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Dark times in Cyprus, are we next?


Jor-el

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The EU is not the lottery, you dont win a prize for a troubled economy. Simply giving 10billion euroos and saying sayanora doesn't fix anything. Just look at what happened in Greece after giving them billions of subsidies, they spent it very poorly.

The EU demands structural changes, where the bank isn't more powerful than the Cypriotic economy. Which, until now, was the case.

I agree that the Russians and probably many others will do anything in their power to move their money, so we'll just have to wait and see how far it goes and how many extra measures will have to be taken.

The problem here is much older than most people seem to realize. Although the cause of the problem was initially American, it merely exposed something that had until then remained hidden due to the easy of getting credit to cover lack of finacial liquidity.

Over the last 25 years or so, it was the fundamental policy of the EU (favouring France and Germany) for member nations to move their Gross domestic product base from an industrial and rural (farming) economy to a mainly service based economy. To this end they gave billions of Euros in aid and incentives for countries to alter their base industries. Fishing was closed down in many countries. Whole fleets of fishing trawlers sent to the scrapyard. They paid farmers NOT to produce, steel mills were closed down because it was cheaper to import the product than make it locally, over close to a generation, service based industry has become the economic base of many of the countries that are now having problems.

Ironically neither France nor Germany changed their industrial based economies, they in fact became the leaders of a monopoly throughout the EU. and the rest of the countries (again mostly those that are now having problems) became their client base.

So we have alot of businesses that are not able to survive right now, because to get the countries back on their feet, they are now essentially in the wrong business and end up bankrupt.

People seem to be saying that we brought this problem on ourselves by our overspending, but many more have forgotten that these very same countries were pushed into becoming the spenders they became. When laws in the EU have to be implemented by all countries (whether they want them or not) they essentially are forcing people to spend more, upgrading, leasing or buying new products which they previously had no need of.

Portugal had one of the highest percentages of deposits in the entire EU in the beginning of the 90's today, they are one of the poorest countries in the Union with most of the population in severe financial problems.

Edited by Jor-el
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The problem here is much older than most people seem to realize. Although the cause of the problem was initially American, it merely exposed something that had until then remained hidden due to the easy of getting credit to cover lack of finacial liquidity.

Over the last 25 years or so, it was the fundamental policy of the EU (favouring France and Germany) for member nations to move their Gross domestic product base from an industrial and rural (farming) economy to a mainly service based economy. To this end they gave billions of Euros in aid and incentives for countries to alter their base industries. Fishing was closed down in many countries. Whole fleets of fishing trawlers sent to the scrapyard. They paid farmers NOT to produce, steel mills were closed down because it was cheaper to import the product than make it locally, over close to a generation, service based industry has become the economic base of many of the countries that are now having problems.

Ironically neither France nor Germany changed their industrial based economies, they in fact became the leaders of a monopoly throughout the EU. and the rest of the countries (again mostly those that are now having problems) became their client base.

So we have alot of businesses that are not able to survive right now, because to get the countries back on their feet, they are now essentially in the wrong business and end up bankrupt.

People seem to be saying that we brought this problem on ourselves by our overspending, but many more have forgotten that these very same countries were pushed into becoming the spenders they became. When laws in the EU have to be implemented by all countries (whether they want them or not) they essentially are forcing people to spend more, upgrading, leasing or buying new products which they previously had no need of.

Portugal had one of the highest percentages of deposits in the entire EU in the beginning of the 90's today, they are one of the poorest countries in the Union with most of the population in severe financial problems.

Well, i dont agree with the fact that you're starting to talk about Portugal while Cyprus is a completely different case.

A report published in January 2011 by the Diário de Notícias, a leading Portuguese newspaper, demonstrated that in the period between the Carnation Revolution in 1974 and 2010, the democratic Portuguese Republic governments have encouraged over expenditure and investment bubbles through unclear public-private partnerships. This has funded numerous ineffective and unnecessary external consultancy and advising committees and firms, allowed considerable slippage in state-managed public works, inflated top management and head officers' bonuses and wages, causing a persistent and lasting recruitment policy that has boosted the number of redundant public servants.[26]

The economy has also been damaged by risky credit, public debt creation and mismanaged European structural and cohesion funds for almost four decades.

Membership in the European Communities, achieved in 1986, contributed to stable economic growth and development, largely through increased trade ties and an inflow of funds allocated by the European Union (and before that the European Communities) to improve the country's infrastructure.

Although the occurrence of economic growth and a public debt relatively well-contained as a result of the number of civil servants has been increased from 485,368 in 1988 to 509,732 in 1991, which was a much lower increase than that which will happen in the following years until 2011 marked by irrational and unsustainable State employment, from 1988 to 1993, during the government cabinets led by then Prime Minister Aníbal Cavaco Silva, the Portuguese economy was radically changed. As a result, there was a sharp and rapid decrease in the output of tradable goods and a rise of the importance of the non-tradable goods sector in the Portuguese economy.[17]

Household debt expanded rapidly. The European Commission, OECD, and others advised the Portuguese Government to exercise more fiscal restraint. Portugal's public deficit exceeded 3% of GNP in 2001, the EU's self-imposed limit, and left the country open to either EU sanctions or tighter financial supervision.

Edited by Render
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Well, i dont agree with the fact that you're starting to talk about Portugal while Cyprus is a completely different case.

As was stated on this very thread earlier, before Cypress went Euro it had an excellent economy (2004), now suddenly we find it is bankrupt, what changed then? The EU changed the Cyprian economy. In 8 years it went bottoms up how is that even possible?

It adhered to the Euro in 2008, that was 5 years ago. In this short time it goes bankrupt?

What changed?

In my view their joining the Euro was suicidal, the ammount of laws and other things they had to change to be accepted as a Euro member destroyed them.

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As was stated on this very thread earlier, before Cypress went Euro it had an excellent economy (2004), now suddenly we find it is bankrupt, what changed then? The EU changed the Cyprian economy. In 8 years it went bottoms up how is that even possible?

It adhered to the Euro in 2008, that was 5 years ago. In this short time it goes bankrupt?

What changed?

In my view their joining the Euro was suicidal, the ammount of laws and other things they had to change to be accepted as a Euro member destroyed them.

Don't kid yourself.

The Cypriotic government and economy was and still is incredibly corrupt. Cyprus has to import most of its food, among many other things. It was the logical decision to trade with the EU and then of course join the EU.

The Euro didn't make their economy collapse, it was their entire system that made that happen. A system the EU wanted to reform, and still wants that. After Greece, Cyprus was exposed to around 4 billion of greek debts. Among many other things that caused this extreme situation.

According to Richter’s analysis this is how the corruption cesspit has manifested itself and allegedly affected an estimated 130,000 purchasers: -

  1. Buyers have bought property in Cyprus using the assistance of allegedly corrupt lawyers who have been in the pockets of the developers selling the properties
  2. The developers and banks have worked together to continue to extend the Cypriot property market – basing no single lending decision on any consideration of sustainability or reality
  3. The local business culture in Cyprus is one where extended family bonds exist and will always dominate, and where any outsider is fair prey – i.e., where it’s a case of ‘us’ (Cypriots) against ‘them’ (anyone else)
  4. Whilst prices of properties have been falling sharply in Cyprus for the past six consecutive quarters, banks are forcing estate agents and valuers to talk up the market so that the loans they have extended for construction and development continue to look realistic
  5. This is done in a bid to hide the true extent of the banks’ bad loan debt, to hide the true nature of the near bankrupt property economy in Cyprus, and to once again advance the positive propaganda internationally
  6. In terms of the bad loans that the banks have been responsible for signing off for developers, these have been secured on parcels of land that unsuspecting foreign buyers believe they have bought un-mortgaged…
  7. Which leads us neatly back to point 1. When a buyer purchases property in Cyprus they ask a lawyer to do searches on the land and property to ensure clear title. The allegedly corrupt lawyers who are in the pay of the developers do no such searches, instead assuring buyers they are purchasing clear title to their new home…
  8. The loan the developer has with the bank to buy the land on which the foreign buyer believes his home will be built is secured with the title deeds – which the buyer believes he will receive, but which in reality remain the legal property of the bank
  9. The developer pockets all the buyer’s money, continues to service the mortgage (or not, as the case may be) and the buyer never gets their title deeds and pays a fortune for something they can never own and never did truly own in the first place
  10. The banks either receive mortgage repayments from the developer – or increasingly they don’t. They can then foreclose on the land and take the land and property out from underneath the unsuspecting foreign buyer. However, this process takes an estimated 10 – 12 years, so the entire situation is a ticking time bomb that, together with the true extent of the bad debts the banks have extended to the developers in Cyprus, will only become evident given a little more time.

http://www.news.cypr...-dust/id=009490

Just as an example of the mess they were already in.

If you think all the crap was sustainalbe if only they hadn't joined the EU, then you really got some eye opening to do.

Edited by Render
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They are giving them 10 billion, provided they come up with 4-5 billion on their own. Does not sound unfair to me.

well surprise surprise, why am i not surprised you dont find it unfair, you've been in favour of the EU / Cypriot government taking peoples money from the outset - like i said before you wouldn't of liked it when you was living in Greece if the EU/Greek government took a large percentage of your hard earned money against your wishes. but then again, way back in 2010 i said things will hot up and you'll simply parachute out of Greece. how long have you been living back in the USA? a good few months now! - the irony a believer - a preacher of the EU up until it goes tits up and do the moonlight flit. you couldn't make it up. :td::unsure2:

Cyprus should have defaulted on the bond markets and the debt would have been written off. they'd have been debt free, moved back to their old currency that seen them right for over 120+ years. leave the EU altogether. restructure their economy. bringing back the cheap holidays etc... at least this would have given them a fighting chance. unlike whats happened - lumbered with more debt, debt they'll never pay back along with Greece Spain and Portugal. out of the whole of europe its the sad state we see the Portuguese as Britain's oldest ally. not only did Portugal have the first true global empire in history it also remained a protectorate of these colonies for over 600 hundred years. they were exploring the world when Britain didn't even have a pot to pee in, and look at them now. they've sold their soul to the devil, and become nothing more than a failed EU member, now bailed out to the tune of 78+ BILLION. high unemployment and everything that goes along with that.

Edited by stevewinn
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well surprise surprise, why am i not surprised you dont find it unfair, you've been in favour of the EU / Cypriot government taking peoples money from the outset - like i said before you wouldn't of liked it when you was living in Greece if the EU/Greek government took a large percentage of your hard earned money against your wishes. but then again, way back in 2010 i said things will hot up and you'll simply parachute out of Greece. how long have you been living back in the USA? a good few months now! - the irony a believer - a preacher of the EU up until it goes tits up and do the moonlight flit. you couldn't make it up. :td::unsure2:

Cyprus should have defaulted on the bond markets and the debt would have been written off. they'd have been debt free, moved back to their old currency that seen them right for over 120+ years. leave the EU altogether. restructure their economy. bringing back the cheap holidays etc... at least this would have given them a fighting chance. unlike whats happened - lumbered with more debt, debt they'll never pay back along with Greece Spain and Portugal. out of the whole of europe its the sad state we see the Portuguese as Britain's oldest ally. not only did Portugal have the first true global empire in history it also remained a protectorate of these colonies for over 600 hundred years. they were exploring the world when Britain didn't even have a pot to pee in, and look at them now. they've sold their soul to the devil, and become nothing more than a failed EU member, now bailed out to the tune of 78+ BILLION. high unemployment and everything that goes along with that.

And it seems another bailout is on the way, since the government here in Portuagal my fall pretty soon. We'll be hocked up to the EU for a generation or two before we see the light of day again.

If we ever do... a much cheaper way to conquer than using any military and much more effective...

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well surprise surprise, why am i not surprised you dont find it unfair, you've been in favour of the EU / Cypriot government taking peoples money from the outset - like i said before you wouldn't of liked it when you was living in Greece if the EU/Greek government took a large percentage of your hard earned money against your wishes. but then again, way back in 2010 i said things will hot up and you'll simply parachute out of Greece. how long have you been living back in the USA? a good few months now! - the irony a believer - a preacher of the EU up until it goes tits up and do the moonlight flit. you couldn't make it up. :td::unsure2:

Cyprus should have defaulted on the bond markets and the debt would have been written off. they'd have been debt free, moved back to their old currency that seen them right for over 120+ years. leave the EU altogether. restructure their economy. bringing back the cheap holidays etc... at least this would have given them a fighting chance. unlike whats happened - lumbered with more debt, debt they'll never pay back along with Greece Spain and Portugal. out of the whole of europe its the sad state we see the Portuguese as Britain's oldest ally. not only did Portugal have the first true global empire in history it also remained a protectorate of these colonies for over 600 hundred years. they were exploring the world when Britain didn't even have a pot to pee in, and look at them now. they've sold their soul to the devil, and become nothing more than a failed EU member, now bailed out to the tune of 78+ BILLION. high unemployment and everything that goes along with that.

He used to say that countries couldn't go bankrupt.

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I'm actually surprised people didn't see this coming, we have been forced to use the banks for everything, all it needed was some kind of 'crisis' to give the banks the power to get their grubby hands on even more of our money.

Its something we all should be concerned with, if it can happen in Cyprus it can happen anywhere.

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I saw this item on another site. I don't know how reliable this publication is, so take it for what you feel it's worth. If true I would be a VERY unhappy depositor.

http://www.dailymail.co.uk/news/article-2301737/Its-robbery-New-Cyprus-bombshell-Britons-told-lose-EVERYTHING-85k.html#ixzz2P8EThsCE

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According to fox news, the fidc told banks last year that if they got in trouble , they could all deposits over 250,000. Actually, the fidc said they could take all of it. But the whole thing. But, according to fox news that would take an act of congress.

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According to fox news, the fidc told banks last year that if they got in trouble , they could all deposits over 250,000. Actually, the fidc said they could take all of it. But the whole thing. But, according to fox news that would take an act of congress.

What I don't understand is how Gov allows banks to take such risks in the first place, its ok saying if you get into trouble take everyone's money what about saying wtf is going on..and who are they answerable to ? as for an act of congress...I cant see that being too much of a problem, lets be clear on this the banks own everything including our gov's. But I think we all know wtf has been going on with the creation of money out of thin air or decades, it was always going to end badly.

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Of course we are next. Don´t expec the great EU bankrobbery to stop in Cyprus.

Now that the Eurocrats have demonstrated that laws and democracy mean nothing to them and they are ready to resort to open theft in order to protect the banks, the last barrier has been broken.

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Banks should do nothing other than take in deposits and give out loans with those deposits, making their profits on the interest difference between what they pay for the deposit and what they get for the loan.

The habit has developed of people taking all sorts of up-front fees on the loans, and making their profits on these things. This creates a perverse incentive to get the loan through no matter how bad, so the immediate cash can be pocketed -- let the future deal with the bad loads that will ensue.

Thus, banks should not be allowed to charge points or other fees, the costs involved in things like appraisals and inspections should be completely independent of the bank (even by having some mechanism where the entities that do these services are state owned or at a minimum chosen by public entities, not the bank or anyone connected with the real estate or title companies).

Because real estate loans are long-term and interest rates vary short term, some variability in interest rates should be mandatory. Otherwise ultimately banks get into trouble when interest rates rise. Either than or some system of periodic automatic renegotiation of the loan.

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According to fox news, the fidc told banks last year that if they got in trouble , they could all deposits over 250,000. Actually, the fidc said they could take all of it. But the whole thing. But, according to fox news that would take an act of congress.

VP Biden acknowledged that that option was one of the administrations first options immediately after getting into office... --To call a Bank Holiday.... you know... RIP OFF EVERYBODY not in the know....... THAT majority so-called current American domestic Democracy covets.

LOL

Watch:

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There, as I numerously mentioned I suspected seems to be the case indeed.

Cyprus plan DID NOT COME FROM ECB..it was the cypriotic government that obviously made a panicked decision. It was just easy for the ignorant to instantly blame the EU for everything.

ECB says first Cyprus bailout plan 'not smart'

The initial plan to make small savers pay for the Cyprus bailout was "not smart", the European Central Bank (ECB) president has said.

ECB president Mario Draghi said a proposal to make "insured depositors" pay did not come from the ECB, the European Commission or the IMF.

He said the proposal only arose in talks with the Cypriot authorities, and was "swiftly corrected".

He was speaking after the ECB held eurozone interest rates at 0.75% again.

It was the ninth month in a row that they had been kept unchanged, but Mr Draghi indicated that the bank was ready to act, if necessary.

He also suggested that the problems seen for some time in smaller, weaker economies such as Spain, were spreading to stronger economies.

...

Speaking about the bailout, Mr Draghi said that the initial plan to impose a levy on all depositors "was not smart to say the least".

He said the ECB did not envisage savers covered by a guarantee - that is, those with up to 100,000 euros in savings - being forced to contribute towards the country's rescue plan.

"You have a pecking order, and here the insured depositors should be the very last category to be touched," said Mr Draghi. "The (European) Commission draft directive foresees exactly this."

...

Mr Draghi also told a news conference that the Cyprus bailout was not a blueprint for what would happen in further bailouts.

http://www.bbc.co.uk/news/business-22024610

The bolded part seems to be the most important one for all the ignorant ones here who are p***ing their pants in panick. GET BACK TO REALITY you fearmongerers

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The problem is that what Mr. Draghi says is what Mr. Draghi says. Words are cheap; what they do is what people notice.

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