Cyprus moves closer to financial collapse, as bailout talks falter

Tuesday, March 19, 2013
By Paul Martin

TheExtinctionProtocol.com
March 19, 2013

CYPRUS – In the early hours of Saturday, Cyprus agreed to a “bailout” with the EU and IMF that is very controversial because it imposes an immediate one-time tax on everyone with money in a Cypriot bank before banks reopen on Tuesday (Monday is a holiday). The deal still needs to be passed by Parliament and that’s not a sure thing. Ekathimerini has this report: The Cypriot government is now sweating over a possible rejection by the island’s parliament of the shocking set of measures imposed on Nicosia for the eurozone to bail its economy out of a likely default, announced in the early hours of Saturday. The Cypriot government is preparing the bill to be tabled in Parliament probably on Sunday in an emergency session, as everything will have to be voted by Monday night for Cypriot banks to open on Tuesday. The stakes are incredibly high. Here’s a statement from Cypriot President Nicos Anastasiades warning of total financial collapse and euro exit if there’s no deal.“It is well known that the deep economic crisis and the state of emergency in which the country has found itself did not come about in the last fortnight since we have undertaken the administration of the country. The state of emergency and critical nature of the times does not allow me, as they do not allow anyone, to embark on a blame game. On Tuesday, March 19 we would either choose the catastrophic scenario of disorderly bankruptcy or the scenario of a painful but controlled management of the crisis, which would put a definitive end to the uncertainty and restart our economy…(without a deal) Such an uncontrolled situation would push the whole banking system into collapse with all the attendant consequences. As a result of the above, the service sector would be led to a complete collapse with a possible exit from the euro. That, in addition to the national weakening of Cyprus, would lead to devaluation of the currency by at least 40%.” –BI

Former US Treasury official warns of system-wide collapse: Outspoken, controversial former Assistant of the US Treasury Paul Craig Roberts spoke yesterday about the problems that Western policy-makers face and the inevitability of the current financial system ending in ruin. There are no economic policy solutions. You can’t deal with [the excessive money printing] by cutting spending because you already have high unemployment. How are you (the Fed) going to contain the inflation? Are you going to jack interest rates up and wreck what little is left of the economy? The whole thing is a disaster waiting to happen. And they (mainstream media and government officials) avoid it. There is no talk about it. It’s soobvious. How can you not see it? And yet they never mention it. So I just feel compelled. It’s my responsibility to mention it. Roberts claims that the game of printing money cannot last and that there are already early warning signs that the US dollar is slipping in its role as the global reserve currency. Eric Sprott of Sprott Asset Management continued with the same theme yesterday in response to Roberts’ comments: They play games, and they manipulate things (such as gold and silver). They are so lucky because they get to borrow money at zero (percent) and lend it to people. They are given this right to make money, and then they turn around and lever it up, and throw derivatives on top of that. I totally agree that someday it will just fall apart and we will find out that none of the counterparties can pay. I’ve never been hopeful for the financial system. Ever since the 2008 financial crisis all we’ve had is printing of money and backstopping of banks. The one thing which has happened since Lehman, Lehman was a liquidation, and there has never been a liquidation allowed since. Nothing is allowed to liquidate, whether it’s Fannie, Freddie, various banks, nobody is allowed to liquidate, and I know exactly why they are not allowed to liquidate, because if they liquidated the first domino falls. And once the first domino falls, everyone starts worrying about counterparties and the whole system fails. That’s why they need to keep propping it up week after week. Somebody is always getting bailed out. It’s just ongoing and anybody who has any common sense at all knows it will end in ruination. -Mining

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