6 votes

Cyprus Banks To Reopen Next Tuesday At Earliest; Capital Controls Become Reality

Cyprus Banks To Reopen Next Tuesday At Earliest As Capital Controls Become Reality
3-20-13

We can only hope that nobody will be shocked that the greatly overhyped Friday Cyprus bank reopen has been postponed.

CYPRUS BANKS EXPECTED TO REMAIN CLOSED THROUGH END OF WEEK:CYBC

And since March 25, Monday, is another Cyprus bank holiday, "Greek Independence Day" (from whom? Certainly not the Troika), it means Cypriot banks will now remain closed at least until next Tuesday and likely far longer. In the meantime, since TV cameras can't show lines of people at their freindly neighborhood bank, which will have been closed for over a week, the propaganda machine will blast full bore how because the market is pushed higher by the Fed, any fears of bank runs can be forgotten. Actually instead of "can", replace with "must."

But since banks have to reopen at some time, at which point the inevitable bank runs will become reality, the already discussed Plan B is now taking shape:

CYPRUS CABINET TO DISCUSS DECREE ON CAPITAL CONTROLS: CYBC

It remains to be seen if a country can't have a bank run in the New Centrally-Planned and Despotic Normal, if there is simply a law saying it is now illegal to pull or transfer more than €100 of cash per day.
http://www.zerohedge.com/news/2013-03-20/cyprus-banks-reopen...

Capital Controls Review: [For everyone to know what is possible]

1. Imposing limits on daily withdrawals from bank accounts
2. Capping the amount of money that can be electronically taken out of the country and making these transactions slower to clear; and
3. Introducing border checks to cap the amount of cash leaving in the country.
http://www.zerohedge.com/news/2013-03-19/next-steps-capital-...

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Cyril's picture

My wife shared with me one of her spot on remarks

My wife shared with me one of her spot on remarks that left me almost speechless. I insist on "almost" of course ;)

She said along these lines:

"Wait... EVEN IF their banks or gov't DO find some flake anywhere stupid or corrupt enough to bail them out from outside (vs. downright stealing them folks) in any way... what you guys expect their people to do after the 'success' of the operation? People aren't so stupid to not lose ALL OF their trust in banks after that, duh !

As I see it there will have to be a spontaneous bank run, ANYWAY, one way or the other. Seems like Cyprus is very small, right? You can really 'freak out' as that starts hitting bigger countries over there."

...

Where I'm unsure it's about her assumption... "people aren't so stupid, ... etc"

Well, I beg to have some remaining doubts.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

bump

Sharing on Twitter.

LL on Twitter: http://twitter.com/LibertyPoet
sometimes LL can suck & sometimes LL rocks!
http://www.dailypaul.com/203008/south-carolina-battle-of-cow...
Love won! Deliverance from Tyranny is on the way! Col. 2:13-15

SteveMT's picture

Thanks, LL.

This has "contagion" written allover it, IMO. The longer that the banks remain closed, the worse that it will be when they do finally open. Keep some money around.

Cyprus Controls Compared to Argentina

In Argentina, account withdrawals were limited so that the people could not spend their money before inflation had eroded its value. The government wanted first use and was trying to slow price inflation. It was a race against time.

Cyprus needs to control the capital because there isn't enough of it. People want cash, not to spend before inflation eats it away, but to store at home because they've realized the banks don't have enough. Not only do banks not have enough currency, they have insufficient "digital" currency because the value of their assets is insufficient to meet liabilities (deposits).

This can also happen in the rest of Europe as well as the US.

SteveMT's picture

"Cyprus Controls Compared to Argentina"...

... and the result will be Zimbabwe.

As soon as I saw that, this

As soon as I saw that, this is exactly what I was thinking. This mirrors Argentina.
I hope that we will have some warning in the US should this happen. However I am more under the impression that our money will simply become worthless overnight when everyone drops the dollar rather than there being restrictions.

To climb the mountain, you must believe you can.