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Europe Announces Bailout For Cyprus — Bank Depositors Get Instant 10% Tax

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Re: Europe Announces Bailout For Cyprus — Bank Depositors Get Instant 10% Tax

#81

Post by ameister14 »

burntsushi wrote: post #78
ameister14 wrote: post #31

Earlier quoted context omitted.

Have people changed significantly since then? Plus, he was saying that prior to banks being how they are now, things were different. That prior period encompasses the middle ages.

> Have people changed significantly since then? I don't know. Your question is sufficiently general that a plausible answer could be given to support either "yes" or "no" answers. It is very dependent on what you mean by "change". And therein lay my answer: I don't know what you mean by "change". The poster in this case was touching on a point that going out and taking a farmer's property (or generally anyone for tha…

Yeah, except you don't need to take the reasoning to the extreme. Physical property redistribution happens in countries all around the world all the time. Why do you think the founders of the US decided only property owners could vote?

I don't think of the government taking people's savings out of a bank and the government taking people's land as very different. It's a small and easy step to take from one to the other, and it's a step that has been taken many, many times before.

As to your last paragraph; it is foolish to assume social changes or governmental behaviors are more or less likely because of technological advances.

Re: Europe Announces Bailout For Cyprus — Bank Depositors Get Instant 10% Tax

#82

Post by InclinedPlane »

wintersFright wrote: post #24
InclinedPlane wrote: post #7

Earlier quoted context omitted.

There's no such thing as an intrinsic value for "money", even in gold. If you keep your money in the form of dollars (or Euros) shoved into a mattress the value can go away through inflation. If you keep your money in the form of gold bars the value can also go away through inflation, but perhaps less so.

Physical gold bars are not money but a phyiscal, tradeable asset. It cannot be inflated except via mining - but even then there are roughly known quantities of metal in the ground that are then liberated. What can be inflated however is paper gold where more paper gold exists and is traded than physically exists - some estimate a 100 - 1 paper to physical ratio. True that gold has no intrisic value, it's value is der…

Gold can inflate quite easily, and does all the time, independent of its scarcity. It's possible for the price of anything and everything to go up, on an absolute scale. And if that happens accross the board then you've effectively inflated even some hypothetical absolute currency.

Money has no value, it is in fact nothing more than tradeable debt. It has as much value as the market is willing to allow. To imagine this in an extreme case imagine if the entire worldwid economy collapsed and food bacame very much rarer. Now you'd expect to have to pay vastly more gold for food. Inflation.

My point is that no part of the economy is static, all of it is dynamic. All of it. The value of everything, labor, goods, food, even money is dynamically dictated by the action of the economy.

Re: Europe Announces Bailout For Cyprus — Bank Depositors Get Instant 10% Tax

#83

Post by InclinedPlane »

burntsushi wrote: post #27
ahomescu1 wrote: post #19

Earlier quoted context omitted.

They would have never gone to a farmer and taken 10% of their grain. Except this actually used to happen a lot in European countries in the Middle Ages. Farmers would still pay taxes to the king, and they'd have to pay in goods if not in gold.

> Except Pretty sure the OP was talking about the present times...

In present times without mandatory taxation. Right, where is this then?

Re: Europe Announces Bailout For Cyprus — Bank Depositors Get Instant 10% Tax

#84

Post by IbJacked »

martinced wrote: post #74
memi wrote: post #16

I do have offshore company with Cyprus company current account. Does this tax also affects my company?

This tax only affects residents living in Cyprus. This is already a crazy tax but if they're confiscating money on private companies' bank accounts they'll be killing the economy.

I didn't see any references to "only affects residents living in Cyprus". From the articles I've read, it appears to be a tax on all deposits, regardless of foreign or domestic, personal or business.

Re: Europe Announces Bailout For Cyprus — Bank Depositors Get Instant 10% Tax

#85

Post by thatswrong0 »

snowwrestler wrote: post #29
rottencupcakes wrote: post #5

Is this really any different than US Monetary policy that leads to continual inflation making your savings worth less over time?

The difference is that U.S. monetary policy seeks to create a low, predictable, consistent level of inflation. This allows everyone to incorporate it into their long-term financial plans. It's harder to plan for surprise 10% haircuts.

> seeks to create a low, predictable, consistent level of inflation

Too bad seeking isn't reality, and too bad it isn't low and isn't consistent. Unless, of course, you alter the metric that measures inflation as the U.S. has done periodically.

Re: Europe Announces Bailout For Cyprus — Bank Depositors Get Instant 10% Tax

#86

Post by burntsushi »

ameister14 wrote: post #81
burntsushi wrote: post #78

Earlier quoted context omitted.

> Have people changed significantly since then? I don't know. Your question is sufficiently general that a plausible answer could be given to support either "yes" or "no" answers. It is very dependent on what you mean by "change". And therein lay my answer: I don't know what you mean by "change". The poster in this case was touching on a point that going out and taking a farmer's property (or generally anyone for tha…

Yeah, except you don't need to take the reasoning to the extreme. Physical property redistribution happens in countries all around the world all the time. Why do you think the founders of the US decided only property owners could vote? I don't think of the government taking people's savings out of a bank and the government taking people's land as very different. It's a small and easy step to take from one to the othe…

> Physical property redistribution happens in countries all around the world all the time.

We're not talking about the entire world.

> I don't think of the government taking people's savings out of a bank and the government taking people's land as very different.

Yes. I don't either, and neither does the top parent. That's the point.

> As to your last paragraph; it is foolish to assume social changes or governmental behaviors are more or less likely because of technological advances.

If you say so.

Re: Europe Announces Bailout For Cyprus — Bank Depositors Get Instant 10% Tax

#87

Post by thatswrong0 »

alan_cx wrote: post #75
martinced wrote: post #59

I've submitted this first but it didn't take off... Anyway: this is just the beginning and it's not going to stop anytime soon. The Eurozone is in big trouble: it simply cannot work when you have people who only want to work 32 hours / week and stop working at 60 years old (France) while on the other side you have hard-working germans. The crisis we're witnessing since a few years in the eurozone is really simple: th…

Socialism and capitalism are tools, not complete methods to run and provide for a country's people, or society. No country exists as purely one or the other. Every country is a shade of socialist and capitalist grey. Even the US has a huge amount of socialist spending. The huge military for starters, all that money that goes via the military to the industries that supply it. Money straight in to jobs. And so on.... S…

> The huge military for starters, all that money that goes via the military to the industries that supply it. Money straight in to jobs.

Jobs which create guns and bullets which are fired and kill people and do absolutely nothing for the betterment of man and do nothing (or very little) to increase productivity. In other words, this is a great example of the broken window fallacy.

> what the anti socialists seem very keen to forget is that this all kicked off with subprime loans, badly regulated, free market loans, not government loans or spending.

So you're just going to ignore all the government encouragement along the way? You're going to ignore the Community Reinvestment Act, Fannie Mae and Freddie Mac, mortgage deductions, and everything else the government has done in the past half century to encourage home ownership? You're just going to ignore the very low interest lates proceeding the dot-com bust? You're going to ignore the implicit bailout guarantees provided by the government and the FDIC? You're going to ignore all the regulation that encouraged too-big-to-fail banks to grow and continue to exist?

No, the housing crisis was a joint effort. It was, as I've heard described best, the private market getting drunk off booze provided by the government. The private and the public sector both messed up. Derivative packaging and trading and all of that was certainly ugly. But you cannot possibly blame this on the free market (because free it wasn't) and you cannot absolve the government of responsibility. To do so would be irresponsible itself.

> I assume the anti socialists wanted the banks to fail?

It was government policy that encouraged their creation, so yes. Of course.

> So, we do like government spending when it suits.

Government spending to solve a problem created by the government. Brilliant.

> So, one cannot complain about the spending when it was the money provider, capitalism, that screwed up in the first place, leaving no money to spend.

No. Just no. This is like saying capitalism caused the Great Depression. See above.

Re: Europe Announces Bailout For Cyprus — Bank Depositors Get Instant 10% Tax

#88

Post by burntsushi »

InclinedPlane wrote: post #83
burntsushi wrote: post #27

Earlier quoted context omitted.

> Except Pretty sure the OP was talking about the present times...

In present times without mandatory taxation. Right, where is this then?

In my interpretation, taxation parallels "banks" in the comparison drawn by the top parent. From the parent,

> but they could only do this because banks and government has stopped seeing money in the bank as belonging to the person who put it there. They would have never gone to a farmer and taken 10% of their grain. They would have never gone and taken physical property in peoples home.

Now instead of "stopped seeing money in the bank as belonging to the person who put it there," simply think of "stopped seeing labor/goods/(taxable things) as belonging to the person who performed/has it/them."

IMO, the top parent was a commentary on cognitive dissonance. It's implied that the parent believes taking stuff from the bank is morally equivalent to taking 10% of the grain from a farmer. The parent could have been more explicit, but alas, this was how I interpreted it.

Re: Europe Announces Bailout For Cyprus — Bank Depositors Get Instant 10% Tax

#89

Post by Gormo »

dmiladinov wrote: post #20
rtwtlkj wrote: post #9

Earlier quoted context omitted.

I thought gold went up with inflation.

The only way for gold to inflate is for someone to dig up more gold, thereby increasing its supply.

Inflation is when the money supply increases in relation to the real wealth that it represents, not when the money supply increases in absolute terms.

Re: Europe Announces Bailout For Cyprus — Bank Depositors Get Instant 10% Tax

#90

Post by Gormo »

martinced wrote: post #72
Pro_bity wrote: post #60

Anyone want to put odds on this starting bank runs across Europe?

Not gonna happen. Several countries moreover already have withdrawal limits per day / week / months to precisely prevent bank runs. Those limits have recently been lowered (for example in Italy). Laws are passed nearly on a daily basis to lower the maximum amount of "physical" money (bills) you can use to buy stuff. What is going to happen is lots of politicians blatantly lying and saying: "Something like this is unt…

> Laws are passed nearly on a daily basis to lower the maximum amount of "physical" money (bills) you can use to buy stuff.

Do those laws also prevent people from transferring funds into other banks or currency denominations, or purchasing gold or other liquid assets?

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