‘Have money in a Spanish bank? Take it out now!’ – Shedlock
The forced bailout of Cyprus, accompanied by the imposition of a 9.9% “solidarity levy” on Cypriot bank accounts makes the experts fear expropriations in other European countries. Mike Shedlock, a well-known financial pundit and a registered investment advisor representative for SitkaPacific Capital Management, advises his readers to take their money out of Spanish banks.
The Cyprus bailout could start a chain reaction of fear. Mike Shedlock
believes
that the EU’s heavy handed bailout strategy will backfire and that the fallout from its implementation will cost far more than the 5.8 billion euros that the Cypriot government will earn from the “levy” on the bank accounts. The American pundit believes that the bailout is nothing more than a
“mandated theft, imposed by EU officials to protect senior bondholders”.
Mike Shedlock points out that bank runs will be an unintended consequence of the EU’s decision to support the bailout by confiscating capital from private bank accounts:
“Why would any rational thinking Spanish person keep any money in Spanish banks? They shouldn't and I suspect they won't”.
The same can be said about Greek or Italian banks. If Cypriot bank accounts can be subject to confiscation, it means that no account in the European Union is safe from confiscation under the guise of a “unique solidarity levy”. The leaders of the European Union, the ECB and the IMF have destroyed the credibility of the European banking system in exchange for 5.8 billion euros. Such a tradeoff is far from optimal and the bailout of Cyprus will be remembered as a huge mistake.
Mike Shedlock’s prediction offers no optimism for the European Union: “this action was one of the single stupidest things the EU could have done… Rest assured there is going to be vengeance over this action. The Cyprus government will fall, and deposit fear will spread everywhere”.
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link to english.ruvr.ru]