Eurozone/IMF Trigger Collapse For a Lousy €10 Billion! – Are They Pulling the Plug?

bank collapseSubmitted 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. 

This is a disaster on so many levels I can’t even count them all.  First off, what happened to the rule of law?  I thought that in a capitalistic society that equity holders lose first, then preferred shareholders followed by unsecured then secured debtors…DEPOSITORS are the absolute last in line to lose money.  This is being called a “tax”, when in reality it is outright theft! 

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. 

My first thought was “why”.  Why would the banksters promote a bank run which this surely will do over $10 billion or less?  This is not even chump change and could be printed instantaneously with no cost.  Are they “pulling the plug”?  Has the tipping point arrived?  Is this “payback” for the 20 tons of heroin that Russia seized a week ago?  What is the possible upside to scaring depositors into withdrawing all of their funds?  This cannot be a “mistake” where they are miscalculating the ramifications, no one is that stupid. 
If I had to guess, this will end up where “currency blocks” are formed.  The Euro may split into a north/south currency where Russia is included with the “hard money” Germans of the north.  I can see an Asian or maybe 2 Asian currencies, a South American currency and a U.S./Mexico/Canada currency.  Have the central banks who have been accumulating Gold over the past years seen this “coming”?  You bet they have which is why they been buyers!
This coming week will be extremely interesting to say the least.  How fast will the bank runs spread?  How far?  And of most humor is that the hedge fund community is now the least long and most SHORT the Gold market that they’ve been since at least 1999…Aug. to be exact and we all know what happened then.

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. 

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.  No stock trading, no banking, no credit or ATM cards.  With this will come “distribution” or lack of it and the shelves will be bare even if you do have Dollar bills to spend.
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.
After pondering further on this situation, I find it extremely curious that Gold has been boxed in for the last 5 months only leading up to THIS.  “THIS” being a potential bank run that doesn’t need to happen here and now but apparently will.  Everything possible has been done over the last 5 months to separate owners from their precious metals and to scare as many possible away.  Since the late 90′s, whenever “something bad” financially happened, Gold would go down and the Dollar would strengthen.  It wasn’t “right” but it was the way it was.  Now we have a different setup.  Those who own Gold now and have hung on will only it have parted from their dead, cold, hands.  Everyone else has been scared away to the point that even hedge funds collectively are short and betting on the price to drop…at the same time that …along comes an event that has the possibilty of tanking the global banking system.  What I am saying here is that a huge move could be afoot and one that is “sanctioned”.  Just my thoughts.
Could “Cyprus” be avoided?  Yes, and it still can be easily with some $10 billion of confetti.  IF it is not avoided?  Then it is game on and “the wind” will be at the PM backs and those that fought so hard for so long to suppress the prices will be on the other side of the trade and “mark” prices to the moon!  It is hard to tell now but a far better picture and clearer read on the situation will be available probably before “beer thirty” this coming Friday (maybe even far sooner).  Those who stepped up over the past month or so and purchased Gold or Silver on the dips will probably be well rewarded in very short order
Regards,  Bill H.

Comments

  1. You would think that this bank theft would spark a call to action by bank depositors all over Europe.  We shall see. 

    • Pollo, I agree with you.  Let’s see if Europeans are smart.  This better wake them up but for some reason I do not think people will pull their money from the banks or convert them to gold or silver.  I kind of given hope that people will open their eyes.  I’ve warned many people about currency debasement.  I tell them to buy precious metals but they don’t do it.  They see the volatility without knowing why the PMs move up and down.

    • I think the timing of Cyprus is interesting. On the 27th the US gets to revist its debt ceiling. Maybe this was a preemptive strike on the Euro, to bolster the dollar in antcipation of its plunge. At the same time Cyprus was a chance to financially smack Russia while being a Russian political embarrassment as well.
      Did Jim Willie call it or what. He said a small bank in Europe would start the dominos, so here’s small Cyprus banks, and raise you a sovereign state.

    • The canary died over the weekend.

    • World Wide..Most people don’t realize the banking system is all linked together. Everyone should have taken their money out of the banks. I have not heard anyone on the news in Hawaii this morning mention this in detail. Oh well so be it. I have other things to take care of. When this thing goes down they are going to be running in mass all over the place and I am for one will be sitting in a place pretty on top of the world not worrying about a thing. A mass rush will go into these metals. Can you imagine being one of these sports stars or actors or actresses thinking they are safe in the bond or treasury markets. Everything that they have earned is worthless..

  2. The possibility exists that within 2 weeks the entire system is shuttered.
    -  -  -  -  -  -  -  -  -  -  -
    The possibility also exists this will be smoothed over and the sheeple will do nothing to protect themselves and will soon forget about it.  So far there has been only a slight upward blip in PM’s and a downward blip in the opposite direction on Wall Street.
     
    What a prudent person needs to keep in mind is that those folks who kept their wealth outside the Cypriot banking system still have 100% of the wealth they possessed last week, whereas those with savings in the bank are now down by 6.7% or 9.9%.

  3. It`s a huge mistake to underestimate people.  Including how stupid they are. It never ceases to amaze me.

  4. Something else is going on.  There’s another motive behind this.  Example–Lehman Brothers.  Why did TPTB let Lehman go under?  Turns out Lehman was not in serious trouble.  The Lehman bankruptcy was a JPM orchestrated takedown for both (1)profit and to (2)nationalize Freddie and Fannie for the purpose of concealing all the mortgage fraud.  Something  nefarious is going on here in Cyprus, too.

    • @Ugly:  One has to only understand WHO’S money is it that is being “borrowed”.  The Cyps have a few bucks involved, but the vast majority of this money belongs to elitist Russians and the Mafia.  If one thinks this will go away quietly, NEVER HAPPEN!  To your point of some nefarious goings on, well, besides what I said here, it may be that some “outsider”, whom I really don’t know who it is, could be trying to do a HOSTILE TAKE OVER of the lucrative COCAINE trade that is where the $$$ comes from???

  5. As of right now we don’t know exactly how this is going to unfold.  Russia is screaming now I am sure and they are probably on the phone right now with IMF officials and things are being said right now that probably can’t be printed.  What will be Russia’s reaction once this is a done deal?  I am pretty sure that Russia will get their come uppance.  Those Russian Mob creeps are going to get their money out of Cyprus most likely.  I expect the banks to be on holiday for the rest of the week while this is being sorted out.  Cyprus banks are in some trouble right now.    

    • Those individuals who are responsible for the decision to steal money from the Russian mob are obviously underestimating the power which they wield, as well as the length of their reach.

    • I agree, Mammoth.  Stiffing either the Russian billionaires OR the Russian mob is an idea that is not compatible with a long or healthy life.  Neither of those groups take getting pooped on lightly.  This is NOT over, not by a long-shot.

  6. Amen!  To any SHEEPLE that may accidently come upon this site, if you think this can’t happen here, just start wearing a hard hat.  What will be raining down on you VERY SOON will be the end as you know it!

    • Addendum to sheeple alert:  What do you think happened at MF Global, PFG-Best, and Sentinel?  Those were robberies too.  
       
      As has been said, “The best way to rob a bank is to own one”.
       

  7. Just because half the money in Cypriot banks is Russian money, the other half does belongs to the Average Joe. 
    This 10 billion euro bailout is only about half of what is needed to ‘fix’ the banks.  Once the funds are confiscated and put back into the bail out banks, the Cyprus debt to GDP will go to 140% from 90%.  That is a sure fire recipe for economic depression. And what’s more, after the IMF steals this 10 billion the ECB will come in and start with their bulls*** austerity programs and screw the Cypriots into the ground just like the Greeks, only after they bag that 10 billion. 
    here is a self answering question.  Imagine the US government taking 10% from your bank account or pension plan and then telling you that you must live in poverty for the rest of your life because some bastard banker needs a bailout and a billion dollar bonus.  Ooops, it already happened.  The housing bubble, lehman, bear sterns, I could go on but everyine gets the picture.
    Get the freak out of this empire of debt. tell the bankers to go to hell.  this crap makes me psycho bats*** and that’s not saying much
    The Cyprus bank holiday is extended to thursday Which thursday is that?

    • @AGXIIK, good thing the US .gov is only taking 2% per year out of our savings through the inflation they are causing by printing money.  That IS the inflation rate, isn’t it?
       
      Ha ha.

    • AG:  ”Once the funds are confiscated and put back into the bail out banks…”
       
      It will be pi$$ed away just like all the other money these idiots get their sticky fingers on.  Nothing ever changes with these slime-weasels.  Giving them money in a bail out is like giving heroin to an addict to bail him out.  It not only won’t work, it CAN’T work.  So why do these jacka$$ politicians keep trying this?  Because they can?  Probably.  :-(
       
      Mammoth:  Yeah, 2%, that must be it.  But don’t count food or fuel.  Doing that will bollix up the numbers we’re creating out of thin air, just like the currency we print!
       

  8. 2% inflation?  Riiiight,  fuzz boy.  That assurance makes me feel so warm and wooly.  LOL
    Silver front runs inflation no matter how much inflation runs up.  Or so I hope.  $50 silver would be nice start IMO

  9.  
    If it is dirty money, I want to see the court’s decision, in which it is written.

  10. People don’t believe me when I say this but, THERE ARE NO COINCIDENCES.
     
    Follow the money and connect the dots and what is happening will make sense.

  11. If they can just wait until after April to pull the plug then I’ll be able to add one more big stack to the pile.  That’s just me being greedy though.  

  12. I think that a property in Cyprus will fall by 20-25%. This finally kill the banks by reducing their assets in financial balance sheets.

  13. I wonder what the price of gold & silver is today on the streets in some of these countries?

  14. I think this was a planned event for a good reason, it gives them the excuse to bailout Euro zone banks in the future, which will require tons of money printing, they rational will be, if we don’t bail the banks out with QE, we will end up like Cyprus, and we don’t want that to happen!
    So it will take the pressure off the ECB to do whatever they need down the road, they will say, “we won’t take depositors money like they did in Cyprus, we will use the ECB to recapitalize the banks”.
    We are dealing with very nasty people, they don’t not make mistakes over 15 billion euros, this was planned out, plus they got the Russians, they killed two birds with one stone.
     
     
     
     

    • Seconded. I think they’re paving the way for massive Quantitative Easing. This is not an accident. They’re not stupid. They must have known there would have been a backlash.

      They’ve built up all the debt, borrowing from each other, and now they’re going to fully monetize that debt.

      The Eurozone is joining the race to debase.

  15. They try this in the USA and bankers are going to become the hunted.

    • Better than that, Mary, they WILL be FOUND!  And dealt with as is appropriate for their crimes.
       
      Once upon a time, there was a government official of some kind who was so rapacious with tax collecting that a revolution occurred.  Once the revolution was done, the fellow was captured.  As his punishment, he got to drink some liquid gold.  Somehow, that seems appropriate for these banksters as well.  Something cheaper would be better, though, as these a**holes do not rate getting gold poured into them.  Perhaps boiling fat rendered from other banksters would be appropriate?  Something along those lines…
       
       

  16. A couple of unintended consequences of the Cyprus deposit confiscation. The major parties in Cyprus voted against this theft.   Leaving that aside for a moment, the run on deposits across the Eurozone is going to start trillions of capital flowing around seeking a home.  The Swiss will offer negative interest rates on their deposits.  the Germans and French already offer NIRP    This currency will seek a safe harbor and it may not be the US since we offer bupkes on deposits today. 
    Investing back into economies that are questionable at best in their growth opportunities while governments are proving to be liars and thieves, this cash must find a home quickly.  Gold and silver may be beneficiaries to this FIAT seeking a warm place to rest.
      These actions may be the elusive factor that increases the velocity of money.  The public’s confidence in currency is pretty much lost no matter what happens in Cyprus.  But loss of confidence AND money moving quickly to find any home could be a pivotal even in the inflation that has been kept down due to the very low velocity of money.  Nothing like a good crisis to get money moving double quick.

  17. This is no longer a capitalistic society when there are banksters who are favoring about themselves and the other corrupt politicians. Like Chris Duane said, just walk out of their paradigm and they won’t be able to do that anymore to you.

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