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While reading about Texas wanting its gold returned to Texas this morning, I came across this article about Germany wanting its gold back from the US Federal Reserve. And questions re; whether or not its really still there.
While reading about Texas wanting its gold returned to Texas this morning, I came across this article about Germany wanting its gold back from the US Federal Reserve. And questions re; whether or not its really still there.
To which they were told "we'll have to owe ya one, how 'bout one of these here bonds instead"? We'll just scratch out the name China on it and write in yours. Sound good?
The threat is the politicians themselves. The market will correct itself if left alone.
Without EU intervention, the market correction would have arrived in the form of the Cyprus banks collapsing. What do you think would have happened to people's savings then?
The Cyprus government did what free-market fetishist are always claiming governments should: Kept out of the way. Cyprus' banks, realizing that they had no oversight, decided to turn their island into a Cayman of the Med, a nice people for Russian oligarchs to stash their holdings with no uncomfortable questions being asked.
Bank boom, hurrah! But a banking industry that turns over 8 times the host country's GDP means the banks of course has to allocate the deposited funds outside the country. The Cypriot banks decided that Greek Gvt. bonds were just the thing. Sort of like a Switzerland without the smarts.
Greek bonds turn out to be so much toilet paper. So here's a nice kettle of fish - 120 billion of deposits, but 22 billion lost thanks to Greece. The banks run to the Cyprus Gvt. saying "You failed to stop us! Your fault! Also, give us money, or we'll fold, and good luck getting elected ever again if that happens." The Cyprus Gvt., having not a lot of money and no way to tax economic activity on the island further - because everyone who is anyone is making their money off banking - runs to the EU with its hand out. And the EU says "First show us you're willing to raise some cash on your own." The Cyprus Gvt. had to figure something out, and it turned out to be this little scheme - only the banks are stalling now, and you can bet that the larger accounts are mysteriously moving as we speak.
The problem here was politicians not having the n.ts to go the banks and say "Are you sure this is a viable model in the long run?"
They have the fear of total collapse of the entire EU in people's mind.
Would that really happen ? Who really knows because none so far have be allowed to declare bankruptcy.
Iceland survived their crash just fine and are that much better off today for not taking IMF money.
Then again, Iceland stood all by themselves, not part of the EU and not beholden to the ECB/IMF.
The EU financial fiasco just shows that parts of globalism really doesn't work.
Cyprus news today, from zero hedge:
Here We Go: Cyprus To Sell €400 Million In Gold, About 75% Of Its Total Holdings, To Finance Part Of Its Bailout
Curious why every bank and their grandmother, and most recently Goldman today, has been lining up to push the price of gold as low as possible? Here's why:
•CYPRUS TO SELL 400 MLN EUROS WORTH OF GOLD RESERVES TO FINANCE PART OF ITS BAILOUT - TROIKA DOCUMENTS - RTRS
Or about 10 tons of gold. But... the bailout was prefunded and there was no need to provide any additional cash?
What happened: was the deposit outflow discovered to have been even greater than the worst case scenario and thus Cyprus needed even more cash? As for the buyers? We will venture a guess: central banks buying at the lows.
Finally: congratulations Cypriots. You are now handing over your gold for the one time, unbeatable opportunity to remain a vassal state to the Eurozone.
Cyprus news today, from zero hedge:
Here We Go: Cyprus To Sell €400 Million In Gold, About 75% Of Its Total Holdings, To Finance Part Of Its Bailout
Curious why every bank and their grandmother, and most recently Goldman today, has been lining up to push the price of gold as low as possible? Here's why:
•CYPRUS TO SELL 400 MLN EUROS WORTH OF GOLD RESERVES TO FINANCE PART OF ITS BAILOUT - TROIKA DOCUMENTS - RTRS
Or about 10 tons of gold. But... the bailout was prefunded and there was no need to provide any additional cash?
What happened: was the deposit outflow discovered to have been even greater than the worst case scenario and thus Cyprus needed even more cash? As for the buyers? We will venture a guess: central banks buying at the lows.
Finally: congratulations Cypriots. You are now handing over your gold for the one time, unbeatable opportunity to remain a vassal state to the Eurozone.
it must be a proud day, but not for Cyprus.
Ok.......please talk to me like I'm 5 and explain this to me. It sounds dire but I'm struggling to fully understand what you wrote and what the repurcussions are for Cyprus, the EU and the world.
Lol the price of tying your less productive economy to Germany's keeps going up.
Quote:
Originally Posted by floridasandy
Cyprus news today, from zero hedge:
Here We Go: Cyprus To Sell €400 Million In Gold, About 75% Of Its Total Holdings, To Finance Part Of Its Bailout
Curious why every bank and their grandmother, and most recently Goldman today, has been lining up to push the price of gold as low as possible? Here's why:
•CYPRUS TO SELL 400 MLN EUROS WORTH OF GOLD RESERVES TO FINANCE PART OF ITS BAILOUT - TROIKA DOCUMENTS - RTRS
Or about 10 tons of gold. But... the bailout was prefunded and there was no need to provide any additional cash?
What happened: was the deposit outflow discovered to have been even greater than the worst case scenario and thus Cyprus needed even more cash? As for the buyers? We will venture a guess: central banks buying at the lows.
Finally: congratulations Cypriots. You are now handing over your gold for the one time, unbeatable opportunity to remain a vassal state to the Eurozone.
it must be a proud day, but not for Cyprus.
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We'll just scratch out the name China on it and write in yours. Sound good?
