a bank they lower the borrower’s debt, then lower the borrower’s bank balance. The bank lowers both an asset and a liability and the money no longer exists.

        If we recognised electronic money as our main medium of exchange it could be created as legal tender without a corresponding debt and it wouldn’t be deleted through loan repayments.

        I don’t think the problem is the euro. If in Ireland we started created punts again but we got the commercial banks to create all electronic punts with an even higher debt and deleted said punts in line with debt repayments how would this be any different to the current situation?

        • bonbon

          You have, like the “establishment” pyromaniacs who have just smashed trust in banking, misunderestimated the problem.

          The DERIVATIVE shadow banking, that even Max Keiser calls “error books”, is a towering shadow over the entire circus. This is not money, untill Mad Ben and nutcase Draghi try to monetize it. Then your chain of logic starts, after the horse has bolted!

          It is time to think systemicly. Monetarism as such is now at its lawful end. It will lawfuly end us unless we go for Hamilton’s Credit system, which I am 100% sure you are aware of by now.

          Think systemically! This is not a TECHNICAL problem, nor a mind game.

  7. pauloriain

    Wow, this is a car crash happening in slow motion. The mis-information or mis-labelling is only incredible.

    The similarity that should be made is with Argentina where the depositors lost all their money. Not nice, no one wants it to happen, but it did and the idea the EU, and that’s us or those who live in the EU, would bail out Russian depositors is absurd.

    When we look at the Irish situation, there is €90bn on deposit in Ireland. That’s wealth, which to date hasn’t been taxed. Yet this is a source of money. Money that in many instances was made during the boom and from this economy and in some cases profits from property and good luck to those people, fair play to them. However, why wouldn’t those who have benefitted from this economy be asked to put something back in.
    Instead we put in place a ponzi scheme whereby loan repayments, to fund promissory notes for example, are pushed out 30 something odd years from now, so the wealthy can stay wealthy today and others can pay for it then, even people who aren’t even born yet.

    I am really struggling to understand the mind set of those who are running this place and those who are crying foul. Even on Prime Time the other night in fairness to Alan Dukes he called for more taxes on his income, even Warren Buffett has called for this.

  8. hibernian56

    I really can’t wait to see Nigel Farrage’s take on this..

    Theft is correct, but they have been robbing us blind for years, they are just getting brazen about it now. It’s the bank of mattress for me now.

  9. lff12

    Hang on a moment.

    1. Cyprus banks were paying interest rates which meant that depositors had received about 15% interest over the last couple of years – which would still have left the sub 100k depositors with a good profit
    2. There is a perception that many of the depositors were offshore account holders – this remains to be proven
    3. The lower rate on smaller depositors ensured that the burden was pushed to bigger depositors

    To be honest, I think it was a better idea than the wide spread done in Portugal, Greece and Ireland, as cash deposits are a much stronger indicators of real wealth than any other form of asset.

    • VincentH

      Wasn’t Cyprus seen as an offshore operation much like Guernsey, the Isle of Mann and the Caymans by far more than the Russians. Didn’t it have something similar legal speaking with it’s company laws. And with us and Malta it was part of the Sterling Area so the civil service would respond much as ours have done.

    • ME

      So anyone who is careful with their money should be punished. And if you spend all your money on beer and watching football or are reckless with money and have none left, then you should be let off with no tax. Oh wait, that’s just like the banks, they are reckless and when it all goes wrong they are let off. And then the public have to pay tax to bail them out. Brilliant. And then we go round and do it all again. That’s great.

    • lff12

      See http://coppolacomment.blogspot.co.uk/2013/03/sham-insurance.html
      Kind of says the same thing as I do, only worse. what would you prefer? To lose 60% of your entire savings in a bank collapse, or to lose 6-10% through a bail-in? You choose.
      “The proposed deposit haircut of 6.75% for deposits under 100,000 Euros looks harsh and unfair. And indeed it is. But not because deposits were ever “safe”. Compared with the alternative – bank failure, sovereign insolvency and unrecoverable loss of most of their money – this was a good deal for small depositors. And it may still be improved.”

      Indeed, it does seem harsh and unfair, but the alternatives are actually much worse.

      • spawny

        Maybe option 3, whereby i don’t lose any of my hard earned money and the people who got us into this mess pay up. In fact isnt there some kind of insurance that the banks have to cover these eventualities.
        If it was an investment, id take the haircut, but it wasnt, thats like saying everyone with salaries over 30k should give 10% to the EU to give back to the bank.
        Its just theft

  10. Beaver

    It seems the ECB today threatened to turn off the ELA in Cyprus on monday. A fine game of brinkmanship. My bet is on the cypriot politicians calling there bluff to avoid the blood thirsty mob outside their door. The ECB then withdrawing ELA to prove its not bluffing and Tuesday being the worst day in Cypruses history since the Turks invaded. The stock markets around the world will collapse when people realise the world has run out of money and that they might be next. What will happen on Wednesday is anyones guess.

    • Dilly

      Wednesday is pancakes n syrup for me anyway. I see a Bitcoin bubble has now begun. Wait until they get completely burned.

  11. Original-Ed

    Their close relationship with Russia is obviously upsetting some core EU member states and you can sense that there is an element of revenge in their approach to the problem.

    The Cypriots, like us, small and on the edge of the Union have very little other than their wits to survive on.

  12. Currently there is a man in Nice visiting the Social Welfare ~Offices confirming to them that the letter he received from them last September that he was dead is incorrect . The authorities do not believe him.

    Is Cyprus a walking corpse ?

  13. Adam Byrne

    This is going to go down like a lead balloon:

    http://www.independent.ie/business/personal-finance/latest-news/lose-health-cover-and-second-car-to-get-bank-debt-deal-29144616.html

    Sure, isn’t Sky Sports a vital part of the Irish cultural landscape these days?

  14. There is a certain irony in politicians from the world’s third largest arms exporter having a go publicly at a country that handles Russian money. Ordnung muss sein!

    So who’s up for camping out in front of the Bundestag this summer? There are so many Greeks, Spanish, Portuguese, Irish and of course Italians in Berlin, it would be quite a party.

  15. McGoo

    >they look incompetent.
    >The people in power are not stupid.

    By a simple process of elimination, there are only three possibilities :

    1. They are in fact stupid and incompetent and know absolutely nothing about banking or money or history or human psycology, or even common sense, and they should not be in charge of running a sweet shop.

    2. They are intelligent and competent and are implementing a secret plan which seems to involve devaluing the Euro and converting the EU to a cash economy.

    3. They are politicians whose only interest is winning the next election.

    All of these possibilities are unacceptable, and should result in these people being replaced.

  16. Deco

    We need a noun to describe what happen when the concept of centralized EU thinking results in a gigantic mess, with misery being thrown on the ordinary people, at the end of a particularly long period of affirmation that everything is going fantastic.

    Because this is what we have been seeing since 1992, in one episode after the next.

    The long term affect of the policy monopoly program that is the EU, is failure. The previous stage, the free trade phase was a raging success. The current phase is a cathastrophic failure, though it takes years for the eventual trends to bear their results.

    It might come as a shock if Cyprus were to leave the EU, and the ECB. But it will not be a surprise, if it does better afterwards.

  17. Deco

    Now that we have reached country number 3 to get a bailout, and with Portugal next, and the possibly Spain, and with even Belgium on very dodgy ground….

    Has there been any consideration given to sacking somebody in the ECB for incomptetence ?

    And there are housing bubbles in NL, and FIN to play themselves out.

  18. Deco

    If I was Spanish, I would be concerned.

  19. SLICKMICK

    PRIVATE & PUBLIC DEBT IS 60% OF GDP IN RUSSIA. IN GERMANY , IT IS 250% . COMBINED WITH A FLAT INCOME TAX OF 13 %, OUR FRIENDS IN MOSCOW WILL CALL THE SHOTS FOR THE FORSEEABLE FUTURE. THE SOONER IRELAND LEAVES THE EU DISASTER, THE BETTER. WE HAD LITTLE NATIONAL DEBT IN 1973.

  20. I do really like the expression ‘ a bank amble’ in the above article . We need more insightful thoughts . I am hoping to experience a bank amble when the sun shines again

  21. pauloriain

    Cyprus could be part of a strategy. Everyone acknowledges that once Spain and or Italy get to this point then it is game over. So if you wanted to put manners on everyone and show that you are serious and willing to let banks collapse, then Cyprus would be the best one to choose because of its size.

    In response to those who are defending people who were prudent and saved, well it’s a zero sum game, pay in this transparent way or pay some other way with higher taxes somewhere.

    • jccusack

      Have to fully agree with paulorain re ECB using smaller countries as examples to put manners on the larger bad boys. Wise and prudent rather than misguided. The ECB are playing the long game.

  22. pauloriain

    1% of the people have 80% of the wealth, that’s where the money is time to go get it and sort the problem and then 99% of the people will think the politicians who did that are hero’s. Sound like a pretty easy vote getting strategy to me.

  23. pauloriain

    It wouldn’t be hard to do the numbers for the ECB, who should have the information on the Cypriot banks deposit accounts, how many and how much, which you have to assume they do have. If they have worked out that this strategy will cost less after paying deposit guarantees up to €100,000 or the same as a bailout then it all makes sense, because on the face of it and initially it looked like they were shooting themselves in the foot with the damage to sentiment and possible flight of capital from other countries banks. But where would be safe now. It’s not as clear cut like 2009 or 2010, when some countries were deemed safe.

  24. Good article with some straight talking

    The incompetence is staggering and it is clear that they are a bunch of dangerous clows aka Chuckie. They will do anything to protect shareholders and bondholders before ordinary people. This is fascism and make no mistake about it

    This in the same week that the Irish boss is taking plaudits from the worst US President in history. We can never trust these guys and the Cypriot people have shown us how to deal with them

    The demonstration in Cyprus remind us that there is only one true power – the will of the people

  25. CorkPlasticPaddy

    I’ve said it before and I’ll keep on saying it. We’ve got clowns running this country and we’ve got even bigger clowns running Europe. If the citizens of this country and the rest of Europe stopped voting for these clowns then things might turn out for the better in the long run!!

    • paddythepig

      Maybe you should stand for election on your ‘they’re all clowns’ platform. Maybe you could become our Beppe Grillo.

  26. dwalsh

    The tail is wagging the dog

    Does the attempted heist on Cypriot savings accounts signal desperation on the part of the global banking system; or is it a sign of the degree of criminalisation that has taken hold at the very highest levels; or is it just incompetence?

    Whatever the truth is and whichever way you spin it, it does not look good.

    As David writes: “…the euro was supposed to protect us, not the other way around.”
    This gets to the crux of the matter globally.

    The tail is wagging the dog.

    Markets are supposed to function as a social utility. Markets are supposed to serve society; enabling settled life and civilisation to develop. What we now have are rogue markets which prey ruthlessly on the surrounding society. The financial system and markets which are functioning like a cancer; actively parasitic and destructive towards society and life.

    The financial system and markets are a mortal threat to our civilisation.

    Until this is perceived and clearly understood by the general population this crisis will lurch from one absurdity to the next. How bad it will have to get before the general population perceives the cancerous state of the financial system and markets remains to be seen.

  27. dwalsh

    Good article from David.
    Once the bell is rung it cannot be un-rung.
    The genie is out of the bottle….we are entering a new phase of the unfolding Tales of Absurdistan that is the global financial disaster.

  28. Pat Flannery

    David, first of all Cyprus is not its banks, any more than Ireland was the Anglo-Irish Bank in 2008. Cyprus is not broke, therefore it does not need to be bailed out or bailed in, any more than Ireland needed a bailout in 2008. Its banks did.

    Also David, please stop blaming everything on the Euro. This is not about the Euro; this is about international money-laundering dressed up as banking.

    I hope the ECB upholds EU Treaty law and stops ELA on Monday. Then what? A bunch of international crooks and money-launderers will have a huge problem. That’s all.

    I managed an Irish chain store through two bank strikes in the ‘70s. We never closed a store for one hour or lost a single penny.

    We each did what we had to do. I personally flew a Cessna 172 from Weston to Aldergrove twice a week where a Munster & Leinster Bank person (later part of AIB) arrived with bagful’s of silver coins(complete with a British Army escort).

    I then flew down to Castlebar’s old airport (which is now a shopping center) where Mnsgr. Horan met me once per week in his Ford Cortina with bagfulls of copper coins from the Knock Shrine devotive candles.

    The pilots among you will understand why I had to quickly become an expert on weight-and-balance calculations and load distribution. Thank you Barney Kennedy for your expert advice, I hope you are still wearing that trilby hat up there in the Heavenly clouds, as you did every day in the skies over Kildare when you taught many of Ireland’s best pilots.

    During the two strikes I hired an out-of-work clearing-house manager from Dame Street who carefully filled several suitcases with customer pay checks from all around the country and having packaged them exactly as he would have done in his Dame Street clearing house I was able to present them for payment the moment the strike was over.

    They all cleared because I was first in line and the store chain never lost a penny. We did however gain the everlasting gratitude of people around the country for cashing their wage checks so they could eat.

    I would love to see the people of Cyprus given the same chance to prove that they can survive against any blackmailer, as we did in the ‘70s.

    David, rather than pitting ordinary German people against ordinary Cypriots or ordinary Greeks or ordinary Irish people, as you do almost every time, you should be pointing out the real nature of this struggle. This is a struggle about how to prevent international crooks and money-launders masquerading as ordinary “depositors”, holding us ALL up to ransom.

    These “depositors” are nothing more than financial terrorists. They hide their financial weapons of mass-destruction among women and children in line at ATM machines and threaten to pull the trigger. At least suicide bombers have the good grace to die with their bombs. But these people???

    And you blame the Euro?

    • bonbon

      I think you will just have to face the fact that the Euro is a tool of the worlds worst gangsters, that it has a grip on the minds of millions that is impossible for most Americans to even comprehend.
      Contrarywise the grip the Dollar and Bernanke’s antics has on American minds most Europeans cannot even begin to comprehend.

      The joke is its the SAME stranglehold.

      Welcome to the British Empire!

      Now when I say that the shrieking from Ami’s and Euri’s alike is deafening. Small wonder, the mental pain is unbearable! It is cosier to put on the shackle’s yerself!

      So have fun! The gangsters have nothing else left except pure destruction. No hiding behind a Mr Blair GRIN anymore. We have Glass-Steagall, which congressmen across party lines and across the Atlantic are timidly turning to.

      • Adam Byrne

        One for you Mr. bonbon,

        Your best pal and his British Empire fetish gets a good mention.

        http://www.monbiot.com/2005/05/10/junk-science/

        • bonbon

          That is from 2005. In 2010 alone we had the East Anglia Uni Climate Research Unit emails all over the internet (I have them plus attachments of program code) showing the deliberate falsification. And Copenhagen 2010 failed as did the next IPCC effort. So Co2 is junk science. Since 2012 we have the CERN “CLOUD” experiment confirming cosmic radiation as the important driving factor in all cloud formation confirming the utter fraud of Co2 and yet again the IPCC imperialists. And now we appear to be entering a Maunder Minimum – remember the last one? The Thames and Baltic froze over.

          The British Empire’s science and finance are junk.

          The pyromaniac attack on savers by pirates, sorry, Privateers, is in the jolly Sir Walter Raleigh tradition, what?

    • bonbon

      I think you will just have to face the fact that the Euro is a tool of the worlds worst gangsters, that it has a grip on the minds of millions that is impossible for most Americans to even comprehend.
      Contrarywise the grip the Dollar and Bernanke’s antics has on American minds most Europeans cannot even begin to comprehend.

      The joke is its the SAME stranglehold.

      Welcome to the British Empire!

      Now when I say that the shrieking from Ami’s and Euri’s alike is deafening. Small wonder, the mental pain is unbearable! It is cosier to put on the shackle’s yerself!

      So have fun! The gangsters have nothing else left except pure destruction. No hiding behind a Mr Blair GRIN anymore. We have Glass/Steagall, which congressmen across party lines and across the Atlantic are timidly turning to.

    • You have made a good point but not a valid point .The Euro is a basket currency without a central bank and in the said times you acted there was a central bank with power in The State thus reason why you were successful .

    • dwalsh

      +1 Excellent post Pat Flannery

      I am critical of David’s anti-Euro stance too (which he denies); and his divisive theories pitting German savers against peripheral spendthrifts and the elderly against their children.

  29. 5Fingers

    Articles are definitely getting better. Very annoying or worrying…meaning DMW may be making some solid predictions which I’d take seriously.

    I remember back in 2007/8 when the everything hit the fan hear, all we now take as normal today was pure histrionic nonsense then even in this blog!

    I am seriously spooked. EU are effectively rudderless, run by a faceless unelected elite who are bean counters. Also, I think Cyprus has no alternative plan that includes the EU.

    I was also appalled at that FG rep on Vincent Browne last night saying that 1.5bn taken out of pensions for Ireland was not the same as the proposed rip off in Cyprus – yet they agreed with the Germans on this tactic.

    This is not a Genie we have let out. It is a Pandora’s box we have opened to paraphrase the SF rep in above program.

    Back in the 70s (I think) the Russians offered to build an aluminium smelter to allow Ireland add massive value to what is the largest zinc/ tin/ aluminium deposits. It got stopped by vested interests (Cold War blah blah. You think today it’ll be any different for Cypriot resources near all that middle eastern snap crackle and pop?

    This is a mess. Another week will test the skill of the spin doctors and the policy makers. I honestly wish them luck…but not hopeful.

  30. bonbon

    Certainly some are stumbling, DMcW, others are firmly putting the solution on the table, something most economists and commentators are having major difficulties to even comprehend.
    If any economists thought they could string along with this mad Euro caper and somehow stumble along and survive, they got a very rude awakening. Ye cannot trust them either!
    If you climb on board with this pack of pirates, remember the first rule on board, no loot means they cut each other’s throats.

    So NO DEAL, OXI! Break up their banks now as FDR did!

  31. bonbon

    Eyewitness account :

    Maltese Finance Minister: Cyprus “Agreed” with a Pistol To Their Head

    Maltese Finance Minister Prof. Edward Scicluna wrote an op-ed for The Times of Malta about being locked in the infamous EU Finance Ministers Meeting that “agreed” to the Cypriot Bank Robbery.

  32. cooldude

    A very interesting article and some very interesting comments. The banksters are now running the whole show and are now overtly coming out and making it clear that bank deposits are in play as well as pensions and anything else they take a fancy to. These guys are parasites in our economies and they control the political system completely. The only real way to stop their control over us is to take away their franchise over what we use as money. Anything else is just pissing in the wind and skirting around the real problem. We need real competition in what is used as a medium of exchange in our economy. The banksters sole franchise is simply a medium of control which they are using to turn us all into debt slaves. It’s not just banks in Cyprus but practically all European banks that are insolvent along with the governments who are insuring deposits. This is a wake up call to get most of your savings out of this corrupt, insolvent banking system and into hard assets. Anyone who expects their government to protect them is in for a shock. The governments are run by the banksters and this will now become clearer. They are already robbing people covertly with their negative real interest rates and dirt taxes but now the gloves are coming off and they will just take what they want and try to pit different sections of society against each other. Get out while the going is good because this will only get worse.
    http://poorrichards-blog.blogspot.ie/2013/03/its-time-to-collapse-ystem.html

    • bonbon

      You are at liberty to run at any time. To where? Even NZ’s Finance Minister Bill English wants the “Cyprus” bail-in model!

      We must use our sovereign protection of the General Welfare to put the banks through a bankster sheep dip, and I’ll bet you know what that means.

      In fact the sheep, sorely bitten by parasites queue up!

      So a firm commission in the Pecora tradition, who took J.P. Morgan to the public view and the blatant criminality became public knowledge. No more TBTF : Progressives in the blogosphere are circulating a succinct petition that reads in toto: “Attorney General Holder: Treating powerful individuals and institutions as `too big to jail’ is fundamentally wrong. It’s your job to prosecute criminals. If you can’t bring yourself to prosecute Wall Street crooks, you should resign.”

    • mccougar

      @cooldude,

      Here’s an interesting alternative foundation to money,called Vollgeld (‘complete’ money as opposed to ‘book’ money)

      The basic idea is division of powers into four: legislative, executive, judicial and minting. This way, all money in circulation can be accounted for. It is available to government without borrowing and interest earned goes into the exchequer to ease taxation. Private banks, now reduced to investment and brokerage, would have to borrow any extra money from government and pay interest.
      Here’s a link to a pdf booklet, short and concise, but with all the neccessary detail.
      Joseph Huber and James Robertson, Creating New Money, A monetary reform for the information age.
      http://www.jamesrobertson.com/book/creatingnewmoney.pdf

      I wonder what David would think of it. I’d be interested to hear his opinion.

      • cooldude

        Thanks for the link Mccougar. Debt free money creation is a far superior monetary system than the current one which is completely flawed and is designed to fail much like we are witnessing. My only reservation is allowing the central banks to still have an exclusive franchise on money. By all means let the government issue their own debt free money and insist on this money being used to pay taxes. But why not let other forms of money be used in daily exchanges of goods and services. By this I mean internet money systems such as bitcoin and also digital commodity backed money systems such as James Turk has designed at wwwgoldmoney.com Only by allowing competition in what is used as money can you prevent the excessive money creation which is currently destroying the present system. If people realize the government money is being over issued and is not maintaining it’s value they can simply switch their savings to other forms of money which act as a proper store of value. This will introduce much needed discipline into anyone offering some form of money. This could even include the likes of Tesco who already issue credit cards. Why not go the whole hog and let them introduce the tesco note and see if it is popular. At least they are a solvent company and they have little chance of going broke unlike the commercial banks who are basically mathematically insolvent. This type of choice and competition in what we use as money is the only way to stop these bankers from turning us all into debt slaves in their planned neofeudal system they are trying to implement.

    • cooldude

      This is exactly what i am saying. There is no running involved it is just non compliance with a banking system which is specifically designed to defraud the people through the boom bust cycle which is an integral part of an elastic unbacked currency system and the fraudulent concept that private banks should not pay the price for their stupid errors in any sort of risk control in their lending. Alan Dukes was on the radio last week defending that wanker Boucher’s pay with BOI. He said that it is vital that BOI pay top rates to ensure that proper risk management is now put in place. This is total bullshit because this same Boucher twit was the head man in BOI lending during the boom years. He even courted Sean Dunne in trying to lend him the vast sums of money to buy land in Ballsbridge which was specifically zoned as low rise at the time. In other words he was talking total bollocks and all the interviewer could say was that is true. Are there any decent media presenters left because this is only seven years ago and that prick who was dishing money out like confetti is now trying to throw innocent small borrowers out of the homes that they were mentally pressured into buying. Not just by him but by the media and politicians and the whole Bertie bullshit of the great property ladder.
      Unlike you Bonbon I am only interested in helping individual people to look after themselves and their families. I don’t give two shits about your fascist five year plans or any of your other statist bullshit. I want to break the banking cartel through individual non compliance with these shower of wankers who are ruining so many lives and whose agenda is complete and total control of this planet

      • bonbon

        Unlike you, I believe only the nation can defend the General Welfare – leaving “individuals” to fend for themselves is stone age hunter-gatherer rubbish from junk science Cambridge Uni anthropologists monkeying around with us humans. We let individual banksters to fend for themselves if they insist on the old game.

        The plaintive pied-piper call to go back to a mythical “golden” epoch (with a much reduced population) that in reality never existed, is no match for the trumpet call to action.

        Listen to Dvorak’s New World Symphony and be on alert for that distant bugle, a haunting stanza. That’s how it starts.

  33. molly

    Is the euro grinding to a stop,it seams there’s a certain group of people who want the euro to keep on going.
    They want to keep the euro going because they see it a the best way forward,clearly its is not ,I don’t think the euro started out to be a bad idear but it has evolved into a monster ,all these ultimatums one after another.
    People’s lives have been destroyed,uprooted and at the very least there standard of living has been destroyed .
    What caused the recession a flood of money from the EU.
    What caused the destruction of our country the EU
    We built up our road network with EU money and then the money flowed in like water.
    At what point did fairness get thrown out the window.
    When are the Irish people going to wake up and make a stand.

  34. Bamboo

    Bankers, Banksters, Wankers, Gangsters, Pranksters!
    Surely there must me one word to cover all the above.

  35. martin O Halloran

    Hey David, keep up the good work I’m a big fan!, Is it not the case that Germany is the problem in all this mess. The fact of the matter is their hyper competitive economy is preventing the value of the Euro from falling to levels that would suit the periphery nations. If Germany left the currency bloc would there not be an automatic devaluation of the Euro, thereby allowing the remaining countries to regain competitiveness without austerity policies. Exports would boom, confidence would be restored, and some Inflation would take hold reducing the debt burden. Of course the remaining nations would have agree to structural reforms and constantly promote policies to remain competitive overseen at an EU Level. The ultimate aim should be to reunite Germany into the currency bloc in the medium to long term. Problem solved with minimal social consequences!!!

    • paddythepig

      And the real purchasing power of everyone’s savings would ….. ?

    • paddythepig

      A case of rosé tinted goggles here methinks.

      • Martin O Halloran

        And the real value of everyone’s debt would….?

        Savings would be hit, but the economic impact of the erosion of debt and regaining competitiveness would have positive effects on the economy and get us out of this mess. Do you not think it is a better option than a country stealing your savings?

        At least with a devaluation debt on the other side of the balance sheet is also eroded!

        • paddythepig

          So while everyone is crowing about stealing depositors money, you propose to steal depositors money and no-one is crowing about it. Strange.

          Ever considered any negative effects of devaluation, or considered some of it’s economic benefits are mythical.

    • bonbon

      No way. The problem is in fact the German Banks holding worthless paper, bondholders.
      Unless this is dealt with up front, burning the bondholders as we say, all other party games are off.

      The problem cannot be solved without a Trennbankensystem, a Glass.Steagall splitting of especially the TBTF’s. Any attempt to avoid this is willful fantasy. This must occur across the Atlantic and now. The pyromaniacs who hit Cyprus have no other option, so are going for sheer destruction.

    • Martin

      I agree with you that Germany is a problem but only because it won’t reflate its economy with tax cuts to generate demand which might offset some of the lack of demand in other parts of the Eurozone. But Germany doesn’t want to do this. So we are stuck.

      Best

      David

  36. mccougar

    This was my first reaction to the crisis, a comment I posted elsewhere yesterday, after reading a suggestion on a business blog that the Russians may retaliate the theft of their deposits by withholding gas supplies to Europe.

    “Cyprus could yet be momentous.

    The European banking system is far from dysfunctional. It is a highly effective asset stripping tool in the control of vested interests.
    It functions by setting up divisions and differentials or imbalances, which are exploited through commodification, monetisation, privatisation, loan-sharking and bankruptcy. Operating at a national level, the exploiting narrative is always tailored to the sensibilities and weaknesses of each victim nation, whilst the rest of the international community is sold a different story, blaming and shaming the victims.

    It’s nearly amusing to see that it is the small slip ups that potentially bring the whole house crashing down. In terms of European and global banking, Cyprus is tiny, yet the troika slipped up and showed their true colours in a way that was revealing and shocking to the general public. People are realising that banks and governments can and do steal our money.

    It goes further. The very foundation of the global banking coup d’état is exposed. The Cyprus fiasco included a covert power struggle between elements in Europe’s banking system with some of the Russian dealers.
    On the surface, however, what we all see is banking, with all the coercive power of imaginary digital money, versus the ‘inheritors’ of the still sizeable remains of the Soviet Union, with all its very real assets: natural resources, as well as the remnants of a superpower with military, KGB networks, and even nuclear weapons.

    If and when the Troika walk backwards, cap in hand, people might just realise that the financial stranglehold isn’t real. That if they wake up one morning to find the banks had collapsed, they’d look around in disbelief to see that all the assets around them are still there. Nothing of value changes. Only access.

    My advice, should that day come? Don’t fight over the assets, over the land, the means of production, the resources. Talk to your neighbours in the local community. Consider the commons as belonging to no one, yet to be held in trust or guardianship to the benefit of the environment and all around.”

    • bonbon

      Talk at community gatherings while entire nations are robbed? Exactly what the pyromaniacs would like.

      Apply sovereignty to protect the General Welfare, or be simply eaten alive.

      Split the banks now, let the useless piece off the bailing line. Throw that shark back in the water. We need functioning banks, as any Cypriot will tell you.

      Hamiltonian sovereign credit then to reconstruct the savaged economy on a grand scale – Cyprus must now call for the Marshall Plan for the Med, immediately, a direct challenge and winner. The looser pyromaniacs are finished.

      Helga Zepp-LaRouche Calls for Reconstruction Program for Mediterranean Region

      There is lots of life after the Euro!

  37. Haven’t time to read other comments now, so will just fire off, maybe repeating what’s been written.

    I don’t for a moment believe that this ‘negative interest rate taxation’ measure is impromptu. It is planned and serves a specific purpose, to see what the reaction of EU citizens is to such an outrageous innovation in financial crisis fire-fighting. Governments and corporations do this all the time, they ‘fly a kite’ and see if it gets wings or gets shot down by angry ‘consumers/citizens/debt peons [select according to taste and political persuasion]. It’s a policy proposal and it’s been shot down, so it will be modified until there’s a version of it that’s digestible.

    The Russian involvement is very worrying. I’ve openly queried the cultural racism in the U.K that bemoans the ‘free movement of EU citizens’when they’re Polish, but is silent when they’re Russian. And oligarchs. I know the difference between Russian and Polish and I hear the Russian Bear on the streets of Chelsea aka: Moscow-on-Thames. The Russians use Cyprus as a financial airstrip just as the Yanks and Brits the Irish IFSC Canary Dwarf matrix.

    In South Korea during the late 90′s implosion, patriotic citizens handed over their gold and goods to the government voluntarily, such was the resolve to make it through.

    http://nowiknow.com/south-koreas-reverse-gold-rush/

    Now, they’ve had their Riverdance moment in ‘Gangnam Style’ and may take over world pop culture. That’s some reversal of fortune!

    Here in the UK-Fifth Province, the proposals for drastic measures are breaking through to the mainstream:

    “This would be an extraordinary thing to do and it needs to be thought through carefully.”

    http://www.bbc.co.uk/news/business-21589128

    They’ll do it, they’ll do what they think the Bond Markets require. But PIMCO probably think they’re nutso for not burning them.

    This is an extraordinarily serious escalation of financial terrorism. I haven’t had time to follow this (or Max Keiser’s thrombos) as I’ve only just recovered from Cheltenham and Brum’s “Mother of All Paddy’s Day” jollifications. To end on a lighter aside, I’m wondering just how much Irish cash flooded into Cheltenham and Birmingham last week? I saw very little advertising for the much-hyped “The Gathering”. Admittedly, those Brummie gurriers raising hell in Eastside-Digbeth probably only have the cash for Butlins, as Ireland is hideously expensive for £ holders, since we’ve had an ‘unforeseen’ 25% currency devaluation since 2008. But even in Montpelier, which was rammed with high-falutin’ high-spending accountants and lawyers on the lash from all over the UK, I never saw any ‘outreach’ from any official Irish source. Too busy on the piss at the race-course, perhaps?

    Anyroads, enarf bin sum grate craic inna der Digbeth hood, da Poliz put the whole place on lock-down to prevent another battle like The Kerryman last year. It worked! And the ECB has the EU on financial lock-down too. And it’s working! Bit mixed up that last bit, but I’m tired, up all night planning worldwide mayhem, etc.

    It’s very clear to me that this is an extreme Economic Stockholm Syndrome situation. Don’t see any clear answers. Here’s a definition from Urban Dictionary, that repository, font of knowledge and jargon innovation:

    “The behavior and attitudes exhibited by victims of financial subjugation, causing then to identify with and even defend their oppressors.”

    “Q: Hey, what’s up with Matt? His Dad is on social security, his mom got laid off, his sister’s kids get free school lunches, he collects federal financial aid for college, and he only makes minimum wage working at Walmarts. Yet he keeps talking about how we need to cut taxes for the wealthy and quit spending so much on social programs.
    A: Yeah, he thinks he’s going to be a millionaire soon. He’s got Economic Stockholm Syndrome.”

    regards
    ‘mad paddy from Brum’

  38. Bamboo

    Russians are not only active in Cyprus. I know they have a strong presence in Vietnam, Danang and Nhatrang in particular. If anyone knows of any other places in the world, please let us know.

    • bonbon

      And Obama wants ABM’s aimed at Moscow. Your kind of hero I suppose.
      Also Russia and China are doing quite well on strategic partnerships, and Obama has a Ring Around China, including now Darwin Australia.

      Napoleon and Hitler tried to go after Russia, both European effusions, and Moscow has no illusions.

      Do you?

  39. diarmuidx

    Bail-in of large depositors is the only solution and the fairest.

    In this case there are insufficient bond-holders to burn.

    The Cypriot banks also hold a large amount of sovereign debt, so once again the dance of death between broken banks and a weak sovereign continues.

    By the way, bank deposits are nothing more than a loan to a bank. Sometimes loans dont get repaid. Deposits in excess of the insurance limit are in an even weaker position.

    And, keep in mind, a 100,000 deposit in Cyprus has earned over 15,0000 euro in interest since Cyprus entry into the Euro in 2008. This is well in excess of what any other Euro area bank would have given you.

    With this extra reward comes extra risk.

    Cyprus has been a rogue euro banking area since 2008 and now needs to choose between Euro or Russia. Unfortunately just like the peasant politicians in Ireland , the Cypriots have really sold-out their own citizens. They choose to dance to the Russian mob cash, just like the Irish Pols and the developers in the Galway tent.

    There are multiple stories of the excesses and corruption of these Cypriot Pols. They chose cash over the long term consequences for their own country.

    Sounds very familiar.

    So everybody cheer-up.

    Cyprus is no systematic threat, just a little bit of Euro business that needed to be taken care of.

    This situation has been known for along time, it was just a question of the Eurogroup deciding when was the most beneficial time to slap this miss-behaving child.

    With one eye on the election cycles in europe and another on Euro strength, now was the time to cause a little more euro weakness.

    The macro picture is the key here. Currency war is happening. Europe needs growth. A weaker euro helps.

    There are many more mini-crisis that can be brought to the frontline at appropriate times to help weaken the euro.

    However as each of these crisis erupt, and the form and style of each negotiated solution emerges, it becomes much clearer how intellectually and strategically impoverished our own politic elite are and were.

    And when one elects peasant politicians you will get incompetent execution.

    Period.

    When we rank the PIIGS+C in terms of how good a job the local politicians did in the negotiated solution.

    Iceland would be on top and poor old Ireland would be on the bottom.

    In 2008 we had a debt to gdp ratio of 25% !

    Well done lads.

    Ah.
    But he is a “nice fella”,
    “but he tried his best”……
    “sure we have to vote for him again….. we always have”
    ” we voted for his father…… so we’ll vote for his son….”
    “… we wont let Dublin elites tell us who we should vote for….. ”
    “…. he made a few mistakes … but he deserves a second chance”
    “… he was a great GAA player……”

    Good luck with that!

    • bonbon

      An amazing defense of Olli Rehn, and the pyromaniacs, in fine Armani suits of course. Have a look at the eyewitness account of the meeting that took place. It should be clear that no amount of legalize can fix this. It is unraveling before their noses and they are doomed to make it worse. They have really not the slightest idea of what to do. How about that. And you try to paint a picture of control – hilarious!

      You speak with the most impoverished empty space where a mind should be, a true liberal. And to sit in judgement promoting theft! How long do you think they will get away with that?

    • SMOKEY

      David, If I remember correctly you said that that stealing savings could happen here not that long ago.
      As for the once off stealing of deposits and the attitude of the ministers who will do the theft, this quote comes to mind,
      When a man is first exposed to crime he will “abhor it” after a time he will “endures it” and once it is the norm “he embraces it”

    • 5Fingers

      The real problem all along has been the theft of savings by a number of means. I am only starting to see this now. After tax earnings are being pilfered.

      Methods:
      - Steal from depositors (negative interest rates)
      - Use pension funds
      - Zero to low interest rates
      and any variation of the above.

      Let’s park the statists/non-statists arguments for a minute and look at what is really going on. By lowering interest rates so much and printing money in effect, we are de-risking to a level to make speculation the only option for banks to get money and balance their books. Digest that. De-Risking in a climate where depositors are likely to become more jittery makes speculation the only do or die option at the moment.

      Once the once valued depositors are disregarded (and I never realised this until Cyprus came into the fore), then the whole thing explodes. Banks no longer lend to grow…they lend to speculate – they have no choice. This is where the Keynesian approach crumbles. This is where Animal Spirits turn truly Animal

      • bonbon

        They do not START to speculate, they have been at it since 2000 full throttle!

        Animal Spirits with Irrational Exhuberance as Sir Alan Greenspan obfuscated. And just watch the Irrational Atlas Shrug of Greenspan’s adored Ayn Rand – pure destruction. The Economist Mag will likely call it Creative Destruction.

        The EU attack on Cyprus is Atlas Shrugging, and no one should be surprised.

        Glass-Steagall or be shrugged into the dustbin!

  40. joe hack

    “”"”"Deposit Guarantee Schemes reimburse a limited amount of deposits to depositors whose bank has failed. From the depositors’ point of view, this protects a part of their wealth from bank failures. From a financial stability perspective, this promise prevents depositors from making panic withdrawals from their bank, thereby preventing severe economic consequences.”"” http://ec.europa.eu/internal_market/bank/guarantee/index_en.htm

    “WHOSE BANK HAS FAILED” THIS DEPOSIT GUARANTEE ONLY APPLIES IN THIS ONE CIRCUMSTANCE.

    David,

    Are you writing for SKY news now?

    If you believe tax is theft then what was proposed in Cyprus was theft however if don’t believe taxes are theft then your articles basic stance is a contradiction.

    As for trust the banking system needs to be cleaned up: if you want trust; it is reported that the banking system as is in Cyprus in not a bastion of ethics or morals, far from it.

    listening to Cypriot MPs one would conclude that they believe that ‘butter would not melt’ their banking system that has been allowed to develop into some form of tax haven, a asylum for people like those that stole from this state.

    Who are the thief’s…

    As for precedence’s there is word called tax it has always been applied a tool
    The Cypriote government may regret there action last week they may now have to return to the deposit tax and do similar to that suggested by the IMFs Christine Lagarde – a higher tax on deposits over 100k.

    Is all the money which is said to be in the Cypriot banks really there, we made find out soon enough?

    If you want trust why not start by cleaning up the banking system, why not start NOW!

    The Germans are making more sense every day so whom is stalling that process. You over emphasize the importance of the election in Germany they will have effect but not by as much as you appear to believe.

    After all you support the money system as is (money that doesn’t really exist)

    It is great to see that you have moved to take account of ‘politics’ in relation to the money tool that you and the IMF support.

    Your articles of late are quite good this one however is not logical as glace in satisfies the shy viewer…

    Corruption is inherent in most humans the only way to stop is to rule against ourselves, enslavement for freedom if you like…

    We need to stop relying on precedence’s

  41. joe hack

    Your articles of late are quite good this one however is not logical at a glance it satisfies the SKY viewer…

  42. irishetcher

    Hi David,

    Like the articles and the new site. But, can you get your webdesigner to but some padding between the paragraphs. Having them bunched up together makes the job of reading your pages tortuous.

    Regards

    • Hi Irishetcher

      Let me have a look at things. Thanks for the heads up.

      Best

      D

      • Adam Byrne

        I’d really love it if the bit at the top where it says the number of comments beside the Irish Independent (or Sunday Business Post) was hyper-linked so we could jump straight to the comments, if we have already read the article. It would save a good bit of time. Thanks.

  43. molly

    The bank gurantee is not worth the paper it’s printed on if Ireland went bang tomorrow do you realy think you would get your savings back.
    Look at the credit unions and Anglo Irish ,the government pulled the plug on Anglo and the credit unions don’t get the money back,rush in ,in haste and repent at your leisure .

    • Don’t use that language.

      I will decide what is ‘must see’

      You overlty polictically correct shallow as usual namby pamby internet brainwashed fucking wanker mammy’s boy of the past generation

      If it is ‘must see’ then at least provide a headline and tagline

      Is it John Pilger?

      You asshole. Fuck off into your hole.

      • bonbon

        You are excreting all over the blog again. A shill.

      • Paul

        Keep the head….as some of the best Celts did in the middle of the park. BTW watch ‘ Gers. Just burned all creditors, income back up, team stronger and will be challenging in a few. Maybe lessons for Cyrus/Ireland from the men with the sash hs father wore!!

        David

  44. Belsen was a gas and this is a holiday in the sun. FFs lighten up.

    You’d think it was the end of the world.

  45. wills

    Firstly, lookit, the EURO is not the problem.

    Secondly, Cypriot people own 400 billion euros of oil n gas recently discovered off its coastline.

    Scratch surface and could it be that the power elite criminals running the banking system are in-fighting over who is getting their slice of the action when the oil n gas is opened up?!

    I think it is so funny to see this Cyprus *ladykillers* spoof underway. It reveals so much more in how the banking system is nothing more than a criminally run racket with the power to steal anyones savings, public monies, steal from the poor, the sick and the old (pensions), enforce govts to bail out their ponzi scams and to top it all off get away with it in braod daylight.

    • bonbon

      Russia was not impressed with the “gas find”, and the finance minister returned from Moscow empty handed. Now it IS the probelm of the Euro, no way to avoid it. The “generous” idea to swap deposits from “gas” bonds, with no trace of a pipeline anywhere (would the depositors have to pay for those too?) will not stop the bank run right around the corner.
      Headlines today in Germany, people are suddeny worried about their money.

      Make no mistake, this breach of the very idea of a bank, is the end of trust right across the Euro theater.

      • molly

        When they steal the money from the bank accounts their,savers will take the remainder of their money out.
        If they get away with it there wheres next?

      • Wills

        …your reply has gone off on a tangent which shows me you are on here to spam peoples comments which I always suspected!

        • molly

          How do you work that out,I am on here because I don’t like whats happing to Ireland the country I live in and I can see thing that are happening to country’s in the EU ,that affect Ireland .

          • Wills

            Molly you know by the *reply* comment system my *reply* is not for you it is for someone else.

            Why pretend otherwise.

        • molly

          Sorry and I don’t do pretend it was a genuine mistake.

        • bonbon

          Your tangential reference to huge gas finds did not impress Russia who sent Sarris home with no deal, rather ricocheted right off the water.
          It does not impress other either, as no-one has pipes. And as Max Keiser pointed out, turkey may dispute it.

          So face it, the Euro elites have shown their true pyromaniac face, for all to see. No one believes anymore their deposits are safe.

          Now what will you say about that, spammer?

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