Tuesday Eurozone Banking System May Collapse--International Banks Charging Cyprus One Third Of GDP--US Is Next--Can We Afford To Pay Banksters $5 Trillion Dollars For Bail Out?

by Monica Davis

Shades of the 1929 Great Depression. In a move to avoid a bank run, the Cypriot government has declared Tuesday a bank holiday. They moved the Sunday bank holiday up to Tuesday, and could stretch it out until Wednesday. 

The European Central bank is holding the Cypriiots’ feet to the fire and are ensuring that they can’t withdraw massive amounts of money from the banks–which would  probably collapse the banks entierely. And it would also destabilize the Eurozone. 

European central bankers are exacting a high price for bailing out Cypress, but, ultimately it is the Cypriot people who will pay the price. Greece, which is in a fiscal devil’s circle itself, sent as muchh as 5 billion euros to Cyprus, reportedly to help the Cypriot banks meet cash requirements.

But it may all be  in vain if there is a bank run, where angry people have already been dunned for 10 percent of their savings accounts–and won’t be able to withdraw money from their accounts.

The Cypriot cabinet has declared Tuesday a bank holiday, for fear of capital flight, and this may even be stretched to Wednesday, as depositors are certain to withdraw huge sums from the Cypriot banks after the haircut imposed.

Nicosia postponed from Sunday to Monday the tabling in Parliament of the bill including the measures for the Cypriot bailout – including a bank account haircut and a tax hike on interest and corporate earnings – but the European Central Bank insists on a rapid voting because there are already signs a domino effect will follow across European lenders and markets from Monday.

There is genuine fear of market unrest on Monday morning when stocks may crumble in the eurozone and bank accounts in other southern European bank may suffer. MOREHERE

The so-called bail out deal has already cost Cypriots billions of dollars, as the Eurozone’s 10 percent  levy on bank accounts came into effect. Angry desitors can’t get the rest of their money out of the bank, due the bank holiday which now extends to Wednesday.

The Eurozone “levy” on Cypriot banks is roughly one third of the nation’s GDP, according to some sources. Imagine, how that would affect the US.  According to Wikipedia:

The economy of the United States is the world’s largest national economy and the world’s second largest overall economy, the GDP of theEU being approximately $2 trillion larger. Its nominal GDP was estimated to be $15.8 trillion in 2012 ,[1] approximately a quarter of nominal global GDP.[2] Its GDP at purchasing power parity is the largest in the world, approximately a fifth of global GDP at purchasing power parity.[2]

Imagine if the US economy was (and is) in such financial straits that some entity bailed us out, but only if they levied one third of our GDP as payment. That would be a third of $15.8 trillion dollars. That would be roughly $5.2 trillion dollars. If the Cypriots are screamiing, what would we be doing?