Submitted by Bill Holter:
The news over the weekend is that the Cyprus banking system will have a “holiday” on Monday which was “scheduled” AND at least Tuesday which was not. The ECB and IMF wanted a 40% haircut and apparently the deal reached is one where balances under €100,000 will be reduced by 6.75% and by 9.9% for those over €100,000. Understand that much of what is deposited in Cyprus are funds from wealthy Russian oligarchs and mafia.
In this case the depositors are first in line which will surely cause a bank run in Cyprus…which will be followed by runs in other places like Greece, Spain, Italy and Portugal. Make no mistake, this could turn into something ugly and HUGE very quickly as the world runs entirely on confidence and won’t run without it.
Investors (depositors) the world over will see this and shortly understand that the rule of law is no longer and that “possession” is now more than 9/10th’s of the law. The possibility exists that within 2 weeks the entire system is shuttered.
I’ve read many comments where people believe that the PM’s will be smashed this coming week as they have been “trained” to do with Dollars being the “safe haven” trade. I don’t think so, “this time is different”. In the past the Dollar caught all of the safe haven trade…because the populace needed to be trained. You must understand that when everything IS under control, the “show” of Dollar strength and Gold weakness was doable. Whether the Cyprus situation is real, done by stupidity or “planned” doesn’t matter, REAL fear will be generated. …And with real fear will also bring with it REAL purchases of metal.
I am not being overly dramatic here, the possibility exists that “this event” sets off the forest fire. If it is not this it will be something else sooner or later as the mathematics of the current system do not and cannot balance out. I cannot believe that this is a “mistake”, only if you wanted to implode a system would something like depositors being defrauded occur. ……….. the above was written Saturday late.