Major news hit the wires on Saturday March 16th. Cyprus, although a very small island in Southern Europe, is the next country to announce a bailout of its banks. European officials and the government in Cyprus worked out a deal in which depositors become part of the bailout: every depositor of a bank in Cyprus will be charged a "one-time fee" of either 6.75% (for deposit less than 100,000 euros... read more
The radical ECB, IMF, EU bank levy and ‘bailout’ package for Cyprus threatened to trigger fresh turmoil in the euro zone, which will lead investors and savers to seek safety in gold. The deposit levy plan in Cyprus may be the spark that gold needed to overcome its recent weakness and commence the next phase of the bull market. Savers in the periphery nations of the EU, such as Spain,... read more
“There are bank runs here in Europe again, Eric. Today is a national holiday in Cyprus, so the banks are closed. But people are lining up at ATMs to get their money out before the ATMs run dry. And there is talk that a bank holiday will be declared, possibly keeping them closed for days. Depositors in Cyprus are going to lose some of their money as part of a proposed EU bailout of that... read more
Cyprus Investors Should Buy Gold Instead What happens in Cyprus doesn't necessarily stay in Cyprus. The media says it can't happen here but it can. If several major U.S. banks failed, trillions of deposits would be at risk, including hundreds of billions insured by the FDIC. However, the FDIC barely has any reserves to cover the potential losses. A bigger bailout than TARP would be required... read more
Yi Gang, Vice Governor of the People's Bank of China (PBOC), recently made the headlines with his comments on Chinese gold reserves. On Wednesday, Mr. Yi stated that China's gold reserves remain static at 1,054 tonnes, and suggested that a sizeable increase in those reserves would be unlikely in the future. "We need to take into account both the stability of the market and gold prices," Mr. Yi... read more
As has been assiduously explained by members of the European statist oligarchy, the reason for the deposit tax levy, in addition to the broader unsecured debt "bail-in" bailout of Cyprus, was due to the unique funding structure of Cypriot banks, in which the bulk of funding was in the form of deposits (whether Russian or domestic), leaving a tiny €2 billion in the form of junior bond... read more
Cyprus: The Next Blunder The Cyprus bailout package contains a tax on bank deposits. This column argues that the tax is a deeply dangerous policy that creates a new situation, more perilous than ever. It is a radical change that potentially undermines a perfectly reasonable deposit guarantee and the euro itself. Historians will one day explore the dark politic... read more
Whenever I see a headline that reads similar to "How to Invest in Uncertain Times," I shake my head. I shake my head because the headline implies there is a time when the outlook is certain. The reality is that all times are uncertain. There has never been an epoch, a year, a day, or even a minute when uncertainty wasn't a prevailing variable in investing. And there never will... read more
Depositors who are waking up to find that up to 10 per cent of their bank accounts in Cyprus have been confiscated as a part of a European Union rescue operation are unlikely to leave their money in the country because of the risk of it happening again. ATM machines have already emptied on the Mediterranean island in a bid to drain accounts. All electronic money transfers have been stopped.... read more
Lest We Forget The main issue is not Cyprus. Cyprus just happens to be the nation where the confiscation is to be enacted. Cyprus is the scapegoat.The European Union, the ECB and the IMF are the villains. Cyprus is the mostly unwilling recipient. What has taken place in Cyprus is far less important than the larger issue which is a forfeiture of pri... read more