The Cyprus Situation

[AntiGuru]

I believe the Cyprus situation is a bigger deal than the mainstream media gives it credit for. This is (to me) on par with 2006 when Bear Stearns had a failed bond auction - which was commented on then dismissed, not treated as anything big. But it turned out to be the first signpost on the road to what became known as the Global Financial Crisis.

It's different, this shows that the over-indebted sovereigns (governments) and banking cartel will go to any length to preserve their hegemony, and that it is getting progressively harder to maintain the facade of normalcy.

This could take a few months to play out, but I think we are headed for the next round of the end of the debt supercycle.

 

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[MJ DeMarco]

It's really scary and I agree, the mainstream won't touch it; Blake Shelton rumors and Vanessa Marcil's divorce is more important. (Actual trending topics on Yahoo right now.)

As with any catastrophe (car accident, major medical illness, etc.) I'm "buying" insurance except in this case, you can't buy insurance for it. Only preparation will be considered insurance.

 

[AntiGuru]

I am happy to report that I have no idea who you're talking about (Blake Shelton and Vanessa Marcil)

But I think about this stuff all the time. I lose sleep over it. We're a long way off up here in Canada, but then again, we're overdue for a meltdown because we missed the last one, and our property bubble is in some ways bigger and badder than the US one was (mortgages here are full recourse, so if you default there's no such thing as leaving your keys in the mailbox and walking away)

So what's a prudent saver to do? Hard to say when the rules are changed from moment to moment. We're living in one big game of Calvinball and the most irresponsible segments of society get to make the rules.

 

[Amail]

So what are the opportunities knowing this is coming?

 

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[The-J]

We're a long way off up here in Canada, but then again, we're overdue for a meltdown because we missed the last one, and our property bubble is in some ways bigger and badder than the US one was (mortgages here are full recourse, so if you default there's no such thing as leaving your keys in the mailbox and walking away)

For banking, I see little threat, but I may be not looking hard enough.

You're 100% correct about the property crisis looming over the horizon. Home prices are skyrocketing, with homes selling for 50% above asking price and 0-down 40-year mortgages becoming the norm.

Anyway...

I'm more concerned about what this Cyprus situation will do the confidence of the markets than anything else.

 

[AntiGuru]

So what are the opportunities knowing this is coming?

Well there's gold and silver. I can't see them not going up (well the reality is that it's not the precious metals going up, its the currencies going down) - as long as every government is averse to austerity and willing to "print strong".

BUT. I fear long term there will be some serious confiscation on gold and silver investors, windfall taxes, nationalization of mines, the whole deal.

It really sucks, as you're being penalized for actually being responsible and prepared.

 

[loop101]

I think the new wealth will not be in having a lot of money, but in not needing a lot of money.

 

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[MJ DeMarco]

So what are the opportunities knowing this is coming?

Andy, I really don't feel there's any opportunity here unless you're a politician, a government worker, a person on the government dole, or a banker ...

I find the question equivalent to being legally robbed at gunpoint and then asked "What's the opportunity here?"

Think of actually what is happening here...

You are robbing prudent savers who saved, budgeted and spent within their means and giving it to people who cannot. Of course, the way you get around the robbery is to just simply call it a "tax".

 

[AntiGuru]

Andy, I really don't feel there's any opportunity here unless you're a politician, a government worker, a person on the government dole, or a banker ...

Marc Faber said it best in his March GloomBoomDoom report: "The unfortunate reality is in many areas those who produce for a living are now outnumbered by those who vote for a living".

 

[loop101]

you're being penalized for actually being responsible and prepared.

I have a "Big Berky" water purifier, dried food, canned food, butane heater, camping supplies, and even a "Luggable Loo". I bought about $2k worth of survival supplies after going 2 weeks without power after Hurricane Sandy. I also got some dried food from Amazon that as a *25* year shelf-life. I guess I am a "prepper" now, but 2 weeks in New Jersey with no power was not fun.

 

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[loop101]

So what are the opportunities knowing this is coming?

I'm learning Ruby-On-Rails so I can make a website for Aunty Entity.

 

[Ivan]

So what are the opportunities knowing this is coming?

Bodyguard service/private security...

 

[CEBenz]

Bodyguard service/private security...

So true.

 

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[DeletedUser2]

I saw the Cyprus thing, and called my friend who had a Business there.
She confirmed it. she lost 10% of her net worth in a weekend. the way they pulled it off scares the shit out of me, since I know that it is just this kind of precedent that could sound like a good idea to the wrong politicians.

"hey, its already been done, we should try that here."

to be clear, they didn't lose any non cash assets. (stocks bonds, ect) were exempt. its just the emergency government needs some money, so tax, and take from those who are already have money, within easy reach.
ugh...

This could take a few months to play out, but I think we are headed for the next round of the end of the debt supercycle.

Lehman's, 100+ yr company. Gone overnight.

when banks are too big to fail, and we bail them out, what happens when governments are "to big to fail" and just take your money right out of your account.

No vote,
No Appeal
No Recourse.

just suddenly YOU have to bail out the big guys, because they just had easy enough access to your money.


Sigh..

I actually started reading about Bitcoin after reading about Cyprus...
Crazy Days....


Z

 

[EastWind]

I'm not overly concerned, if it was going on in Canada or Major parts of Europe then I do be seriously worried.

 

[CEBenz]

I'm not overly concerned, if it was going on in Canada or Major parts of Europe then I do be seriously worried.

Oh but Europe isn't done yet. There's a couple major countries left yet.

Zen,

Have they found a way too keep from losing bitcoins if your counter crashes?

 

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[Jake]

I actually started reading about Bitcoin after reading about Cyprus...
Crazy Days....

Z

I finally bought a (very small) bit. I put it off for years because of the steps needed to purchase them. Then I started thinking how many people, like me, simply have not bought some because of the few steps you need to take to setup the means of payment. It's a spec bet but with pretty big potential.

With paypal and other payment services blocking countries and / or eating a sizable percentage of funds it makes for a pretty good method of online payment.

 

[CEBenz]

Computer*

 

[tamo42]

I think the more likely version for when this comes to more developed economies is to "tax" financial assets.

Regardless of how it plays out though, I think the name of the game is to get out of parked cash and get into productive assets.

Plus I will be selling puts on gold and silver pretty aggressively.

 

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[andviv]

Threads like this? Me no likes. We rarely get anything positive out of them...

So what's a prudent saver to do?

Don't be prudent.

If you are being penalized for doing something, why would you continue doing it?

Only preparation will be considered insurance.

So, if you have assets, you need to look into asset protection techniques and hide stuff like crazy (i.e. multiple corporations in multiple localities, Corp A owns one asset and leases it out to Corp B who owns an asset that Corp C needs but that Corp A owns, blah blah blah -- trusts, etc)

But... If you don't have assets to protect, why worry?

But I think about this stuff all the time. I lose sleep over it.

So I take you do have assets to worry about... I assume you are a Canadian citizen so you have lots of opportunities for offshore banking, as far as I know, but reach out to GlobalWealth for advice.

You're 100% correct about the property crisis looming over the horizon. Home prices are skyrocketing, with homes selling for 50% above asking price and 0-down 40-year mortgages becoming the norm.

Maybe it is a great time to be a renter? Why try to compete with EVERYBODY trying to body for appreciation? Stay out of that bubble and wait for it to pop. You will pick up assets for pennies and will be gazillionaire in no time. I wish I had heard the advice from the wise ones during the last bubble.

It really sucks, as you're being penalized for actually being responsible and prepared.

Agreed. So again, play the debt game. Go get a huge loan with set rates and for long term. With inflation coming you will be making a killing by having cash now to deploy for assets in other markets, while paying the debt later with cheaper, devaluated money.

I know that it is just this kind of precedent that could sound like a good idea to the wrong politicians.

"hey, its already been done, we should try that here."

Yep, it will happen. Maybe diversification of assets in different market (i.e. some bank accounts in Europe, some in Latinamerica, some in Asia --all of it if you have a non-Us passport) could help to mitigate the risk, but will increase the management cost.

 

[CEBenz]

Threads like this? Me no likes. We rarely get anything positive out of them...

Maybe. But I think it serves people to be aware of things governments may do so as to plan accordingly.

Maybe it is a great time to be a renter? Why try to compete with EVERYBODY trying to body for appreciation? Stay out of that bubble and wait for it to pop. You will pick up assets for pennies and will be gazillionaire in no time. I wish I had heard the advice from the wise ones during the last bubble.

My grandmother bestowed the wisdom on me to avoid that mess.

Not sure how it works in Canada, do they have puts available on bank stocks?

 

[GPM]

I'm not overly concerned, if it was going on in Canada or Major parts of Europe then I do be seriously worried.

I saw it happen in Greece, but I was not worried because I was not a Greek
I saw it happen in Italy and Ireland, but I was not worried because I am not Italian or Irish
Then it happened in Cyprus, I was not worried because I am not a Cypriot.
Then it happened in Canada…

The world is interconnected, what happens in one country has ripple effects in another, especially when that country is part of “The West”. When Europe goes down, USA will follow. Think Canada will be so safe then?

Don’t be naive, be prepared.

 

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[DeletedUser394]

Establish multiple accounts in multiple currencies in multiple countries around the world. Change your residency, give up your citizenship. Buy assets through multiple corporations in multiple jurisdictions. Hord gold, silver, food. Stash foreign currencies outside of banks as well. Whatever you think is necessary.

Bottom line, I will never let the looters win. Never.

 

[Jake]

bitcoins going parabolic...

 

[AntiGuru]

I have land in another country (bunch of us building our kind of "Galt's Gulch"), a have been stockpiling gold and silver since 1999, married to a national of another country that automatically confers citizenship on me (time to start working on that passport).

bitcoins going parabolic...

My web services business is going to start accepting payments in bitcoin by the end of the month.

I still worry about all of it. Maybe it's in my nature to worry.

Bottom line, I will never let the looters win. Never.

Problem is, governments are bankrupt, they want to hang on to power and will change any rule on no notice to do it. And they get to "make the rules".

It's all very Kafkaesque.

 

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[CommonCents]

It's already happening in California.

They change the law on small business, make it RETROACTIVE for 5 YEARS. Then go after them. What's the difference between that on Cyprus?

California businesses fuming over retroactive $120M tax grab | Fox News

The idea of govt eyeing your IRA/401k has already been floated as well. In the next 20-30% downdraft in market they may offer you an above market value offer for your account being the nice govt they are, in exchange for a govt "guaranteed" return retirement program. You know how well they manage that just look at SS, medicare, budget(they don't even produce one) etc....


I don't know much about bitcoin but I have a hard time thinking a digital currency cannot be manipulated. It's a bunch of 1's and 0's sitting on servers somewhere.

 

[DeletedUser394]

Problem is, governments are bankrupt, they want to hang on to power and will change any rule on no notice to do it. And they get to "make the rules".

It's all very Kafkaesque.

Problem is, almost EVERYONE is bankrupt haha. Most people and most governments. They make the rules, but they can't force a person to comply. If any person or government attempts to seize my assets without provocation, they will need to bring guns, and lots of them.

I will happily give up my life fighting for what I believe in instead of giving up my freedom. Freedom or death.

Luckily there are so many governments/countries and places to escape to. Any individual with means is free to go where they please. The richest among us are the most mobile obviously. Just look at what happened when that idiot president in France went for a 75% tax. They will never win. They might fight like hell, but they will never win so long as there are people to stand up to them.

It's just like terrorism, drug wars, etc. Do we really think that's ever going to stop? In the entire history of the world crap like this has been going on. It will never end. I wish people and governments were fiscally conservative, peaceful, and accountable, but sadly they never have been, and never will be.

It'll be interesting to see what happens when shit really hits the fan.

 

[andviv]

Luckily there are so many governments/countries and places to escape to.

Examples?

 

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[DeletedUser394]

Examples?

Well as a canadian citizen I can establish residency in any low tax, no tax country and only pay taxes on income earned in said country (in this case 0% or close to it).

Switzerland, Caymans, Virgin Islands, Isle of Man, Andorra, Bahamas, Turks and Caicos, Jersey, Guernsey, Lietchetenstein, Panama, Monaco, San Marino, Cyprus (formerly LOL), Seychelles, Bermuda, Hong Kong, Signapore, Vanuatu, UAE (Dubai, Abu Dhabi), Qatar, Saudi Arabia (if you're into the whole Sharia law haha). Most of those place you only have to be there 180 days/year, etc. And if you have the means to travel anyway, you're always going some place.

And if one of those places changes their laws suddenly, then you can just pack up and leave and move on to the next one.

If you're a fan of flat taxes: Albania, Anguilla, Belarus, Belize, Bolivia, Bosnia & Herzegovina, Bulgaria, East Timor, Estonia, Georgia, Greenland, Grenada, Guyana, Hungary, Jamaica, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Macedonia, Madagascar, Mauritius, Mongolia, Montenegro, Romania, Russia, Serbia, Slovakia, Trinidad and Tobago, Turkmenistan, and the Ukraine and probably more.

Plenty of other paths to more freedom, less taxes but I'm not well versed in international taxation laws haha.. not yet at least.

Every country is different, with different laws that react differently to one another though, so every situation is different.

 

[CommonCents]

Cyprus may hold offshore gas reserves of as much as 60 trillion cubic feet, Charalambos Ellinas, head of Kretyk, the country’s state hydrocarbons company, said on March 15. That would be worth about 475 billion euros at today’s price for month-ahead gas on the Title Transfer Facility in the Netherlands, mainland Europe’s biggest market, according to broker data compiled by Bloomberg.

bloomberg

They can accelerate the sale of some of those drilling rights.