By Jeff BerwickThe Dollar Vigilante
March 21, 2013
News came out yesterday that all Cypriot banks will continue to be closed until at least next Tuesday and may remain closed permanently.
Last week, the European Central Bank threatened to cut the Emergency Liquidity Assistance which Cyprus had been receiving unless Cyprus’ major banks implemented legislation which would “tax” all investors who have accounts in Cypriot banks an amount up to 9.9 percent of their total deposits. The tax was rejected by the Cyprus parliament on Tuesday.
The ECB proposal led to runs on Cypriot banks and to angry protests, including from Russia’s Vladimir Putin, as many Russians have money in those banks. Cyprus is a more than thousand year-old banking center which has facilitated trade in the region for centuries, so this situation is of great interest to many people worldwide including a massive amount of shipping companies who use Cyprus as their financial center.
Nigel Farage is a British politician and leader of the UK Independence Party (UKIP) since 2010 and, since 1999, he has been a Member of the European Parliament for South East England. He came out with a scathing rebuke of the ECB’s plans.
In his first TV appearance since the Cypriot wealth tax was announced, he stated that in all his years and all his experience of the desperation of the European Union’s leadership “never did [he] think they would resort to stealing money from people’s savings accounts.”
He stated the obvious. The EU knows they cannot let any country leave, no matter how small, for “once one country goes, the whole deck of cards will come tumbling down.”
He parroted our comments that this has the potential to destroy the entire EU banking industry and even the euro itself. Italians, Spaniards and many other weaker EU citizens must be looking at their local bank accounts with great worry.
We agree completely with Nigel’s prognosis that Europeans and anyone with a bank account in Europe should “get your money out while you can.”
“Do not invest In The Euro-Zone,” he said, which we have been saying at TDV for years. He went on, “you have to be mad to do so – as it is now run by people who do not respect democracy, the rule of law, or the basic principles upon which Western civilization is based… They are propping up a Eurozone that, in the end, will collapse in disastrous failure and they are prepared to do anything to do so.”
But here we take issue with Nigel that this shows a lack of respect for democracy. This is the inevitable outcome of the democratic political process which allows voting for goodies from politicians at the expense of future generations and ever increasing debt. The bill is now coming due.
The events in Cyprus in the last week may have been the linchpin that sets off a complete collapse of the Euro Zone and even, by extension, the entire Western financial and banking system should enough panic set in.
Continue Reading at..... http://intellihub.com/2013/03/21/euro-banking-system-on-the-verge-of-collapse/
