(h/t Zero Hedge)
What’s happening right now in Cyprus should be worrying every reader here. Why? Because what is happening there WILL effect us, and it could very well come to our shores.
For those unfamiliar with what is going on the short story is that Cyprus, a little island in the Mediterranean
Is going bankrupt. They went to the Eurozone for a bailout as every country in Europe has it seems and it was granted, with the condition that every depositor must have a portion of their money confiscated.
So every person who has money in the banks will have some money taken from them without their permission.
As you can imagine that caused a run on the banks. Cyprus fixed that by disabling all withdrawals.
The firestorm this caused has now pushed the Cyprus government to contemplate voting against the bailout. Good for them right?
But the genie is already out of the bottle:
The National Government are pushing a Cyprus-style solution to bank failure in New Zealand which will see small depositors lose some of their savings to fund big bank bailouts, the Green Party said today.
Open Bank Resolution (OBR) is Finance Minister Bill English’s favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank’s bail out.
Why should we worry here?
There is about $20 trillion in US Retirement “assets.” A “small” 10% “one time” tax levy on those assets would fund the US Deficit a couple of years from now, and I will go out on a limb now and predict that exactly that will be done.
We all know that someday are entitlement debt will become just to much. It WILL happen as we continue kicking the can down the road. At that point what will government do?
Think it can’t happen here?
Think again.
As for the markets today?
Things are escalating rather quickly… Treasuries have soared to yesterday’s low yields (below 1.90%), S&P 500 futures are cracking lower on heavy volume -10 points (with the cash S&P below yesterday’s lows) – after the other indices all went green earlier. The FX market is in a mini-crisis with EURUSD dumping and JPY strengthening considerably and rapidly. In Europe, it is worse as Portuguese, Spanish , and Italian bond spreads are snapping wider to post Cyprus wides; Spanish and Italian equity markets are tanking down 3-4% on the week; and GGBs are back under EUR50 – their lowest in 3 months. Gold and Silver are rising as Copper and Oil slide. Swiss 2Y rates are negative at their lowest in over 2 months. VIX is up 33% from Thursday’s lows and back above 15% – biggest 2-day jump since Nov 11.
Go the link to view some troubling charts.
This bailout, too big to fail, entitlement culture will not end well for the globe I’m afraid.
As far as I am concerned, the klepto-kretins have finally crossed the collectivist Rubicon by merely suggesting that private property rights should be sacrificed at the alter of bailout kapitalism.
The situation drips with historic irony given the Russian connection.
Their Nobel farce has now been fully exposed for what it is.
There is no rule of law in the European Union.
There are only ends justifying the idiotic means of tyrannical klepto-midgets.
All their grandiose bloviations are nothing more than pompous hot hair:
“United in Kleptocracy”
A fiat accompli!
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