How to cause a run on the banks

[KentPhilip]

How is this anything other than theft?

It is theft. But then all tax is theft, by the group, from the individual.

The only difference here is that it is just a lot more clear that the tax is a theft than it normally is.

This is going to open a can of worms, many lawsuits, and much rumpus. For example what happens if person A was holding money in their account on behalf of person B? In law will person B be able to sue person A for return of the lost 10%?

It is a very bad idea.

[tomtomagain]

Well it's not really theft.

If they don't get the bale-out from the IMF & EU the entire banking system is going to collapse and therefore they'd lose a lot more than 6.75%.

What it does is set a precedent that says the German tax payer is no longer willing to foot the bill to save the savings of other European countries.

It's highly likely to end badly.

[SantaClaus]

Well it's not really theft.

If they don't get the bale-out from the IMF & EU the entire banking system is going to collapse and therefore they'd lose a lot more than 6.75%.

What it does is set a precedent that says the German tax payer is no longer willing to foot the bill to save the savings of other European countries.

It's highly likely to end badly.

Of course, if everybody loses confidence in the banks because their savings are exposed to the tax collecting whims of government, then the system will collapse anyway.

btw, I use the phrase "tax collecting" in the loosest sense of the word.

EURUSD gapped on the open, down 170 pips this evening.
EURGBP down 115 pips.

[MarillionFan]

Well it's not really theft.

If they don't get the bale-out from the IMF & EU the entire banking system is going to collapse and therefore they'd lose a lot more than 6.75%.

What it does is set a precedent that says the German tax payer is no longer willing to foot the bill to save the savings of other European countries.

It's highly likely to end badly.

In days of old, countries would go bankrupt, currencies would devalue and we'd all be heading to a nice hot country for a holiday. Instead Germany is taking it in

Let the fookers fail!!!

[IR35FanClub]

Its the most stupid idea I've ever heard of.

Just in case it ever happens here, I've just set up 2 dozen accounts on a social lending site, lent myself all my own money via one of those social lending sites, taken out the cash, and bought a lorry full of rice and flour and hidden it in a warehouse. On paper I now owe myself £400k, but I have enough food to eat for he rest of my life, or can I sell it off as the price increases.

[Ignis Fatuus]

How is this anything other than theft?

Government claims a monopoly on all major crimes.

[Mich the Tester]

Well it's not really theft.

If they don't get the bale-out from the IMF & EU the entire banking system is going to collapse and therefore they'd lose a lot more than 6.75%.

What it does is set a precedent that says the German tax payer is no longer willing to foot the bill to save the savings of other European countries.

It's highly likely to end badly.

My question is whether they're only hitting savings of individuals, or savings of businesses (I don't approve of either), and whether they're going to hit current accounts of people and businesses; if businesses lose 6.75% or 10% of the money in their current accounts in the current curcumstances that could tip many businesses over the edge and cause a downward spiral. I really think this is a fop to Europe's voters and not a clever idea at all. Sure, let's think about ways of sharing the risk in banking, but don't fuel the flames while you're trying to put out the fire.

Right now this seems to be making things worse, just as I (sort of) predicted in my original post. Now savers in Italy, Spain and Portugal are starting to panic.

[DimPrawn]

My question is whether they're only hitting savings of individuals, or savings of businesses (I don't approve of either), and whether they're going to hit current accounts of people and businesses; if businesses lose 6.75% or 10% of the money in their current accounts in the current curcumstances that could tip many businesses over the edge and cause a downward spiral. I really think this is a fop to Europe's voters and not a clever idea at all. Sure, let's think about ways of sharing the risk in banking, but don't fuel the flames while you're trying to put out the fire.

Right now this seems to be making things worse, just as I (sort of) predicted in my original post. Now savers in Italy, Spain and Portugal are starting to panic.

It's absolutely crazy and indiscriminate theft.

Imagine you are a business or individual with money in the bank to pay your large tax bill for example. Suddenly, you can't pay it now as it's 10% down. Or you are in the middle of a property sale or purchase. Again you are now fooked.

If ever there were a reason to be hoarding gold bars and coins, this is it.

[Mich the Tester]

It's absolutely crazy and indiscriminate theft.

Imagine you are a business or individual with money in the bank to pay your large tax bill for example. Suddenly, you can't pay it now as it's 10% down. Or you are in the middle of a property sale or purchase. Again you are now fooked.

If ever there were a reason to be hoarding gold bars and coins, this is it.

Yes I agree, but I can understand the logic; the public in the less insolvent European countries are getting tired of bail-outs and so the politicians are trying to show them 'look, we're making Cypriots pay for their own mess'. But that's crap reasoning; this will hit a lot of entirely innocent people and businesses and cause worries for the account holders in Italy, Spain etc. As well as that, has it occurred to nobody that Cyprus is a banking and business centre for many international businesses who trade with the whole world? Guess where people go if they want to trade with Israel and at the same time Arab countries? Yep; Cyprus, because it's 'neutral' territory but still within the EU. I am somewhat discombobulated by the stupidity and short sightedness of this.

[VectraMan]

This is going to open a can of worms, many lawsuits, and much rumpus. For example what happens if person A was holding money in their account on behalf of person B? In law will person B be able to sue person A for return of the lost 10%?

Yes but we all pay tax on interest on savings, and the same applies. What if you hold some money in your account for someone else, earn some interest, pay some tax - does the other person get the interest and have to pay the tax? What if you take out a mortgage and temporarily have a large amount of cash in your account? You could earn some interest, and pay some tax on it.

This is more extreme, but generally speaking the interest on savings minus tax doesn't keep up with inflation anyway, at least not in a regular deposit account, so this is no different to what has been happening to UK savers for decades.