Forget Rule of Law, forget the sanctity of private property and given the Cyprus “bail-in”, forget the concept of “risk free” savings. In the olden days (2012) people used to refer to an endeavor considered to be a fairly safe bet as being “as good as money in the bank”.
So much for that.
Data Point #1: The Cyprus Bail-In
The big news tonight is a new Cyprus bailout, where the near virginal Cypriot government, the IMF, and the Eurozone finance ministers have all decided on new bailout terms and come to an agreement over who gets to have their bank deposits confiscated to pay for it.
Typically, depositors bank accounts are not summarily raided to fund bailouts, so as Calvinball dictates, the confiscation was simply deemed a “tax”. That backfired however, when every single member of the Cypriot Parliament voted against it.
So after tonight’s deal, it will not do to have an intransigent gaggle of “People’s representatives” scuttle the entire affair again, so this time, it’s not a tax – it’s a bank restructuring. Therefore, no parliamentary vote required, just one more bank holiday (tomorrow) to plunder all the uninsured bank accounts from those who were immoral enough to amass over 100,000 euros in savings and then the Eurozone can get on with the business of pretending it isn’t collapsing for another few weeks.
Data Point #2: Dutch ABN Halts Gold Delivery
Dutch bank ABN Amro has decided to change it’s precious metals custodian rules so that nobody can take physical delivery of their gold. Instead they will be settled at market prices.
This move begs at least two questions:
1) what is the real premium for actual physical gold over the pretend paper-based commodities markets prices? (Jaded traders don’t call the COMEX”the Crimex”for no reason).
2) what’s the point of having a custodian for your precious metals if they’re just going to sell it out from under you? After all, if you wanted to sell your physical gold, you would do just that, instead of actually contracting a custodian to hold it for you.
This is the world we live in folks, western welfare states are going bankrupt and anybody who has had the foresight to defer gratification and save their capital will be brutally penalized for their prescience.
(Also see: The Tragedy of Contrarianism)