The S has Already HTF In Cyprus: How Long Will You Wait Before Taking Action?

Who would have thought it? A tiny island in the Mediterranean looks set to collapse whats left of the Eurozone. While we all had out eyes on Spain and Italy, and maybe even France banks in Cyprus will remain closed on Thursday and Friday while the country scrambles to find a way to secure bailout funds after rejecting a levy on all savings.

With Monday a public holiday, the move effectively closes lenders until Tuesday, March 26th,The finance ministry said the decision had been taken

“on grounds of public interest in order to ensure financial stability”.

Banks have already been closed since last Saturday as Cyprus seeks to prevent the uncertainty prompting a run on them.

Money in cash machines around the island is running out  and the lack of liquidity in the market has seen petrol stations close their credit card facilities and many stores refuse to accept cheques.

Cyprus’ cabinet went into emergency session on Wednesday after voting against the tax on all savings, which was originally agreed with international lenders to secure a 10bn euro (£8.6bn) bailout package.

The floodgates for such levy schemes has been opened with New Zealand announcing they will consider such a plan to finance failing banks.

Scoop reports:

“Bill English is proposing a Cyprus-style solution for managing bank failure here in New Zealand – a solution that will see small depositors lose some of their savings to fund big bank bailouts, the Reserve Bank is in the final stages of implementing a system of managing bank failure called Open Bank Resolution. The scheme will put all bank depositors on the hook for bailing out their bank. Depositors will overnight have their savings shaved by the amount needed to keep the bank afloat. While the details are still to be finalized  nearly all depositors will see their savings reduced by the same proportions. Bill English is wrong to assume everyday people are able to judge the soundness of their bank. Not even sophisticated investors like Merrill Lynch saw the global financial crisis coming. If he insists on pushing through this unfair scheme, small depositors can be protected ahead of time with a notified savings threshold below which their savings will be safe from any interference.”

It’s begun. No one will tell us when it’s going to happen of course. We will just get up one morning and find the banks closed, the ATM’s will run for a couple of hours and then that will be it.

On a personal level my money is now out of the bank. It will be spent on food and long term preps while there is still food to be had. As Cyprus has shown, petrol stations are already closing. Shops will not be able to sell goods because people have no access to money and when the people get hungry, and their kids get hungry the looting will begin.

With the Russians so far not offering a tangible solution, probably because Cyprus does not want to let them have their offshore natural gas at a rock bottom price, and with the Cypriots still saying no to the Germans (and the other countries of course) there is no saying how this will end.

I for one have no intention of waiting to see what happens because if I do the window of opportunity may well have passed.