Gerald Celente: Cyprus Looting is Only The Beginning for Global Elite

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18 March 2013

What is Going on in Cyprus?

Why is the banktruptcy of a tiny economy in the Mediterranean making headlines across Europe? The answer is that the Cyprus solution is what every saver across Europe fears might be coming their way soon. The awareness that money is not real and that countries are not good for the amounts of money they have guaranteed has been creeping into people's consciousness over the past five years. I know this because I speak to large groups of people about money and this fear is lurking behind their questions about gold and their decisions to put money into renewable energy schemes or socks under the mattress.

It was this fear that drove Alastair Darling to increase the savings guarantee in Britain at the start of the financial crisis: nothing is worse for a banking system than people feeling that their deposits are not safe and withdrawing their money. And nothing spreads this fear as rapidly as governments taking money out of their citizens' bank accounts as the Cypriot government has threatend to do. When the Argentinian government made a similar move in 2001 it precipitated a massive withdrawl of capital and the collapse of the national economy.

I am pleased to see that, although the levy on Cypriots' bank accounts is a policy made in Germany and to please German tax-payers, the Green Group in the European parliament, alhough it is dominated by German MEPs has made its opposition clear. Greens/EFA co-president Dany Cohn-Bendit is quoted stating that:

'The attack on ordinary depositors in the context of Cyprus' bail-out is outrageous and must be urgently corrected. Small depositors should be last in the line of fire in any bank restructuring. This is the guiding logic behind EU legislation providing for national deposit guarantee schemes, as well as draft legislation currently under consideration on an EU deposit guarantee scheme. While the proposed depositors' levy may be legally consistent with the existing legislation, it is a cynical ploy, which totally defies the spirit of the rules and their raison d'être.'

Merkel's decision to crush a tiny and vulnerable economy comes less than a month after the 60th anniversary of the cancellation of Germany's own war debt. By 1953 Germany was still carrying pre-war debts which had been massively increased by the costs of borrowing to fund the war itself. The country was in ruins and was incapable of borrowing to rebuild. Germany's former enemies agreed that for the sake of peace and humanity a significant portion of its huge debts should be written off, sums amounting to a value equivalent to 75% of Germany's exports in 1950. The remaining debt was restructured and interest rates reduced.

The Dublin based Ango: Not Our Debt campaign celebrated the anniversary, which is passing unmentioned in Germany. Its spokesman Andy Storey commented:‘The 53 Accord was signed initially by 22 creditor countries, including by Ireland and Greece.' Anglo: Not Our Debt point out that the amount of debt cancellation received by Germany in 1953 in today’s terms is worth nearly ?37bn., similar to the amount of the principal of Anglo debt being paid by people in Ireland over the next 40 years. Indeed, the amount of debt cancellation received by Germany is all the more impressive, as Germany’s economy was far smaller then than today

http://gaianeconomics.blogspot.kr/2013/03/what-is-going-on-in-cyprus.html

Cyprus banks close as bailout terms spark Europe-wide crisis

By Jordan Shilton and Chris Marsden
19 March 2013

The terms attached to the European Union (EU) finance ministers’ bailout for Cypriot banks triggered heavy losses on financial markets that were lessened only on the basis of an expected climb-down.

A vote in Cyprus’s parliament was first postponed from Sunday until Monday, and then until today, as it remained uncertain if President Nikos Anastasiades could win majority backing for the plan. In a statement on national television Saturday, he declared that Nicosia had no other alternative but to accept the terms of the programme if the country was to avert a full financial collapse. He compared the current crisis to the Turkish invasion of the island in 1974, which led to partition.

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The current version of the plan will see around 10 billion euros ($13 billion) made available to the island’s banks, and close to a further ?6 billion raised through a tax on banking deposits. Accounts with a balance of less than ?100,000 were to be taxed at 6.75 per cent, while those with more than that amount faced a 9.9 per cent charge.

With banks closed, depositors emptied ATMs over the weekend. The terms of the bailout met near universal hostility from widely varying layers of the population. Banks due to open today after a bank holiday are to remain closed until Thursday to prevent further panic withdrawals.

Accounts differ as to who proposed what in discussions leading up to the EU decision to levy a tax on small investors. The Cypriot government blamed Berlin, which countered that it was Cyprus that decided to levy a tax on small investors after rejecting suggestions of a bigger tax—up to 40 percent—on those with over ?100,000 in Cypriot banks.

In either event, the terms agreed represented a breach of existing guarantees that small investors are safeguarded from the consequences of the banks’ bad practices.

Berlin’s portrayal of the measure as a policy targeting Russian oligarchs using Cyprus as a tax shelter did nothing to lessen public outrage.

Long-running negotiations over a bailout for banks controlling assets worth more than eight times GDP have brought divisions between the European powers to the fore. The key measures in the bailout were dictated by the German government, which was unwilling to play the main role in funding a full-scale bailout. Finance Minister Wolfgang Schäuble pushed for the bank deposit tax, as well as the demand that Cyprus increase its corporation tax from 10 to 12.5 percent.

These measures, which will contribute approximately 40 percent of the overall cost, are aimed at strengthening Berlin’s position against Russian and—to a lesser extent—British investors. Russian investors control a total of ?19 billion of bank deposits in Cyprus, equating to 7 percent of all Russian corporate deposits. The island has become the second-largest source of foreign direct investment into Russia, as many companies have set up bases there to take advantage of low corporate tax rates.

Britain, the former colonial power, views Cyprus as a strategic location and maintains a military presence on the island with around 3,000 troops. Approximately ?2 billion of bank deposits are controlled by Britons, around 30,000 of whom live there.

Behind calls for a struggle against “money-laundering” and funds from the “black market”, which were embraced by the opposition Social Democrats as well as the Merkel government, one aim of the bailout was to undermine the position of Russian and British investors. President Vladimir Putin denounced the measure as “unjust, unprofessional and dangerous.”

However, the levy also ensures that working people in Cyprus are made to bear the costs for the bailout of the country’s failed financial institutions. In reality, the oligarchs and the wealthy have far greater ability to withdraw their funds than Cypriots, Greeks and other smaller investors—unless Cyprus were to take the extraordinary decision to impose capital controls.

In January, ?43 billion of the ?68 billion in Cypriot bank deposits was held by domestic residents, with a further five billion held by Greeks.

Some within the bourgeoisie supported the notion of making Russia pay, but most considered the taxing of small investors a political disaster, fearing that both measures raised grave dangers.

The decision to seize investors’ money overnight could provoke a bank run in other European countries—with savers in Spain, Portugal or Italy fearing the possibility that money may also be removed from their accounts in the future. Cyprus is a warning of what might happen. In the first two weeks of February alone, $1 billion in deposits were removed from banks in Cyprus, as speculation grew that the tax would be imposed.

Greek financial commentator Yiannis Mouzakis wrote, “Deposits flight combined with the sale of the Greek operations will probably leave the Cypriot banking system half the size it was on Friday night, even left with one systemic bank after restructuring.”

If this were to be repeated in other struggling countries the potential for devastating contagion is incalculable.

Germany’s media was filled with dire warnings.

D ie Welt asked, “Who can say that at some point the Cyprus model will not be used by banks in Italy or Spain? And that bank customers could lose far more than 10 percent?”

Süddeutsche Zeitung wrote, “Banks closed, money gone, confidence destroyed. The last taboo of the euro crisis has been broken, and it’s now reaching directly into savings accounts… The crisis surrounding the euro has unexpectedly reached a new level of escalation.”

Handelsblatt declared, “Cyprus sets a precedent. What happens there can also happen elsewhere. In Spain and Ireland, bank bailouts have allowed the national debt to explode to an unsustainable level. There, the euro zone could see tapping into bank accounts as the next step. In principle, no European depositor can remain assured that their bank balance will remain untouched—even in Germany.”

Jean-Claude Juncker, the prime minister of Luxembourg and head of the 17-nation euro group, told AFP: “I have grave concerns that this will lead to a loss of confidence, not just from the banks but also from the people.”

With so much at stake, some rejigging of the terms of the bailout may well be made before it is re-presented today. But, as with all such “bailouts”, only the bankers and the super-rich benefit, while the working class is made to suffer.

The Cyprus bailout, like those for Greece, Spain, Portugal and Ireland, is conditional on the launching of a vast austerity programme, including privatisations, which will lead to the elimination of jobs in the public sector and the destruction of social services. A public sector strike took place a day prior to the EU finance ministers’ announcement, involving up to 16,000 state employees. It was called against wage freezes and budget cutting.

Paul Krugman of the New York Times commented that the levy on investors “is just the beginning! Even with the effective default on deposits, Cyprus will need a huge loan from the troika, and the condition for this loan will be harsh austerity. This looks like the beginning of endless, inconceivable pain.”

http://www.globalresearch.ca/cyprus-banks-close-as-bailout-terms-spark-europe-wide-financial-crisis/5327444

Tuesday, March 19, 2013

Gaming the Cyprus Negotiations (Updated)

The state of play in Cyprus is that negotiations in Parliament are underway, with the hope of a yes vote on a “Plan B” today (see update at the end, this is looking a lot rockier than conventional wisdom surmised). The Cypriot officialdom has allowed for slippage in this timetable, with the bank holiday in effect till Thursday. The latest events were largely a nothingburger, aside from the big news of the failure to approve the president’s plan yesterday: European ministers confirmed that they’ll approve an agreement so long as Cyrpus obtains ?5.8 billion from depositors. Monday night, President Nicos Anastasiades gave his version of the Hank Paulson armageddon speech on national TV, laying out the fact that no deal means an immediate collapse of “one bank” (presumably Liaki), and a possible exit from the Eurozone.

The widespread assumption is that the Cypriots will fall into line, since the alternative really does look even uglier. But the runway is pretty short. The government could conceivably extend the bank holiday through Friday, which means through the weekend. But anything beyond that likely starts to eat at the real economy.

Moreover, even getting a deal still will have a big, negative economic impact in Cyprus. Deposits are certain to flee, so the bank crisis that was hoped to be averted is still a real possibility. After all, it is not clear that Cyprus will be out of the woods with this rescue; many experts expect further restructuings are in the works. Why sit around and let your ox be gored a second time? The Prodigal Greek (hat tip Guardian) notes:

No matter what today’s outcome, Cyprus’ banking system will not be the same ever again. If Germany’s intention was to reduce the size of it – closer to the eurozone average – they managed to achieve that with a masterful stroke in just one weekend.

Deposits flight combined with the sale of the Greek operations will probably leave the Cypriot banking system half the size it was on Friday night, even left with one systemic bank after restructuring.

Cannot see a smooth transition period without some form of capital controls.

By the time the dust settles, the Cypriot economy will sink and PIMCO’s adverse scenario will materialise. Many people did their best to make this a reality.

Felix Salmon takes issue with Andrew Ross Sorkin’s “those dirty Cypriots had it coming to them” for living in a tax haven. Ahem. People in glass houses should not throw stones. How exactly are tax evaders like GE and Apple any different than Russian oligarchs (some of whom evade taxes via perfectly legitimate big companies?) As Nicholas Shaxson pointed out in his book Treasure Islands, the biggest tax haven in the world is now run by the US, between Delaware and Wyoming corporations (you can hide ownership just as well via Wyoming limited liability corps as Isle of Man shells) and our friends in Caymans. By Sorkin’s logic, it would be OK to cram down everyone in Delaware because they benefitted from the local tax avoidance business.

Separately, Sorkin is way too sanguine about contagion risk. Did he miss that there was already destablizing deposit flight from the periphery, and only the successful OMT headfake of last September calmed nerves enough to put it to a stop? You don’t need lines at ATMs to bring a bank down; a slow big deposit drain will do that too if the bank has dodgy, illiquid assets. That is exactly what brought down WaMu, and plenty of Spanish banks have balance sheets at least as ugly.

But Salmon is also unduly enthusiastic about a hail Mary idea of having the Cyriot government vote through a plan to convert deposits over ?100,000 to 5 or 10 year CDs, with the longer term ones secured by gas revenues. You could completely spare the under ?100,000. Now I will say the plan is exceedingly clever and Salmon cheekily urges the Parliament to pass it and force the Eurocrats to dare to shoot Cyprus in the head with a perfectly reasonable, indeed better, plan on offer.

The problem is that this idea is altogether too late. I’ve been in a fair number of two party negotiations, and unless both sides trust each other a lot, radical new ideas at the 11th hour are generally seen as a sign of bad faith dealing. People have gotten locked into positions and find it psychologically difficult to budge. It’s even harder to get bigger groups on board. Given that Anastasiades is so afraid of rattling the Eurocrats that he felt the need to get their blessing merely for rearranging the deck chairs on his Titanic (shifting the amounts various depositors get whacked to meet the required ?5.8 billion target), I doubt he would back this sort of idea, and without his support, I don’t see how this could get through Parliament (Salmon isn’t wrong in thinking the Germans would look like idiots to refuse this deal, but if the surplus countries feel they are being played by the Cypriots, don’t underestimate national prejudices overriding sensible reactions).

But there is another potential wild card, which is Russia. If nothing else, Putin is ripshit about not being included in the negotiations, as well as having all Russian activity depicted as money laundering. Some (much) undeniably is, but there are also Russian retirees living in Cyprus, and perfectly legitimate Russian companies who use Cyprus because it is an English law jurisdiction (as in a lot of international companies prefer entering into contracts with Russians in that jurisdiction; I know Americans who do deals regularly with Russians who operate this way). As the New York Times pointed out:

The din of criticism from Moscow signaled the importance of Cypriot offshore financing for the Russian economy. The island has long served as an escape valve for Russian businessmen. Some are surely dodging local taxes. Others, paradoxically, are seeking better courts in the British law system practiced in Cyprus.

Offshore domiciles are so ingrained in the post-Soviet way of doing business in Russia that Cypriot shell companies are linked not only with money launderers and organized crime, but well-established companies like the metals giant Norilsk Nickel.

In theory, Russia has a lot of leverage. It has a ?2.5 billion loan to the government, and it has been asked to lower payments and extend the maturity. After making its displeasure with the deposit grab known, and convening an emergency ministerial meeting to contemplate what to do, it has pointedly said it has not made a decision about whether to restructure the loan, and is reconsidering its position. This is a comparatively small piece of the overall equation, but with all sides locked into positions and time running out, a Russian reversal would be a serious, potentially fatal complication. And Russia is going to be even more unhappy with a deal that hits Russian depositors even harder, which is the only sort of deal the Parliament might approve.

But as the Financial Times tells us the Russians do not want to blow Cyprus up, which is what they could do if they try flexing their muscles:

The main fear is blockages in money transfers from or through Cyprus as a result of the authorities stepping in to deal with a pending deposit run on the island, according to David Nangle, head of equity research for Renaissance Capital, a Moscow-based investment bank. While Russians own billions in Cyprus deposits, the island is far more important to the Russian economy as a conduit for financial flows – Russian money goes to Cyprus, where it gets advantageous tax treatment, and then back into Russia.

In all honesty, I’m not sure I buy that Cyprus is indispensable. It would take some doing to operate out of other tax havens, but Cyprus is not unique. But the cost of a meltdown would be much larger than any deal, and the Russians are also angling for a role in the development of gas reserves near Cyprus, so there are other considerations at work here.

My belief is that there are a lot of moving parts, and while it is perfectly rational for everyone to come to some sort of deal, the principals have a lousy negotiating dynamic at work. Russia has been excluded and is feeling angry and abused, and the Wall Street Journal description of the 10 hours negotiations that led to the original deal sound nightmarish: confused, chaotic, dysfunctional. It’s proof of the old notion that people (in this case finance ministers) should never negotiate their own deals unless they are super experienced negotiators (and pretty much everyone overestimates their negotiating skills). And these all-over-the-map negotiations took place when the principals were in the same location. It’s worse doing this sort of things by phone and e-mail.

So the odds are not trivial that a deal fails to come together, not because a pact is impossible (as in there is appears to be a bargaining space where everyone could find a solution they could swallow) but that the key actors will be unable to get to that agreement before time runs out. Stay tuned.

Update 8:30 AM: As I was drafting this post, Reuters released a story quoting President Anastasiades saying Parliament was likely to reject the revised bill. This is not what either Mr. Market or the Eurocrats anticipate. They assumed Anastasiades’ Hank Paulson armageddon speech plus rational self interest (as in recognizing that blowing up the entire banking system would cost the citizenry more) would lead to sullen acceptance of the inevitable, just the way the Greeks (and to a lesser extent, the Portuguese and Spanish) have accepted being put on the rack. Apparently a fast seizure of funds is harder for the public to accept than a sustained grind-down into penury. From Reuters (hat tip Richard Smith):

“The feeling I’m having is that the house is going to reject the bill,” President Nicos Anastasiades told reporters. Asked why, he added: “Because they feel and they think that it is unjust and it’s against the interests of Cyprus at large.”

Asked what he would do next, he said: “We have our own plans.”

Unless Gazprom is about to ride in to the rescue, this is trying to make the best of an empty hand.

Update #2 It appears that there will not be enough votes for the revised bailout, either (in fact no-one’s going to vote for it). Let’s see what the trailed ‘Plan B’ is, if the Eurogroup bailout isn’t going to fly. The Cyprus Finance Minister, Sarris, has reportedly resigned (funny, thought he was flying to Moscow today). There are rumours that the President has not accepted his resignation. The Euro is sharply weaker. UK’s Ministry of Defence making sure that the 3,500 British servicemen stationed in Cyprus have some spending money despite the bank holidays, by flying EUR1Mn over, in a jet.

Update #3 Revised bailout terms have been rejected by the Cyprus Parliament, as expected; 36 (or so, reports vary) vote against, 19 abstain. So now we really are on plan B, whatever that is. Meanwhile, the Cyprus Finance Minister, Sarris, denies having resigned. And he’s in Moscow. That gives a hint about Plan ‘B’…

Topics: Banking industry, Credit markets, Currencies, Doomsday scenarios, Economic fundamentals, moral hazard, Politics, Regulations and regulators

http://www.nakedcapitalism.com/2013/03/gaming-the-cyprus-negotiations.html

Gerald Celente: Cyprus Looting is Only The Beginning for Global Elite

Infowars.com
March 19, 2013

Alex invites economic trend forecaster and publisher of the Trends Journal Gerald Celente to discuss the looting of Cypriot bank accounts, and what the future holds for Italy, which may be the next nation to be similarly plundered. We’ll also cover other major headlines and take your calls.

This article was posted: Tuesday, March 19, 2013 at 6:14 am

Tags: business, economics, financial, money

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http://www.infowars.com/gerald-celente-cyprus-looting-is-only-the-beginning-for-global-elite/

The Great Cyprus Bank Robbery Shows That No Bank Account, No Retirement Fund And No Stock Portfolio Is Safe

By Michael, on March 18th, 2013

 

  

The global elite have now proven that when the chips are down they are going to go after any big pile of money that they think they can get their hands on.  That means that no bank account, no retirement fund and no stock portfolio on earth is safe.  Up until now, most people assumed that private bank accounts were untouchable and that deposit insurance actually meant something.  Now we see that there is no pile of money that is considered "off limits" by the global elite and deposit insurance means absolutely nothing.  The number one thing that any financial system depends on is faith.  If people do not have faith in the safety and stability of a financial system, it will not work.  Well, the people that rule the world have just taken a sledgehammer to the trust that we all had in the global financial system.  They have broken the unwritten social contract that global banking depends on.  So now we will see a run on the banks, and this will not just be limited to a few countries in southern Europe.  Rather, this will be worldwide in scope.  Yoda may have put it this way: "Begun, the global bank run has."  All over the world, frightened people are going to start pulling money out of the banks.  A lot of that money will go into gold, silver and other hard assets.  And as money starts coming out of the banks, this could cause many of the large banks that have been teetering on the edge of disaster to finally collapse.

Many of you may not believe that they would ever come after bank accounts, retirement funds or stock portfolios in the United States.

Many of you may be entirely convinced that the Great Cyprus Bank Robbery could never happen in America.

Well, where do you think this whole plan was dreamed up?

It was the IMF that reportedly pushed the hardest for the wealth tax in Cyprus, and the IMF is headquartered right in the heart of Washington D.C.

Almost every nation on the planet has to deal with the IMF.  It is an organization that is dominated by the United States and that is always involved when there is an international debt crisis.

If the IMF thinks that it is a great idea to steal from bank accounts to solve a financial crisis in Cyprus, why wouldn't they impose a similar solution in other countries in the future?

And if bank accounts are no longer safe, are there any truly safe places to put your money?

You can trust the politicians when they tell you that an unannounced "wealth tax" will never happen where you live if you want, but that is the exact same lie that the politicians in Cyprus were telling their people until the day that it happened.  The following is from an article in the Cyprus Mail...

And after all, President Anastasiades had emphatically declared in his inauguration speech that “absolutely no reference to a haircut on public debt or deposits will be tolerated,” adding that “such an issue isn’t even up for discussion.” Finance Minister Michalis Sarris made similarly reassuring statements, arguing that it would be lunacy for the EU to impose such a measure because it would threaten the euro system.

At this point, politicians in Cyprus have been given two very unappealing options.  Either they vote yes on the wealth tax and destroy all faith in the banking system of Cyprus, or they vote no and they are forced out of the eurozone.  In either case, we will probably see the financial system of Cyprus collapse and their economy plunge deep into depression.

At this point, the vote has been delayed until Tuesday.  Apparently some additional "arm twisting" was required to get the needed votes.

And there have been proposals to change the terms of the wealth tax.  Reportedly, some politicians want to impose a maximum rate of up to 15 percent on bank accounts of over 500,000 euros so that the rate on smaller accounts can be decreased.

It has also been announced that the earliest that banks in Cyprus will reopen will be Thursday.

But what is happening in Cyprus is small potatoes compared to how this will affect the rest of the world.  The entire planet is watching this unfold, and as a recent article by Lucas Jackson described, faith in the global financial system is being greatly shaken...

It would be hard to over-emphasize how significant the Cyprus situation is.  The EU demonstrated under no uncertain circumstances that they will destroy the rule of law to maintain their own power.  It was a recognition of tyranny that many of us have always assumed was the case but yesterday became reality.

The damage done here is not related to the size of the haircut - currently discussed between 3 and 13% - but rather that the legal language which each and every investor on the planet must rely on in order to maintain confidence in the system has been subordinated to the needs of the powerful elite.  To the power elite making the major decisions in DC, London, Berlin, France, Brussels, et. al., laws are like ice cream, easily melted.

Which begs the question, who is next?  Will it be Portugal?  Greece? Spain?  Italy?  France???

Will they impose a “one-time” tax on your bank account?  Your house?  Your stocks and bonds?  Retirement accounts?

The global elite have declared open season on all large piles of money, and now many people all over the world will consider taking money out of the bank to be the rational thing to do.  This will especially be true in countries in southern Europe since they would probably be the next to have wealth confiscated.

This is so abundantly clear that even Paul Krugman of the New York Times understands this...

It’s as if the Europeans are holding up a neon sign, written in Greek and Italian, saying “time to stage a run on your banks!”

Tomorrow and the days immediately following should be very interesting.

The global elite have truly "crossed the Rubicon" by going after private bank accounts.  It is almost as if they purposely chose the most damaging solution possible to the financial crisis in Cyprus.

Many in the financial world are absolutely stunned by all of this.  For example, David Zervos is describing this move as a "nuclear war on savings and wealth"...

All of us should really take a moment to consider what the governments of Europe have done. To be clear, they initiated a surprise assault on the precautionary savings of their own people. Such a move should send shock waves across the entire population of the developed world. This was not a Bernanke style slow moving financial repression against risk free savings that is meant to stir up animal spirits and force risk taking. This is a nuclear war on savings and wealth - something that will likely crush animal spirits. This is a policy move you expect from a dictatorial regime in sub-Saharan Africa, not in an EMU member state. If the European governments can clandestinely expropriate 7 to 10 percent of their hard working citizen's precautionary savings after the close of business on a Friday night, what else are they capable of doing? Why even hold money in a bank account? Are they trying to start a bank run?

So what motivated the global elite to do this?

According to CNBC, one of the motivations was to go after the Russians that had been using the banking system of Cyprus to launder money...

Indeed, the IMF is reported to have been keen on the levy as a way to stem the flood of Russian money into the island over the last few years which has prompted concerns over money laundering.

Russian money accounts for about 25 percent of all money in the banking system of Cyprus, and obviously the Russians are quite upset by what the IMF and the EU have decided to do.  Even Vladimir Putin is loudly denouncing this move...

Russian President Vladimir Putin called the tax “unfair, unprofessional and dangerous,” according to a statement posted on the Kremlin website. Russian companies and individuals have $31 billion of deposits in Cyprus, according to Moody’s.

And you haven't heard a lot about this in the western media, but the Russians have actually stepped forward and have offered to help Cyprus out of this jam.  For example, there are reports that Russian investors are interested in buying the two banks that were the primary cause of this bailout...

Officials have also said Russian investors are interested in buying a majority stake in Cyprus Popular Bank and increasing their holdings in Bank of Cyprus - the two biggest banks on the Mediterranean island.

And according to Sky News, Gazprom has offered Cyprus a very large sum of money for the right to explore their offshore gas reserves that have not been developed yet...

The uncertainty comes as Russia's finance minister said his country would consider restructuring its loans to Cyprus.

Russian energy giant Gazprom has also reportedly offered financial assistance to Cyprus in exchange for access to the island's gas reserves.

So far the government of Cyprus has rejected the help of the Russians, but could they change their mind at some point?  Apparently the Russians are offering enough money to completely fund the bank bailout...

According Greek Reporter, Gazprom made an offer over the weekend to the Cypriot government to fund the bank restructuring planned under the Cypriot bailout (which is set to cost up to ?10bn) in exchange for exclusive exploration rights for Cypriot territorial waters. How reliable this story is remains to be seen, but it does hint at the geopolitical tension which we have been warning about.

Gazprom is known to be very close to the Russian government and despite Russian President Vladimir Putin overtly slamming the deposit tax - calling it "unfair, unprofessional and dangerous" -  it is unlikely that they would let this opportunity pass untouched. Fortunately, the Cypriot government is said to have rejected the deal off the bat, but if displeasure towards the eurozone and the EU grows, the Russian option may become increasingly appealing.

It will be very interesting to see what happens.

Meanwhile, some European officials are already suggesting that other nations in southern Europe should have a "wealth tax" imposed upon them.  The following comes from an article by Paul Joseph Watson...

Joerg Kraemer, chief economist of the German Commerzbank, has called for private savings accounts in Italy to be similarly plundered. “A tax rate of 15 percent on financial assets would probably be enough to push the Italian government debt to below the critical level of 100 percent of gross domestic product,” he told Handelsblatt.

A "tax" of 15 percent on all financial assets?

Could you imagine if you woke up one morning and the government had decided to suddenly steal 15 percent of all the money that you had in bank accounts, retirement funds and stock portfolios?

If I had a bank account in Italy I would be very nervous right about now.

Under normal circumstances these kinds of things don't happen, but governments will use an "emergency" to justify all kinds of things.  I recently came across an article that included a great quote by Herbert Hoover that put this beautifully...

"Every collectivist revolution rides in on a Trojan horse of ‘emergency’. It was the tactic of Lenin, Hitler, and Mussolini. In the collectivist sweep over a dozen minor countries of Europe, it was the cry of men striving to get on horseback. And ‘emergency’ became the justification of the subsequent steps. This technique of creating emergency is the greatest achievement that demagoguery attains."

This is what the elite love to do.

They love to create order out of chaos.

And this is just the beginning.  The Great Cyprus Bank Robbery was just a beta test for what is coming next.

As the global financial system crumbles, the global elite are going to target our bank accounts, our retirement funds and our stock portfolios.  You might want to start thinking about how you will protect yourself.

http://theeconomiccollapseblog.com/archives/the-great-cyprus-bank-robbery-shows-that-no-bank-account-no-retirement-fund-and-no-stock-portfolio-is-safe