Discussion in 'Economics' started by Banjo, Mar 28, 2013.
Excellent article, thanks!
I'm cetainly not advocating it, and am not knowledgable enough to think it through, but just for the sake of discussion, it could be an alternate (read "another') form of taxation.
for instance, in USA, all bank balances above 250K are subject to taxation, not just on the interest, but also on the principal.
either you invest it, or we will spend it.
What an important piece ! Dated Mar 28, 2013, it fills in gaps not explained in the daily 3-hour CNBC Squawk Box I record before the market opens. I have seen every report from its ace reporter sent to Cyprus and some other reports/analysis on Fox Business cable t.v. since last week. The first page of this article alone fills in some gaps for me not addressed in what I have seen on financial cable t.v. And I have only read the first page of this piece since I am not registered at the site and cannot see the 2nd page.
The first page (my summary): The FDIC and Bank of England jointly put out a report last December 2012 explaining contingency plans as originated by elements of G20 that the current execution of the Cyprus banking âbail-inâ appears to be stylized after. [Bail-in relates to the corporate capital structure, like stock and bond holders, taking the wrath for failure-- not tax payerâs money through their government in a bail-out.] And hey, what a plus ! ..... In the case of a bank failure, it happens to be a corporation that has cash on hand to expropriate from depositors. Maybe, then, wiping out all the investor/creditors and depositors will clear the bankâs financial problem. In return, a new capital bank structure occurs like the Phoenix rising out of the ashes and handing out IOUâs from the new entity in the form of stock in the new bank. The article explains traditionally our cash deposits have always become property of the bankâs with an obligation to pay it back to us depositors. The new plan emanating from G20 allows for the bank to keep our cash, and we become stock holders of the new bank. Just what I always wanted. Itâs one way to own stock without paying your brokerage a commission.
Two gaps this fills in for me that arose when I watched the CNBC reporterâs coverage on location in Cyprus since last week. This now explains more specifically why in her report the Russian oligarchs (and others with 100,000 Euros on deposit) at the Cyprus banks âhave become share holders.â She explicitly said those words just incidental to some other broader context she was reporting. She never explained it or the origin of it. Frankly I donât think she knew. I am speculating we all soon will know because of the following which is the second gap I experienced last night, Thursday: I saw an interview by Lou Dobbs of Fox Business of an English legislator addressing his country putting together an emergency fund to address what may become a spreading loss of confidence in European banks and runs of them, with depositors withdrawing their money and collapsing banks. I am supposing when Europeans become aware of information as reported in this piece (the link directs us to) and elsewhere, there will become a strong wake up call for depositors to contemplate becoming part owners of banks in return for loss of their money. Thus the Bank of England is attempting now to develop a cash buffer.
The U.S. next ? What we have been told repeatedly is that European banks are undercapitalized, especially in comparison to U.S. banks that started to recapitalize soon after the credit crunch of 2008 â 2009. Regardless, how do you think U.S. citizens are gonna take to this G20 plan when becoming largely aware of it ? Iâm guessing its not widely known that effective Jan 1, this year, U.S. citizens must hand over 30% withholding to the IRS when transferring money overseas.. Geesh ! Canât keep your cash in banks at home nor send it overseas. I wonder if they (âauthoritiesâ) can get their hands on our cash turned into gold stored in the bankâs safe deposit box ? If not, maybe gold bullion and coin will become illegal to own. Ridiculous ? I suppose it would be if you believe in a good track record of nothing having been ridiculous so far.
Now will someone please paraphrase the essence of the next page in the article ? Iâve gotta go watch this Friday morningâs recording of CNBCâs Squawk Box.
Oh, and by the way, maybe it is the G20 plan that Dutch Finance Minister who heads the Eurogroup of euro zone finance ministers who made the gaff the other day about the Cyprus banking "resolution" will become the "new template !"
I think I heard that he was forced to come out after making that remark to "restructure" (pun intended) his remark into a less provocative way. (Bank run, anyone ?)
I have been hearing ever since, this word "template" over and over. It just fills another gap for me......template = G20 concoction.
it all comes down to an opinion on wealth redistribution. I mean, that's all economics really is. Just the constant debate about whether we should redistribute like when a Monopoly game gets too one sided, or should we just let nature take it's course?
Yes, except the bank deposits have already been invested in government bonds and they've already spent it.
The depositor haircut is just an admission that the money is already long gone.
can you clarify? i have more than that in the bank,but never saw any taxes or any other tax forms,besides 1099 INT
looks like it's time to spread the money all over the place.
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