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Cyprus government confiscates 10% of personal bank accounts. Coming to USA?

Discussion in 'BBS Hangout: Debate & Discussion' started by otisthorpe3, Mar 18, 2013.

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  1. otisthorpe3

    otisthorpe3 Member

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    http://www.dailymail.co.uk/news/art...rmed-forces-Cyprus-cash-machines-EMPTIED.html

    Up to 60,000 British savers are to lose thousands of pounds each as expats in Cyprus have their savings decimated in part of a painful bid to bail out the bankrupt island.

    The move sparked panic and violent protests yesterday as crowds desperately tried to withdraw their money at cash machines.

    Restrictions have been imposed to stop people emptying their accounts or moving their money out of the country following the deal with other eurozone finance ministers, under which ordinary citizens’ deposits will be directly raided for the first time.

    One furious expat said: ‘This is plain theft. I’d love to hear someone explain to me why it isn’t.’

    And one of the 3,000 British service personnel based on the island said: ‘I stand to lose €4,000 [£3,500] We’ve tried to save quite hard while we are here – that’s been thrown back in our faces.’

    Under the deal, all bank deposits over €100,000 will be hit with a levy of 9.9 per cent. Those with smaller savings will pay 6.75 per cent.

    But financial experts said the move – designed to stop Cyprus crashing out of the euro, potentially destroying the currency – would send shock waves through the eurozone.

    If savers in other troubled nations fear their accounts might be next, they could withdraw their money and spark a catastrophic run on the banks.

    Economist Howard Archer from IHS Global Insight said: ‘It is an alarming precedent to hit the man in the street. As much as they say this is a one off, people will say if they can do it once they could do it again.’

    Shirley Brooks, 61, originally from Manchester, stands to lose €18,600. She said: ‘I am extremely angry. This is our retirement money, and there was no warning that this was coming. I don’t think we should have to pay anything as we did not cause the problems in the economy.’

    ‘And now they’ve done it once, what’s to stop them deciding to do it again next week? If there’s a run on the bank, that’s a terrifying thing.’

    Her sentiments were echoed by former Army officer Graham Smith, who moved to Cyprus from Dundee five years ago. ‘I don’t believe we Brits should have any money taken,’ he said. ‘We have not contributed to the bankruptcy. If anything, all we’ve done is contribute to the economy.’

    He stands to lose about €2,000, as does financial adviser Steve Carr, who is originally from York but has been living in the coastal city of Limassol for the past 24 years.

    He said the supposed solution to the island’s woes could make matters worse: ‘When the banks reopen, people will start moving their money out of Cyprus because they don’t want this happening again. This could create a run on banks, which would be a very bad thing for Cyprus.’
     
    #1 otisthorpe3, Mar 18, 2013
  2. pippendagimp

    pippendagimp Member

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    #2 pippendagimp, Mar 18, 2013
  3. bobrek

    bobrek Politics belong in the D & D

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    Not coming to USA.
     
    #3 bobrek, Mar 18, 2013
  4. Major

    Major Member

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    Yeah, I'm not understanding why anyone would even think that. Cypress is doing it because that's the condition of their bailout by the EU. The US doesn't have conditions of any bailout since we print our own money.
     
    #4 Major, Mar 18, 2013
  5. rockbox

    rockbox Around before clutchcity.com

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    We would never have to do this. All we would have to do is inflate our currency. It does the same thing but hits everyone pretty much evenly including entitlement recipients.
     
    #5 rockbox, Mar 18, 2013
  6. bobrek

    bobrek Politics belong in the D & D

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    Perhaps once we are all in internment camps it will happen since we won't be able to make the run on banks. :)
     
    #6 bobrek, Mar 18, 2013
  7. Mr. Clutch

    Mr. Clutch Contributing Member

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    Will spread to the rest of the euro countries
     
    #7 Mr. Clutch, Mar 18, 2013
    1 person likes this.
  8. pippendagimp

    pippendagimp Member

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    bernanke prefers the currency devaluation route
     
    #8 pippendagimp, Mar 18, 2013
  9. SamFisher

    SamFisher Contributing Member

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    Why's that? Cyprus banking has the unique feature of being a massive Iceland style bubble with asset values at 800% of GDP fueled by Russian "legitimate businessman" cash....
     
    #9 SamFisher, Mar 18, 2013
  10. sugrlndkid

    sugrlndkid Member

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    if this ever happened in the US...the country would actually have another civil war...civilians vs government...

    The framers, and other US visionaries have warned us about the power of banks and its devastating consequences it can have in society. The Cyprus incident shows one extreme...

    When personal wealth is involved, any civil adult will loose all civility...
     
    #10 sugrlndkid, Mar 18, 2013
    1 person likes this.
  11. RedRedemption

    RedRedemption Contributing Member

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    Good luck fighting a civil war against the most powerful military force of all time.
    Besides this won't spread to the US anyway.
     
    #11 RedRedemption, Mar 18, 2013
  12. Realjad

    Realjad Contributing Member

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    US does the same **** through devaluation of our "money". Inflation is a tax.

    I would go on record and say it would never happen here but screw it, I'm not going to say never.. things I would have never imagined in the past have all occurred so nothing will surprise me, especially since we seem to have fallen in love with everything European
     
    #12 Realjad, Mar 18, 2013
  13. SamFisher

    SamFisher Contributing Member

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    Yes, and deflation is christmas!

    for stupid people.
     
    #13 SamFisher, Mar 18, 2013
  14. Mr. Clutch

    Mr. Clutch Contributing Member

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    Like Major said, because they can't print money. Note that Iceland didn't resort to this. And they didn't just target rich Russians.

    Might not happen, but there is real fear that future bailouts with other countries could involve this same maneuver. But maybe it will turn out so badly that Germany takes it off the table.
     
    #14 Mr. Clutch, Mar 18, 2013
  15. Deckard

    Deckard Blade Runner
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    It wouldn't bother me if it were just the "rich Russians" being penalized, but that's not the case. Some of these people retired there and it's their savings being confiscated. Bummer. I'm surprised they can do it.
     
    #15 Deckard, Mar 18, 2013
  16. JuanValdez

    JuanValdez Contributing Member

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    I don't see it happening here or even in mainland Europe. I'm betting that in Cyprus, if they tried a more normal and honest way of applying a tax to help support the bailout, the Russian money would disappear and the burden would shift entirely on the locals. Freeze bank assets and you get to skim off 10% of the Russians' money to pay for a Cypriot problem. Taxing locals too puts a facade of fairness on the thing so that Russia would come down on them for targetting Russian billionaires. Russia knows what's up, but there's some plausible deniability and an air of legitimacy because Cypriots took a hit. There will probably be some fear in Italy and Spain for awhile, but as long as they make no overture in this direction there, it should blow over in time.
     
    #16 JuanValdez, Mar 18, 2013
  17. da_juice

    da_juice Member

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    How does this work for foreign citizens with accounts in cyprus or who live there?
     
    #17 da_juice, Mar 18, 2013
  18. ipaman

    ipaman Contributing Member

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    It will never happen like you said but if it did, who says a large part of that force isn't on "our" side? They're Americans too and use banks just like the rest of us.
     
    #18 ipaman, Mar 18, 2013
  19. Deckard

    Deckard Blade Runner
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    My understanding is that they get hit as well. That's what I was complaining about. Other Europeans who retired there are getting hammered, not just "rich Russians," but regular people.
     
    #19 Deckard, Mar 18, 2013
  20. bobrek

    bobrek Politics belong in the D & D

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    Right. According to the reports, over 100,000 euros is taxed at 9.9%, under that amount is taxed at 6.5%.
     
    #20 bobrek, Mar 18, 2013
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