GOLD AFTER CYPRUS

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▬ blog 17 march 2013 ▬

GOLD AFTER CYPRUS

how easy it is for banks to intrude into your account

It is not final yet, but it is likely that Cyprus will consent to last Saturday’s plan of the EU and IMF to let the clients of the Cyprus banks’ clients contribute €6 billion to solving the new need of the government. In addition, Cyprus will then receive a €10 billion injection from the EU/IMF. The plan is to charge ALL accounts a 'one-time-fee' of 6.75% for deposits up to €100,000 and 9.9% for deposits exceeding that amount.

If Cyprus will go along, the ‘fee’ will be deducted from the accounts before the banks on the island will be opening up next Tuesday. It is as easy as that and I am pretty sure you would never suspect that the banks can so easily intrude the accounts of their clients. And what a weird sense of timing, to announce this on a Saturday of the weekend before a Monday that is a national holiday with the banks closed....

I would be curious to know about the legal grounds that allow the banks to take money out of the accounts. Is such a stipulation included in the ‘small-lettered’ rules and regulations?

I just hope whether this action will give some smart ideas to the other financially weak countries in the EU and more impacting, in the rest of the world. We all know that the banks are not only powerful, mostly back by their respective governments, and getting away with their doubtful products and actions. Like this legal theft, I cannot name it any different.

This weekend surprise came as a magician gets his rabbit out of his high hat and we can only wonder what comes next……

At this time, Sunday evening 23.30 European time, it is difficult to judge what impact this despicable action will have on the price of gold. But what it does anyway, is that it confirms the expectations I had and with me, many of my colleague gold watchers. This Cyprus case is another step into a world of financial stress –I don’t want to use the word chaos-   and uncertainty. Tomorrow, we will see how the bank clients in the rest of Europe will react, and naturally also the financial markets. As a believer in gold, I would be quite surprised if the gold price would not go up through the $1,600 level. Let’s see whether the Fed, possibly joined by the European banks, will be able to counter gold’s upward move.

I hope you and I can sleep tonight. Not that we have money in any Cyprus banks but the sound of the money printing machines that are working full-speed all over the world may keep us awake…… (hjk)