Bazz, you might also be interested to know that the Russians and British as well as a few other nations 'big depositors' removed most of their money whilst the Cypriot's home bank branches were closed.

They managed to do this because the main Cypriot bank has branches in Moscow, London and a few other European cities, these branches did not close and the big depositors (mainly Russian Oligarchs and Mafia types) still had access to their accounts and managed to transfer their money to other safe havens.

Unfortunately the Cypriot man and woman in the street did not have this option and have been left holding the can.

The same think happened when Iceland failed.

It's like 'jobs for the boys' if you are in the club you never lose, if you are one of the 99% you will always lose.

Cheers
Geoff

This 'bail-in' idea seems all back-to-front. Of course it all stems from the experience in the U.S., where only Lehman Bros took the big hit (and even there it appears that the assets of those at fault - the directors and senior executives - were not seized, as they should have been, in proportion to those parties' direct responsibility for the losses of ordinary investors), and where the directors, executives and account managers of the likes of Goldman Sachs and AIG, etc, have not been held responsible for their role in the whole GFC disaster - but rather, massive bonuses were paid, virtually out of public funds and the funds of massively losing investors. Where is justice?

It seems clear to me that the first who should pay are those directly responsible for a financial organisation's bad investment decisions, with their private assets frozen, and withholding of salaries and bonuses, until the mess is sorted by appointed administrators. If ordinary investors' funds are to be used in a bail-out, then these investors should become the holders of equity in the institution, in proportion to their 'investment' in the bail-out - they become part-owners, just as the U.S. became a part- or outright-owner of some of their failing investment organisations - and such private investors should have a say in bail-out plans, just as equity investors do in a company's AGM, but regarding what portion, if any, of their holdings may be used in any bail-out, what reciprocal equity they should receive, and on what terms.

If one cent is 'confiscated' from ordinary private bank savings in Cyprus or elsewhere without a reciprocal, and appropriate, conversion to equity, this can only be viewed as government-supported highway robbery, nothing less, and relevant government(s) must be held directly responsible as a co-conspirator and thus subject to legal challenge.

Until the U.S. pursues legal action against the perpetrators of the GFC to seek reparation for ordinary investors it, the U.S., can only be viewed as complicit, not only in that debacle, but also in all the ensuing failures around the world.

"this can only be viewed as government-supported highway robbery, nothing less"

Bravo Saltpetre! At last you've got it!

Now, can you see that there's no way that government-sponsored and -imposed fractional reserve banking can be anything else? How could you have a government-granted monopoly power to manipulate the money supply, exclude competition, and require the banks to buy government debt in exchange for issuing new money, that could be anything other than government-supported highway robbery?

What evidence or reason is there to think that the government and the banks wouldn't use it to defraud the population which is exactly what's been happening on a grand scale?

The very expression 'highway robbery' presupposes that you care to protect private property rights. But when I ask Alan how the economy knows whether the source of the stimulus funding is criminal or governmental violations of property rights - you answer that that I've reached a new low, as if it's wrong to ask how you can distinguish monetary policy from criminal activity?

But that's what you're arguing, remember?

"relevant government(s) must be held directly responsible as a co-conspirator and thus subject to legal challenge."

Hooray Saltpetre! Now you're getting it!

Fractional reserve banking is a crime, sponsored by government, against the people, but you can't sue the perpetrators, because they have control and the backing of the legislature, and simply apply a double standard, declaring that what's a crime for anyone else - printing money - is socially beneficial when they do it.

But that's what you and Alan have just been arguing *in favour of of* remember?

"Until the U.S. pursues legal action against the perpetrators of the GFC to seek reparation for ordinary investors it, the U.S., can only be viewed as complicit, not only in that debacle, but also in all the ensuing failures around the world."

Hooray Saltpetre! Everyone else, listen up please!

Alan
So, how does the economy know whether the source of the stimulus funding is criminal or political activity? What is the economic difference, if any, if they are both spent on the same stimulus project that you approve of?

When you do your cost/benefit analysis, do you count the value received by the owner of the wealth that was taken by government to pay for the stimulus spending, on an equal footing with the value received by someone else? If so, why, and if not, why not?

Geoff, yes I heard about the Russian raid on the Moscow branch.
When the Cyprus President went to Moscow they probably made him an
offer he could not refuse.
I also Heard on the BBC that Estonia was given a wrap over the knuckles
by the EUC for being a naughty boy for being involved, and if they want
to be part of the Euro, they should behave.

Geoff, when it finally starts to crank on the 1% will be in the same
boat as the rest of us, but out of habit they will probably be the
Lord over us tenant farmers.

No one thought the government could consider fiddling with the super
but if they can do that, I guess they would not think twice about the
snatching some of bank deposits.

Talking of deposit insurance, does anyone know if the guarantee
applies to $250K in each bank or to $250k no matter how many banks it is in ?
Also when $20 billion in claims is paid that's it, the end, all the rest can whistle.

Cyprus now, Egypt next ?

http://news.yahoo.com/egypt-calls-favours-credit-crunch-hits-key-imports-084458158--finance.html

http://tinyurl.com/d4obtas

This will make Cyprus look like a picnic where someone forgot the sausages.

Egypt has been hand to mouth for some time. Due to its oil production
peaking in 2000 it has been a significant importer.
This meant that the subsidies on fuel have been a big burden as the
price oil has increased 10 times since 2000.
They also susidise food imports as they cannot supply from the
Nile valley since their population doubled from 40 million to 80 million.