"News of the tax triggered a run on cashpoints in Cyprus over the weekend. Monday is a bank holiday and measures need to be approved before banks reopen on Tuesday.
Cypriot President Nicos Anastasiades, a conservative elected just three weeks ago, said the tax on deposits was an alternative to a disorderly bankruptcy.
In a televised address, he said it was painful but "will eventually stabilize the economy and lead it to recovery."
Savers who lost money would be compensated by shares in commercial banks, with equity returns guaranteed by future revenues expected from natural gas discoveries, Anastasiades said.
Reuters, Cyprus Works On Tax Levy Deal To Get Bailout Approved
The futures are down 16+ points this evening, most likely on jitters over bank instability in the eurozone.
According to one of my friends, Dennis Gartman sent out the following:
"By now I suspect that most of you have heard the news from Cyrpus over the weekend, but just in case you’ve not the Cypriot government has chosen to confiscate money from any and all accounts at any and all banks in Cyprus to pay for its banking problems...I had a couple of email messages after a post about the sacredness of trust in money and banking earlier today. They implied that I had a misplaced sympathy for the crooked Russians, and the little people of Cyprus.
This is astounding, and the decision was… if not fully decided in Brussels… was approved by Brussels and Berlin and Paris et al. This is unlike anything I’ve heard in my 40+ years of being in the market. This is HUGE news; this is massively bearish news for the EUR; this is massively bullish news for gold and this is THE MOST IMPORTANT BUSINESS NEWS OF THE YEAR THUS FAR. Please believe me on this; this is Europe’s “Lehman” moment.
I shall be around all day tomorrow trying to figure out what has happened here and why, but if the EUR… which closed on Friday at 1.307… does not open below 1.2900 and then continue lower, and if gold, which closed on Friday at $1590/oz does not open above $1625 and head higher I will be truly, truly stunned."
Be prepared; Monday is going to be violent"
That post was not intended to be a moral message, although morality is certainly involved. It is more of a practical matter.
When your money system is based on trust, it is critically important to maintain appearances. Simply reaching out and confiscating the insured savings of depositors is very bad form, especially when everyone knows you are doing it to support a rigged system that is run for the benefit of a fortunate few.
The sophisticates are fairly used to discussing the darker corners of injustice of the system in their own circles. And they have become comfortable with it, as they are in viewing the victims of their greed as 'takers.' I am sure that this played some part in the expedient decision to support the Eurocrony corporatist zone by simply stealing depositors' money, and deriding them as either crooks or hapless fools who 'must contribute.'
But what the cynical plutocrats do not realize is that most people still believe in the system, in rules and justice. And it is this belief that sustains a system based on promises and guarantees and trust.
I am fairly certain that the financiers and central bankers will wish to shut down any incipient panic in the Euro banks. After all, the entire global reserve currency system is a confidence game.
Buying the SP futures and selling more paper gold and silver might do the trick. And their talking heads will carry the message that this is much ado about nothing, and merely another buying opportunity.
They certainly have dipped into that bag of tricks many, many times in the recent past. And personally I will be stunned if they do not make a determined effort to do it again.
