Cyprus was “fixed” overnight. The decision was made that 40% of deposits over 100,000 Euros would be lost (stolen) at the Bank of Cyprus and 100% lost (stolen) at Laiki bank. The decision was made by the Troika and the bankers. The Cypriot legislature has no say one way or the the other. So much for sovereignty. One can only wonder what Mr. Putin and the Russians will think of this as they have a “few” of these uninsured deposits that are being “lost.” Mind you these “Russian deposits” are not those of the working class. No, these deposits represent the “silent polonium” class. It will be quite interesting to watch what “happens” to the international banking class over the next weeks and months.
So, like the title implies, “nothing here to see, please move along” …which is what you may be seeing soon in Italy, Spain, Portugal and even France. Depositors holding balances above (and even below) the “insured” amounts may have been incentivized to move their monies around. Will they move 1 million Euro balances into 10 different banks? Will some of this “movement” have a little bit of leakage which finds its way into the precious metals held outside of the banking system? Which country is next? Which bank? How will the next bank be handled? Oh, and the “stress tests,” didn’t all of the Cypriot banks pass these with flying colors over the last 6 months? Questions, lots and lots of questions and only one answer… “please move along, nothing to see here.”
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THE most important lesson that I hope people learn from Cyprus is just how fast something, anything, can happen. Two weeks ago Cyprus was not even mentioned in the news. 99.9% of CNBC employees could not even pinpoint it on a map (even with names printed on the map). I wanted to mention “speed” because as I’ve written before, in today’s computerized world things can change faster than even a floor trader can react in real time. You, sitting at home or in an office stand zero chance of moving fast enough or competing in any fashion with the “computers.”
Read More at milesfranklin.com . By Bill Holter.