![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
Cyprus
Hey, Americans! Did you know that the country of Cyprus went bankrupt yesterday? I thought not. Did you know that tomorrow just happens to be a regularly-scheduled bank holiday in that country? After banks closed on Friday for a three-day weekend, the people of Cyprus were told that their deposit insurance was ineffective and they will lose 7¢ of every euro they thought they had — and the cabinet politicians assured them that they had negotiated this great deal because the ECB's original offer would have confiscated 40¢ of every Cypriot euro! As you can imagine, the citizenry are a wee bit unhappy after hearing this news, with some minor-league rioting, so the back-bench politicians are making a show of not voting for the deal today like they were told to — so the cabinet declared that Tuesday will now be an unplanned bank holiday, as will every day from now until the government of Cyprus obeys its orders from Europe, because Cypriot banks actually failed last June and have been living ever since on borrowed time and ECB handouts, which have now come to an end.
Did you know that the people of Iceland were in a similar situation in 2007, and they refused to bail out the banksters, despite the dire warnings that their world would end if they didn't? Well, things were bad for a few years, but Iceland's world didn't end, and they're doing sort of okay these days. So it is not yet clear whether Cyprus will actually bend over as instructed. The obvious alternative is to refund 100% of depositors' money for Cypriot citizens and make the foreign depositors take the loss. Problem: the foreign depositors in Cyprus are widely believed to be Russian mobsters, who do not take kindly to losses — and Cyprus owes a whole lot of money to the government of Russia, from whom they took a bridge loan last year. Did you know any of this? Because American media have all collectively decided that you don't need to know. But (for now) we still have the Internet.
Meanwhile, anyone who is paying attention will realize that "FDIC insured" doesn't mean anything any more. There is not enough money in the world to make all depositors whole. Eventually the USA will finish flooding the world with worthless government bonds that can never be repaid, and there will be no one left still dumb enough to buy them, so the government will run out of money, so it will no longer be able to make good on "FDIC insured" promises (because that's where the money has been coming from, folks).
Welcome to the Brave New World, where your news media are censored for your protection. Because surely you wouldn't have wanted to hear about Cyprus if it would be upsetting and maybe put you off of your next shopping spree? The world needs you to keep shopping, because God knows your money isn't safe in banks. But that's such a downer. Wouldn't you rather hear about two high-school football players who were convicted of rape because they tweeted about it? The poor girl! Those poor strapping young men whose athletic careers are now RUINED! Let's not worry our pretty little heads about some boring "money" thing. Change the channel, Edith!
Did you know that the people of Iceland were in a similar situation in 2007, and they refused to bail out the banksters, despite the dire warnings that their world would end if they didn't? Well, things were bad for a few years, but Iceland's world didn't end, and they're doing sort of okay these days. So it is not yet clear whether Cyprus will actually bend over as instructed. The obvious alternative is to refund 100% of depositors' money for Cypriot citizens and make the foreign depositors take the loss. Problem: the foreign depositors in Cyprus are widely believed to be Russian mobsters, who do not take kindly to losses — and Cyprus owes a whole lot of money to the government of Russia, from whom they took a bridge loan last year. Did you know any of this? Because American media have all collectively decided that you don't need to know. But (for now) we still have the Internet.
Meanwhile, anyone who is paying attention will realize that "FDIC insured" doesn't mean anything any more. There is not enough money in the world to make all depositors whole. Eventually the USA will finish flooding the world with worthless government bonds that can never be repaid, and there will be no one left still dumb enough to buy them, so the government will run out of money, so it will no longer be able to make good on "FDIC insured" promises (because that's where the money has been coming from, folks).
Welcome to the Brave New World, where your news media are censored for your protection. Because surely you wouldn't have wanted to hear about Cyprus if it would be upsetting and maybe put you off of your next shopping spree? The world needs you to keep shopping, because God knows your money isn't safe in banks. But that's such a downer. Wouldn't you rather hear about two high-school football players who were convicted of rape because they tweeted about it? The poor girl! Those poor strapping young men whose athletic careers are now RUINED! Let's not worry our pretty little heads about some boring "money" thing. Change the channel, Edith!
no subject
no subject
no subject
Good news:
http://www.businessinsider.com/cyprus-parliament-vote-on-bailout-deal-2013-3
It's been voted down; not going to happen (at least, with the current proposal).
My guess is that the politicians were trying to figure out "can we get away with this?". Now they know how much opposition they'd get, so they'll try something "half way" there, and will probably succeed.
Interesting that supposedly many of the large bank accounts were owned by Russian mobsters... I wonder how many politicians just realized that they would be on the hit list if they supported this proposal.
Another article...
"As recently as in January, Cypriot banks offered 4.5% for a 1-year deposit while other peripheral countries, including Italy and Spain, offered about 2.5%, and Germany 0.9%. Since 2008, a depositor in Cyprus has earned 31% in yield (before tax), compared with 15%-18% in Italy and Spain and 8% in Germany. Now do your math on these numbers: A Cypriot (or foreigner) who placed €100,000 in deposit in Cyprus in 2008 would by now have earned just around €15,000 more than if he had placed that money in Italy or Spain (and some €23,000 more than if he had placed it in Germany.) Why does the Cypriot parliament (and many commentators) seem to suggest that a 15% tax on such deposits (which would cover the bill also for the sub-100,000 Euro deposits) would be unreasonable now the banks are in trouble?"
no subject
no subject
In the political realm, "rumours" are almost always false. They are being pushed to the media to help maintain the public calm, not because the person spreading the rumour actually believes in it.