“What Cyprus makes clear is the realization that there is not enough money in the world to bail out the banks. So to keep the political experiment called the European Union alive, the oligarchs in Brussels have now resorted to stealing depositor money.
The important point here is if they can steal it in Cyprus, they can do the same in Spain, Italy or any other country where the banks are insolvent, and the reality is that most of the global banking system is insolvent. But sometimes it takes a while for a lesson to sink in. Some people began recognizing the counterparty risk that comes with bank deposits when Northern Rock collapsed in 2007, and the point was driven home again in 2008 with the Lehman debacle.
More details about the Cyrus bank collapse are starting to emerge, Eric, and it is not a pretty picture. Depositors in those banks are going to lose a lot of money. At Laiki Bank, which was the second biggest in Cyprus, the confiscation of depositor money went from 9.95% to what officials are now saying will be 80%. Continue reading