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The madness of the bailout in Cyprus

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Re: The madness of the bailout in Cyprus

#71

Post by st0p »

omgyeah wrote: post #69
st0p wrote: post #63

Earlier quoted context omitted.

We're helping them and meeting our obligations. In what way are we punishing them? Yeah, it's not nice to lose 6.75% of what you have in savings (the 9.9% is only for those who have more than 100.000 euro in their bank account), but the alternative would be much worse for the Cyprians. [edit] And yeah, this is a very crude way to raise the money. Given more time, a better way is probably possible. But I think time is…

Please, you are not helping anybody. Nobody has ever paid back a loan with a bigger loan. It's just an excuse to take your money too and blame someone else for doing so.

So what do you propose? We sit back and do nothing?

Re: The madness of the bailout in Cyprus

#72

Post by acd »

The rich are getting richer for each year that goes, Middleclass are therefore relatively getting poorer compared to the rich. Yet we bail out the banks that supports the debt money of the super-rich. Thus we save the rich and put austerity packages on the poor.

There is not money for the principal in the current economic system.

Almost all money is debt. Less than 5% of banks assets are cash, the rest is debt.

The current economic system is a gigantic Ponzi scheme, were wealth is transferred from the working class to rich. Since there is not money for the principal the system will crash by itself since its inherently instable, but no we keep saving the debts the rich has created.

If central banks did not create at least 2% inflation new money in its goals, since there is not money to pay the interest principal in the system, all banks would eventually go bankrupt.

We should create a new economic system with debt free money.

Re: The madness of the bailout in Cyprus

#73

Post by st0p »

omgyeah wrote: post #62
st0p wrote: post #59

Earlier quoted context omitted.

>> In case that you have not realized it, you are not paying any money. O yes I am. I'm paying taxes here to keep your economy afloat. I don't mind that, but I'm not going to respond all of the rest you posted.

OK. I agree with you. And I am paying money to keep your economy afloat. Can you see how stupid this is? Little guys fight each other. And the winner gets eaten by the big guy (= bank).

I can't agree with your last sentence. We've all had the profits of having banks providing liquidity (common, all that Russian money into the Cyprian economy has been great for all of Cyprus). Now that system has failed and the big guys aka the banks are just as clueless as the little guys.

Do we need to rethink how our economy works? Yes. Do we need to help Cyprus, Italy, Spain? Yes. Partially because it is in out best (Dutch) interests, but also because they are European brethren. Is it okay to ask the locals for a sacrifice themselves? Yes.

I know I'm living in one of the richest countries in the world. I don't mind helping another country. I understand that losing 6.75% of your savings hurts.

Re: The madness of the bailout in Cyprus

#74

Post by omgyeah »

TillE wrote: post #4

It's absolutely insane. I can't understand how they think this will cause anything other than a catastrophic bank run on Tuesday. At least they get to skim off a percentage before the banks collapse, I guess? Someone's benefiting, somehow.

Let's just hope that this bank run will lead to a chain-reaction worldwide bank run, which in turn will lead to a much needed society's hard reset.

But it won't.

Re: The madness of the bailout in Cyprus

#75

Post by ameister14 »

st0p wrote: post #63
ameister14 wrote: post #46

Earlier quoted context omitted.

The thing is, your country signed an agreement to help them if they need it. You don't get to punish them for the fact that you are upset to have to meet your obligations.

We're helping them and meeting our obligations. In what way are we punishing them? Yeah, it's not nice to lose 6.75% of what you have in savings (the 9.9% is only for those who have more than 100.000 euro in their bank account), but the alternative would be much worse for the Cyprians. [edit] And yeah, this is a very crude way to raise the money. Given more time, a better way is probably possible. But I think time is…

You're forcing them to redistribute wealth from the individual to the banks.

If you lose sight of the individual in all this, then I suppose it isn't a punishment. But I don't think it's appropriate to do that.

Re: The madness of the bailout in Cyprus

#76

Post by [deleted] »

omgyeah wrote: post #62
st0p wrote: post #59

Earlier quoted context omitted.

>> In case that you have not realized it, you are not paying any money. O yes I am. I'm paying taxes here to keep your economy afloat. I don't mind that, but I'm not going to respond all of the rest you posted.

OK. I agree with you. And I am paying money to keep your economy afloat. Can you see how stupid this is? Little guys fight each other. And the winner gets eaten by the big guy (= bank).

[deleted]

Re: The madness of the bailout in Cyprus

#77

Post by Tuna-Fish »

ameister14 wrote: post #35

This makes me extremely uncomfortable and I don't understand how anyone could think this was a good idea. We have high unemployment across Europe, Catalunya is attempting to become independent and there is open talk in the press about a military coup if that goes through. Meanwhile, Greece elected a bunch of fascist mps, and now this? Imagine if you woke up tomorrow and 10% of your savings were gone. What would you d…

The traditional answer in this situation would have been to devalue the currency. Cyprus is not capable of doing this because they do not control the Euro.

It's important to note that 10% haircut is much, much less than what would have happened if Cyprus was not under the Euro and had devalued. Just a few years ago, everyone in Iceland lost more than 50%.

Re: The madness of the bailout in Cyprus

#78

Post by moe »

caf wrote: post #49
mixmax wrote: post #42

Earlier quoted context omitted.

There are pan-European laws that if a bank goes under you get the funds up to €100.000 you had in the bank reimbursed by the state. The reason for this is that is that banks are the financial glue of society, and for better or worse we can't live without them. Bankruns can bankrupt a bank in a day, thus it's incredibly important that people feel secure in knowing that the money they have in the bank is secure no matt…

That guarantee is clearly a dead letter in the case of Cyprus anyway, because there's no way that their government can make good on that promise in the face of multiple large bank collapses. I already said that I agree it was a bad move due to the effect on confidence.

That guarantee is clearly a dead letter in the case of Cyprus anyway, because there's no way that their government can make good on that promise in the face of multiple large bank collapses.

That's where the EU steps in, or rather: was supposed to step in.

We were promised that our small savings accounts (This came with the implied assumption that when shit hits the fan, they will shave what they need from the big accounts (>100k). Because those did either benefit from the gambling or can at least afford a lawsuit to recover some of their funds.

That promise was broken today. Many people will be very, very unhappy.

Re: The madness of the bailout in Cyprus

#79

Post by icebraining »

lrei wrote: post #30
jasonlingx wrote: post #27

A good reason to keep your cash in bitcoin ;)

sure because bitcoin value never went down overnight. Not even 10% like the cypriot savings. Oh wait, never mind. It went down 30% in a single day: http://www.dailytech.com/Digital+Black+Friday+First+Bitcoin+...

The Cypriot savings didn't lose value, they lost a part. It's not the same thing at all. The proof is that Bitcoin returned to its previous value (and then some) rather quickly, while the savings will never return.

Re: The madness of the bailout in Cyprus

#80

Post by davorb »

wintersFright wrote: post #53
ameister14 wrote: post #35

This makes me extremely uncomfortable and I don't understand how anyone could think this was a good idea. We have high unemployment across Europe, Catalunya is attempting to become independent and there is open talk in the press about a military coup if that goes through. Meanwhile, Greece elected a bunch of fascist mps, and now this? Imagine if you woke up tomorrow and 10% of your savings were gone. What would you d…

At the end of the day you have two camps: debtors and savers. You can't force a tractor factory to make a factory once it has closed down ie: you can't force a debtor to pay debt they want to default on. The only way to rebalance the system is to screw the savers. It was always going to happen, the question is whether by stealth via inflation or overtly. It looks like they are taking the overt path. The problem is th…

I'd like to add one thing, that those people weren't just hoarding that money. What happens now is that Cyrpus is losing out on some badly needed investment.
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