We come to it at last, the great collapse of our time

And thus, it begins (h/t Vox Day). Zerohedge ran an article yesterday concerning the EU's blatant money grab into Cyprus's banking system which should be required reading for anyone who wants to know what will happen in the Western world as the leaks in the banking system become ever more impossible to plug.
It is difficult to describe the weekend bailout package to Cyprus in any other way. The confiscation of 6.75 percent of small depositors' money and 9.9 percent of big depositors' funds is without precedence that I can think of in a supposedly civilised and democratic society. But maybe the European Union (EU) is no longer a civilised democracy?
heard rumours about this when I visited Limassol last week, but dismissed them as completely outlandish. And yet, here we are. The consequences are unpredictable, but we are clearly looking at a significant paradigm shift.
This is a breach of fundamental property rights, dictated to a small country by foreign powers and it must make every bank depositor in Europe shiver. Although the representatives at the bailout press conference tried to present this as a one-off, they were not willing to rule out similar measures elsewhere - not that it would have mattered much as the trust is gone anyway. It is now difficult to expect any kind of limitation to what measures the Troika and EU might take when the crisis really starts to bite.
If you can do this once, you can do it again. if you can confiscate 10 percent of a bank customer's money, you can confiscate 25, 50 or even 100 percent. I now believe we will see worse as the panic increases, with politicians desperately trying to keep the EUR alive.
Depositors in other prospective bailout countries must be running scared - is it safe to keep money in an Italian, Spanish or Greek bank any more? I dont know, must be the answer. Is it prudent to take the risk? You decide. I fear this will lead to massive capital outflows from weak Eurozone countries, just about the last thing they need right now. Even from the EU as a whole, I suspect, as the banking union is in place in most countries already.
Another open question is what will happen to the huge number of brokerages based in Cyprus? There is about 100 or more FX and other brokers currently operating under the relatively light Cypriot regulation. How will this impact the trustworthiness of these many small institutions? What IS the exact impact on the client deposits they might be holding in Cyprus? Will anyone dare to do business with them going forward?
This is a major, MAJOR game changer and the fallout will be with us for a long time to come. I believe it could be the beginning of the end for the Eurozone as this is an unbelievable blow to the already challenged trust that might be left among investors. Talk about a possible own goal.
For those who aren't aware (I wasn't, until today), the Eurocracy has decided to unilaterally steal the money of bank depositors as the price of providing a bailout to the Cypriot banking system. Most people will find the very idea astounding. I do not. I have seen this happen before- when the IMF imposed "extreme" austerity preconditions on their Southeast Asian bailout funds to South Korea, Thailand, and Indonesia in 1997 and 1998. This is how massive international bureaucracies think. This is how they move. They believe that they have the power of right on their side, and they will not let trivial matters such as national sovereignty, individual rights, or the concept of representative taxation get in their way.

This step was inevitable; I'm only surprised by the timing, not by the action itself. As the CEO of Saxo Bank says, this could potentially be a massive own goal; the very fact that the EU is now taxing deposits makes it less likely that people will make deposits in the first place, and will drive the circulation of money underground where the government can no longer control the value of the currency. It is only a short set of steps from that point to the complete dissolution of the European common currency and then the destruction of the EU itself. And good bloody riddance when that does happen.

There is no going back now. The EU has essentially given itself the power to tax people who never voted for those taxes. Do not for one moment think this cannot happen to you. Do not be so stupid and naive as to believe that you Americans are safe. This is what will happen to you at some point, as the authorities of this country realise that the only way to prevent the banking and financial system from collapsing completely is to squeeze blood from the taxpayers in the form of their retirement accounts, their pension plans, even their bank deposits. This country's government has already shown, repeatedly, that the interests of the big banks are more important than the rights of the average citizen. Don't be dumb enough to think somehow the next major crisis will be different. Get out while you can.


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