Did the EU just GUT it's economy? Spain, Italy next. Portents for our future?

[Mr Mannn]

http://www.telegraph.co.uk/finance/financialcrisis/9952979/Cyprus-bail-out-savers-will-be-raided-to-save-euro-in-future-crises-says-eurozone-chief.html
an EU announcement today:

Savings accounts in Spain, Italy and other European countries will be raided if needed to preserve Europe's single currency by propping up failing banks, a senior eurozone official has announced.

Me:
Cyprus banks are STILL closed. extreme limits on ATM withdrawals. In Cyprus, all large depositors will be levied 40% of their money.
Now its going to happen in Spain and Italy.

This means you money is not safe anywhere in the EU. Large investors will see the writing on the wall and move their money to safe havens. that leaves the little guy to pay the bill.

Tell me, who in their right mind will have any confidence in banks? Mattress look a lot safer than banks right now. Here at home, Obama is eyeballing your retirement...Europe broke the ice. can private accts be next on the b;lock here in the US.

Banks are the backbone of any economy, if the public loses confidence in banks, everything goes BOOM real fast.

*********** is this what liberals in the US and the EU want? A collapsed economy and a paniced public that will follow any tyrant promising to fix things?

I didn't used to be a conspiracy nut...but Obama makes it easier to be one every day.

[DumbAss Tanker]

Within the Eurozone, it's difficult to see why any depositors would leave their Euros in a Mediterranean bank instead of moving them to German, Austrian, or Scandinavian bank...after all, the whole purpose of the Euro was to erase borders for economic purposes by means of a common currency and borderless financial transactions.  Why leave anything in a Cypriot, Italian, Spanish, Portuguese, or Greek bank at this point?

[Duke Nukum]

I think the EU was always a suicide pact and that is what it is meant to be.

Cypress should have been doing cartwheels when were threatened with being kicked out of the EU.

I'll be doing cartwheels if Europe doesn't pull the whole world into another war over this nonsense.

[EagleKeeper]

Of course I don't know this to be true but my feeling on this is...

Everyone knows that there is a lot of "off shore money" in Cypriot banks and I think that the lower limit that was set (100.000 euro) was specifically done to steal from the Russian mob (and whatnot) and to spare the typical Cypriot.

The really chilling thing was when the EU turned their eyes to the southern EU countries and said "Hey, this just might work for you too".

I can totally see bank runs now, heck if I lived in Spain I'd be warming up the engine right now for a ride to the bank.

I think they sold out for a short term fix but they just broke the EU banking system for the longer term.

On edit: I forgot the "portents for our future" part.

I'm instructed that the EU is our biggest trading partner, If EU banks start collapsing faster then they can be re-monitized due to bank runs then I can't see how this does not come home to us.

[NHSparky]

It can, it will.  If a good chunk of the world economy collapses, even if it ain't our chunk, it's still going to drag us down into a recession the likes of which haven't been seen since the Great Depression.

IOW, it'll make 2008 look like child's play.  Hold on to your asses, people, it's gonna get mighty bumpy in here.

[JohnTee]

We're not all that far behind.  With foreigners already shying away from buying out debt, the Fed has been printing it.  When this house of paper collapses, Obama will look to the only reservoirs of wealth left to him, the IRAs, 401Ks, personal wealth and will eventually confiscate gold and precious metals. 

His alleged reason for stealing from retirement funds will come in response to a sudden exposure of an obscure fund manager caught stealing.    Obama will step in and"save" us all by converting some % of the assets into "safe Treasury bonds backed by the full faith and credit of the US government".

Americans should look into shielding some of their assets from these thieves.

[Articulate Ape]

The EU is toast.  They just don't know it yet.

[Wineslob]

It can, it will.  If a good chunk of the world economy collapses, even if it ain't our chunk, it's still going to drag us down into a recession the likes of which haven't been seen since the Great Depression.

IOW, it'll make 2008 look like child's play.  Hold on to your asses, people, it's gonna get mighty bumpy in here.

Un-possible. Our economy is too big to fail. The media told me so.

[Dori]

Of course I don't know this to be true but my feeling on this is...

Everyone knows that there is a lot of "off shore money" in Cypriot banks and I think that the lower limit that was set (100.000 euro) was specifically done to steal from the Russian mob (and whatnot) and to spare the typical Cypriot.

That's what I'm hearing also. Most of the big depositers are the Russian mafia. The Cyprus banks only guarantee up to 100k.  That's what we used to have, until it was raised to 250k.  So yeah, I could easily see the government taking anything over the insured amount.

I can totally see bank runs now, heck if I lived in Spain I'd be warming up the engine right now for a ride to the bank.

They have put limits on how much you can take out.

I'm instructed that the EU is our biggest trading partner, If EU banks start collapsing faster then they can be re-monitized due to bank runs then I can't see how this does not come home to us.

It already has.  We've had to bail out banks.  The difference is we are monitizing them with Bernanke running the printing presses, and outside of things costing more, it hasn't trickled down to us.....yet.

The only thing that's going to save us, is higher growth in our GDP and reduced spending.  We should be getting our first qtr numbers soon, if you can believe what the Feds say.  Last qtr was only .01%, upgraded from a negative. Another bad qtr and we will be in a recession.