European Union is robbing its citizens' bank accounts. 9.9% to be confiscated.

[ArticMine]

In the US, they would just print 11.1% more money. Same effect, but people don't realize.

If is not the effect at all. The credit card balances, mortgages etc are not affected at all only the savings are impacted. So if someone has 100,000 EUR in the bank and a 100,000 EUR mortgage. The mortgage stays the same but the bank account is now 91100 EUR. This is way worse that simply printing 11.1% more money.

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[zeroday]

If I was a benevolent dictator of Cyprus, I would buy a bunch of bitcoins quetly, order a shitload of ASIC miners and adopt Bitcoin as reserve currency while using a state issued currency (Drahma?) in interim. Though risking US/Turkish invasion is not a small feat.

There was recently one benevolent dictator who did not push his people into debt to international bankers, held lots of gold, and worked on gold-backed pan-African currency. Armed rebelion was organized and supported by several powerful countries, and he and most of his familiy was ultimately murdered.

This way The New Order is being built. It's sad, but any honest and independent leader like Gaddafy will be smashed by The Global Corporation which is going to rule our planet.
And recent action of EU with Cyprus has just created a precedent and showed us our place in this word. Private property is not more private. We don't own our money, we only lease it with a wide set of restrictions from the government.

[Peter Lambert]

That's not the only tax they're pushing either.  In April, they're supposed to be taxing people for having spare bedrooms.  If you don't have the required amount of people in your home to fit your rooms, you'll get taxed pretty heavily. 

However, if you live in a mansion, rest assured that you are completely exempt from this tax.  Phew!  Close one, right?  Wouldn't want those millionaires to pay for hundreds of empty rooms.

Here's the article if anyone's missed it.

Meh. The article describes it as a tax, but it is more like a reduction of welfare to people living in larger houses than they need. The article mentions a single, unemployed fellow who, oh noes!, will not be able to afford his two bedroom flat when they reduce his dole. Well shucks, maybe he should get a roommate? They also have an example of a family who are "entitled" to such and such amount, they have four kids and live in a five bedroom place. What, we couldn't possibly have the kids share a bedroom! We are entitled to that money, you can't reduce it!

[wormbog]

That's not the only tax they're pushing either.  In April, they're supposed to be taxing people for having spare bedrooms.  If you don't have the required amount of people in your home to fit your rooms, you'll get taxed pretty heavily. 

However, if you live in a mansion, rest assured that you are completely exempt from this tax.  Phew!  Close one, right?  Wouldn't want those millionaires to pay for hundreds of empty rooms.

Here's the article if anyone's missed it.

Meh. The article describes it as a tax, but it is more like a reduction of welfare to people living in larger houses than they need. The article mentions a single, unemployed fellow who, oh noes!, will not be able to afford his two bedroom flat when they reduce his dole. Well shucks, maybe he should get a roommate? They also have an example of a family who are "entitled" to such and such amount, they have four kids and live in a five bedroom place. What, we couldn't possibly have the kids share a bedroom! We are entitled to that money, you can't reduce it!

Right on. The article's main example family has an autistic kid who has a special "sensory room" he can use to get some peace and quiet when he needs it. They are shocked that the gov't seems unwilling to pay for it. One of the parents is even considering taking the extreme step of looking for a paying job. 

[CurbsideProphet]

These southern-tier countries were serial defaulters.  By constantly devaluing their currency and multiple sovereign defaults, interest rates in these countries were very high.  The Euro provided them with a stable currency and lower interest rates.  While this allowed the formerly-poor to achieve a much higher lifestyle, the fact is for the better part of the last 20 years these countries have lived well above their means.  Looks like it might be time to pay the piper and it will not be pretty.

[rpietila]

As a Finnish taxpayer, I think the deal is good:

- It will reduce the need for taxpayer money in the bailout
- It will reduce the confidence in the banks and the corrupt system as a whole
- It will punish the speculators that have both loans and money in the bank (sucker, your arbitrage just shrank by 990 pips how do you feel about that?)
- Which will further reduce the confidence on any tricks that the banks keep pulling from their hats to tie up your money in their value-reduction schemes such as pension plans, mutual funds, etc.
- It will keep the banks afloat for a few more months and give everybody with a brain a chance to invest in bitcoin.

[Jaagu]

As a Finnish taxpayer, I think the deal is good:

- It will reduce the need for taxpayer money in the bailout
- It will reduce the confidence in the banks and the corrupt system as a whole
- It will punish the speculators that have both loans and money in the bank (sucker, your arbitrage just shrank by 990 pips how do you feel about that?)
- Which will further reduce the confidence on any tricks that the banks keep pulling from their hats to tie up your money in their value-reduction schemes such as pension plans, mutual funds, etc.
- It will keep the banks afloat for a few more months and give everybody with a brain a chance to invest in bitcoin.

As an Estonian taxpayer, I think the deal is morally bad, no matter how good is economic "analysis".
There is no defense for armed robbery.
This is akin to blowing up a disco because it is partially owned by a mob - irrespective of the human cost.

[rpietila]

As a Finnish taxpayer, I think the deal is good:

- It will reduce the need for taxpayer money in the bailout
- It will reduce the confidence in the banks and the corrupt system as a whole
- It will punish the speculators that have both loans and money in the bank (sucker, your arbitrage just shrank by 990 pips how do you feel about that?)
- Which will further reduce the confidence on any tricks that the banks keep pulling from their hats to tie up your money in their value-reduction schemes such as pension plans, mutual funds, etc.
- It will keep the banks afloat for a few more months and give everybody with a brain a chance to invest in bitcoin.

As an Estonian taxpayer, I think the deal is morally bad, no matter how good is economic "analysis".
There is no defense for armed robbery.
This is akin to blowing up a disco because it is partially owned by a mob - irrespective of the human cost.

Yes, the only moral thing was to let banks compete with same terms as the other companies do. You know, it is considered fraud, if you sell something you don't have, eg. banks are doing with their fractional reserve deposits. To me, the moral alternative would have been to refuse to bail out from day 1, or even better not allow the banks to operate fraudulently.

This goes into the right direction, if my ethics is concerned. Bankruptcy would have been better.

[JoelKatz]

Yes, the only moral thing was to let banks compete with same terms as the other companies do. You know, it is considered fraud, if you sell something you don't have, eg. banks are doing with their fractional reserve deposits.

Fraud requires deception. Nobody thinks the bank takes their money and locks it in the vault.

This seems to me like the government is defaulting on their deposit insurance obligations. Of course, you can never trust an agreement with the government since the only place you can go to enforce it is ... the government.

[rpietila]

Yes, the only moral thing was to let banks compete with same terms as the other companies do. You know, it is considered fraud, if you sell something you don't have, eg. banks are doing with their fractional reserve deposits.

Fraud requires deception. Nobody thinks the bank takes their money and locks it in the vault.

Well, if their current account contract says that you can withdraw any amount anytime, and they do not possess the capability of making good of such a promise, it IS fraud.

[JoelKatz]

Well, if their current account contract says that you can withdraw any amount anytime, and they do not possess the capability of making good of such a promise, it IS fraud.

No, it's not fraud. We all understand under what circumstances the bank can and cannot keep that promise. It's not a secret.

The contract is saying that you can request a withdrawal at any time. It is totally obvious that the bank can't process a withdrawal if they don't have the money. They could add that clause to the contract, but there would be no point -- everyone understands that already.

This is the tradeoff we choose to make in exchange for an account that bears interest, rather than paying someone to lock our money in a vault. It's a good deal for the depositors. (Unless the government decides to renege on it, but that could happen without fractional reserves.)

[luffy]

I think all the actions of global economy leaders are in the way of helping cryptocurrencies!
i wonder

[Vladimir]

I think all the actions of global economy leaders are in the way of helping cryptocurrencies!
i wonder

Yep, LOL, they must be loaded up on Bitcoin themselves (hence the run from 5$ to 50$) now they simply doing their best to help their newest investment.

[jago25_98]

No, it's not fraud. We all understand under what circumstances the bank can and cannot keep that promise. It's not a secret.

That's a good point. Hard to say what the consensus is amongst average people. Some get it but... I'm not so sure that most get it even now? I'd like to see a survey to see what average people understand.

The thing about this is that it doesn't seem to be a fix? It only guarantees a loan that isn't even enough to fix the situation. If they made it a 100% tax (which is what it could actually fall into!), I don't think even that would be enough to start again.

We've seen it all in Argentina. I've been telling everyone this. No one believes me. When I say I'm putting cash into Bitcoin they all think I'm mad.
It's exactly how many said it would happen.

The thing is, it is possible to get away from Euro banks but it isn't easy, even now. Bitcoin is  the easiest option. Trying to find a decent bank abroad and actually getting all that up and running is even harder. It's really hard work going through financial statements to figure out just how much of your cash is in the bank at worse case scenario - even sharia banks are not a safe bet. Now what happens if everybody in Crypus starts moving cash to Lebanon and the middle east? Do we then get more flare ups there or more peace because it's hard to attack a place where your cash is?  

Taking a load of savings is not so different from the fed and BoE printing loads of cash, it's quick but the BoE did quantitative easing in quite big chunks anyway.

Meanwhile I read of markets going nuts this morning. I can see a lot of movement but I don't know how to put it into context of how big it is.

Cyprus is kind of halted right now. No banking. No ATMs. Hope you've got some food in the fridge? That's how it started out for Argentina. But it just kept going and going until they had enough people to overpower the police and the president legged it in a chopper. I don't think this one will go that far but... it could with a run on the banks?

[Kluge]

I think all the actions of global economy leaders are in the way of helping cryptocurrencies!
i wonder

That's what I've been preaching for years. We can't have "effectively theft" -- we need real "in-your-face" bullshit from our bosses. Those with national and international powers are doing more to catalyze international-scale revolution against governments and other established cartels than any I've lived through.

God bless drones.

[caveden]

The contract is saying that you can request a withdrawal at any time. It is totally obvious that the bank can't process a withdrawal if they don't have the money. They could add that clause to the contract, but there would be no point -- everyone understands that already.

I'm sorry, but the contract must explicitly define such things. I'm among the minority group of libertarians that disagree that fractional reserves are inherently fraudulent - they certainly don't need to be. But the terms should all be explicit, otherwise it's indeed a fraud.

"Implicit contracts" are only tolerable for really obvious things, where no reasonable person would think otherwise (classic example: you invite me for a ride on your boat: there's an implicit agreement that you'll bring me back to the shore, and not order me to leave your property in the middle of the sea)

[caveden]

We've seen it all in Argentina.

Brazil has seen this too. Much worse than 10%. I think something like 80% of all savings accounts was frozen in 1991 (maybe 1990). The money was only released years after, when it was already corroded by (hyper)inflation.


Welcome to the Third World, Europeans.

[JoelKatz]

The contract is saying that you can request a withdrawal at any time. It is totally obvious that the bank can't process a withdrawal if they don't have the money. They could add that clause to the contract, but there would be no point -- everyone understands that already.

I'm sorry, but the contract must explicitly define such things. I'm among the minority group of libertarians that disagree that fractional reserves are inherently fraudulent - they certainly don't need to be. But the terms should all be explicit, otherwise it's indeed a fraud.

That's a good way to make lawyers rich, but it doesn't actually do anything.

"Implicit contracts" are only tolerable for really obvious things, where no reasonable person would think otherwise (classic example: you invite me for a ride on your boat: there's an implicit agreement that you'll bring me back to the shore, and not order me to leave your property in the middle of the sea)

It's not a bank's job to give its customers an education. If they don't understand how banks work, odds are they don't really want to know and I don't see it being reasonable for a bank to try to educate them. I can't imagine how adding a few more paragraphs of legalese explaining how fractional reserve banking works to their agreements would make any difference and I think it's kind of odd to imagine it would.

In any event, it's not a secret. It's understood by anyone who takes the time to learn it. So it's not fraud. The bank doesn't seek to profit from anyone's lack of understanding how fractional reserve banking works. Nobody would act any differently if they knew and the only people who don't know are those who don't wish to and don't care.

That's a good point. Hard to say what the consensus is amongst average people. Some get it but... I'm not so sure that most get it even now? I'd like to see a survey to see what average people understand.

What would you suggest? A mandatory eight hour finance course and a passing grade on the final to open a bank account? Or a few more paragraphs of legalese nobody would read? The fact is, we have fractional reserve banking because it makes sense and it's what people want. Yes, there are lots of dirty secrets, but you can expose them all and very few people would care. (That's not to say that the system's not badly broken. But the fix isn't banks that lock your money in their vault and charge you a storage fee.)

[Monster Tent]

It wouldnt be so bad if they reduced your outstanding loans by 9%

[rpietila]

The contract is saying that you can request a withdrawal at any time. It is totally obvious that the bank can't process a withdrawal if they don't have the money. They could add that clause to the contract, but there would be no point -- everyone understands that already.

I'm sorry, but the contract must explicitly define such things. I'm among the minority group of libertarians that disagree that fractional reserves are inherently fraudulent - they certainly don't need to be. But the terms should all be explicit, otherwise it's indeed a fraud.

That's a good way to make lawyers rich, but it doesn't actually do anything.

"Implicit contracts" are only tolerable for really obvious things, where no reasonable person would think otherwise (classic example: you invite me for a ride on your boat: there's an implicit agreement that you'll bring me back to the shore, and not order me to leave your property in the middle of the sea)

It's not a bank's job to give its customers an education. If they don't understand how banks work, odds are they don't really want to know and I don't see it being reasonable for a bank to try to educate them. I can't imagine how adding a few more paragraphs of legalese explaining how fractional reserve banking works to their agreements would make any difference and I think it's kind of odd to imagine it would.

In any event, it's not a secret. It's understood by anyone who takes the time to learn it. So it's not fraud. The bank doesn't seek to profit from anyone's lack of understanding how fractional reserve banking works. Nobody would act any differently if they knew and the only people who don't know are those who don't wish to and don't care.

Thank you. It seems that I need to reconsider my position. Up until now I have been considering fractional reserve banking a fraud, and I still think it is a detriment to the society. At the very minimum, bailouts of any kinds of businesses should be expressly forbidden. The Cyprus deal, even as it stands now, still supports Russian oligarchs from my pocket without my approval, and I don't think it is a stable ground to build a society upon.