Cyprus

If this comment "Cyprus was the source of about a quarter of all foreign direct investment in Russia" is true, I guess there is no hono[u]r among thieves.

Best regards, Spehro Pefhany

Lovely. For small accounts, the levy (tax) is 6.75%. Looks like one bank is paying 3% interest on small accounts. So, leaving money in the bank will produce a net loss. I predict a run on the banks as people withdraw their money in order to avoid the tax.

It's already happening... I saw a website displaying a picture of long lines at ATM's.

Who may get screwed... it was noted that more than half of the savings deposits are of non-resident Russians. They won't be able to withdraw quickly enough... premature.... >:-} ...Jim Thompson

It is guaranteed that they will not be allowed to.

Best regards, Spehro Pefhany

There are all sorts of interesting instabilities possible in the Monetary Union. And all sorts of nationalistic resentments to go along, not to mention the Russian complications. As they are saying, the EU is now an unruly teenager.

The US is probably in for some equally interesting financial dynamics, a few years out.

It's all about the money. Money , money, money...

Sadly, most of the world is increasingly all about the money. Traffic and parking enforcement used to be about public safety and convenience. Now it's all about the money.

"Money" is of course just the way we keep score nowadays. It's really about class warfare, where the winning class is now government.

all

Differential taxation, higher taxes on short-term and nonproductive income, lower taxes on genuine productivity and job creation, would help.

So would less government and more reasonable compensation of government employees. At the city and county level, bankruptcies will take care of some of that.

Unlike Cyprus, the US government *can* (and will) print money to steal everyone's savings. It's inevitable: when interest rates go up from zero to something more realistic, government debt payments will be impossible to make otherwise.

Union.

Reading between the lines, it appears that Cyprus is trying to get EU bailout money, which will require a tax increase. The governments logic may have been based on raising taxes for foreign (mostly Russian) depositors instead of residents, but the distinction is probably lost on residents that just had a large hole drilled in their assets. It's much worse than just 6.75% since my guess(tm) is that most lower income workers probably are only able to save, at best, perhaps 10% of their gross income. That would mean that the residents would need to generate 10 times as much in income to replace the amount they just lost in the levy.

Any positive feedback (rewards) system is inherently unstable. Only negative feedback (taxes) produces a stable system. However, if the government increases feedback (taxes) to the point of quenching the system (economy), such high feedback (taxes) are capable of shutting down the entire system (latchup).

Also, at any given time in US history, we are usually recovering from the mistakes of previous administrations. Extrapolated to its logical extreme, I could demonstrate that we're still recovering from the cost of the French and Indian War.

"A refresher on the 1930s"

Policy perhaps, financially I don't think so (although I haven't heard anything about it). I had heard sort-of-recently (i.e., in the last ten years) the Spanish-American war was finally paid off.

I haven't heard, but I expect WW1, and the especially pricey WW2, are still on the books.

Tim

rint

.highlandtechnology.com  jlarkin at highlandtechnology dot com

All your money belong to us.

Well your money gets stolen either way. Better a slap in the face than a knife in the back.

Vlad doesn't like it.

It gets even better:

Banks never reopen, so steal 100% of the deposits.

Throughout Europe, there will be a run on matresses.

You don't think Obama is going to learn this trick? Why do you think he's trying to grab guns?