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Cyprus - Spain, Ireland, Italy and Portugal are next?

Discussion in 'BlackHat Lounge' started by lancis, Mar 23, 2013.

  1. lancis

    lancis Elite Member

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    Although I personally dont have any deposits in Cyprus, I know some lawyer offices who do. And at the moment those fellas are moving from Cyprus to other jurisdictions, that are not part of EU. From the looks of it, no matter what Cyprus does at the moment, their banking system is doomed. Once banks are opened people will start to withdraw, with tax or without.

    The worst part, it looks like Cyprus has no choice, but to impose 20% tax on the deposits that exceed 100,000 EUR. Comparing to other countries in EU, Cyprus is the smallest, and I bet EU economists think of it in a terms of a guinea pig. Once, the precedent of bank accounts "taxation" proves to be successful other countries might follow.

    Rumor has it, that the Russian Foreign Ministry sent to its embassies all over the world advising both Russian citizens and companies to begin divesting their assets from Western banking and financial institutions "immediately". The Kremlin feared grow that both the European Union and United States were preparing for the largest theft of private wealth in modern history. Spain, Ireland, Italy and Portugal are supposed to follow Cyprus fate at the next week.

    But rumors aside, even British politician advices to "get your money out" while you can:



    I think the first time in history BitCoins look more stable than EU banking system. :)
     
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  2. Duffers5000

    Duffers5000 Elite Member

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    For reference the "reputed" English politician is the head of a lowly rated right wing anti-immigration party....so no bias there.

    Cyprus is a unique case....and very sad...but Spain and Ireland would bring down the EU.
     
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  3. lancis

    lancis Elite Member

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    I believe we'll see a wave of withdrawals from Spanish banks during the next week, that alone might be catastrophic for EU economy. The press is pessimistic as well, which stirs people to look for alternatives even more. For example, quoting wired: "Bitcoin interest spikes in Spain as Cyprus financial crisis grows":

    http://www.wired.co.uk/news/archive/2013-03/20/bitcoin-spain-currency-run
     
  4. subster

    subster Elite Member

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    Yes, it is a pretty "interesting" situation at the moment.
    I am heading over to Barcelona, Spain next week and will let you know if there is something "feelable" in the climate there. My personal guess is that after Greece & Cyprus Italy will follow first and after that Spain will.
     
  5. sashablack

    sashablack Elite Member

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    here we go armageddon time :)
     
  6. lancis

    lancis Elite Member

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  7. Roparadise

    Roparadise BANNED BANNED

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    Is it the Eurozone or the EU doing this? I'm confused on it,since some people say its just for countries using euros or all EU nations could be affected.
     
  8. lancis

    lancis Elite Member

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    I believe Eurozone only, dont think that UK has any part in it. Most of the initiative is coming from Germany according to news.
     
  9. Roparadise

    Roparadise BANNED BANNED

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    I always thought Cyprus was doing well since it was a tax haven, When Bulgaria became a tax haven it helped grow their economy.
     
  10. giveitlegs

    giveitlegs Regular Member

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    That's why I've invested most of my 'meager' wealth in the only real currency that stands up over time.
    .357+Magnum.jpg

    Step 1: Withdraw what's left of my useless dollars from the bank.

    Step 2: Activate Rioter/Zombie Repulsion System (ie - close my steel shutters, load ALL my guns and keep them on person even inside the house...)

    Step 3:

    skull_shot_glass_01.jpg

    Let the Zombacalypse begin! ;)

    Cheers!
     
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  11. lancis

    lancis Elite Member

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    As I know, Cyprus economic model was to offer banking services for offshore companies (that were registered in other tax heavens, such as Seychelles), without its banking system Cyprus had nothing to offer (their corporate tax was about 10%). They had a lot of private money in the banking sector, and enjoyed a prosperous living during the last years. However, lately the Greek financial crisis affected them, and some minor sum was needed to help their economy (about 4 Billion EUR, which is nothing in EU terms).

    I'm not sure what drives EU in this case, but as the rumor goes...

    A large part of their clients were Russians, and Cyprus was heavily dependent on Russian money. Even large Russian companies, like Lukoil used Cyprus banking system to process payments from EU. Moreover, there are rumors that Russian tycoons and ex-KGB officials generally preferred Cyprus. Possibly, EU "confiscated" that money in order to save itself from collapse. Russians were a convenient target in that case. UK citizens were affected as well as far as i know, they were the 2nd large population who used Cyprus banking, the later are convenient target as well, since they are not part of the Eurozone.
     
  12. Nato1

    Nato1 Regular Member

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    it was just announced that banks in cyprus will stay closed till thursday. earlier they said they would open small banks tomorrow.
    cyprus was used heavily to laundry money and it was "supported" by the state. their economy was mainly based on it.
     
  13. Roparadise

    Roparadise BANNED BANNED

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    So Cyprus was like the EU's Detroit in a way by not diversifying their economy?
     
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  14. Nato1

    Nato1 Regular Member

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    i read the cyprus state will take a 30% share of everones savings above 100.000€ from the 2 biggest banks in cyprus. this is madness!
     
  15. eaymon

    eaymon Registered Member

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    thats nuts.... i know i was using FXCC (located in cyprus) for currency trading just to get away from the OCO rules here in the US... looks like i have to go back to trading in the US
     
  16. jazzc

    jazzc Moderator Staff Member Moderator Jr. VIP

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    Obviously they didn't get bankrupt because of the deposits :D

    The got bankrupt because of big exposure on Greek loans - The lost ~4-5 billion directly from the Greek bonds haircut and those 2 banks had 17 billion private loans in Greece through their branches - loans in Greece are in "red" so the are also getting losses from there + their own "red" loans on their country etc etc
     
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  17. blueplanet

    blueplanet Senior Member

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    Seems that economic crisis that never seems to end , and going to more worse ....
     
  18. IamNRE

    IamNRE Jr. VIP Jr. VIP Premium Member

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    Who do they owe that money to?

    Banks? IMF? World Bank?

    Did their government take out loans and then use it buy cars and houses or what? I don't get it.

    Am I the only one that thinks its weird that private banks "owns" countries ? I wonder what would happen if they did not pay their loans...would the banks reposes the countries and sell it at auction ? :p
     
    Last edited: Mar 26, 2013
  19. jazzc

    jazzc Moderator Staff Member Moderator Jr. VIP

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    The big debt is in the banking sector - the government dept is also big, but 10 times lower than the banks dept.

    So, the 2 bigger banks got bankrupt. The state was to prevent them from doing for political reasons mostly (like all EU states did the same) and has to borrow money (since it also has none :D). The only one who 's lending them money is the EU - they need to borrow 15 billion and the EU gives them 10. The other 5 are coming for the bank deposits.

    How did the banks get bankrupt in the first place? Read my previous post ;)
     
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  20. BlackSeng

    BlackSeng Jr. VIP Jr. VIP

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